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John Key to slash public services

Written By: - Date published: 8:16 pm, April 22nd, 2010 - 48 comments
Categories: capitalism, class war, economy, Economy - Tags:

John Key is planning to slash and burn $2 billion out of our public services. Key says the slashing is needed to pay for increasing health and education costs. Bullshit. It’s about paying for John Key’s and his rich mates’ tax cuts. TVNZ reports:

The government has announced it will cut nearly $2 billion from ineffective public services and use that money for new initiatives, mainly in health and education.

Yet Labour didn’t have to slash and burn our public services to pay for new initiatives in health and education.

“In this budget we will find another $1.8 billion of low quality spending from the years of now to 2014 which we will redirect into higher priority initiatives,” says English.

Low quality spending like helping beneficiaries into work?

This means there will be $1.1 billion in new spending and $1.8 billion will taken off a range of government departments and put into other areas deemed to be higher priority.

Basically, Key is trying to con us all here. Every year health and education need increased government investment. This is stock-standard. Now all of a sudden we need to smash the rest of the public service to pay for it? Why doesn’t Key instead abandon his tax cut for himself if the cuts are so pressing?

Labour is predicting a public backlash.

“They will accept not those sort of cuts and I think that Mr English is going to need to be very careful where he takes the money from,” says Labour Deputy Leader Annette King.

People will not be happy if services deteriorate while Key pockets thousands of extra dollars a week in new tax cuts.

English will not say where the money will come from although there have been some hints about where it will go.

It is clear the money is being slashed from pretty much every area.

In his second budget English will again say there is no new money for most government departments for at least four years.

The only reason I can think of that government finances are suffering is because Bill “Double Dipton” English will be spending a tidy sum on building himself a new primary place of residence castle (maybe perched on a Wellington hill, with a lovely moat, overlooking the Beehive) 😉

“There was a reduction of about 1500 jobs in the last 12 months and I expect that process is likely to continue.”

It’s just awful to see the Government continue to cut people’s livelihoods. I wonder if anyone in Cabinet actually considers the families of the workers they decide to lay off.

48 comments on “John Key to slash public services ”

  1. I might be able to advise where some of the savings will come from. The 5 Year Property Funding for my school has been cut from $311k five years ago to $130 for the next five years. This at the same time as the MOE have introduced a new plan which asks schools to create and maintain ‘Modern Learning Environments”. I am unsure if the reductions apply to every school in NZ but it is particularly bad news for my school and could lead to circumstances around the country such as that that occurred at Keys old school Aorangi Primary which was forced to close because, at least in part, it had become run down. Modern Learning Environments on $26k a year – Yeah Right!

    • lprent 1.1

      That is stupid. It means that the buildings will run down and ultimately cost more, a *lot* more, to maintain.

      It means (for instance) that schools will skimp on repainting the buildings, fixing guttering, and fixing window leaks.

      Typical short-term National thinking.

      • Dan 1.1.1

        Compare that to Australia where Rudd is pouring money into public facilities. Australia-based brother who is a builder says most schools have yards of blue temporary fencing that surround building sites and upgrades.
        “I am ambitious for NZ! We want to catch Australia!” Yeah right!

      • Draco T Bastard 1.1.2

        Or possibly medium term. Once the schools are run down NACT complain about how much they’ll take to fix and then sell them all off while bringing in a voucher system. The countries general education goes down making the general population more manageable and NACTs rich mates get richer courtesy of the taxpayers.

  2. Bill 2

    “They will accept not those sort of cuts and I think that Mr English is going to need to be very careful where he takes the money from,” says Labour Deputy Leader Annette King.

    Well that’s really fucking giving it to them, innit? Sorry, but wtf?

    ‘They’…that’s you and me that the unaffected detached one is talking about there…way to go to connect! But it gets better because the ‘they’ will let Blinglish away with his proposed cuts ( in the esteemed ones opinion) as long as he is careful enough about it…surgical…precise…oh, sorry… merely ‘very careful.’

    Which is to lead me to assume that as long as Blinglish is ‘very careful’ enough, then Labour will not object too much?

    What the fuck is all this detached otherworldly no fucking idea stepping backwards coming forwards shit?

    • Rex Widerstrom 2.1

      Where’s that level of detachment come from?

      23 years in Parliament on a salary most NZers can only dream of. Plus perks. That’s where.

      • QoT 2.1.1

        Exactly, Rex. And don’t we all know if Annette were saying “taking our money” Bill here would be b!tching because “where is this “we” coming from? How dare you try to connect with normal/mainstream/middle New Zealanders!!!”

  3. infused 3

    “It’s just awful to see the Government continue to cut people’s livelihoods. I wonder if anyone in Cabinet actually considers the families of the workers they decide to lay off.”

    Maybe if Labour hadn;t hired so much dead weight to being with, this wouldn’t need to happen.

    • Eddie 3.1

      What deadweight?

      The 50 frontline health services that National has cut?

      The Police car funding that was axed?

      The rehabilitation programmes for at risk youths?

      The public transport infrastructure money?

      The customs officers?

  4. big bruv 4

    $ 2 Billion!…that is a disgrace, I am sure that there is at least another three of four billion the gutless wonder could have found if he really looked hard enough.

    Never mind Neville, keep borrowing $1 billion a month and she will be right in the end aye…

    • lprent 4.1

      …keep borrowing $1 billion a month…

      He isn’t, and never was. You obviously don’t have an eye for accounting. I guess we’ll have to add that to your numerous other deficiencies.

      (there is nothing quite as ignorant as a wingnut with a slogan).

  5. Ianmac 5

    Bill the cuts haven’t happened yet so its hard to say,”Don’t you cut there Mr English, or I will smack your little bottom!’
    But when it becomes clear then attack if necessary. If about 1500 Public Service jobs have been cut already, what were they? Hard to be constructive unless the number of teachers, nurses, policemen, IRD inspectors are cut. But so far I don’t know what the cuts were. If not, why not?

    • Bill 5.1

      It ‘shouldn’t’ be a case of ‘don’t cut here or else’….it ‘should’ be like the mining, ie No excuses , no gouging, end.

  6. big bruv 6

    Of course Iprent, the figure is just short of 1 billion a month.

    Care to tell me why this is a good thing?, why do we need to keep borrowing money every month when it is so obvious that we should be making drastic cuts to government spending?

    Speaking of deficiencies, how are things with the self confessed worlds greatest computer geek?, had any three day crashes that you cannot work out how to fix lately?

    (there is nothing quite as nasty as a cornered pinko).

    • Eddie 6.1

      big bruv. Catch up. Since December last year net debt has decreased.

    • millsy 6.2

      I would love for you to go to a restaurant to tell that waitress who gets working for families why she and her kids should give up their house and live in a car

      I would love for you to go into Starship childrens hopsital and tell those sick kids why their health no longer matters

      You are completely devoid of compassion. Unlike you, I think EVERYONE should have healthcare and a roof over their head, and if we are to burrow money then so be it.

  7. RedLogix 7

    Lets see now.

    Core govt spending is in the order of $50b (depending very much on how you define it.)

    Lets consider the three big line items that apparently are not being cut:

    Superannuation: $16b

    Health: $13b (Likely to be increased)

    Education: $11b

    That leaves about $10b left over for all other spending. This $1.8 billion will taken off a range of government departments will have to come out of that number. That’s a lot of govt Dept’s facing a 20% cut on average.

    • Fabregas4 7.1

      Who said Education spending isn’t being cut? Night Classes gone, tertiary funding reduced, student lending under review, operations grants stagnant (less due to inflation).

  8. big bruv 8

    Red

    A 20% cut is to be welcomed, although it should be more.

    What part of “we do not have the money” do you guys not get?

    • millsy 8.1

      And what about people who need an education. Hard luck? How do you sleep at night boy?

      Fuck off and enjoy your tax cut. Think about what the people at the bottom had to give up in order to get it.

  9. prism 9

    A cornered pinko. Someone could come up with a good graphic to illustrate that. Only to be outshone by a wingnut looking wild and bewildered lost in a maze of its own making.

    Each time the right wingers get in they manufacture a crisis or bulk up a difficulty till they can use the TINA medication. They use the broken record approach – where you wear down opposition, and make explanations seem plausible, by repetition of the current slogan.

  10. Descendant Of Smith 10

    Here big bruv grow some balls.

    The biggest beneficiary expense is NZS $7,744,149,000 spent in 2009. That doesn’t include the Veteran’s Pension figures of $175,861,000.

    DPB at 1,530,294,000 pales by comparison. That’s a gross figure as well. Have to take off the payments made by liable parents of $2,185,000.

    You want to reduce expenditure old people is where it’s at. Go on take off your own mother and father should they still be alive.

    NZS is why we are borrowing – everything else is just a storm in a teacup.

    MSD Annual Report

    • nzfp 10.1

      The MSD Annual Report Chief Executive’s foreword doesn’t sound very rosy “The recession has had a significant impact on the Ministry. Unemployment Benefit numbers increased 187 per cent during the year with even greater growth in youth unemployed” and so on…

  11. nzfp 11

    Author Michael Rowbotham, in his book “The Grip of Death: A Study of Modern Money, Debt Slavery and Destructive Economics’ explains how governments use public funds, deficits and public debt – or more precisely, the absence or presence of it – as an excuse for what public services can be supported or “afforded”. Governments use deficits in order to appeal to segments of society in order to win votes and to stay in power. A government with debt and a deficit can say ” $1.8 billion will taken off a range of government departments and put into other areas deemed to be higher priority” where the “higher priority” departments appeal to the segments of society that the government is courting for votes and support.

    This political model is entirely false – there is as much “money” in the nations coffers as the nation needs. Rowbotham defines a solution where central banks such as the RBNZ could fund the all of the states monetary requirements by creating and spending directly into the economy the money necessary for states needs (infrastructure, civil, education, health etc…), removing the requirements for foreign debt or deficit spending. As long as the spending is in areas that create goods and services such as the nations infrastructure there will be no inflation. However neo-liberal monetarist economists such as the New Zealand Bankers Association (NZBA) would argue that if the RBNZ “finances its excess of spending over revenue using new cash provided by the Reserve Bank, it increases the amount of cash in the economy. This provides the basis for banks to create a great deal more money and credit”. Remember that any money the RBNZ creates to fund infrastructure projects would ultimately end up in one of the New Zealand banks. This could lead to an inflation of the money supply because the New Zealand economy allows Banks to create credit against deposits. However, Rowbotham has a solution for this as well, a solution, named “The Chicago Plan” that was originally proposed by University of Chicago economist Henry Simons and then later championed by the founder of Chicago School neo-liberal economics himself, Nobel laureat and American Economist Milton Friedman.

    Simons proposal was based on three concepts, summarised below they include:

    1. “Only the government would create money. […] The power to create money was to be removed from private banks by abolishing fractional reserves – the mechanism through which the banking system creates money […]”.

    2. “The Plan separated the loan-making function, which can belong in private banks, from the money-creation function, which belongs in government. Lending was still to be a private banking function, but lending deposited long-term savings money, not created credits […]”

    3. “The proposal recognized the distinction between money and credit, […]. The confusion was seen as one of the causes of the depression, because when businesses reduced their borrowings on commercial bills which occurs during any downturn, parts of the money supply had been automatically liquidated. The Chicago Plan saw the instability of this that it aggravates a downturn”.

    With the implementation of these three steps, the New Zealand government would not need Keynsian deficit spending or taxes on labour or manufactured products – such as income, GST or value added taxes – to fund government services. Neither the National nor Labour governments would need to make announcements such as have been presented in Michael Foxglove’s article above. The government could eradicate unnessary Emissions Trading Schemes and replace it with a complete overhaul of our nations transport and power infrastructure – replacing unsustainable energy consumption with clean green environmentally friendly and economically sustainable and ultimately free energy. We could eradicate income tax, which would reduce the costs of labour in New Zealand and make our labour and manufactured products far more competitive on the world market. It only takes the will of our nations legislators and our nations citizens.

    peace

    • RedLogix 11.1

      Of course the bankers will not permit this.

      Eventually we’ll finish up looking for lamposts in order to get rid of the scum. Their greed got the better of them; pity because otherwise most could have otherwise been decent, productive folk.

      • nzfp 11.1.1

        RedLogix, “Of course the bankers will not permit this” well that’s probably true considering former Merril Lynch global head of foreign exchange John Key is/was a Banker, Huljich Wealth Management chair, ANZ National Director, former Governor of the Reserve Bank of New Zealand and former National Prime Minister Don Brash is/was a Banker … kinda says it all really.

        There’s always the example set by one of our nations historical figures, Te Rangihaeata in Wairau 1844 😉

  12. tsmithfield 12

    I expect Helen Clarks pet Arts and Culture budget will be taking a bit of a hair-cut.

    • r0b 12.1

      Does that please you TS?

      • tsmithfield 12.1.1

        Its probably a nice to have thing rather than a necessity. When times are tough its probably one of the first things that would be considered for a cut.I thought the extra amount she put in was quite ridiculous, so I would shed too many tears if there is a cut in that area.

        I think RL has made a logical error when he made the following comment:

        “Lets consider the three big line items that apparently are not being cut:

        Superannuation: $16b

        Health: $13b (Likely to be increased)

        Education: $11b

        That leaves about $10b left over for all other spending. This $1.8 billion will taken off a range of government departments will have to come out of that number. That’s a lot of govt Dept’s facing a 20% cut on average.”

        There could be cuts made to poor quality spending within health, education etc that frees up money to be spent on better quality spending in these areas. So, it doesn’t necessarily follow that all the cuts will be outside health, education etc.

        • nzfp 12.1.1.1

          ts “Its probably a nice to have thing rather than a necessity” well we could look at the example Franklin Delano Roosefelt set with the “Emergency Relief Appropriation Act of 1935” which included “Arts Stimulus Funding” during the Great Depression where:

          The project employed more than 5,000 artists at its peak in 1936 and probably double that number over the eight years of its existence. It produced 2,566 murals, more than 100,000 easel paintings, about 17,700 sculptures, nearly 300,000 fine prints, and about 22,000 plates for the Index of American Design, along with innumerable posters and objects of craft

          • Murray 12.1.1.1.1

            Im sure that would have been great comfort to the dispossessed and starving during the great depression

        • Zaphod Beeblebrox 12.1.1.2

          Then again tax cuts to people earning over $70K may be considered pretty poor quality cuts to expenditure don’t you think?

          • felix 12.1.1.2.1

            Yep. You might even say it’s “probably a nice to have thing rather than a necessity”.

            • Pascal's bookie 12.1.1.2.1.1

              Yep.

              Funny. the other day smitty was agreeing with me that govts shouldn’t tell bullshit about how they are going to pay for their polices.

              And yet, here he is running the exact line we were using as an example of the bullshit that people oughtn’t oughta use.

              Smister: What’s this arts funding that you are talking about? English is talking about the thick end of 2billion dollars.

  13. nzfp 13

    Hey guys,
    I believe it is better to consider and discuss what our Government “should” be doing so that we can demand they “do” it tomorrow (figuratively). While it is constructive to analyse what the “are” doing it is also reactive and leaves us feeling as if we are chasing our tails.

    What do you think should be done?
    How do you think we should demand that it be done?

    • luva 13.1

      “What do you think should be done?
      How do you think we should demand that it be done?”

      Good questions to which I do not have the answer. But as I have said below there is only one show in town at the moment with John Key as the main character. Until Labour offers some alternative answers to the big questions I do not see things changing.

      If there is going to be a credible alternative to this government we need to begin hearing and seeing plans for the future now. I do not buy the line that it is too early for Labour to be showing their hand. It is not too early. If the comments here are to be believed the Nats want to push a hard right agenda in the future. Therfore there should be no risk of policy theft from a centre left alternative offerd up by Labour.

      It is very very easy to oppose everything because improvements can always be made. But unless that opposition is made in conjuction with a real alternative then it falls on deaf ears. Same as these mindless attacks on a very popular leader. Nobody will listen unless a credible alternative is offered.

      I vote National because there is no alternative. Andrew Little cannot enter Parliament quick enough. Put him in Andertons seat now.

      • Pete 13.1.1

        Thanks luva for that thoughtful post.

        Though I don’t support National, I agree that ‘Middle New Zealanders’ won’t listen to reason until a credible alternative is offered.

        However, I see three roadblocks to this at the moment (IMHO):
        1. Labour do not use the media as effectively as National
        2. Phil Goff is not a charismatic leader (despite what he believes and publicly states)
        3. We don’t often know what Labour stand for, though they do advise what they stand against – if only occasionally (they may do it more often, but this will be circumvented by point 1).

        Also, the NZ public is still being constantly fed lines by the government (supported by the media) that Labour mismanaged NZ over their last three terms. Where there are real abberations these need to be defended emphatically in the House and in the media – Labour needs to stop being so coy.

        In the meantime I’ll continue reading up on what I can from all ends of the spectrum and support the party that I feel most represents my interests and concerns (at the moment neither National or Labour – and certainly not any government support parties).

      • HitchensFan 13.1.2

        “Andrew Little cannot enter Parliament quick enough. Put him in Andertons seat now.”

        Hear hear. The Nats will swan in next year if this doesn’t happen. The great unwashed need a real alternative and it ain’t there at the moment.

        (I’m not speaking personally, I will always vote Labour no matter who is at the helm. I’m referring to the majority of Kiwis who couldn’t give a fat rat’s arse about detail and voted for Key cos he had a “nice face” and they “needed a change”)

  14. If the frontline public service workers have already been shafted and theres no fat there to be cut, then surely doesn’t that just leave the middle management bureaucrats heads on the block ?

    Much like the private sector wanting to increase profits and make savings by eliminating ‘irrelevent’ deadweight as in Telecom unloading 200 middle managers.

    And wouldn’t these managers in the public service be the very same ones on higher end salaries ? The supposed ‘rich pricks’ who would benefit most from the tax cuts they will now probably miss out on ?

    Bet they feel betrayed in voting Key in now or maybe they’re mostly entrenched Labourites from Aunty Helen’s reign in which case it’s a purge and they should have seen the writing on the wall ?

    I think mainstream NZ are gonna swallow this one wholesale cos hell, reprioritising health and education is a hearts and minds winner over paying paper shufflers in Welli on exorbitant salaries in what most would consider jobs for life for the boys and girls who faithfully toe the party line.

    it is afterall just indicative of the tough economic times…isn’t it ?

    • Pascal's bookie 14.1

      Na.

      What ya do is cut the funding and then the awesome power of passive voice will require that cuts to services will eventually happen.

      Won’t happen all at once, and the passive voice thing means it isn’t the govt what done it, and it’s all vewy quiet with no big announcements. People eventually start to notice that the services suck harder than usual. Which is when you blame ‘socialism’, demand tax cuts to pay for private services, rinse and repeat.

      After that wears off, and the deficit blows out, and the kiddies are turning up with third world diseases from the overcrowding and the lack of primary health care, then the left wins an election and raises the taxes, rinse and repeat.

      Pitchforks and tumbrils may be thing for breaking this cycle.

      • handle 14.1.1

        That process of quiet cuts started some time ago through mechanisms like narrowed statements of intent alongside strangled funding. Cuts to aged home care services were not announced by the Minister’s office, were they? What’s the bet they get used to justify slashing and merging district health boards to make them more “efficient”.

        • Pascal's bookie 14.1.1.1

          I seem to remember too, that one of the first things the govt did on finding themselves in office was to get the various public sector CEO’s to identify something along the lines of the ‘least performing 10% of their spending’.

          Which will now, no doubt, be transmogrified into “low value spending” which is obviously wasteful and which it would be reckless not to cut.

  15. Bruce 15

    I just cannot believe the sacrifices some people are prepared to make to acquire such a small increase of income through a tax cut.

  16. tc 16

    Australia awaits…….that’s what they meant about catching up…..you end up living there.

  17. Bruce 17

    Something has to give sooner or later. This government practically thinks it can do whatever it wants, which is not good for NZ.

  18. Fisiani 18

    23/4/10
    On Xtra today

    “The question for (Labour leader) Phil Goff is whether he still has confidence in his finance spokesman,” Mr English said.

    “The fact is that Treasury forecasts in December predicted a cash deficit of $10.1 billion in the current year to June 30.”

    It was therefore “plainly ridiculous” to say there wasn’t a debt problem.

    “We are already borrowing an average $240 million a week for the next four years,” Mr English said.

    Do the maths, borrowing about $40,000,000,000 over 4 years and redirecting not SLASHING $1.8 B is the end of the world.? Thank goodness we now have a finance minister who understands finance.

    • lprent 18.1

      It is going to be interesting to see Binglish finally answer on April 26th. But I can tell you that the $240 million is a total fabrication. The same as it was last year when he was running the same bullshit and Cunliffe pulled him up in the house about it. What English ‘forgets’ to account for is that it includes only the total debt, not the repayments of debt that were also made in that period. In other words it includes the normal debt rollover.

      The actual nett figure is something like $130-140 million per week. That is reasonably high because of the recession, and wouldn’t have been an issue if the tax cuts hadn’t taken place in 2008/9.

      If you were capable of reading accounts rather than only being able to adsorb spin, you’d know this and wouldn’t be spinning crap. Now I really don’t think that you have the capability to understand what I just said. So lets spice it up with a few insults to see if we can invigorate you into using your brain.

      Surely by now you’d have realized that Bill lies routinely about everything from his house to who runs The Standard. This is a ‘debt per week’ lie that he has been saying for most of the last year is just another. Like his attempts to recast history of economic growth over the last 9 years (because his performances in the 90’s and now look so frigging pathetic by comparison), it is incorrect. He relies on morons like Hooten and you to keep repeating the big lie, because in both cases you’re obviously incapable of reading accounts.

      Fisiani, you’re really too stupid to be capable of commenting on politics. Of course you’re in good company. Many of the MSM political commentators are in the same boat…

  19. john 19

    John Key wants an American style society here. Here’s a link about that failed society.

    http://www.globalresearch.ca/index.php?context=va&aid=18967

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  • New Zealand leadership contributes to significant progress at the WTO
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