Key’s vision: tax cuts for rich, more debt for youse

Written By: - Date published: 3:39 pm, August 3rd, 2008 - 71 comments
Categories: economy, election 2008, john key, national, slippery, tax, transport - Tags:

In a speech described by attendees as ‘more bullet points’, John Key announced to the National Party conference today that National would borrow $5 billion more over 6 years to finance infrastructure – specifically roads and the broadband ‘plan’. The money-man has dressed it up cleverly, of course. A fancy new class of ‘investment vehicle’ will be created – infrastructure bonds. Banks etc will buy these off the Government, which will use the money to build roads and then the bond holder will, over the course of several decades, make huge profits from these bonds. It’s a fancy name, but it’s the same thing – we borrow money off someone else and pay them a mint for it later on. Our public debt would increase from 20% to 22% of GDP as a result. Hundreds of millions will flow overseas every year to pay our debts, rather than being used to fund our hospitals and schools.

Key tells us this has nothing to do with tax cuts; that tax cuts would be ‘hermetically sealed’ from borrowing. If you believe that, you’ll believe anything. First, how could decisions on tax cuts be separated from borrowing? They both appear on the Government’s balance sheet – if you cut tax for the wealthy, you’re going to have to borrow more to make up the difference – or would a Finance Minister English not tell himself how much he wants to cut tax when he’s working out how much to borrow? Secondly, if those tax cuts don’t take place, we won’t have to borrow billions of dollars and spend decades paying back foreign banks. It is only because National plans such big tax cuts for upper income earners that it would have to borrow.

And let’s not forget the macro-economics. When New Zealand borrows money, the amount of money circulating in our economy inceases. But our economy is still pretty close to full capacity (unemployment remains below 4%). So, our economy cannot produce enought extra things to be bought with this extra money. Instead, the extra money floating around means that stuff starts to cost more. Borrowing is inflationary and that’s not a good thing, especially right now in New Zealand where the economy is at full tilt and inflation is already heading north of 5%.

Finally, I know I’ve said it before but is this the ambition that Key keeps promising? More roads and more debt – not even an impressive building programme pouring billions into infrastructure, just $500 million a year for more of the same. Where’s the innovative planning, the imagining of a new and better New Zealand? All we’re seeing is ‘we’ll cut your taxes and build some more roads, and we’ll pay for it all by borrowing from the Aussie banks’. 

The same old plan, with a bit more debt. No vision of a world-leading low-carbon public transport system, no cutting edge rail network ready for the reality of peak oil. Hell, even the $1.5 billion broadband ‘plan’ remains totally bereft of detail and is coming under criticism from the industry for attempting to do something that isn’t needed in the wrong way, while incidentally restoring Telecom’s monopoly. 

National is sorely lacking in a vision for New Zealand, and belief in New Zealand’s ability to be world-leading. They seem more concerned with helping the bottom lines of foreign investors.

71 comments on “Key’s vision: tax cuts for rich, more debt for youse ”

  1. Did they let you stay for the speech Steve?

  2. Yeah, just more bloody bullet points. How much new spending? For what exactly? What would the terms of the PPPs be? What about rail? What are the productivity benefits expected? How much of the extra borrowing will be to cover a structural deficit resulting from the tax cuts?

    None of the details we need to meaningfully assess this “major” announcement, as DPF puts it. Well, the implications may be major, but the actual announcement is grossly inadequate.

  3. coge 3

    This is a better plan than enduring third world style infrastructure. Look at most folk buying a house, how many ever pay cash for it? NZ needs a modern infrastructure to enable us to grow & move ahead. It will be provided in a cost effective & timely fashion.

    How do inefficient roads & traffic jams save us energy & time?
    Such improvements can be said to pay for themselves in the overall economic performance. Better than self flagellation & running around in hairshirts. Better for us all.

    One day we can look back & say “How did we ever do without this?”
    It is heartening to see National articulate a clear vision for our future.

  4. gobsmacked 4

    The MMP referendum will get the headlines (and the good reviews).

    Smart politics, empty economics.

  5. randal 5

    keys on the road to nowhere…driving along

  6. coge: “It is heartening to see National articulate a clear vision for our future.”

    What’s clear about it? If it’s so clear, tell us what exactly the money’s going to be spent on. Just roads? Which roads? Electricity infrastructure? If electricity, how does that impact on the electricity market? Anything else?

    You would think that you’d do some costings before going public with a $500 million/ year spending promise. Not National.

    Captcha: Fabian Lt

    Edit, And what Felix says at 4.22pm. Shite.

  7. Felix 7

    He’s bumpin some easy listening on the stereo.

    coge you’ve either never been to a “3rd world” country or you’re just talking shite.

  8. Kevyn 8

    Yet another me too from National. This time they haven’t bothered pretending its an original by giving it a different name. Infrastructure Bonds is what Cullen called his too. I suppose Key wants to toll AlpurtB2 and PPP the Waterview connection too.

  9. infused 9

    Hopefully they sell the rail eventually. Stupidest move ever.

  10. Draco TB 10

    This is a better plan than enduring third world style infrastructure.

    It’s the exact same plan Sir Rob Muldoon worked to. It didn’t work 30 years ago and it won’t work today. This plan is more likely to push us even further toward third world living standards because the cost will be more than we can afford.

  11. burt 11

    coge

    Look at most folk buying a house, how many ever pay cash for it?

    Exactly. The supporters of Dr. Muppet Cullen think it’s completely valid to use taxation on current tax payers to fund things that last for generations. Roads that last 150-200 years paid for by current tax payers.

    I’ve been to a few third world countries, I’ve seen how in possibly all of them the govt are rich and the people are poor – a bit like looking at NZ under Labour.

  12. Talking about third world countries, aren’t our appalling child abuse statistics higher than many lesser Nations?

  13. KK 13

    you guys on the right are pathetic.

    the point of this blog concerns debt, and national’s plan to increase it – even my dead cat realises that’s not the way forward. The only reason that we came off the latest slow down comparibly unscathed was due to our surplus (I think that Spain had a comparible situation)

    Labour has actually had a masssive expansion of roading over the years – you guys obviously choose to ingore that.

    Burt – going by your inadaquate analysis, I don’t believe that you’ve been to the so-called ‘3rd world’, let alone know what it means.

    D4J – S59 mate

  14. I’ve done a bit of a summing up of my view on John Key’s 10 election pledges over at NewZBlog for those interested: http://newzblog.wordpress.com/2008/08/03/key-unveils-election-promises/

    If people are calling New Zealand 3rd world then they’ve obviously never visited a 3rd world country. Period. People think they know what 3rd world conditions are but I’m telling you now: you never will until you have actually visited one of these places. I’m sorry to link whore again but if you want to read a first hand account then have a read of the following posted during my month long trip to Vietnam earlier in the year: http://newzblog.wordpress.com/2008/02/05/third-world-new-zealand-bullshit/

  15. Quoth the Raven 15

    Talking about third world countries, aren’t our appalling child abuse statistics higher than many lesser Nations?

    This coming from a guy who was just coming out in support of the Exclusive Brethren. Good one.

    Roads that last 150-200 years paid for by current tax payers.

    Really you been driving on any 200 year old roads lately. 200 years ago when they had cars and truck aye. In 200 years time will we still be driving around cars?

  16. infused 16

    Link whore your shit eles where. You don’t even refute any points. Just your opinion. Which is fine, but don’t expect anyone to take you seriously.

  17. Draco TB 17

    The supporters of Dr. Cullen think it’s completely valid to use taxation on current tax payers to fund things that last for generations.

    That’s because it is. Remember that the current tax payers will benefit from the infrastructure as well.

  18. Kevyn 18

    So – current taxpayers should wear 100% of the cost because they’ll get 10% of the benefit? No wonder you have such a good understanding of what motivates rich pricks to ripoff the workers.

  19. RedLogix 19

    Burt,

    If you could pay cash for your home why you would ever borrow for it? The fact that the home will last many years is irrelevant.

    The only reason why individuals borrow for their homes is that the price is usually many multiples of their annual income and there is no way they can reasonably save to purchase one outright. And the cost of borrowing is enormous. By the time you have paid off a mortgage you have repaid 3-5 times over the original value of the home you purchased. (Of course with rising property prices most of us have been able to conveneiently ignore this, but the same is not necessarily true of motorways, hospitals and the like. And in case you have not noticed, the property bubble popped six months ago.)

    There is very little that a govt can spend on that it cannot actually afford out of cash flow, or short-term debt.

    The other problem with using debt to fund infrastructure is that the repayments gobble up the cash that is needed to maintain the asset. As many a local govt body has discovered to it’s cost, it’s all very well to build new water treatment plant, roads and the like, but all these assets DEMAND constant expenditure to maintain them.

    A road that is not maintained becomes useless very quickly. It may have been originally cut 50-80 years ago… but it was the grader that went over it last week, or the resealing done last year that means you can still use it.

  20. coge 20

    OK. Here is another way of looking at the situation. Anyone who has had building experiance should understand this point. Taking ALL costs & benefits into account, which is cheaper. Building now or building in ten years time? Let’s have some non-partisan opinions.

  21. chris 21

    Wow, with another round of socialised losses in the offering the scrappys will be besides themselves with glee at the prospect of another Methex or Marsden B to dismantle in the years to come.

  22. Draco TB 22

    So – current taxpayers should wear 100% of the cost because they’ll get 10% of the benefit?

    The purpose of building infrastructure is to increase the productivity of the country. Paying interest (long term) and inflation (short term) on the infrastructure will cancel out those productivity increases if not throw them into the negative. What this means is that present taxpayers will pay almost nothing of the costs and get the bulk of the benefits (increased productivity now) while later taxpayers will pay the bulk of the costs and get almost no benefit (productivity remains stable).

  23. lprent 23

    coge: You missed one really important point – Risk.

    Right now building roads is a very risky investment, and is likely to be even more risky as the cheaper extraction cost hydrocarbon reserves are exhausted.

    Factor that into the NPV’s benefit side. Face it – the Nats look into the past and refuse to look into the future. In this case they’re repeating the same logic that invented “Think Big” (now known as “Fuckup Bigtime”).

    Why is it that the Nat’s keep wanting to spend money that they don’t have and pass the costs off to other people…

  24. Dan 24

    Fascinating comment on the news just now from Key. He promised to resign both as PM and as MP if superannuitant allowances were cut from his promised levels. Surely all his promises indicate policy platforms for the Nats.
    In other words, all his other promises are not worth the paper they are written on. Promise everything, deliver nothing.

  25. RedLogix 25

    coge,

    You build when you can afford to do so.

    For instance. I personally own five properties. I would like to have built another two about six years ago, but I’ve had to wait until very recently before I had sufficient and conservative equity so that could access new funding at a reasonable price.

    If you imagine that it is always cheaper to built today than in 10 years time, then ipso facto everyone would build today. But they don’t.

    People cut their suit to the measure of their cloth.

    The critical thing about debt is serviceability. There is no problem with debt as long as the asset I have borrowed for is productive AND I can access the resulting cash flow, AND the whole exercise eventually yields a return commensurate with the risk involved.

    But Key would have us believe that he can similtaneously increase our govt debt obligations AND reduce the govts ability to service that debt by reducing taxes. It’s magical thinking.

    It is a swindle. Until just hours ago Key was still telling interviewers that “National will not increase borrowing to pay for tax cuts”. Those were his exact words. I’ve heard him state this a number of times and his meaning was absolutely unequivocal. He was plainly answering these questions in a manner that conveyed ‘no more borrowing’to his listeners.

    At their conference this weekend the Nats announce that they will be increasing borrowing.

    Key has been lying. There is no wriggle room on this.

    The idea that he can somehow ‘ring-fence’ tax cuts and borrowing on infrastructure expenditure is a plain nonsense as anyone who has ever run a household budget knows. At the end of the day it is all the same pot of money.

    And if he has lied about something as plain as this, why the hell would any of you believe anything else he has said.

  26. “At the end of the day it is all the same pot of money.”

    My Maori mate says the same thing when he gives the pokies a nudge.Monty Burns is my father.

  27. Quoth the Raven 27

    You know what I love this little gem from Bernard Hickey about Labour’s budget awhile back:
    Whatever happened to their mantra that they wouldn’t pay for tax cuts by running up debts? Their (quite powerful) argument that it wasn’t right for National to pay for tax cuts with debt is now dead as the proverbial. Their rebuttal that the debt is only paying for infrastructure is, strictly speaking, true, but debt wouldn’t have to be raised without the tax cuts. There’s no getting away from this. They are raiding the Reserve Bank’s cookie jar and borrowing from foreigners for an irresponsible spending and tax cutting budget.

    I wonder if Hickey will be criticising National’s plan or if the sad little sycophant will have nothing to say.

  28. randal 28

    key is not the new man. he doesnt have a vision. sounds trite but it is true. he only wants the money. NOW. he gets his upfront. we have to pay it off for him. there is no short term gain at the moment and we are already positioned so butt out.

  29. burt 29

    RedLogix

    If you could pay cash for your home why you would ever borrow for it? The fact that the home will last many years is irrelevant.

    If you could pay cash for your house while the builders were paid buttons you would be called a rich prick exploiting workers. If the govt can pay cash for roads while people are struggling to put petrol in their cars to use them then the govt should be called a rich prick exploiting the tax payers.

    You also completely ignore the realities of capital, the position the govt have with that capital and the means of funding maintenance. The govt are the landlords of this country, we (you and I and other currently living people) are the current tenants.

    If I were a land lord (residential property) and I expected a sitting tenant to fund the additional bedroom I wanted to add because they had a use for it I would be called a scum landlord. If I put their rent up slightly after I had build it (ie: Collected more maintenance and capital funding revenue) then I would be being fair to the current tenant.

    If you can justify a house owner charging the current tenant for extensions to the house then perhaps you could justify the govt using cash to fund long term infrastructure. Long term infrastructure that we as the funders do not own or get anywhere near value for money from due to our short tenure as a tenant of this country compared to their effective life.

    Sure if the people of NZ are happy to fund it all today via taxes and that is an election issue then the choice is that of the voters. Do you think most people understand the capital funding realities or do you think the buy into or out of the “John Key will plunge us into debt BS” ?

  30. gobsmacked 30

    Quoth the Raven

    Very true. In fact, we could quote just about every right-wing pundit, politician, professor that has ever drawn breath … all denouncing the reckless, irresponsible left for their borrow n’ spend wickedness.

    Let’s face it, John Key gets a free pass on this because

    1) He isn’t Helen Clark
    2) He isn’t Michael Cullen
    3) Um … that’s it.

    Still, I must admit that watching the cheerleaders do the semantic gymnastics is very entertaining. It’s going to be a fun campaign.

  31. coge 31

    Iprent, what about the risk of not building safe & efficient roads?
    Lack of hydrocarbon reserves or not (in my opinion not) roads will still be used. Unless you have a teleportation machine in your garage they will always be needed. They are convenient & people like to use them. It’s been that way for hundreds of years. Same for the forseeable future, unless we repair to the caves. Even then quality foot tracks will still be required.

    Redlogix, it looks as if we are in the same business. Talk to any accountant or valuer, & there are a myriad of ways to cost up virtually any activity. In the end they are all opinions. So we must agree to disagree, or we could debate this for hours & still not get anywhere.

  32. randal 32

    yeah well take a hike and I’ll finish it off…ok?

  33. RedLogix 33

    Burt,

    I’ve seen some confused analogies before burt, but that one takes the cake.

    The govt is not analogous to a landlord. A far better analogy is the idea of a collective in which all citizens have an interest.

    But just to humour you.

    Right now we have the tenant demanding demanding a new bedroom, demanding a new kitchen next year, demanding a lower rent, AND demanding that the NEXT tenant pay for it all.

  34. RedLogix 34

    Talk to any accountant or valuer, & there are a myriad of ways to cost up virtually any activity. In the end they are all opinions. So we must agree to disagree, or we could debate this for hours & still not get anywhere.

    Yes I can fully agree with that.

    In one of my fantasy worlds I would have borrowed ten’s of millions of dollars and built 100’s of rental units 30 years ago, because one view is that it would have been so much cheaper to build back then.

    But if I had done that I would have likely gone broke trying to service the cash flow. Or even if I had been prepared to take on the risk, I would have struggled to find an affordable funder who would.

    Which is why your original question, although a good one, is very hard to answer because there are so many different paths through it and so many ways to evaluate the potential risks of any given scenario.

  35. Nomestradamus 35

    Pop quiz for “Steve Pierson”:

    One of the great features of Infrastructure Bonds is their transparency. New Zealanders will be able to readily see how borrowed funds are being used for key State Highway projects.

    Who said that, and when?

  36. burt 36

    RedLogix

    But just to humour you.

    Right now we have the tenant demanding demanding a new bedroom, demanding a new kitchen next year, demanding a lower rent, AND demanding that the NEXT tenant pay for it all.

    Then they are being unreasonable, I guess it’s probably because some muppets have told them that it’s got noting to do with capital and it’s all about a point of difference between Labour and National policy and naturally National are bad eh.

    How are the hospital waiting lists looking while we spend todays cash on new roads for our great grand children to enjoy?

    And you seem to have missed this question;

    Sure if the people of NZ are happy to fund it all today via taxes and that is an election issue then the choice is that of the voters.

    Do you think most people understand the capital funding realities or do you think the buy into or out of the “John Key will plunge us into debt BS’ ?

  37. RedLogix 37

    Burt,

    Actually our great grandchildren do not get to enjoy it. They get to maintain it. As all developed nations have discovered it’s one thing to build something, it’s another to be able to afford to keep it going.

    How much easier if great-grand-dad hadn’t saddled you up to the eyeballs in debt.

    But you miss completely the point yourself.

    It is one thing to do a one off increase in debt to fund an asset. As long as the debt serviceability is ok, the cash flow is positive (ie the govt is getting an increased income as a result) and the risk is acceptable … then hell go for it.

    But Key is ALSO promising to cut taxes that will put the govt into deficit and require more debt to fund year on year.

    This is exactly the same mistake New Zealand made in the 70’s and 80’s. Because the govt is in deficit every year, the debt increases every year, and the interest bill increases every year. (And all interest rates rise every year because the market perceives our risk profile as being poorer.) It is a very easy to get into debt; much harder to get out of.

    And in case you hadn’t noticed we are in the middle of a global fiscal crisis that is making ANY credit exceedingly expensive.

  38. burt 38

    RedLogix

    A better analogy of the govt are that they are the trustees of the ‘asset’ that is NZ. We the people elect them to run the trust in our collective best interest.

    We don’t elect them to take ideological stances and do shit without fully explaining the cost and benefits associated with each of several options.

    As Nomestradamus points out to the ever balanced and open minded Steve P. If [xyz] policy was good under Labour, why is it bad under National?

    Steve P and yourself might also want to reflect for a moment on how the proposed tunnel under the PM’s electorate was being talked about regards funding.

    Yes credit is expensive now, buying a house is expensive now. But it won’t be for long will it. How shortsighted is not planning to borrow now because interest rates are high and credit is tight when it’s just part of a cycle that the funding of the asset will endure in a randomly/cyclical nature over it’s life. It’s justifying it on high interest rates as a bad idea rather than bad timing that is the BS.

  39. RedLogix 39

    Burt,

    As Nomestradamus points out to the ever balanced and open minded Steve P. If [xyz] policy was good under Labour, why is it bad under National?

    Policy 1. Borrow a prudent amount that can be serviced out of current cash flow.

    Policy 2. Borrow a reckless amount that requires going into more debt to service it, AND substantially reduce your income at the same time.

    Yes you might call both policies ‘borrowing money’, but only a fool could not spot the difference.

    Do I have to keep spelling out the incredibly obvious here?

    And if you are betting that the current fiscal crisis is going to be short-lived you are a much braver man than most pundits.

  40. Nomestradamus 40

    Redlogix:

    Let me assist you here:

    Budget 2006 provided for up to $1 billion of bonds to be issued over the next five years to accelerate land transport improvements.

    “One of the great features of Infrastructure Bonds is their transparency. New Zealanders will be able to readily see how borrowed funds are being used for key State Highway projects.

    “We are investing $13.4 billion over the next five years, $300 million more than we will receive by way of petrol excise duties, road user charges and motor vehicle registration fees.

    “The Labour-led government regards transport investment as a key part of its strategy to transform the economy,” Dr Cullen concluded.

    Is this what you call “[b]orrow[ing] a prudent amount that can be serviced out of current cash flow”?

  41. lprent 41

    coge: Do a study running on different assumptions about the future of personal transport. Hell I’m not even a green and I can see the problems with building more roads at this point. They just don’t make any kind of economic sense bearing in mind the risks on the fuel issues.

    I suspect I’d have a better-based opinion about oil and its possible substitutes than you. Geology, science, and management background plus all of those interesting courses on economics. The alternate reserves and substitutes are available, but they are going to be far more expensive.

    I’d say that the minor prices increases in the 70’s and current show quite a price sensitivity by both governments and consumers about fuel costs. What are you going to fill the roads with? People spending quarter of their income on fuel – or just the rich?

    If I’m correct, then effectively the poor without vehicles will be subsidizing the rich drivers for building and maintaining these excessive roads in 20 years. They’ll pay through excessive transport costs.

    Looks to me like the money would be better spent on rail and public transport. But as we know National are fiscally impudent and always try to build for things that have already past.

  42. Razorlight 42

    Can someone from the left please tell me what they think is a manageable level of debt. There seems to be alot of scaremongering. But really at what level does debt become a problem.

    We are not selling out the next generation if we can afford to service the debt. Not one person has explained why a 2% increase in debt will not be manageable.

    We want to be able to maintain today’s infrastructure and build more. The electorate is asking for tax cuts and both major parties are offering this. So can this happen through a small increase in debt, National are saying yes. You guys are saying no but not really explaining why we can’t afford this.

  43. RedLogix 43

    Nostredamus,

    Petrol excise duty is only one, relatively minor source of govt income. In fact roading has been subsidised by the General Fund for some years now. It really doesn’t matter how you juggle the line items, it’s the bottom line that counts.

    I personally think that it is perfectly plausible for the govt to find an extra $300m out of cash flow over a period of 13 years. That about $23m per year.

  44. Kevyn 44

    Draco TB, On the face of it that seems a good argument. Even with it’s one flaw it is still an important argument to put forward to anybody who suggests borrowing to upgrade either road or rail. Both may turn out to be inappropriate transport solutions in the not too distant future. Some of the technical developments in sail design and airship design could turn the whole freight system on it’s head very quickly if energy costs continue the price trends of the last few years. The tradition of pay-go funding for road improvements makes sense in these troubled times.

    The big question is whether a peak oil shift from road to rail can actually be funded that way too. The catch 22 is that since at least 1935 rail capital investment has been either borrowed from banks or taken from roads. In a peak oil crunch the revenue from roads that is currently being used highway capital investment will collapse as quickly as it did in the 1970’s with the result that almost all of the revenue from roads is needed merely to preserve the existing assets. Remember that maintenance of tarsealed roads and ferro-cement bridges is largely independent of light vehicle traffic loads.

    Although Mallard has stated that the rail upgrades will be funded from roading revenue there is nothing in the NLTP ten-year forecast to that effect.

    The one flaw in your argument is the assertion that future generations get no benefit because productivity remains stable. Of course it does remain stable, but at the improved level. Thus the benefit accrues to future generations, although that may degrade over time.

    The best documented example of this is Auckland’s inter-peak congestion which is significantly better than Christchurch’s as a direct result of building the motorways. Thus without the motoways Auckland would either not have it’s current population and not have it’s agglomeration economics due to being for independent cities instead four interdependent cities.

    Um, reading your paragraph again there is a second flaw. You assume the combination of interest and inflation will cancel out the productivity increase. Inflation on it’s own will do this even without adding interest. How long it takes to reach this equilibrium point depends on the size of the productivity increase and the rates of interest and inflation, and that determines the amount of benefit that accrues to each generation.

    This is how I think your last sentence should read (not sure about adding strikethroughs so please imagine them next to where I’ve inserted my words in square brackets – the editor doesn’t like IE8):
    What this means is that present taxpayers will pay almost nothing of the costs [agreed] and get the bulk [some or almost nothing] of the benefits (increased productivity now [when the job is finished]) while later taxpayers will pay the bulk of the costs and get <del almost no [the bulk of the] benefit (productivity remains stable).

  45. RedLogix 45

    Not one person has explained why a 2% increase in debt will not be manageable.

    Because English is lying to you.

    Cullen’s last Budget cut the govt books right to the bone, the surplus’s are gone.

    Any further tax cuts puts the govt books into deficit. Get it?

    This deficit has to be funded by borrowing. Each year and every year.

    So Bill English is lying to you when he says that their extra spending will only cost an extra 2%. Sure, that is this year. Next year he has to borrow more.

    But that year Key has promised even more tax cuts. And each year the interest bill arrives, bigger than the year before.

    More borrowing.

    Tax cuts that create a permanent structural deficit, result in accumulating debt. 2% this year, 3% the year after… and after 3, 6 or 9 years of that we are right back in the crap again.

    Only this time the crap will be deeper and a lot more toxic. The global fiscal ecosystem is nowhere near as benign as it was when we got into trouble last time.

    The alternative is the ‘drowning govt in a bathtub’ game. We’ve seen right wing govts do this over and over. They get into power promising tax cuts (but they never tell you that the cuts will only benefit a minority at the top of the tax scale), they then let the resulting debt accumulate until the bankers call it quits. In response to the crisis they to cut services and welfare that impacts the majority of people below the median income.

    And in the meantime, interest rates go through the roof and Mr Key’s real masters are doing very nicely thank you.

    If you think I am being paranoid, try Argentina for real-life example.

  46. Nomestradamus 46

    RedLogix:

    I think reasonable minds can disagree on this.

    I assume (correct me if I’m wrong) that there’s widespread agreement that major new infrastructure investment is required. So we’re talking, aren’t we, about new infrastructure projects – not about maintaining existing infrastructure from current government reserves?

    If we approach the issue on that basis, then infrastructure bonds aren’t financial wizardry – as “Steve Pierson” apparently thinks – but rather an unexceptional way to raise finance against new infrastructure projects. For that reason, they can be transparently decoupled from other government measures like tax cuts. Even Michael Cullen accepts this. And that’s before we get to public-private partnerships, which allows for various mixes of debt and equity financing.

    What we don’t yet know is how National proposes to structure major infrastructure projects – and I’ll reserve judgment until I see more specific proposals from them.

    But, as I’ve shown, Steve Pierson’s claim that “[a] fancy new class of ‘investment vehicle’ will be created – infrastructure bonds” is just laughable.

  47. Kevyn 47

    RedLogix,

    Petrol excise duty isn’t a source of govt income anymore, its been hypothecated since early July. In fact roading has been subsidising the General Fund for some decades now. The subsidy from the General Fund is essential the subsidy from road users to the Crown being returned with strings attached. LTA has to abide by the egalitarian principals enshrined in road revenue legislation ever since road revenue was introduced. The only way 40% of South Island road revenue can legally be transferred to Auckland, Welington and Tauranga is by Cabinet fiat.

    Which leads me to these three questions.
    1) Why is Canterbury’s receipt of it’s share of the hypothecated petrol tax conditional on Ecan levying a regional petrol tax?

    2) When did the Government rescind the decision to allocate the 5 cent regionally allocated petrol tax on a per capita basis?

    3) If the Government haven’t rescinded that decision then why is Canterbury’s entitlement missing from the NLTP ten-year forecast?

  48. Swampy 48

    “The same old plan, with a bit more debt. No vision of a world-leading low-carbon public transport system, no cutting edge rail network ready for the reality of peak oil.”

    Peak oil is a load of rubbish, the oil may be scarcer but there are other reserves (tar sands, coal) that can supply hundreds of years of fuel needs at comparable prices.

  49. Draco TB 49

    The one flaw in your argument is the assertion that future generations get no benefit because productivity remains stable. Of course it does remain stable, but at the improved level. Thus the benefit accrues to future generations, although that may degrade over time.

    I considered that the benefit would be there but the problem with it is that the benefit, to pay the interest, needs to grow every year. Benefits from infrastructure will grow most when they are new then slow down and finally stop or even reverse in accordance with the law of diminishing returns (Rush hour in Auckland costs the country a few billion dollars every year even though the roads have been upgraded). This means that the price of the loan will outstrip the benefit and so later taxpayers will be paying for a benefit (growth in productivity) that they no longer receive.

    You assume the combination of interest and inflation will cancel out the productivity increase. Inflation on it’s own will do this even without adding interest.

    In this part you seem to be talking about the normal inflation that comes with a growing economy whereas I’m talking about the forced inflation that comes with government deficit spending.
    As this is deficit spending the rise in inflation will be almost immediate due to the boost of money into the economy. It is this rise in inflation combined with the interest that needs to be paid at the beginning that will eat away and possibly cancel out the most productive part of the infrastructure being built.

    This and the above point make it highly improbable that infrastructure paid for through borrowing will be able to pay for itself. Throw in the fact that bonds tend to be interest only until maturity at which point the entire principal is paid making it so that later tax payers will pay the bulk of the cost of the infrastructure (assuming Nationals $3b in tax cuts and the fact that it’s entirely possible that these cuts will mean that such infrastructure will have to be mostly, if not entirely, paid for through borrowing).

  50. r0b 50

    Peak oil is a load of rubbish

    Swampy is flaunting his/her ignorance even more blatantly than usual. The nice people here can lend you a clue Swampy:
    http://www.thestandard.org.nz/?p=1423
    http://simontegg.wordpress.com/

  51. Draco TB 51

    Peak oil is a load of rubbish, the oil may be scarcer but there are other reserves (tar sands, coal) that can supply hundreds of years of fuel needs at comparable prices.

    But they can’t ramp up to the level to maintain present usage as production of conventional oil declines never mind the increased usage of years and decades to come. They’re also very dirty and cause far more damage to the environment that we depend upon to survive.

  52. Kevyn 52

    Draco TB, OK, it seems to me we’ve reached understanding, which is the most important objective of any discussion. We can probably haggle over the details till the cows come home but I think its more important that we are actually both opposed to the Nat policy for essentially the same reasons.

    I don’t suppose Key said anything about a sinking fund?

  53. Greg 53

    Most assume debt is bad – its not (well at appropriate levels anyway) the nats are borrowing to fund infrastructure that will hopefully increase GDP by more than the cost of borrowing – this is a very good thing. New Zealand does not have a debt problem! Our global competitiveness on the other hand is severely lacking.

    On the other hand I do agree that the borrowing to fund infrastructure and not tax cutsd argument is farcical. But borrowing to fund tax cuts isn’t a bad thing either – it increases incentives to work which also increase GDP and productivity.How’s labour planning to do this?

  54. Pascal's bookie 54

    “But borrowing to fund tax cuts isn’t a bad thing either – it increases incentives to work which also increase GDP and productivity”

    Greg, sounds like modern GOPenomics. How’s that working out?

  55. Greg 55

    “Greg, sounds like modern GOPenomics. How’s that working out?”

    No actually, its not. There’s a big difference. This is not unrestrained borrowing. Debt will stay at prudent levels. My point is there is often a knee jerk reaction that debt is bad, but when the costs of servicing that debt are less then the extra productivity created by it, its a very good thing.

  56. Pascal's bookie 56

    All well and good. But that wasn’t the bit I quoted. That bit seemed to me to be about the idea that tax cuts increase GDP and Productivity… just because. They do. Always. Or something.

    Which ties in to what the GOP has been selling. Laffer curve voodoo etc. that tax cuts pay for themselves and “Reagan proved deficits don’t matter” etc.

    But as you were, if that’s not what you mean, fine. I’ll wait to see what infrastructure they are talking about though, ’cause at the moment it just sounds like a promise to cut taxes at no cost.

    “… but when the costs of servicing that debt are less then the extra productivity created by it, its a very good thing.”

    This is obviously true, but what politician would say that their debt plan wouldn’t fit within it. What they say isn’t what counts. That’s how we got in trouble in the first place.

  57. burt 57

    DPF has a post here Clark and Cullen on Debt, which might help add some balance to the debt issues. It’s worth reading.

    I like this quote from Dr. Muppet Cullen.

    “The previous government had established a 30 percent of GDP target when the Fiscal Responsibility Act was passed in 1994, and had reduced it to 25 percent in 1999. When we came into office that year we made the judgement that the Crown finances and the state of the economy could not sustain that lower target, so we restored it to 30 percent of GDP.’ – Michael Cullen 18 May, 2004, Speech to Chen Palmer & Partners Business and Government Seminar

    Guess all that extra tax take had to be spent somewhere where it couldn’t create further inflationary pressure and now that it’s been spent on debt to the detriment of hospital waiting lists etc the Labour-led govt need to defend their actions.

  58. Andrew 58

    To quote kiwiblog. some nice little quotes from Helen and Micheal have surfaced. kinda kills this whole argument really.

    First Dr Cullen:

    “The previous government had established a 30 percent of GDP target when the Fiscal Responsibility Act was passed in 1994, and had reduced it to 25 percent in 1999. When we came into office that year we made the judgement that the Crown finances and the state of the economy could not sustain that lower target, so we restored it to 30 percent of GDP.’ – Michael Cullen 18 May, 2004, Speech to Chen Palmer & Partners Business and Government Seminar

    So National had a target of 25%, and Labour increased it to 30%. yet now they are saying 22% is lunacy and madness.

    And now Miss Clark:

    All these quotes are from 1994, when debt was in excess of 50% of GDP!!’

    “I am pleased that economic growth has produced enough tax revenue to declare a surplus and repay debt. But I am appalled at the rate at which debt repayment is occurring at the expense of families, and schools and other essential social and public services.’ – Helen Clark (July 1994) Speech Auckland Labour Regional Conference

    “The Government is putting an undue emphasis on debt repayment at the expense of our failing services and infrastructure in New Zealand,’ – Helen Clark (June 1994) Opening address to the Massey University Winter Lecture Series.

    “We agree that we should be aiming to ensure that the ratio of debt to GDP in New Zealand is not out of line with other smaller industrialised countries. But Labour does not accept that having the smallest debt to GDP ratio in the OECD is an important goal. Nor do we believe that reducing our debt quickly should take precedence over improving the living standard,’ – Helen Clark (July 1994) Speech to Northern South Island Labour Regional Conference.

    “At Budget time our net public debt was equivalent to 42 per cent of GDP – down from 48 per cent a year earlier Given those figures, it is hard to believe that the international credit rating agencies with which the Government is so besotted can have any real concern at our current level of debt,’ – Helen Clark (June 1994) Waikato Labour Regional Conference.

    “The Government is obsessed with debt reduction over all other needs for spending,’ – Helen Clark (July 1994) Speech to Wellington Labour Regional Conference.

    So when gross debt was over 50% of GDP, Clark time and time again attacked reducing that level of debt, and specifically advocated investing money into infrastructure instead.

    I trust we will hear no more hysteria from Helen or Michael on a gross debt setting of 22% of GDP!

  59. burt 59

    I can see why a govt would concentrate on reducing debt. It’s a bloody easy thing to do if you have a surplus. It readies you for more borrowing when you finally need to act and it’s popular.

    Well… Not this Labour govt. If this Labour govt were prepared to borrow to finance major infrastructure projects rather than fund them out of current over taxation revenue then it would not criticise it’s opposition when the opposition said it was going to do that. Unless the Labour party are completely hollow and popularism is their only objective, the Labour party have no option but to enter the election with all policy carrots (bribes, incentives, winning ideas – call them WTF you like) funded on higher taxation.

    Good luck guys, you have already cut taxes, you say you won’t cut govt spending and you say you won’t borrow. It’s quite a corner chasing the opinion polls has painted you into.

  60. Andrew 60

    Cullen has already agreed to increase debt from 18% to 20% after the last budget! Where were Helen’s cries of anguish then?

    The left say that National will say anything to get into power, quite rightly so. They wont just say anything, but they have to appeal to the masses in order to get into power. But Labour will say anything to stay in power. It’s power that Helen craves, not to serve the people of New Zealand!

  61. Felix 61

    Clue: National aren’t going to borrow for infrastructure – surely you haven’t actually fallen for that line burt?

    You remind me of an old flatmate from a few years ago who had a bit of a gambling problem. He asked (for the umpteenth time) for a loan one day and I took him aside and told him his gambling was out of control if he was borrowing money for it. He agreed, but explained that he didn’t need money for the pokies – just to buy groceries. Of course he’d already gambled his budgeted food money.

    We ended up having to boot him out to cut our losses as he owed quite a bit of money for bills and rent. I expect that’s what’ll happen to Key too if he ever finds enough greedy fools to vote for him.

  62. burt 62

    Felix

    We ended up having to boot him out to cut our losses as he owed quite a bit of money for bills and rent.

    You capitalist pig, as soon as he was costing you money you turned on him and sent him off down the path of homelessness. Shame on you not being prepared to spend your own money looking after the needy in society.

  63. Andrew 63

    Its really not that hard to understand. Tax cuts will be funded by cutting excessive spending and govornment waste brought about by the labour govornment and it’s 9 years of riding a wave of econimic prosperity.

    Big infrastructure projects will be part funded by increased borrowing. Labour has done it, National are going to do it, what’s the problem? Helen herself said that borrowing for infrastructure is not a bad thing!!

    All businesses do it. You may as well borrow to get things done, and then pay it back when the economy is doing better and there is more of a surplus to spend on debt reduction.

  64. Draco TB 64

    Ah, Andrew – there’s nothing in what either Dr. Cullen or HC said that is inconsistent with what they’re saying today. In the 1990s living standards were dropping considerably and their positions reflect that living standards were a primary concern with debt coming secondary. This is reflected in their move in 1999 to shift the accepted debt level to 30% from 25% but then as living standards and surpluses increased, to drop that debt level. They’re saying the same thing today and being consistent within their values ie, maintaining living standards and living standards while keeping debt low. The issue with Nationals tax cuts and spending increases are that they go too far and are irresponsible.

    The left say that National will say anything to get into power, quite rightly so.

    No, lying to get into power is not right no matter how you dress it up.

  65. burt 65

    Andrew

    Home owners do it to.

  66. burt 66

    Draco TB

    In the 1990s living standards were dropping considerably and their positions reflect that living standards were a primary concern with debt coming secondary.

    So what’s different in a recession with soaring fuel prices, soaring food prices and the highest interest rates in the OECD?

    Let me guess, It’s National suggesting it not Labour?

    How’s that corner looking, talking about debt as a priority before falling living standards when Labour have been screeching at National for wanting to move it at all paints the corner a bit tighter.

  67. Andrew 67

    “there’s nothing in what either Dr. Cullen or HC said that is inconsistent with what they’re saying today”

    Really? So when HC says that it’s lunacy to increase debt from 20% – 22% of GDP, that is consistent with raising debt levels from 18% – 20% after the last budjet?

    Rather inconsistent i would have thought.

    “In the 1990s living standards were dropping considerably and their positions reflect that living standards were a primary concern with debt coming secondary”

    Ummmmmm …. have you opened your eyes lately? We are in a resession dont you know!

    “No, lying to get into power is not right no matter how you dress it up”

    Just who in fact is lying? National are not lying, they have said they will not sell anything in their first term and then will go to the people to see what they think about certain things that may be sold, or part privatised.

  68. Kevyn 68

    Draco TB, Having argued in favour of infrastructure I now find there are some hooks that even you didn’t mention. They have created yet another fiscal crisis for the NY subway system.
    “MTA’s problems stem from state budget cuts in 1995 that reduced state subsidies and forced MTA to finance improvements by issuing $10 billion in new bonds. According to MTA’s budget, those bonds along with existing debt means that MTA is spending $1.6 billion this year in debt service alone.”

    http://www.nydailynews.com/ny_local/2008/07/23/2008-07-23_why_we_need_corn_in_subways.html

  69. ron 69

    “People who make under $80,000 are too stupid to understand taxes anyway.’ John McCain

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    The revitalisation of Auckland city centre, especially around Wynyard Quarter, Te Komititanga, and Queen Street, is top of mind for Greater Auckland readers – but other cities around Aotearoa New Zealandare installing people-friendly streets. This guest post by Jessica de Heij, who grew up in the Netherlands and is an ...
    Greater AucklandBy Guest Post
    5 days ago
  • Bernard's Pick 'n' Mix for Thursday, July 11
    TL;DR: My pick of the top six links elsewhere around housing, climate and poverty in Aotearoa’s political economy in the last day or so to 7:30 am on July 11 are:Scoop: NZ First Minister acted 'contrary to law’. Casey Costello has been severely reprimanded by the Chief Ombudsman and forced ...
    The KakaBy Bernard Hickey
    5 days ago
  • The Kākā’s Journal of Record for Thursday, July 11
    TL;DR: The top six announcements, rulings, reports, surveys, statistics and research around housing, climate and poverty in Aotearoa’s political economy in the day to 6:00 am on Thursday, July 11 are:Economy: Te Pūtea Matua The Reserve Bank of New Zealand (RBNZ) announced its Monetary Policy Committee decided to hold the ...
    The KakaBy Bernard Hickey
    5 days ago
  • Farmers’ revenge meets Green resistance
    If there was one issue that united farmers in opposition to the Labour Government, it was the battle of the waterways between farmers and Environment Minister David Parker. Parker won the first round with his 2020 National Policy Standard on Freshwater Management (NPSFM) which imposed tough new standards on waterways ...
    PolitikBy Richard Harman
    5 days ago
  • Personal Reflections: 10th July
    Please note: This is a personal reflection and does not refer to politics. These entries are not sent to subscribers.Text within this block will maintain its original spacing when publishedHubris and Pride Out of the fire and into the frying pan? Swimming with the big sharks Tonight, I am excited. ...
    Mountain TuiBy Mountain Tui
    5 days ago
  • Oh Vienna
    Nothing can warm your heart like the sight of your daughter stepping off a train. Mary-Margaret arrived on Saturday to ride with us to Vienna.You know your way around a bike? the guy at the hire shop asks her. Yep. She’s ridden them on rail trails, Auckland’s mean streets, commutes ...
    More Than A FeildingBy David Slack
    5 days ago
  • Geoffrey Miller: New Zealand forges deeper ties with NATO
    Christopher Luxon is finding his foreign policy feet. Now eight months into the job, New Zealand’s Prime Minister is in Washington DC this week to attend the NATO summit. It is the third year in a row that Wellington has been invited to the annual gathering of the North Atlantic ...
    Democracy ProjectBy Geoffrey Miller
    5 days ago
  • Climate Change: National’s carbon capture fantasy
    As the climate crisis has grown worse, the tactics of the polluting industries have shifted. From denying climate change, they then moved on to pushing "carbon capture" - dumping their emissions underground rather than in the atmosphere. It's a PR scam, intended to prolong the life of the industry we ...
    No Right TurnBy Idiot/Savant
    5 days ago
  • Harsh Truths.
    The Way We Were: An indelible mark was left upon a whole generation of New Zealanders by the Great Depression and World War II; an impression that not only permitted men and women of all classes and races to perceive the need to work together for the common good, but also ...
    5 days ago
  • Explainer: Simeon Brown's CCUS Announcement
    Sources for the data and research:Peter Milne: Time’s up on Gorgon’s five years of carbon storage failureSimon Holmes a Court: "Does best CCS power station in world provide model for Australia?" Chris Vanderstock: "The truth about Carbon Capture and Storage"   "Sunk Costs": documenting CCS's failure to meet every, single, target, ...
    Mountain TuiBy Mountain Tui
    5 days ago
  • The Kiwirail Interislander saga continues
    This morning, 1 News is reporting that the cancellation of the i-Rex ferries has so far cost taxpayers $484 million.That's almost half a billion dollars. That could probably fund thousands of new doctors, maybe complete a few hospital rebuilds, or how about money for our experienced police so they don’t ...
    Mountain TuiBy Mountain Tui
    5 days ago
  • Bernard’s Chorus for Wednesday, July 10
    As foreshadowed in legislation passed quietly under urgency just before Christmas, the Transport Minister has personally watered down standards for car imports in a way expected to add millions of tonnes to our climate emissions Photo: Lynn Grieveson / The KākāTL;DR: My top six things to note around housing, climate ...
    The KakaBy Bernard Hickey
    5 days ago
  • Christopher Luxon's business acumen
    It’s April, and the relatively new Prime Minister of New Zealand is on his first overseas mission to South East Asia.Christopher Luxon walks into the room. A warm smile on his face. A hand extended to his counterpart.“We are open for business,” he says confidently. “New Zealand is under new ...
    Mountain TuiBy Mountain Tui
    6 days ago
  • Meet New Zealand's Russell Brand?
    Hi,There is an all too common story within the guru community, and we see it play out again and again. The end is nearly always the same — a trail of victims and confusion left in the guru’s wake.As seen in the recent case of Russell Brand, the guru simply ...
    David FarrierBy David Farrier
    6 days ago
  • Why is the Government flooring it on unsafe speeds?
    Feedback closes midnight Thursday 11 July, on the draft speed-setting rule. See our previous post on the subject for details, and guidance on having your say. Among other things, it proposes to raise speeds in cities back up to a universal 50km/h (with no option of 30km/h), and will restrict safe ...
    Greater AucklandBy Greater Auckland
    6 days ago
  • American Boy
    Take me on a trip, I'd like to go some dayTake me to New York, I'd love to see LAI really want to come kick it with youYou'll be my American boy…Love letters straight from the heart. Hmm, I think that’s a different tune, but that’s where we’ll begin. With ...
    Nick’s KōreroBy Nick Rockel
    6 days ago
  • Bernard's Pick 'n' Mix for Wednesday, July 10
    Photo by Jannis Brandt on UnsplashTL;DR: My pick of the top six links elsewhere around housing, climate and poverty in Aotearoa’s political economy in the last day or so to 7:00 am are:Investigation: Benefitting from the misery of others. Over 40% of emergency housing funding went to a concentrated group ...
    The KakaBy Bernard Hickey
    6 days ago
  • The Kākā’s Journal of Record for Wednesday, July 10
    Photo by Mr Cup / Fabien Barral on UnsplashTL;DR: The top six announcements, reports and research around housing, climate and poverty in Aotearoa’s political economy in the day to 6:30 am on Wednesday, July 10 are:Climate: Minister for Transport Simeon Brown announced changes to the Clean Car Importer Standard that ...
    The KakaBy Bernard Hickey
    6 days ago
  • How rural families are saving thousands with electric vehicles
    This is a re-post from Yale Climate Connections by Daisy Simmons (Photo credit: Automotive Rhythms / CC BY-NC 2.0) Some people thought Juliana Dockery and her husband Sean were being impractical when they bought an electric vehicle in 2022. Why? Like one in five Americans, they live in a rural area ...
    6 days ago
  • Love to complete it all
    Photo credit: Rob DickinsonThis is my wish for you: Comfort on difficult days, smiles when sadness intrudes, rainbows to follow the clouds, laughter to kiss your lips, sunsets to warm your heart, hugs when spirits sag, beauty for your eyes to see, friendships to brighten your being, faith so that ...
    Mountain TuiBy Mountain Tui
    6 days ago
  • Climate Change: What’s left of the Emissions Reduction Plan?
    In 2019, Parliament, in a supposed bipartisan consensus, passed the Zero Carbon Act. The Act established long-term emissions reduction targets, and a cycle of five-yearly budgets and emissions reduction plans to meet them, with monitoring by the independent Climate Change Commission. In theory this was meant to ensure that the ...
    No Right TurnBy Idiot/Savant
    6 days ago
  • The President They Have Got.
    “This cannot be real life!” Confronted with the choice of recommitting themselves to the myth of Joe Biden, or believing the evidence of their own eyes, those Americans not already committed to Donald Trump will reach out instinctively for the President they wish they had – blind to the President they ...
    6 days ago
  • Has Progressivism Peaked?
    Let’s Go Crazy! AOC (Alexandria Ocasio-Cortez) rarks-up the voters of New York’s 16th Congressional District.HAVE WE MOVED past peak progressivism? Across the planet, there are signs that the surge of support for left-wing causes and personalities, exemplified by the election of the democratic socialist Alexandria Ocasio Cortez (AOC) to the US House ...
    6 days ago
  • The Kākā’s Dawn Chorus for July 9
    TL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy in the last day are:Labour may be looking at signing up for an Irish style 33% inheritance tax instead of or as well as a capital gains tax;Sam Stubbs has proposed the Government sell ...
    The KakaBy Bernard Hickey
    6 days ago
  • Mr Luxon goes to Washington.
    Once fastened servile now your getting sharpMoving oh so swiftly with such disarmI pulled the covers over him shoulda' pulled the alarmTurned to my nemesis a fool no fucking godTuesday morning usually provides something to write about with a regular round of interviews for the Prime Minister across Newshub, TVNZ, ...
    Nick’s KōreroBy Nick Rockel
    6 days ago
  • Kiwirail at Councils Transport & Infrastructure Committee
    Last week at the Council’s Transport and Infrastructure Committee, Kiwirail gave an update about the state of the network and the work they’re doing to get it ready for the opening of the City Rail Link. There were a few aspects that stood out to me so I’ve pulled them ...
    Greater AucklandBy Greater Auckland
    7 days ago
  • Bernard's Pick 'n' Mix for Tuesday, July 9
    Photo by City Church Christchurch on UnsplashTL;DR: The top six links elsewhere I’ve spotted around housing, climate and poverty in Aotearoa’s political economy in the last day to 8:00 am are:Scoop: Waipareira Trust political donations probe referred to Charities Registration Board NZ Herald-$$$’s Matt NippertScoop: Migrant whistleblowers speak out after ...
    The KakaBy Bernard Hickey
    7 days ago
  • What’s next after Supreme Court curbs regulatory power: More focus on laws’ wording, less on the...
    This article by Robin Kundis Craig, Professor of Law, University of Kansas is republished from The Conversation under a Creative Commons license. Read the original article. Federal Chevron deference is dead. On June 28, 2024, in a 6-3 vote, the Supreme Court overturned the 40-year-old legal tenet that when a federal ...
    7 days ago
  • The folly of retreat in the face of defeat
    Note: This is a long readPolitical discourse on social media taught me that bad faith operators and tactics are not only prevalent, they are widespread and effective.Thanks for reading Mountain Tui! Subscribe for free to receive new posts and support my work.Their objectives are much narrower than one might imagine.The ...
    Mountain TuiBy Mountain Tui
    7 days ago
  • The Parent Zone
    Hi,I am about to wing my way back to New Zealand for the Webworm popup this Saturday in Auckland — can’t wait to see some of you there! In the meantime, I highly recommend the latest pet thread over on the Webworm app. All I’ll say is that readers here ...
    David FarrierBy David Farrier
    7 days ago
  • Tuesday: The Kākā’s Journal of Record for July 9
    Photo by Alex Zaj on UnsplashTL;DR: The top six announcements, speeches, news conferences reports and research around housing, climate and poverty in Aotearoa’s political economy in the day to 6:00 am on Tuesday, July 9 are:Politics: Full news conference: 'Please resign', Chloe Swarbrick tells Darleen Tana RNZ VideoPaper: Increasing speed ...
    The KakaBy Bernard Hickey
    7 days ago
  • Breaking up is so hard to do
    The fundamental weakness of the waka jumping legislation is once again on display, as the Greens seem reluctant to trigger it to remove Darleen Tana from Parliament altogether. Tana has been suspended from the Greens Caucus while it had barrister Rachel Burt investigate allegations that she had been involved in ...
    PolitikBy Richard Harman
    7 days ago

  • NZ, Korea strengthen relationship
    New Zealand and the Republic of Korea continue to strengthen their relationship, Foreign Minister Winston Peters says.   “New Zealand and Korea have a long history – from New Zealand soldiers fighting in the Korean War, through to our strong cooperation today as partners supporting the international rules-based order.    ...
    BeehiveBy beehive.govt.nz
    2 hours ago
  • Investing for future growth in tourism and hospitality
    The Government is moving forward with recommendations from the Tourism Data Leadership Group, beginning with establishing a Tourism Data Partnership Fund says Tourism and Hospitality Minister Matt Doocey. “The Tourism Data Partnership Fund is funded through the International Visitor Conservation and Tourism Levy (IVL) and will provide up to $400,000 ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • Trade Minister to attend G7 meeting in Italy
    Trade Minister Todd McClay will attend the Group of Seven (G7) Trade Ministers meeting in Reggio Calabria, Italy next week. This is the first time New Zealand has been invited to join the event, which will be attended by some of the world’s largest economies and many of New Zealand’s ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Ministers reveal consequences for unruly Kāinga Ora tenants
    Ministers are pleased to see Kāinga Ora taking a stronger approach to managing unruly, threatening or abusive tenants, Housing Minister Chris Bishop and Associate Housing Minister Tama Potaka say.    “For far too long, a small number of Kāinga Ora tenants have ridden roughshod over their neighbours because, under Kāinga ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Prime Minister wraps up US visit in California
    Prime Minister Christopher Luxon has finished a successful four-day visit to the United States with meetings in California on his final day focusing on innovation and investment.  “It has been fantastic to be in San Francisco today seeing first-hand the deepening links between New Zealand and California. “New Zealand company, EV Maritime, ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Prime Minister leads Indo-Pacific Four at NATO
    Prime Minister Christopher Luxon today chaired a meeting of the Indo-Pacific Four (IP4) countries – Australia, Japan, the Republic of Korea and New Zealand. The IP4 met in the context of NATO’s Summit in Washington DC hosted by President Biden. “Prosperity is only possible with security,” Mr Luxon says. “We need ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • District Court judges appointed
    Attorney-General Hon Judith Collins today announced the appointment of three new District Court Judges.   The appointees, who will take up their roles in July and August at the Manukau, Rotorua and Invercargill courts, are:   Matthew Nathan Judge Nathan was admitted to bar in New Zealand in 2021, having previously been ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Urgent review into Wairoa flood response begins
    Environment Minister, Penny Simmonds today announced the terms of reference for a rapid review into the Wairoa flood response. “The Wairoa community has raised significant concerns about the management of the Wairoa River bar and the impact this had on flooding of properties in the district,” says Ms Simmonds. “The Government ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • NZDF’s Red Sea deployment extended
    New Zealand has extended its contribution to the US-led coalition working to uphold maritime security in the Red Sea, Defence Minister Judith Collins and Foreign Minister Winston Peters announced today. “The decision to extend this deployment is reflective of the continued need to partner and act in line with New ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Government provides support to tackle tax debt and compliance
    New compliance funding in Budget 2024 will ensure Inland Revenue is better equipped to catch individuals who are evading their tax obligations, Revenue Minister Simon Watts says. “New Zealand’s tax debt had risen to almost $7.4 billion by the end of May, an increase of more than 50 per cent since 2022. ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Taking action to reduce road cones
    The Coalition Government is taking action to reduce expenditure on road cones and temporary traffic management (TTM) while maintaining the safety of workers and road users, Transport Minister Simeon Brown says.  Rolling out a new risk-based approach to TTM that will reduce the number of road cones on our roads.  ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Celebrating 100 years of progress
    Te Arawa Lakes Trust centenary celebrations mark a significant milestone for all the important work done for the lakes, the iwi and for the Bay of Plenty region, says Māori Crown Relations: Te Arawhiti and Māori Development Minister Tama Potaka. The minister spoke at a commemorative event acknowledging 100 years ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Foreign Minister to travel to Korea and Japan
    Foreign Minister Winston Peters will travel to the Republic of Korea and Japan next week.    “New Zealand enjoys warm and enduring relationships with both Korea and Japan. Our relationships with these crucial partners is important for New Zealand’s ongoing prosperity and security,” says Mr Peters.    While in the ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Huge opportunity for educators and students as charter school applications open
    Associate Education Minister David Seymour says today is another important step towards establishing charter schools, with the application process officially opening.  “There has already been significant interest from groups and individuals interested in opening new charter schools or converting existing state schools to charter schools,” says Mr Seymour. “There is ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Decreasing gas reserves data highlights need to reverse oil and gas exploration ban
    MBIE’s annual Petroleum Reserves report detailing a 20 per cent reduction in New Zealand’s natural gas reserves shows the need to reverse the oil and gas exploration ban, Energy Minister Simeon Brown says.“Figures released by MBIE show that there has been a 20 per cent reduction in New Zealand’s natural ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Providers of military assistance to Russia targeted in new sanctions
    Foreign Minister Winston Peters has announced further sanctions as part of the Government’s ongoing response to Russia’s illegal invasion of Ukraine.    “Russia’s continued illegal war of aggression against Ukraine is a direct and shocking assault on the rules-based order. Our latest round of sanctions targets Russians involved in that ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • OECD report shows New Zealand is a red tape state
    Minister for Regulation David Seymour says that the OECD Product Market Regulation Indicators (PMRI) released this morning shows why New Zealanders sorely need regulatory reform. “This shocker result should end any and all doubt that the Government must go to war on red tape and regulation,” says Mr Seymour.  “The ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government unveils five-point climate strategy
    The coalition Government is proud to announce the launch of its Climate Strategy, a comprehensive and ambitious plan aimed at reducing the impacts of climate change and preparing for its future effects, Climate Change Minister Simon Watts says. “The Strategy is built on five core pillars and underscores the Government’s ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • National Bowel Screening Programme reaches 2 million life-saving screening kits
    The National Bowel Screening Programme has reached a significant milestone, with two million home bowel screening kits distributed across the country, Health Minister Dr Shane Reti announced today.   “This programme, which began in 2017, has detected 2,495 cancers as of June 2024. A third of these were at an early ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Granny flats popular with all ages
    More than 1,300 people have submitted on the recent proposal to make it easier to build granny flats, RMA Reform Minister Chris Bishop and Building and Construction Minister Chris Penk say. “The strong response shows how popular the proposal is and how hungry the public is for common sense changes to make ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • $25 million boost for conservation
    Toitū te taiao – our environment endures!  New Zealanders will get to enjoy more of our country’s natural beauty including at Cathedral Cove – Mautohe thanks to a $25 million boost for conservation, Conservation Minister Tama Potaka announced today.  “Te taiao (our environment) is critical for the country’s present and ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New Zealand increases support for Ukraine
    Prime Minister Christopher Luxon and Foreign Minister Winston Peters have announced a further $16 million of support for Ukraine, as it defends itself against Russia’s illegal invasion. The announcement of further support for Ukraine comes as Prime Minister Luxon attends the NATO Leaders’ Summit in Washington DC. “New Zealand will provide an additional ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Country Kindy to remain open
    Associate Education Minister David Seymour says that Country Kindy in Manawatu will be able to remain open, after being granted a stay from the Ministry of Education for 12 weeks. “When I heard of the decision made last week to shut down Country Kindy I was immediately concerned and asked ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Government lifts Indonesian trade cooperation
    New export arrangements signed today by New Zealand and Indonesia will boost two-way trade, Trade and Agriculture Minister Todd McClay says. Mr McClay and Dr Sahat Manaor Panggabean, Chairman of the Indonesia Quarantine Authority (IQA), signed an updated cooperation arrangement between New Zealand and Indonesia in Auckland today. “The cooperation arrangement paves the way for New Zealand and Indonesia to boost our $3 billion two-way trade and further ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Carbon capture framework to reduce emissions
    A Carbon Capture, Utilisation and Storage (CCUS) framework has been released by the Coalition Government for consultation, providing an opportunity for industry to reduce net CO2 emissions from gas use and production, Energy Minister Simeon Brown says. “Our Government is committed to reducing red tape and removing barriers to drive investment ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Faster consenting with remote inspections
    The Government is progressing a requirement for building consent authorities to use remote inspections as the default approach so building a home is easier and cheaper, Building and Construction Minister Chris Penk says. “Building anything in New Zealand is too expensive and takes too long. Building costs have increased by ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Revision programme presented to Parliament
    A new revision programme enabling the Government to continue the progressive revision of Acts in New Zealand has been presented to Parliament, Attorney-General Judith Collins announced today. “Revision targets our older and outdated or much-amended Acts to make them more accessible and readable without changing their substance,” Ms Collins says. ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Government aligns Clean Car Importer Standard with Australia to reduce vehicle prices for Kiwis
    The Government will be aligning the Clean Car Importer Standard with Australia in order to provide the vehicle import market with certainty and ease cost of living pressures on Kiwis the next time they need to purchase a vehicle, Transport Minister Simeon Brown says.“The Government supports the Clean Car Importer ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • NZQA Board appointments
    Education Minister Erica Stanford has today announced three appointments to the New Zealand Qualifications Authority (NZQA). Kevin Jenkins has been appointed as the new Chair of the NZQA Board while Bill Moran MNZM has been appointed as the Deputy Chair, replacing Pania Gray who remains on the Board as a ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • More support for Wairoa clean-up
    A further $3 million of funding to Wairoa will allow Wairoa District Council to get on with cleaning up household waste and sediment left by last week’s flooding, Emergency Management and Recovery Minister Mark Mitchell says.  In Budget 24 the Government provided $10 million to the Hawke’s Bay Region to ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Minister thanks outgoing Secretary for Education
    Education Minister Erica Stanford has today thanked the outgoing Secretary for Education. Iona Holsted was appointed in 2016 and has spent eight years in the role after being reappointed in May 2021. Her term comes to an end later this year.  “I acknowledge Iona’s distinguished public service to New Zealand ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Minister concludes local government review
    Local Government Minister Simeon Brown has concluded the Future for Local Government Review and confirmed that the Coalition Government will not be responding to the review’s recommendations.“The previous government initiated the review because its Three Waters and resource management reforms would have stripped local government of responsibility for water assets ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Consultation begins on new cancer medicines
    Associate Health Minister for Pharmac David Seymour says today’s announcement that Pharmac is opening consultation on new cancer medicines is great news for Kiwi cancer patients and their families. “As a result of the coalition Government’s $604 million funding boost, consultation is able to start today for the first two ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • 50 years on, Niue and NZ look to the future
    A half-century after pursuing self-government, Niue can count on New Zealand’s steadfast partnership and support, Deputy Prime Minister Winston Peters says. “New Zealand and Niue share a unique bond, forged over 50 years of free association,” Mr Peters says. “We are looking forward to working together to continue advancing Niue’s ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Upgrading system resulting in faster passport processing
    Acting Internal Affairs Minister David Seymour says wait times for passports are reducing, as the Department of Internal Affairs (the Department) reports the highest ever monthly figure for digital uptake in passport applications.  “As of Friday 5 July, the passport application queue has reduced by 34.4 per cent - a ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Roads of National Significance moving at pace
    Transport Minister Simeon Brown has welcomed news that the NZ Transport Agency (NZTA) is getting on with the Government’s first seven Roads of National Significance (RoNS) projects expected to begin procurement, enabling works and construction in the next three years.   “Delivering on commitments in our coalition agreements, we are moving ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New school for Flat Bush
    The Coalition Government is building for roll growth and easing pressure in Auckland’s school system, by committing to the construction of a new primary school, Education Minister Erica Stanford says. As part of Budget 24’s $456 million injection into school property growth, a new primary school (years 1-6) will be ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Dr Shane Reti's speech to Iwi-Maori Partnership Boards, Rotorua
    Dr Shane Reti's speech to Iwi-Maori Partnership Boards, Thursday 4 July 2024    Mānawa maiea te putanga o Matariki Mānawa maiea te ariki o te rangi Mānawa maiea te Mātahi o te tau Celebrate the rising of Matariki Celebrate the rising of the lord of the skies Celebrate the rising ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Announcement of Mental Health Targets and Mental Health and Addiction Community Sector Innovation Fu...
    Kia Ora Koutou, Tena Koutou, Good Morning. Thank you Mahaki Albert for the warm welcome. Thank you, Prime Minister, and thank you everyone for coming today. When I look around the room this morning, I see many of our hard-working mental health and addictions workforce from NGO and Community groups, ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Expert panel appointed to review Public Works Act
    An independent expert advisory panel has been appointed to review the Public Works Act to make it easier to build infrastructure, Minister for Land Information Chris Penk has announced.  “The short, sharp review demonstrates the Government’s commitment to progressing critical infrastructure projects and reducing excessive regulatory and legislative barriers, so ...
    BeehiveBy beehive.govt.nz
    2 weeks ago

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