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Labour Green fiscal framework

Written By: - Date published: 9:16 am, March 24th, 2017 - 97 comments
Categories: economy, greens, labour, leadership - Tags: , ,

As widely reported this morning, Labour and the Greens have set out an agreed fiscal framework. Here’s the Labour press release:

Labour and Greens commit to rules for responsible financial management

Posted by Grant Robertson on March 24, 2017

The Labour Party and the Green Party have agreed to Budget Responsibility Rules, which will provide the foundation for sound fiscal management after the election.

“New Zealanders rightly demand of their government that they carefully and effectively manage public finances. We understand that and are committed to delivering this,” says Labour Finance Spokesperson Grant Robertson.

“These rules demonstrate how Labour and the Greens in Government will manage the economy prudently, effectively and sustainably.”

Under the Budget Responsibility Rules the Government will:
• Deliver a sustainable operating surplus across an economic cycle
• Reduce the level of Net Core Crown Debt to 20 per cent of GDP within five years of taking office
• Prioritise investments to address the long-term financial and sustainability challenges facing New Zealand
• Maintain its expenditure to within the recent historical range of spending to GDP ratio
• Ensure a progressive taxation system that is fair, balanced, and promotes the long-term sustainability and productivity of the economy.

The Government will establish an independent body to make sure the rules are being adhered to.

“These rules are a clear and direct statement to New Zealanders that we will manage the economy carefully and be held to account. We will provide the Government that New Zealanders have been looking for: Responsible management of the economy and prepared to tackle the housing crisis and the growing problems in health and education,” says Mr Robertson.

Green Co-leader James Shaw says, “Sustainability is a stool with three legs – environmental, social and economic. Take one leg away and the stool falls over.

“In government, we’ll be a steady pair of hands. These are economic principles but we’ll measure our success by how many children we lift out of poverty, how many rivers we make clean enough to swim in, and how much progress we make towards a low carbon economy.

“The Greens and Labour are very much on the same page about this. This is what a stable, responsible, alternative government looks like,” says Mr Shaw.

Smart politics.


Update: Liam Dann has a “big read” piece about the framework (it’s stupidly titled, but that might not be his fault).

I get pretty annoyed by the idea that fiscal responsibility is a centre right [thing].
James Shaw, Green Party


(Tweets aren’t loading – those are images)

97 comments on “Labour Green fiscal framework”

  1. Grant 1

    MSM still spinning the same tired old line that National are the better financial managers when that has catagorically been proven to be incorrect.
    Labour need to highlight this fact over and over again…

    • Yep, in fact, they need to be attacking National for being bad for the economy and fiscally irresponsible, not just tooting their own horns. The Greens and Labour won’t be viewed as the sensible option until people realise just how much of a wrecking crew for the economy literally every National Government has been.

    • mosa 1.2

      Yeah Grant i was making this very point about why Labour and Little don’t emphasize their sound record of running the economy , creating real surpluses, savings programmes and instituting real progressive policy a few weeks ago.

      They accomplished more in two years that National in nine.

      Its almost like the fifth Labour government did not exist.

    • SpaceMonkey 1.3

      National only know how to loot the economy.

  2. Antoine 2

    I’m not a finance guy so I may be missing some shortcomings of these rules, but on the face of it they seem very creditable

    A.

    • Red Hand 2.1

      My concern is how “the long-term financial and sustainability challenges facing New Zealand” are defined.

      A prospective government needs to spell out clearly what they think the challenges are and why.

      They also need to clarify why they recognize only financial and sustainability challenges long term and why they present them as separate issues. I’m no finance guy either, but they seem to me to be inseparable.

      I’m also concerned that our social challenges of wealth inequity and the problems that flow from that are not separately identified.

      I note that it’s worded so that financial precedes sustainability. I’m very suspicious about this, it doesn’t feel right to me. Where is the emphasis on governing to achieve a society where everyone is valued and supported and wealth is more equitably shared.

  3. james 3

    Will be interesting to see how “• Ensure a progressive taxation system that is fair, balanced, and promotes the long-term sustainability and productivity of the economy” sits with Labours statement that they ‘definitely would not increase taxes’.

    http://www.newshub.co.nz/home/politics/2017/03/labour-probably-won-t-raise-taxes-andrew-little.html

    But then the greens wont rule out – despite Labour being definite about it:

    Ms Turei told Newshub the party is still developing its tax policy for this year’s election and wouldn’t take raising taxes off the table.

    “We’re not ruling it out,” she said.

    http://www.newshub.co.nz/home/politics/2017/03/tension-brewing-between-labour-and-greens-over-tax.html

    And this is just this month.

    • DoublePlusGood 3.1

      You make new progressive taxes to compensate those that your get rid of for being regressive.
      (Of course, they should just put the top tax rate up to 45% at around 150k, 40% above 100k, but they’ve shied away from that)

    • roy cartland 3.2

      “Definitely not increase taxes” could easily apply to the vast majority of workers. Slap a few on the m/billionaires, the rest of us won’t feel sorry for them.

      • james 3.2.1

        wouldnt that be increasing taxes?

        • roy cartland 3.2.1.1

          Yes, on a few who no one cares about. The announcement wasn’t to them, it was to the rest of us, as I said. I can imagine Andrew saying, “well we weren’t talking about millionaires” and no one clamouring to defend them.

          • james 3.2.1.1.1

            So you are OK with him telling deliberate lies?

            (of course he isnt telling a lie until he does something – I was talking about your argument)

            • roy cartland 3.2.1.1.1.1

              If the only person that ‘suffers’, if you can call it that, is a millionaire, I couldn’t give a shit what you call it. He’s not talking to or about them and they know it. He could always just ‘change his mind’, I’m sure you’d ‘be comfortable with that’ (now where have I heard that phrase before…)

              And by the way, looking at your orig post, how does “probably” become “definitely”?

              You seem to clutch at a few to make your straw man.

              • Draco T Bastard

                He could always just ‘change his mind’, I’m sure you’d ‘be comfortable with that’ (now where have I heard that phrase before…)

                Yep, just like John Key did when he cut taxes for the rich and raised GST on the poor after promising not to raise GST.

                • mosa

                  +1 Draco

                  Cullen got hammered for “stealing our money ” when he did not cut tax after running huge surpluses but was fully funding public services.

                  He never touched GST because he did not have to.

              • Sam C

                “A millionaire”… politics of envy, here we come.

                • SpaceMonkey

                  As opposed to the politics of abuse focused on beneficiariesand the working poor by National?

            • Matthew Whitehead 3.2.1.1.1.2

              It’s not a deliberate lie if the total effect of the income tax change maintains roughly the same level of revenue- that’s not raising taxes, it’s re-balancing them.

              Besides, they can probably afford to cut income taxes a little if the Greens insist on a wealth tax as part of the coalition deal.

        • KJT 3.2.1.2

          Yeah. But greedy bludgers do not vote Labour or Greens, anyway.

          Raising taxes on property speculators, wealthy beneficiaries of Nationals cronyism and the modern day equivalent of War profiteers would be hugely popular.

      • Antoine 3.2.2

        I think there may be more millionaires out there than you realise

        • roy cartland 3.2.2.1

          No, they just wield (dis)proportionately more power. We can’t afford them.

          • Antoine 3.2.2.1.1

            I maintain there are quite a few out there.

            Stop me if I’m stating the obvious, but pretty much anyone who owns a house freehold in Auckland will be a millionaire, right?

            A.

            • McFlock 3.2.2.1.1.1

              maybe there’s fewer of those than you think.

            • Greg 3.2.2.1.1.2

              Only On paper property pops party. Is over

              • Antoine

                Of course I was referring to paper millionaires, yes

                • David C

                  Well how can you be a millionaire other than “on paper”?

                  Horde cash? its just paper. Horde gold? its worthless metal. Or digits on a bank statement?

                  Pretty much farmland or pant/machinery is really the only tangible wealth.

        • Draco T Bastard 3.2.2.2

          No, there isn’t.

          the fact that they have more say is a problem and so is the fact that one millionaire is one too many.

      • Eralc 3.2.3

        Typical of Greens/Labour envy politics.

    • weka 3.3

      Labour might not want to raise taxes, but it’s not going to be a Labour govt, it’s going to be a L/G one. MSM will call it tension brewing, I’ll call it two groups with their own purpose who are developing a relationship of working together. We don’t know yet what that will look like because we haven’t had an election. It’s reasonable for them to have differences, they’re not joined at the hip and rightly so. We want diversity here. It would be stupid and lessen democracy for them to become one party.

      This is a new thing for MMP btw. Might want to get past thinking in the old structure of a main party with a few minor parties tacked on.

      • roy cartland 3.3.1

        +1

        I like the idea of tension – it means that people are actually thinking about and discussing policy, and arriving at a solid, sensible outcome.

        Imagine if we had the kind of government where all the ministers just blithely followed whatever the leader said, that would suck.

      • james 3.3.2

        Except he said they ‘definitely’ would not increase taxes.

        • ian 3.3.2.1

          What if they raised taxes on some, but lowered taxes for others and the overall impact would be that taxes weren’t increased?

          It’s pretty much impossible to not increase taxes and, in fact, taxes had increased every year of the National government.

        • roy cartland 3.3.2.2

          Ahh, I see where you’re confused. Governance isn’t up to him. He’s not the king. Andrew doesn’t make the rules. He doesn’t decree legislation.

          That’s why you should be informed by policy, not placating soundbites, I thought you’d be sick of those by now (I know I am).

        • KJT 3.3.2.3

          Just like National said.

          But in the interim they have increased taxes every year in power.

        • weka 3.3.2.4

          “Except he said they ‘definitely’ would not increase taxes.”

          So? Did you have trouble understanding what my comment meant?

          btw, according to your link,

          “Labour’s not planning on going into this year’s election with a policy to raise taxes, says leader Andrew Little.

          They’ve said there is enough in the govt coffers for them to run their policies, presumably in the first year. Or do you think that Labour are saying they will never ever raise taxes?

          • Ad 3.3.2.4.1

            Little signalling he will be scaling back the Defence big ticket items will help his budgetary reallocations.

            I suspect they will also scale back other dumb spending, before really tinkering with tax levels.

            That’s the whole sense I get from the joint announcement.

        • David C 3.3.2.5

          James.

          You arent James P of The Fish by any chance?

          Yes if Labour say one thing and Greens say another then Bill and Winston with drive a truck thru that.

        • One Anonymous Bloke 3.3.2.6

          Except that if he said “we will not raise GST” and then raised GST, you voted for him, so your whingy whiny concern seems very whingy whiny and hypocrisy.

      • Karen 3.3.3

        Labour are going to set up a tax working group to look at reviewing the whole tax system – Deborah Russell (New Lynn candidate and renown tax expert) is obviously going to be a key player in the review.

        The Green Party are amenable to the review but that doesn’t mean they shouldn’t spell out their preferred tax policy now. It is helpful for voters to know what their position is prior to the election – and can then choose to party vote Green if they want the Green Party to get a bigger say on tax policy after the election.

        I understand the reasoning behind Labour saying no piecemeal changes because the whole system needs reviewing, but I also think they should be emphasising that the purpose of the review is to make the system fairer in order to reduce inequality.

        • weka 3.3.3.1

          Thanks for that. I think James is struggling with the whole MMP thing.

          • roy cartland 3.3.3.1.1

            +1
            So long of just obsequiously assenting to the word of King John can do that.

        • mosa 3.3.3.2

          Totally agree Karen.

          Its long overdue that the Greens have some imput into the current tax system which must be overhauled.

          They have a unique opportunity here and i am looking forward to the recommendations to get good fair,equitable tax law including corporate that has teeth and getting it implemented.

          That will stir up the ants nest but its a priority and will only happen with a “changed” government.

          Like to see where they are with the U.B.I and if that is all go.

    • Hanswurst 3.4

      Will be interesting to see how “• Ensure a progressive taxation system that is fair, balanced, and promotes the long-term sustainability and productivity of the economy” sits with Labours statement that they ‘definitely would not increase taxes’.

      Interesting. You seem to be suggesting that taxes would need to be raised in order to be fair and sustain a productive economy.

      • KJT 3.4.1

        They do. Governments share of the economy is way too low, for a sustainable future.

        Too much money is being taken from the community by, banks, big box stores, speculation and the laughingly called, “financial services”.

    • adam 3.5

      Out spouts privilege moaning that they have to pay their fair shear

      But so nicely done as a concern troll.

      Who cares if national use the economy to extract as much as possible from the poor. Poor rich people need more money damn it, they need that extra money, becasue it’s just not satisfying to be ridiculously loaded, they must have more! And how dear the greens even think of taxing some of it!

  4. KJT 4

    It is regrettable that Labour/Greens have now bought into the Neo-liberal framing of the issue.

    There are actually good economic reasons for Governments running deficits.

    Though, Not for Nationals borrowing to make life better for overseas corporations.

    All L/G needed to reiterate is that left wing Governments have been provably better economic managers than right wing ones.

    Balancing budgets with Government austerity, has failed everywhere.

    • Siobhan 4.1

      + Spot on KJT.

      More of this book balancing nonsense is very disappointing. Though I suspect NZers love the concept as a distraction from our massive Private Debt issues.

    • Actually if you listen to the speech, James is quite clear they don’t buy into that framing. He clearly states that deficits are, in some situations, the fiscally responsible thing to do, and that what’s important is that you be in surplus over an entire fiscal cycle. (ie. boom and bust) Both Grant and James also talked about how achieving surplus by cutting services is short-sighted and not actually a real surplus.

      So, in short, that’s a mischaracterisation caused by people hearing “fiscal responsibility” as a codeword rather than actually listening to the content of the announcement.

      • KJT 4.2.1

        “State spending to GDP ratio to be maintained”??

        • If you accept that they’re going to do counter-cyclical economics, it’s absolutely possible to pay down debt to a given ratio to GDP without engaging in austerity. It might require some prioritization and political bravery, but it’s doable.

          • KJT 4.2.1.1.1

            “Spending”, not debt.

            Successful economies have higher ratios of Government spending to us.

            We cannot continue to use up the capital from Government spending before the 80’s.

            • Matthew Whitehead 4.2.1.1.1.1

              Ah, yes, I do disagree with that in principle, my apologies. But that doesn’t imply austerity, it’s more a limit on revenue increases without increasing GDP, and the amount they want to spend isn’t actually that far from recent budgets.

              That said, I think there are enough cuts that you might well be able to make a pretty reasonable budget within that 30% of GDP, it just wouldn’t be a budget with room for any new spending initiatives like say NZF’s call for writing off student debt for people staying in NZ, or implementing a UBI. I don’t see anything particularly wrong with spending more relative to GDP so long as you’re reasonably below 100%.

    • Ian 4.3

      + 100 Right on the money!!

  5. Antoine 5

    So am I the only one here who actually liked the Lab/Green announcement?

    • weka 5.1

      You going to vote for them then? 🙂

      • Antoine 5.1.1

        This increases the chance slightly

        Guess we need some costed policies that are consistent with the fiscal framework, sometime in the next few months

        • James addressed this- they actually ran the Green Party 2014 policies through the framework and ended up not only following the rules but actually freeing up money. Obviously the 2017 policies are still under development, but I believe the intention is to have them independently costed too.

          And while I don’t know if Labour will be costing their policies, they’ve been pretty clear that they expect to be both paying down debt and working within current revenue amounts, (which I think is slightly stupid, but hey, that’s why I’m left of Labour) so given those two constraints they would pretty much have to be working within the framework, although of course it makes sense to want to look at costing to see they’re not missing anything.

          • KJT 5.1.1.1.1

            Unlike National, who hide any research and/or statistics, about how their policies are not working.

    • Ad 5.2

      Loved it myself.

    • AB 5.3

      Quite like it.

      “Deliver a sustainable operating surplus across an economic cycle”. I wonder how a cycle will be defined. Is it a Kondratiev wave? If it is long enough to rule out imposing austerity during a recession that’s not too bad.

      It irks somewhat that Lab/Grn need to demonstrate their ‘responsibility’ when it’s actually National that are economic vandals.

      I understand the need not to frighten the horses. But will this framework allow the downwards re-distribution of wealth and power we need to create a properly functioning society again? It might, but not quickly, not within the probable lifetime of any Lab/Grn government.

      Still it’s something, so a cautious thumbs up.

  6. Andrew 6

    “Deliver a sustainable operating surplus across an economic cycle”

    Its all very well to promise this, but what happens if there is another major worldwide recession? Or the Alpine fault ruptures? That will blow away an operating surplus pretty quickly.

    (note: just read this from the Labour website: “We expect to be in surplus every year unless there is a significant natural event or a major economic shock or crisis”)

    So you can ignore my first point entirely.

    “Reduce the level of Net Core Crown Debt to 20 per cent of GDP within five years of taking office”

    Net Core Crown Debt should be at, or close enough to 20% in 5 years anyway with the current government, given its at 24.6% now and dropping from a peak of 25.5% in 2014.

    http://www.tradingeconomics.com/new-zealand/government-debt-to-gdp

    • That’s literally in the text of the rules that the approach isn’t intended to survive major natural disasters. I think that’s a pretty reasonable exception.

      It is intended to be applied over periods of recession- that is, taken between both growth times and recessions, the overall budget should net out to a surplus.

  7. saveNZ 7

    I’d like to see Labour and Greens having an equal focus on middle NZ concerns as well as those in or close to poverty. This is because that is a big voter group that seems to have been ignored by the left in the past or used as some way to extract more taxes.

    The super rich, offshore migrants and corporations seem exempt from tax in this country for some strange reason (but a global trend). Nobody seems to have though anything odd about it, apart from a bit of controversy when the Panama papers came out. (and many newspapers refused to print it at the time). You can’t blame them if it’s legal government policy.

    I’d like to see tax changes that mean that any income made in this country has to be taxed here no matter what. At the moment a global corporation or an individual can just avoid taxes if they reside or are domiciled else where. This might have worked before globalism and the gig economy, but it clearly does not work any more where people flit in and out of countries making profits but not paying any taxes in the country they made the profits in or they can make artificial ‘losses’. Taxes need to get off paper and into reality. If someone makes 4 billion in sales in NZ but legally does not need to pay taxes here – something is very wrong. Likewise someone with extensive investments here, but lives offshore and so does not have to legally pay taxes here is destroying our country. There should be a minimum tax take on income here. Pay up or leave. Yep, we could live with out our iPhones and Palm oil products and surveillance weapons.

    I’d also like to see a lot more to help those on wages and in the gig economy.
    Companies used to train people for their companies now they import people and throw those in NZ on the scrap heap on lower and lower wages, worse conditions and the gig economy that started in NZ here in the 1990’s has mean’t most people including middle NZ and both rich and poor earners, are now in insecure work and income.

    One of the ways people have tried to cushion themselves from the Gig economy in NZ and low wages is property investment.

    Middle NZ to survive are becoming uber drivers and renting out their own homes on AirB&B. It’s not exactly the middle class dream to work every minute of the day to keep ahead because every 5 minutes some CEO has put up the cost of some essential service to keep their shareholders happy and their bonus intact.

    I think reversing the company structure in councils would be popular with many. Councils are not companies and should not be run as such. Go back to the days when they didn’t do investments in malls and airlines and actually mowed the berms and ran the libraries – not built billion dollar stadiums, spent billions on consultants and private legal services and made librarians redundant.

    More and more services are being cut for locals, more and more hidden charges being charged and less and less for anyone to live on.

    Having a house saved middle NZ and trying to make them feel bad about it is like blaming the victims of the Titanic who made it into a life boat in time.

    Labour and Greens need to run a campaign to improve most Kiwis lives and learn a few inconvenient truths about what has happened here in the last decades and what people have had to do to survive here.

    Voter’s did not vote for Key, they have already forgotten him – they voted or not voted to send a message to the left to get their act together last election.

    Key’s legacy has been described as doing nothing in the MSM and non MSM media. I disagree, never has a politician been more stealthy in increasing the right wing neoliberal agenda here in NZ.

    Now’s the time to highlight that stealth and the damage it’s caused, and reverse it.

    Not tax the local survivors and keep Key’s neoliberal legacy of globalism, going Lite.

  8. xanthe 8

    I actually dont think this will help lab/grn , Its not actually about which way the levers get pulled, we actually need some new innovative levers. This despite the speachifieing and promises is really a surrender to “the way things are”, its putting a smiley face on what is actually “austerity” . If we are going to continue neoliberal debt based economy i actually would prefer National , If on the other hand some party puts its hand up and says “STOP it dosnt have to be this way there is actually plenty to go around and here is a way that could work” I will be there doorknocking or whatever for them.

    • This announcement specifically attacked austerity politics. Again, you’re hearing “fiscal responsibility” as a codeword, rather than looking at what they’re promising, which is simply “we’ll increase spending to sustainable levels and still run surpluses.”

      I agree Labour’s policies are insufficiently radical, but the Greens have some really good and needed reforms that will make life better for both those in poverty and middle New Zealand, and they’re doing it within the constraints of these rules already.

      If you can have fiscal responsibility and social responsibility at the same time, why not have both?

      • Nic the NZer 8.1.1

        Despite our discussion the other day you seem not to understand the basic macro of what this anouncement is promising. Say the govt runs a net surplus over a time period (like an economic cycle). Say also that nominal GDP has grown over the same period, this then means (by accounting) that non government indebitededness has grown by the govt net surplus plus the GDP growth plus the Current account deficit. If the non government indebitedness didnt grow by that much then GDP shrank. This policy could only reasonably be a good idea if NZ consistently runs current account surpluses.

        • While current account surpluses are something we should be working towards as well in the long-term, we can’t balloon debt as far as we like in the medium-term just to make up for balance of trade. Sometimes the pain has to go onto the private sector, like it or not, if we want to keep debt under a certain level. Unrestrained growth isn’t as good as it sounds tbh, as that’s where we get recessions from a lot of the time.

          My hope is that net cyclical surpluses will be kept pretty damn small with individual-year surpluses and deficits being respectably large.

          • Nic the NZer 8.1.1.1.1

            “While current account surpluses are something we should be working towards as well in the long-term, we can’t balloon debt as far as we like in the medium-term just to make up for balance of trade.”

            Actually NZ can. Australia has been doing it for decades, by way of example. If NZ follows Australia’s example and prefers avoiding recession, to it happening automatically due to recession (and the current account drain is only one issue meaning a ‘surplus over the cycle’ rule is not commensurate with the government acting counter-cyclically) then this will be much better.

            “Sometimes the pain has to go onto the private sector”

            As follows from our discussion from the other day, the private sector is basically all the perceptible impacts on the economy. Your saying sometimes we just need to ‘hurt’ the economy now?

            “Unrestrained growth isn’t as good as it sounds tbh …”, I suspect your making no effective distinction here between income, e.g GDP growth and growth in the actual resource profile of the real side of the economy. Particularly as the rest of that makes a non-sense claim that GDP growth leads to GDP shrinking (literally that is what a recession is).

  9. Tuppence Shrewsbury 9

    Finally. A credible policy that accurately captures the electorates mood around governments and their gathering and spending of tax dollars. One that is forward looking and based on a working precedent already established, the reserve Bank act.

    Well done, it seems we can start to see the glimmer of credible opposition. I’m just surprised it took long

    • One Anonymous Bloke 9.1

      If relative competence at economic management is the issue, when we we see the glimmer of credible government from the National Party?

      • Tuppence Shrewsbury 9.1.1

        8 years of it so far according to the electorate.

        • One Anonymous Bloke 9.1.1.1

          Keep telling yourself that.

          A recent Roy Morgan survey on the ‘Most Important Problems facing New Zealand’ showed Government/ Public Policy/ Housing issues 41% (up 1% since October 2016) are clearly the most important set of problems facing New Zealand according to a representative cross-sample of 1,000 New Zealanders interviewed in January 2017.

    • indiana 9.2

      Are you saying there was no glimmer of a credible opposition before?

      • Tuppence Shrewsbury 9.2.1

        The wasn’t even the making of a speck of light that could pass as a glimmer

        • One Anonymous Bloke 9.2.1.1

          🙄

          Which is why the corrupt National Party spent so much energy telling lies about Labour and Donhua Liu, and still only scraped a majority with help from their remora.

    • Both parties have already been doing most of this anyway, they just sat down to agree on actual rules and added some transparency to the process.

      If this is what makes the opposition parties credible to you, you should never have found National credible in the first place, because they don’t believe in fiscal responsibility, they believe in spending themselves into holes that Labour has to drag the country out of.

      • Nic the NZer 9.3.1

        Well this development is a disaster. It might be smart politicks but its a catastrophy for any progressive policy.

        In particular if the govt commits to balanced budgets over the economic cycle and particularly to reducing crown debt to 20% of GDP that means (almost certainly) more non govt debt (e.g continued low savings rates).

        We should see the alarming nature of this from Nationals policy being quite good by the same economic ideals, especially getting back into surplus quickly after the recession. That came at the cost of funding education and health and housing of course.

      • Tuppence Shrewsbury 9.3.2

        Errr….

        MMP? You do realise that an important reason labour started to tank further once it went under 30% was that it absolutely needed the greens to govern?

        The greens don’t exactly exude Fiscal prudence, despite your desperate assurances to the contrary. So they couldn’t be trusted just because they and their supporters say so. when have they ever been on the treasury benches? What do they know about actually running a country?

        • Whoah there, there’s no actual evidence that’s the case, and pretty good circumstantial evidence it’s not, given how many Labour voters explicitly want the Greens in coalition when asked. (I need to check if they’ve re-done that question recently, but the Greens were the biggest preferred partner since way back in the Clark era. Well, I lie slightly, more people wanted a grand coalition with National IIRC, but That’s Not Happening. Reid research hides away their detailed data, and I think they’re the only ones still polling on this question, and the only discussion I can find on it is talking about National Party coalition options, so we’ll have to stick with Clark-era figures unless someone else can find them)

          You might have an opinion that the Greens don’t exude fiscal prudence, but their policy portfolio says otherwise by marrying sufficient long-term investments with prudent restraints on expenditure and reasonable revenue proposals, and they’re walking the talk by getting independent costings done on their policies out of their own money.

          The perception that the Greens aren’t fiscally prudent is certainly out there, but it’s just plain wrong. Their willingness to consider the revenue side of the equation and their frank talk on the need to do so for Super pretty much makes them the front-runner on this issue, as Labour thinks it can stick its head back into the sand after backing off some of the good parts of its 2014 manifesto. (by which I mean the CGT, not necessarily the Super at 67 stuff) Sure, Labour has the record of being the best at fiscal policy, but you won’t get the Greens without Labour anyway, so even if you do believe, despite the facts, they’re going to be bad for fiscal policy, they’re still going to be tempered by a larger Labour Party, and given that they’ve been able to so easily agree on fiscal policy and have in fact stated that they improved on policy for both parties by coming together, I would say that’s a good argument that you will get better fiscal policy out of the two in coalition than you would out of Labour alone.

          And even with Labour alone, the record is light-years ahead of National, so it’s not as if we’d not be headed uphill either way if the government changed.

  10. Skeptic 10

    I think there is both a glimmer of hope that some form of equitable tax system might emerge in the detail as well as making sure that everyone – and that means everyone – who resides or trades in NZ will contribute to the upkeep of our society.
    I hope that the details (where the devil is) will include substitution of GST for TOT (Turn Over Tax) which will automatically hit those current tax avoiders hard and right where it should – at the till. When Jim Anderton proposed this a decade or so ago the only people who disliked it were Treasury, the Corporates and large LLCs – small and medium business loved it because it reduced their paperwork by three-quarters. Big LLCs and Corporates never supported Labour anyway – Treasury needs wholesale replacement to get the embedded Chicago School of Economics die-hards out. Removal of GST helps the consumer in many ways – feel free to read up on this on a number of websites – it’s very similar to the “Robin Hood Tax System”.
    Another item missing from this announcement is where a fairer wage system fits in. Is it possible for a Lab/Green Govt to legislate for complete mandatory transparency of income – I see no reason why not. Is it also possible for a Guaranteed Minimum Livable Income level to be linked through legislation to a percentage of the average top 10% of income levels – I see this as the surest way to curbing excessive wealth and income in this country. When the wealthiest know full well that any greediness on their part will automatically be matched with a corresponding increase in the GMLI, then and only then will we see some restraint shown by the “greedies” and selfish.
    Will we also see a CGT for all property other than the family home – one per family. This would be one sure method of starting to curb the housing crisis – not a cure but just a start.
    Will we see a solid commitment to training and good tertiary education for the next generation – not just Varsity, but polytechs and other similar institutions where the practical and home-minded can get a solid grounding in their own preferred career choice. Can this be linked into genuine sustainable careers and positions, in both public and private sectors.
    Will we see work hours legislated as a matter of Health and Safety in the Workplace so that the 35/40 hour week is restored with overtime legislated at a minimum of double time (so employers can’t cheat workers at derisory time-and-a-half or time-and-a-quarter) – so that our voluntary sector, which prior to 1987 stood at one in three – one worker in three also partook in voluntary work of some form or other (surf life saving, church working bees, sports coaching etc), can be restored.
    There are so many details that could make this country a world leader again that I hope the authors of this announcement have really thought it through.

  11. Nic the NZer 11

    Discussion of what happens in an economy when the government persues this kind of policy.

    http://bilbo.economicoutlook.net/blog/?p=35610

  12. Very unwise.

    This notion of fiscal – or ‘budgetary’ – responsibility is a rhetorical mis-step. If it’s meant to beat the Nats at their own neoliberal game it won’t work (they’re more wholehearted about it because their base approves and assumes any temporary departure from it is simply political pragmatism).

    If, alternatively, it’s meant to ‘redefine’ what it is to be ‘budgetarily responsible’ then, sorry, it also won’t work.

    ‘Fiscal responsibility’, as a term, has a history and clear meaning that is now embedded into the political language of the day {not to mention legislation}. Buying into such terminology simply makes a big, thick stick with which any Lab-Green government will be relentlessly beaten.

    Trying to escape the historical meaning of such ‘responsibility’ will simply look two-faced – that is, ‘you claimed you were going to be fiscally responsible but it turns out you were trying to do the old tax and spend, leftie thing by stealth, and deceptive semantics’.

    This may help win the 2017 election but it almost guarantees a one-term government. It paints a big target on its back. Also, it advertises just how best wedge politics could be deployed to detach not just swing voters but the Lab-Green base from its own government.

    I fear that it’s not so much ‘Clever Politics’ as ‘Too clever for its own good politics’.

    I hope I’m wrong.

    • Incognito 12.1

      I tend to agree.

      Based on the first few articles I read in MSM on these so-called BRR I thought it oozed orthodox economics. As Liam Dann wrote:

      It certainly looks like a conservative set of rules. In fact, at first glance, the document looks as if it could have fallen out of Bill English’s briefcase.

      Exactly my thoughts too.

      Too much explanation is required to explain the subtleties, to appease the more progressively-inclined perhaps. As they say, with some good reason, in politics explaining is losing (the argument). Now John Key is finally gone (Yay!) we don’t need to continue his slippery semantics, do we?

      It all sounds very much like have your cake and eat it too; will the wider electorate buy it?

      • weka 12.1.1

        I’ve been hearing similar criticisms all day. What I’d like to know is what they should have done instead.

        btw, in what universe could this have fallen out of BE’s briefcase?

        “In government, we’ll be a steady pair of hands. These are economic principles but we’ll measure our success by how many children we lift out of poverty, how many rivers we make clean enough to swim in, and how much progress we make towards a low carbon economy.”

        • Incognito 12.1.1.1

          I think I can see why they did it and in this way. The initial and admittedly superficial readings did sound like a PR release from the (new) PM’s Office and maybe this was deliberate.

          I think it sounds too contrived bordering on deceiving; why not start with the core (progressive) values and be upfront about these and then make the fiscal/economic ‘rules’ subject/secondary to them rather than the other way round (i.e. starting with the neo-liberal hymn book of status quo) or pretending that they are, more or less, on equal footing?

          I personally like honesty and with that comes clarity, being crystal clear, as little as possible ambiguity and confusion; make it as simple as possible but no simpler.

          John Key had a real gift of saying things in such a way that people would hear the things they liked to hear but he didn’t actually say them AKA doublespeak, forked tongue, talking out of both sides of his mouth, etc.

          I guess I disagree with the emphasis and order of the narrative and thus am slightly (!) worried about the possible underlying message(s) and intentions.

          Just my personal opinion though …

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