web analytics

Margin of error

Written By: - Date published: 10:09 am, December 19th, 2012 - 16 comments
Categories: debt / deficit - Tags:

So, National’s still on track to surplus in 2014/15, eh? A $66m surplus. Well, don’t be counting those chickens just yet. That projected Total Crown Operating Balance Excluding Gains and Losses, known to everyone as the surplus or deficit, is just 0.07% of projected Total Crown spending and revenue that year (see graph of the projected surplus beside revenue/expenditure at the bottom). That makes wafer thin look fat.

And it’s not exactly like Treasury has laser-precision accuracy when predicting 2.5 years ahead. In PREFU 2008 they were $15.9 billion out on the size of the deficit for 2010/11. In HYEFU 2009, they were $3.24 billion out on the size of the deficit for 2011/12. In other words, the surplus they’re projecting is a fraction of Treasury’s normal margin of error when projecting over two and a half years.

But there’s a bigger question: is any surplus at all better than any deficit?

I mean, last year, Treasury said the surplus would be $1.4 billion (Labour was chastised when their projected accounts showed a surplus of ‘only’ $660m). Since then, $1.3b has been lost off the forecast government balance. Would it be worse to lose, say, another $200m off that and go into a tiny deficit than losing that $1.3b but staying just just in the positive was? Of course not. The $1.3b that has disappeared from the projection in the last year means $1.3b more on the government’s debt than previously thought – an extra $200m would mean deficit, but it would have a far smaller impact on the government’s debt pile.

Besides, a billion here and there doesn’t really matter – it’s 1% of annual government turnover. And there’s nothing magical about being in surplus, as long as you’re generally on a track to getting your debt under control being in surplus in 2014/15 or 2016/17 (which is the downside scenario in Treasury’s books, and everyone else’s central scenario) is neither here nor there.

But National thinks its terribly important to be able to say they’re getting to surplus in 2014/15, even though they probably won’t be in office when it happens, because … um … they decided it ought to be. To that end, they’re putting a billion tax increase on petrol so they won’t have to borrow even more for their pointless motorways. And they’re not investing any new money in non-transport capital for years. Not to mention the grinding down of the public workforce though sub-inflation pay rounds, and the culling of staff at all levels.

Those are decisions with quite serious consequences that are being made for a very unserious reason – so that forecasts that are almost very, very wrong can say that there will be a tiny, neither here nor there, surplus in a year when the Nats are unlikely to even be in power any more.

fiscal balance projection for 201415

 

16 comments on “Margin of error ”

  1. wyndham 1

    And the proposed extra petrol tax(es) will hit the less well-off hard. Yet there is no suggestion that the tax cuts, given earlier to the wealthy, should be reversed or even lessened.
    Another hike along to road to ever increasing social division.

    • Draco T Bastard 1.1

      Of course there isn’t. National’s purpose is to enrich the rich at everyone else’s expense which is why all the extra taxes they’ve put on since they cut taxes for the rich adversely impact the poor more.

    • Lanthanide 1.2

      “And the proposed extra petrol tax(es) will hit the less well-off hard.”

      Not sure about that. The media quoted someone saying that for every 1c in tax, it increases the average fuel cost per year by $15. So $45 spread over a whole year, $3 a month, isn’t likely to hit “the less well-off hard”. It is also the case that the “less well-off” probably drive cars less than the average, simply because they can’t afford WOF/registration/fuel/insurance in the first place anyway.

      • Draco T Bastard 1.2.1

        If they need to drive, which they probably do due to the rather poor public transport in NZ, then they will be worse off. It may only be $3/month but it’s still less than what they had and if what they had wasn’t enough in the first place…?

  2. Enough is Enough 2

    We need some clever bean counters to keep an eye on those books between now and 2014 because you can be sure of one thing, there are cook booking instructions going out to every government department right now.

    They will be moving items off the balance sheet to get the answer they simply must have going into the election.

    The problem is 90% of this country is financially illiterate so if Mr English tells them we have a surplus, they will believe him.

    • Nick 2.1

      “They will be moving items off the balance sheet to get the answer they simply must have going into the election.”
      One problem with your conspiricy theory. The 2014/15 surplus will be announced in 2015, AFTER the election..

  3. Peter 3

    So what, in your opinion, are the three main reasons the electorate should be against National aiming for a surplus?

    • One Tāne Viper 3.1

      The fact that they aren’t “aiming”, they’re aspiring.

      The fact that they’re failing.

      The fact that Labour led governments do a much better job.

    • vto 3.2

      Nothing wrong with it Peter.

      The problem is the lies and deception they use every time they talk about it.

      I mean, quite clearly, having to raise taxes to achieve it means they have not achieved it. They are just lying deceiving bastards and this is proof again.

    • bad12 3.3

      National could achieve surplus simply by adding another 1 cent to the income tax of the top 40% of income earners, the negative effect of that extra cent taxation upon those with plenty of disposable income would be ZERO,

      By loading those who have no disposable/discretionary spending in their income, the bottom 40% of earners, with the cost of achieving surplus National are simply short circuiting 200-250 million dollars annually from passing through the local economy instead raking this into the Government coffers,

      There are 2 adverse economic effects that will ensue from this point, there will be a severe reduction in the use of petrol products and the estimated tax will not eventuate for the Government, and/or, in order to maintain their present use of petrol products those with no discretionary income in their budget will cut back on spending into the local economy which will cause the Governments tax take to shrink even further, less business to be conducted and thus create even more unemployment which is a direct cost to Government,

      The fact is that there is up to 7 billion dollars of taxation annually being evaded or avoided where Government could more than balance it’s books by ensuring all due taxation is paid throughfurther legislation and reversing the 50% staff cuts inflicted upon Government tax employees across the country,

      Any fool can see,(with the exception of Slippery and the idiot from Dipton English), that if there is no-one round to ensure taxation is paid then a lot of it won’t be….

  4. NoseViper (The Nose knows) 4

    On Bryan Crump tonight there was an interesting thing on Argentina and how it is selectively choosing statistics to bolster its financial standing. A government statistician was pushed out of her job, and can’t get any job, because she refused to change the statistical methods she had been instructed to use so that the results titled in the government’s favour. Government here might have to look at new ideas in manipulating unwelcome stats.

  5. tracey 5

    Any evidence the surplus will continue beyond 2014/15?

  6. tracey 6

    Could the media stop going to bank economists for so-called analysis… These guys have so much vested interest it would almost be funny if it werent masquerading as impartial.

    Its like asking the ceo of nzx whether he thinks our assets should be listed.

  7. tracey 7

    “New Zealand emerges from recession,” 2010 bill english

    Yet yesterday i heard him on the radio and three times he mentioned us being in recession as paet of his surplus explanation.

Links to post

Recent Comments

Recent Posts

  • New visitor attraction to boost tourism
    The opening of the first major new tourism attraction since the global outbreak of COVID-19 closed borders to international travellers will provide a welcome boost to visitor numbers in our largest city, says Tourism Minister Stuart Nash. Mr Nash has this afternoon taken part in the official opening ceremony of ...
    BeehiveBy beehive.govt.nz
    6 hours ago
  • Govt moves on drug checking to keep young New Zealanders safer this summer
    The Government will pass time limited legislation to give legal certainty to drug checking services, so they can carry out their work to keep New Zealanders safer this summer at festivals without fear of prosecution, Health Minister Andrew Little says. Next year the Government will develop and consult on regulations ...
    BeehiveBy beehive.govt.nz
    10 hours ago
  • Public Service Commissioner reappointed
    Minister for the Public Service Chris Hipkins announced today that Public Service Commissioner Peter Hughes CNZM has been reappointed for three years. The Public Service Commissioner is appointed by the Governor-General on the recommendation of the Prime Minister. “Mr Hughes’ reappointment reflects the need for strong leadership and continuity to ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • Pōwhiri marks the start of a critical year for APEC
    New Zealand kicked off its APEC host year today, with a pōwhiri taking place on Wellington’s waterfront with local iwi Te Atiawa, and a number of Government ministers welcoming representatives from the other 20 APEC economies. “APEC is a hugely important international event, and New Zealand is hosting amidst the ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • Speech at APEC 21 Opening Pōwhiri
    9am, Tuesday 1 DecemberTe Whare Waka o Pōneke, Wellington Central He Mihi Kei aku rangatira no ngātapito e whā o te ao huri noa, tātou e huihui mai nei. Tēnā rā kōutou katoa. He tangiapakura ki ngā tini aituā kei waenganui i a tātou, ka tangi tonu te ngākau ki ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • Government extends business debt relief to October 2021
    To assist with the ongoing economic recovery from COVID-19, rules allowing affected businesses to put their debt on hold have been extended by 10 months. “New Zealand’s economy is recovering better than we expected, but the impacts of the pandemic are far-reaching and some businesses need continued support to keep ...
    BeehiveBy beehive.govt.nz
    17 hours ago
  • Bill introduced to support workers with 10 days sick leave
    The Government is delivering on a key commitment by introducing a Bill to Parliament to expand sick leave entitlements from five days to ten days a year, Workplace Relations and Safety Minister Michael Wood announced today. “COVID-19 has shown how important it is to stay at home when people are ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Progress on pay equity for DHB staff
    Today’s initial agreement between DHBs and the PSA on pay equity for clerical and administration staff is an important step toward better, fairer pay for this crucial and largely female workforce, Health Minister Andrew Little says. If ratified, the agreement between the Public Service Association and the country’s 20 District ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Iconic Milford Track officially reopens
    One of New Zealand’s premier hikes and a cornerstone of the Te Anau community, the Milford Track has officially reopened, “From today, hikers booked on the popular Great Walk will be able to complete the walk end-to-end for the first time since early February,” Minister of Conservation Kiri Allan says. ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Support for farmers beefed up ahead of La Niña
    Further funding for feed support services and new animal welfare coordinators will help farmers who continue to feel the effects of an extended drought, says Rural Communities Minister Damien O’Connor. “In March this year, I classified the drought in the North Island, parts of the South Island and the Chathams ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Next steps for Christchurch Hospital campus redevelopment
    Canterbury DHB will be better placed to respond to future demand for services and continue to deliver high quality care, with the next stage of the campus redevelopment programme confirmed, Health Minister Andrew Little says. The Government has approved $154 million in funding for the construction of a third tower ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Five Power Defence Arrangements Defence Ministers’ Joint Statement
    The Defence Ministers from Australia, Malaysia, New Zealand, Singapore and United Kingdom reaffirmed their nations’ continued commitment to the Five Power Defence Arrangements (FPDA), and commended the achievements over the past 49 years as the FPDA moves towards its 50th Anniversary in 2021.  The Ministers recognised the FPDA’s significant role ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Jobs for Nature funding protects health of Hawke’s Bay waterways
    A joint Government and Hawke’s Bay Regional Council project will invest $4.2 million to protect local waterways, enhance biodiversity and employ local people, Environment Minister David Parker announced today.   Over two years, the Hāpara Takatū Jobs for Nature project will fence 195km of private land to exclude stock from vulnerable ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New Year border exception for seasonal workers in the horticulture and wine industries
    2000 additional RSE workers to enter New Zealand early next year employers must pay these workers at least $22.10 an hour employers will cover costs of managed isolation for the RSE workers RSE workers will be paid the equivalent of 30 hours work a week while in isolation From January ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Government increases support for New Zealanders to work in seasonal jobs
    The Government is offering further financial support for unemployed New Zealanders to take on seasonal work. These new incentives include: Up to $200 per week for accommodation costs $1000 incentive payment for workers who complete jobs of six weeks or longer increasing wet weather payments when people can’t work to ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Government receives Royal Commission of Inquiry report into the Terrorist Attack on Christchurch Mos...
    Minister for Internal Affairs Jan Tinetti has today received the Royal Commission of Inquiry report into the Terrorist Attack on Christchurch Mosques, and will table it in Parliament on Tuesday December 8. “I know this will have been a challenging process for whānau, survivors and witnesses of the terrorist attack ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New Zealand Government to declare a climate emergency
    The Government will declare a climate emergency next week, Climate Change Minister James Shaw said today.                                       “We are in the midst of a climate crisis that will impact on nearly every ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Call for urgent action on Pacific conservation
    A declaration on the urgency of the global biodiversity crisis and the need for immediate, transformative action in the Pacific was agreed at a pan-Pacific conference today. The 10th Pacific Islands Conference on Nature Conservation and Protected Areas is taking place this week across the Pacific.  Minister of Conservation Kiritapu ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Speech from the throne
    E aku hoa i te ara o te whai, Kia kotahi tā tātou takahi i te kō, ko tōku whiwhi kei tō koutou tautoko mai. Ko tāku ki a koutou, hei whakapiki manawa mōku. He horomata rangatira te mahi, e rite ai te whiwhinga a te ringatuku, me te ringakape ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Keynote address to Chartered Accountants Australia and New Zealand conference
    Speech to the CAANZ conference - November 19, 2020 Thank you, Greg, (Greg Haddon, MC) for the welcome. I’d like to acknowledge John Cuthbertson from CAANZ, the Commissioner of Inland Revenue Naomi Ferguson, former fellow MP and former Minister of Revenue, Peter Dunne, other guest speakers and CAANZ members. I ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Expert independent advisory group appointed to strengthen the future of Māori broadcasting
    A panel of seven experts are adding their support to help shape the future of Māori broadcasting, Minister for Māori Development Willie Jackson has announced today. “Today I will meet with some of the most experienced Māori broadcasters, commentators and practitioners in the field. They have practical insights on the ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Government to review housing settings
    New Zealand’s stronger-than-expected economic performance has flowed through to housing demand, so the Government will review housing settings to improve access to the market, the Finance Minister Grant Robertson announced today. “Our focus is on improving access to the housing market for first home buyers and ensuring house price growth ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Crown accounts reflect Govt’s careful economic management
    The better-than-expected Crown accounts released today show the Government’s careful management of the COVID-19 health crisis was the right approach to support the economy. As expected, the Crown accounts for the year to June 2020 show the operating balance before gains and losses, or OBEGAL, was in deficit. However that ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Community launch marks next step in addressing racism in education
    The launch of Te Hurihanganui in Porirua today is another important milestone in the work needed to address racism in the education system and improve outcomes for Māori learners and their whānau, Associate Education Minister Kelvin Davis says. Budget 2019 included $42 million over three years to put Te Hurihanganui ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government to consider recommendations on DNA use in criminal investigations
    The Minister of Justice has received the Law Commission’s recommending changes to the law governing the way DNA is used in criminal investigations. The report, called The Use of DNA in Criminal Investigations – Te Whahamahi I te Ira Tangata I ngā Mātai Taihara, recommends new legislation to address how ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Speech to Wakatū Nelson regional hui on trade
    First, I want to express my thanks to Te Taumata for this hui and for all the fantastic work you are doing for Māori in the trade space. In the short time that you’ve been operating you’ve already contributed an enormous amount to the conversation, and developed impressive networks.  I ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Speech to Primary Industries Summit
    Thank you for the opportunity to speak to you today about the significant contribution the food and fibres sector makes to New Zealand and how this Government is supporting that effort. I’d like to start by acknowledging our co-Chairs, Terry Copeland and Mavis Mullins, my colleague, Agriculture Minister Damien O’Connor, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Fast track referrals will speed up recovery and boost jobs and home building
    The Government is taking action to increase jobs, speed up the economic recovery and build houses by putting three more projects through its fast track approval process. “It’s great to see that the fast-track consenting process is working. Today we have referred a mix of potential projects that, if approved, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Papakāinga provides critically needed homes in Hastings
    A papakāinga opened today by the Minister for Māori Development the Hon Willie Jackson will provide whānau with much needed affordable rental homes in Hastings. The four home papakāinga in Waiōhiki is the first project to be completed under the ‘Hastings Place Based’ initiative. This initiative is a Government, Hastings ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand ready to host APEC virtually
    Prime Minister Jacinda Ardern took over the leadership of APEC earlier today, when she joined leaders from the 21 APEC economies virtually for the forum’s final 2020 meeting. “We look forward to hosting a fully virtual APEC 2021 next year. While this isn’t an in-person meeting, it will be one ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Revival of Māori Horticulturists
    The rapid revival of Māori horticulture was unmistakeable at this year’s Ahuwhenua Trophy Awards, with 2020 marking the first time this iconic Māori farming event was dedicated to horticulture enterprises. Congratulating finalists at the Awards, Māori Development Minister Willie Jackson said growing large-scale māra kai is part of Māori DNA. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Emergency benefit to help temporary visa holders
    From 1 December, people on temporary work, student or visitor visas who can’t return home and or support themselves may get an Emergency Benefit from the Ministry of Social Development, Social Development and Employment Minister Carmel Sepuloni announced today. Previously, temporary visa holders in hardship because of COVID-19 have had ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • School sustainability projects to help boost regional economies
    Forty one schools from the Far North to Southland will receive funding for projects that will reduce schools’ emissions and save them money, Education Minister Chris Hipkins announced today. This is the second round of the Sustainability Contestable Fund, and work will begin immediately. The first round announced in April ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Farmer-led projects to improve water health in Canterbury and Otago
    More than $6 million will be spent on helping farmers improve the health of rivers, wetlands, and habitat biodiversity in Canterbury and Otago, as well as improving long-term land management practices, says Agriculture Minister Damien O’Connor. Four farmer-led catchment group Jobs for Nature projects have between allocated between $176,000 and ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Tupu Aotearoa continues expansion to Pacific communities in Nelson, Marlborough, Tasman & Northl...
    Pacific communities in Nelson, Marlborough, Tasman and Northland will benefit from the expansion of the Tupu Aotearoa programme announced today by the Minister for Pacific Peoples, Aupito William Sio. The programme provides sustainable employment and education pathways and will be delivered in partnership with three providers in Northland and two ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New primary school and classrooms for 1,200 students in South Island
    Education Minister Chris Hipkins unveiled major school building projects across the South Island during a visit to Waimea College in Nelson today. It’s part of the Government’s latest investment of $164 million to build new classrooms and upgrade schools around the country. “Investments like this gives the construction industry certainty ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Minister of Māori Development pays tribute to Rudy Taylor
      Today the Minister of Māori Development, alongside other Government Ministers and MP’s said their final farewells to Nga Puhi Leader Rudy Taylor.  “Rudy dedicated his life to the betterment of Māori, and his strong approach was always from the ground up, grassroots, sincere and unfaltering”  “Over the past few ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Prime Minister to attend APEC Leaders’ Summit
    Prime Minister Jacinda Ardern will attend the annual APEC Economic Leaders’ Meeting and associated events virtually today and tomorrow. “In a world where we cannot travel due to COVID-19, continuing close collaboration with our regional partners is key to accelerating New Zealand’s economic recovery,” Jacinda Ardern said. “There is wide ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Speech to Infrastructure NZ Symposium
    Tena Koutou, Tena Koutou and thank you for inviting me to speak to you today. This is a critical time for New Zealand as we respond to the damage wreaked by the global COVID-19 pandemic. It is vital that investment in our economic recovery is well thought through, and makes ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Pike River 10 Year Anniversary Commemorative Service
    Tēnei te mihi ki a tātau katoa e huihui nei i tēnei rā Ki a koutou ngā whānau o te hunga kua riro i kōnei – he mihi aroha ki a koutou Ki te hapori whānui – tēnā koutou Ki ngā tāngata whenua – tēnā koutou Ki ngā mate, e ...
    BeehiveBy beehive.govt.nz
    2 weeks ago