National is devastated as PREFU is better than expected

Written By: - Date published: 9:17 am, September 13th, 2023 - 26 comments
Categories: Christopher Luxon, Economy, election 2023, grant robertson, labour, national, nicola willis, treasury - Tags:

I almost felt sorry for Christopher Luxon and Nicola Willis yesterday.  Having to negatively paint a PREFU that was better than expected has clearly taxed their abilities.

The figures in PREFU were relatively stable.

Annual GDP is forecast to increase from 1.0% to 1.3% for the next financial year compared to budget figures.  Inflation will be slightly higher at 3.8% compared to 3.3%.  Unemployment will be slightly lower at 4.8% which is a remarkable achievement. Over the forecast period it will peak at 5.4% before declining back to 4.8%. The current account deficit will be 6.6% of GDP and it will take longer to reach the country’s debt goals.  And wage growth will outpace declining inflation.  Worker’s living conditions will improve over time.

And net debt will be slightly higher at 22.3% of GDP compared to 22%.  Robertson’s recent budget realignment has clearly had an effect.

Luxon’s response was typically downbeat.  The guy really needs to chill out and smile.  All of this relentless negativity must be getting to him.

With typically overblown hyperbole he said Grant Robertson will go down as one of New Zealand’s “worst finance ministers”.

He and Willis then went into metaphor overdrive.

From One News:

Luxon said Labour’s “excessive spending” was driving economic pain and there was nothing to show for the additional spending.

“It’s not just about the numbers.

“Behind all the data… are Kiwi families [who] are facing tough choices every day.”

He said the state of New Zealand’s economy was driving Kiwis overseas.

“Grant Robertson is going to go down as one of the worst finance ministers this country has ever had.”

National finance spokesperson Nicola Willis said Labour had “left the cupboard bare”.

“The day of reckoning is now here.”

She said economic growth forecast was “lacklustre”.

Willis said National remained committed to tax cuts.

“We will mount the fiscal repair job New Zealand needs.”

His claim about Robertson being one of the worst Finance Ministers needs a bit of unpicking.  During his tenure Robertson has overseen two upgrades and no downgrades to New Zealand’s credit rating given by the major ratings agencies.  By comparison National’s Bill English achieved two increases but three downgrades.

And Rob Muldoon is clearly the worst Finance Minister.  Ever.  Not only did he sabotage the Douglas Super fund, the main reason why Australia’s economy has surged past New Zealand’s in the past 50 years, he also blew the country’s budget on the Think Big projects.  Who can ever forget that our foreign exchange trading market had to be shut in 1984 to stop excessive speculation following the collapse of the dollar?

And shock horror stories about debt are fantastically overblown.

As are the claims there is nothing to show for increased spending.  Significant increases to benefits, nurses and teachers salaries, increased spending in health, winter energy payments and climate projects come at a cost.

Meanwhile Christopher Luxon has changed tack on his earlier promise that Health and Education budgets would be increased by at least the rate of inflation.  Stand by for Health and Education to be gradually run into the ground if they win.

Hopefully more and more people will see through National’s overblown rhetoric.  Because their current comments show that

26 comments on “National is devastated as PREFU is better than expected ”

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  1. Roy Cartland 1
    13 September 2023 at 9:41 am

    With typically overblown hyperbole he said Grant Robertson will go down as one of New Zealand’s “worst finance ministers”.

    I thought we weren’t doing nasty personal attacks this election, Christopher?

    • Kat 1.1
      13 September 2023 at 10:27 am

      "I thought we weren’t doing nasty personal attacks this election, Christopher?……."

      "Yes, no, but just not on the front page of the Herald……….there may be some other places as well and we will let everyone know in due course……….."

  2. KJT 2
    13 September 2023 at 10:59 am

    Muldoon "worse than Douglas and Richardson".

    Really??

    • Barfly 2.1
      13 September 2023 at 1:03 pm

      Not in my opinion – Douglas with his looting of the collective wealth of New Zealand is who I would nominate.

      Though the harm that Richardson did with her ‘smash the poor’ budget is a close second – we are still having and will continue to have great societal harm as a result of this evil woman’s actions.

      • Patricia Bremner 2.1.1
        13 September 2023 at 2:17 pm

        Barfly, I rate Paula Bennet as bad as a contender. Her lumping everyone onto Job Search and taking all benefits to the lowest possible, coupled with the sell off of State owned houses to "Developers" by Nick Smith and friends, he was actually removed by Bill English, to go on to "Wadable Rivers" infamy. All bad in my book.

    • Nic the NZer 2.2
      13 September 2023 at 7:54 pm

      I would say completely wrong based on the reasons given.

      NZs fixed exchange rate regime (which led to the currency crisis) was bound to end at some time. The other bs which gets thrown around about this is the claim NZ was bankrupt in some way, no it couldn't maintain its fixed exchange rate. A fixed exchange rate as a primary economic goal has really bad outcomes for an economy in general.

      And the think big projects were the backbone for a lot of the countries electricity production and still are important to it. The question of if these could be sold profitably (or more importantly in practice were sold profitably) is a stupid way to judge their worth.

      And no the governments retirement savings policy is not a cause of economic decline vs Australia.

      • Ed1 2.2.1
        13 September 2023 at 9:45 pm

        Nic, it is not clear what you are claiming is completely wrong; so my comment is about your claim that "the think big projects were the backbone for a lot of the countries electricity production and still are important to it." That is certainly in part true, but which were part of Think Big and which came earlier or later would help – certainly newer generation sources are becoming more important. You say "The question of if these could be sold profitably (or more importantly in practice were sold profitably) is a stupid way to judge their worth." Whether they were sold for their true underlying value is not clear – many believethey were sold at far lesss than true value – so yes the sales were profitable to the purchasers and unprofitable to the public. The true horror however is the 'market' system that has guaranteed high profits to the generating company shareholders – the ''Bradford bungle" has led to excessive electricity prices to users, with an increasingly non-transparent pricing system that now makes selecting a supplier a guess as to how to minimise cost – leading to low levels of switching while profits continue to grow, with many dividends disappearing off shore.

        As far as retirement savings policy is concerned, Australia now have large funds seeking to compete for profitable investments – Aussie companies find it easier than NZ companies to raise capital provided their financial data supports investment. In NZ the (tax) favoured investment is rental property – our Kiwisaver funds are generally not large enough to bear the liquidity risk, and may not qualify for hte tax reductions anyway. Worse, Aussie companies are required to match employee contributions to a higher level than in NZ – over time we are heading to many retirees with insufficient assets for a comfortable retirement. The scheme Muldoon canned would have had the beneficial effects for NZ that Australia has seen.

        • Nic the NZer 2.2.1.1
          13 September 2023 at 11:22 pm

          I was highlighting that many of the criticisms of Muldoon as finance minister really don't hold water. As you highlighted a bunch of related policies were down to future governments.

          and I don't buy the impact of the super scheme being so significant to Australian economic performance. The article attributes a large part of the difference in economic performance to this. You could not tell when Kiwisaver or the Cullen fund were introduced from macro economic data, which should be apparent if it actually makes a difference to macro economic performance.

  3. James Simpson 3
    13 September 2023 at 11:28 am

    I think the government needs to steer the campaign away from the economy and the numbers. You may call them stable but anyone going to the supermarket, or filling up their car will make their own assessment on the cost of living and it won't be a favourable view.

    Lets focus on things, that are of real concern to people, that National will and is ignoring. The key one being the climate. The past 12 months has shown us the damage from climate change. They don't want to talk about it because their policy is at best do nothing, and worst, go backwards.

    We don't want Luxon talking about tax cuts because at this point in time, people are desperate for cash in their pockets. We want him talking about climate, because their solution to that is as scary as fuck.

    • Anne 3.1
      13 September 2023 at 6:54 pm

      100% James Simpson.

      Lets focus on things, that are of real concern to people, that National will and is ignoring. The key one being the climate.

      I received an email from the L.P. asking "why am I supporting Labour". I made the same point as you have made using CC as an example. The NActs ignored CC for years. Most were in total denial of its existence. Imo, it is because they are so tunnel-visioned, they could not – or would not – comprehend the evidence that has been around for decades.

      Luxon is an illiterate when it comes to the science. Hipkins would run rings around him on the subject. It is sure to come up in the upcoming debates (if it doesn't then there will be good reason to suspect the 'hosts' of political connivance) and Hipkins could have him on a plate.

  4. Anne 4
    13 September 2023 at 11:39 am

    From the TVNZ link:

    Luxon said Labour’s “excessive spending” was driving economic pain and there was nothing to show for the additional spending.

    As we know, a blatant lie. Is the MSM highlighting the Luxon and Willis lies that have been publicly expressed? Nah… but they go into overdrive when a couple of Labour MP's don't do their homework properly (yes, a bad look and not good enough) and give them a bollicking.

    One rule for NAct and another for Labour.

  5. Ad 5
    13 September 2023 at 11:46 am

    High time Labour or the media generally put Nicola Willis under scrutiny.

    What exactly are her credentials for preparing a Budget with the scale of cuts that their tax policy clearly requires?

    The quick answer is none.

    So who are the people behind her?

    • Patricia Bremner 5.1
      13 September 2023 at 11:56 am

      Eight million dollars of expectationssurprise who is really driving National's bus?

    • bwaghorn 5.2
      13 September 2023 at 12:31 pm

      Ever noticed she often wears Act pink, coincidence maybe, signed of true nature more likely, imho

      • Anne 5.2.1
        13 September 2023 at 1:31 pm

        She's portraying her femininity. Carefully designed to attract the votes of women – at least the less astute and politically uninformed amongst us.

        • bwaghorn 5.2.1.1
          13 September 2023 at 3:14 pm

          She reminds me of my last boss, a woman who was the most greedy under handed power tripper I've ever met,

          Actually used the line "it's not personal it's just business " while shaftimg me from a position of power, I almost want lamb prices to tank completely because I reckon shell go broke and it'll give me great pleasure to see her fail.

    • Barfly 5.3
      13 September 2023 at 1:12 pm

      Really? Does she not have a degree in Zoolology?

      • Ad 5.3.1
        13 September 2023 at 1:28 pm

        Yes I get the reference to PM Clark.

        Dr Cullen was the one who set the budgets and he had a PhD in economic history and plenty of ministerial chops before that.

  6. Mike the Lefty 6
    13 September 2023 at 1:18 pm

    I suspect that even if it looked rosy it wouldn't make a whole lot of difference. It is no good telling people that in reality their inflation, food costs and interest rates are no worse than our trading partners and comparable democratic countries.

    What matters is that they are high now, so inevitably the current government has to wear the blame. Never mind that the opposition contains elements of the Rogernomes that drove inflation and home lending to 16% plus in the 1980s.

    National look oh so attractive skipping gleefully around New Zealanders who are struggling to get by, whilst promising a chicken in every pot and banking on finding pots of gold at the end of rainbows to pay for it all.

  7. adam 7
    13 September 2023 at 2:29 pm

    I've said it before, but it now seems to becoming real. I can't tell the difference between a marxist leninist and a neo-Liberal. Both worship economic purity, and both will sink our country faster than Liz Truss.

    The problem we face is both national and act are both economic purists. To burst the bubble of so many on the right, the labour party, nor grant robertson, are not marxist leninist's.

    We have no City of London to drag us out of the nightmare stupidity of purity they are about to release, if the Tory's win.

  8. Dean Reynolds 8
    13 September 2023 at 2:33 pm

    Luxon is a penis in a suit

  9. AB 9
    13 September 2023 at 3:05 pm

    National were always going to say the same thing no matter how the PREFU panned out. It was written down in advance so Luxo had time to just about memorise it and repeat it endlessly. Hardly anybody notices, and the people who might care because their jobs are supposedly about getting at the truth, don't care.