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National’s alternative budget doesn’t add up

Written By: - Date published: 9:36 am, September 26th, 2020 - 23 comments
Categories: election 2020, Judith Collins, making shit up, national, paul goldsmith, same old national, spin, you couldn't make this shit up - Tags:

If ever you needed a symbol of National’s current plight it is the handling of the release of its alternative budget.

It has been a complete and utter shambles.  A clusterf&*k of epic proportions.  A week in and they are still being hammered about it.  Because if there is one part of National’s reputation that needs to be defended at all costs it is the perception that they are competent financial managers and making multiple billion dollar mistakes in your alternative budget at election time is the one thing over all else that will hurt that part of your reputation.

The first mistake that emerged was a doozy, overestimating the savings from cutting contributions to the Cullen Fund by $4 billion.  I earlier posted this:

It appears that Paul Goldsmith, financial spokesperson for the party that prides itself on its ability with finances, has made a rather large miscalculation.

When creating National’s budget he anticipated that stopping contributions to the Cullen fund would “save” the Government $19 billion dollars.  I put “save” in parentheses because it will actually cost the Government and the country long term but that is a topic for a different day.

But the actual figure was $15 billion, so National had banked on $4 billion in savings that it was not going to get.

More mistakes appeared.  National used the wrong figures for its capital allowance and faced another hole of $88 million that had to be filled.

Then it transpired that National had double counted a $3.9 billion contribution from the National Land Transport Fund.  Its solution was to just say that the NLTF would have to pay this sum twice.  What fiscal geniuses National has.  Imagine being able to get funding this way by drawing twice on a fund in the future even though you have no idea if it will be able to afford this.

But things became worse yesterday.  Clint Smith who has done some great analysis on the subject noticed another hole.

Surely that was the end of it.  Surely this was the last mistake and after patching up its budget National could then get on with campaigning.

Well hold my beer.

Thomas Coughlan at Stuff has reported on how National and NZIER, who did the checking on the figures, both agree to stand behind the budget, but the budgets they were standing behind have different figures in them.

From Stuff:

The National Party and the economic agency used to vet its figures are now using different numbers to explain how the National Party’s alternative budget stack up.

Both National and NZIER stand by the alternative budget, but they stand by alternative versions of it, with each version containing different numbers.

In the space of just eight hours, Paul Goldsmith and NZIER have given two different versions of how the numbers added up – both have issued corrections of sorts following enquiries from Stuff.

National has been fighting allegations that its numbers don’t add up after it was discovered that their alternative budget included $3.9b from the NZ Upgrade Programme.

That programme no longer exists, with what was left of it rolled into the main government capital account in May.

The party has since said that it will find the money by raiding NZTA’s National Land Transport Fund (NLTF) for another $3.9b, cutting spending from some transport projects to make the numbers work.

This is the version of the budget that has existed since Tuesday.

But Goldsmith changed his tune on RNZ this morning, stating that he’d be funding the $3.9b through an increase to the capital allowance – the pot of money allocated in each new budget.

“We’ve also shifted – because the Government allocated the spare money from that upgrade fund into the capital allowances – we’ve increased our capital allowances,” Goldsmith said.

But Stuff later clarified with Goldsmith that the $3.9b would still be coming from the NLTF, not the capital allowance as he told RNZ.

“It’s no different to what’s been said over the last few days. We’ll be taking it from the NLTF,” Goldsmith told Stuff.

Stuff confirmed with Goldsmith this would mean a little over $10b being cut from some transport projects in the $48b NLTF and given to others.

This had clearly not been communicated to NZIER, the agency that vetted National’s numbers to make sure they added up.

Stuff has been trying for two days to get the agency to stick by its figures – and only received a response late this afternoon from Peter Wilson, the NZIER economist who vetted the National plan.

Wilson’s response backed the original budget: $6.3b would come from the NLTF, not the $10.2 National now claims.

National cannot have it both ways.  Either its debt reduction figures are correct and there is a large hole the size of half of Auckland’s third harbour crossing in it.  Or its debt reduction figures are wrong and we have to borrow more.  Or it should cancel its tax cuts because remarkably they are similar in size to the latest discovered hole.

Despite National’s hope we do not notice we certainly cannot have our cake and eat it as well.

The one thing that is certain is that we should not trust National with running a cake stall.  Let alone running the country’s finances.

23 comments on “National’s alternative budget doesn’t add up ”

  1. Dennis Frank 1

    Primary school drawing class, you use a rubber. Make a mistake, rub it out & try again. Goldsmith hasn't forgotten this early lesson: he's putting on a public exhibition of artistry for kids. Whereas you expect an arithmetical focus.

    Wrong: he knows voters identify with a trier, and think in pictures, not numbers. His media adviser keeps saying "Yeah, nice big picture but bits are fuzzy. See if you can get it better." Voters, entranced, marvel at the ever-changing picture…

    Okay, it's just a theory, but it does fit the facts eh? Perhaps others can come up with something better. Defaulting to chronic incompetence is just so damn boring.

  2. Andre 2

    To be fair, raiding the NLTF for more money is easily achievable by upping the various taxes and levies that pay into the NLTF.

    Arguably, that would even be a sensible thing for an environmentally conscious incoming government to do. Making road transport more expensive discourages use of one of our most resource-wasting and polluting sectors, giving people incentives to use less and switch to (hopefully) less damaging alternatives.

    Of course, that's dead against what minimal actual philosophy and principle the Nats possess.

    • woodart 2.1

      perhaps someone should ask road transport federation(always an ex nat at the helm) what they think of raiding the nltf for tax cuts. should be good sport watching ken shirley? dance on a pin head.

  3. Stuart Munro 3

    It is less National's accounting errors than the gross policy errors that reek of decay to me.

    If overspending by 4-10 billion were all we had to fear from the Gnats I'd be greatly relieved. Leaving aside Covid, the thrust of their policies is broadly anti-environmental and anti-social. Labour is mildly embarrassed that our rivers run with cow poo, but the Gnats want an altogether different aesthetic – "Where there's muck there's brass." They are certainly brazen.

    There is some poetic justice however, in visiting their own accounting errors on the party who made such a meal of the wholly fictitious decade of deficits.

  4. Dean Reynolds 4

    National are a disorganised rabble, led by a psycopath

  5. Sabine 5

    Mickey, would it really be asking to much to actually debate or discuss what Labour wants to do rather then what National is not gonna get to be doing?

    I would like to know more about Grant Roberstons 'Social Welfare Insurance' that he wants to do once elected. Could you enlighten us to if this is going to be a Payroll Tax or part of the income tax, and is it going to be a non tax cause they call it insurance?

    Seriously, i think that would be way more interesting considering that the No Mates party does not stand a chance in hell of getting even elected dog catcher this year.

    And it might be interesting to voters that are considering Labour to know what the Party has in store for them, and this 'social welfare insurance/tax/whatever' would be a good start.

  6. barry 6

    Which just about kills the economic credibility of NZIER (yes I know).

    As for National:

    This is the second election in a row where they have a finance spokesperson who can't add up, and when people who can add up point out their mistakes they continue to lie about it.

    It is a sad day for National when ACT (yes I know) has more credibility.

  7. observer 7

    I think National must be relying on the Trump tactic (and we know it works, though I still have enough faith in NZ voters to hope it doesn't work here). It goes like this …

    Headline: "Nats' error! Billions missing!" = widespread media coverage, and voters notice.

    Next day, new headline: "Another Nat error! Billions more!" = less media coverage, voters sigh but less interested now.

    Next day, yet another headline: "More maths mistakes!"

    Voters: "yeah, we've done this already. What else is happening?"

    In short: diminishing returns. Objectively, the most recent missing million is as important as the first million, and so it's only getting worse for National, but voters have already factored that in. Just as Trump lying every 5 minutes does not have a cumulative effect, because nobody is shocked any more.

    Of course Robertson and the media must continue to hammer Goldsmith on this. But anyone who still believes in National's numbers is going to vote National even if they promised all debt would disappear by Christmas.

    • Hanswurst 7.1

      That seems a bit much like Underpants-Gnome theory to me: stupid mistakes — ? — profit!

      If, when recalling the publicity about the National Party in this campaign, all the electorate has in its collective mind is a series of accounting stuff-ups, then the basic association will be vague references to not very much of something that was wrong anyway. Trump brings more to the table, in that the background of incompetence and constant errors is fronted by an idiot clown prancing around making a dick of himself. Since Key left, National are missing the secret dickhead-clown ingredient that made the rest of it fall into place.

      […] I still have enough faith in NZ voters to hope it doesn’t work here […].

      Well, as per the above, I would argue that it already has worked here. It’s just that NZ doesn’t have the same mix of a polarised electorate and brazenly celebrified politics as the USA, nor does NZ face the recent cycle of deadlock and partisan programme-pushing that has arisen there from the dynamics between the president and the legislature, so Trump and the Republicans look quite different to Key and the Nats.

      • observer 7.1.1

        Seems pretty basic to me.

        National (Goldsmith) stuffed up, and so they faced the usual choice for politicians who stuff up – accept and take the hit, or double down. They are doing the latter (as Trump usually does).

        As I say, there are new errors, but National are hoping it's seen as an old story.

        • Hanswurst

          accept and take the hit, or double down.

          They're actually doing neither, or having a bob each way, if you like. They admitted the first mistake, and sort of admitted subsequent ones, while claiming that it was just a matter of opinion/viewpoint/pedantry (hard to tell which) as to the precise allocation of the funds. Their narrative has been that the one mistake is a 'rounding error', while the other is simply a technicality.

          National are hoping it’s seen as an old story.

          Of course they are; anyone would, but again, that's not doubling down, it's minimising and hoping that people will forget. I don't really see much parallel with Trump's brazen approach. Nor does it look like a tactic at all, since it seems very reactive, rather than like a planned approach.

  8. Austringer 8

    Well the notice of working groups, prior to this was the Nats, and wealth pointing to no we cannot have a Financial Transaction Tax, it will chase away our overseas investors to other places more open to tax exile care, as they said if it was universal it would be acceptable, heh! as would universal socialism.

  9. Hanswurst 9

    The first mistake that emerged was a doozy, overestimating the savings from cutting contributions to the Cullen Fund by $4 billion.

    In a way, of course, it's a technicality, but they 'overestimating' it is actually precisely what they didn't do. They didn't prepare their own estimate, but just retained figures from an earlier treasury projection than the one they were meaning to use.

  10. Ad 10

    A cut of $3.9 billion to transport would wipe out any major capital project, including motorways with cycleways in parallel, any light rail system that was publicly funded, anything which could start to sort out Wellington tranpsort, kill the Auckland busways, and more.

    It would deliver transport back to being our number 1 climate change contributor.

    In order to deliver a tax cut.

    • Incognito 10.1

      In order to deliver a tax cut.

      In order to save a few National MPs and Judith’s position as Leader. You can smell the fear and desperation on their breath each time they open their mouth. They’ll do anything to stave off a resounding loss at the polls, even taking redistributing billions of Taxpayers’ money to buy votes from other Taxpayers. Internal polling must be bad and getting worse.

      • hanswurst 10.1.1

        … although, of course, if the effect is only to lift their polling from abject to miserable, they're not actually redistributing anything, but getting the votes for free.

  11. Maurice 11

    Perhaps the National Budget is merely "aspirational" ???

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