National’s proposed public spending to GDP ratio – the election’s clear blue line

Written By: Guest post - Date published: 9:22 am, May 15th, 2014 - 72 comments
Categories: bill english, Economy, national, privatisation, Public Private Partnerships, public services - Tags:

The real story of the coming election is neither corruption nor perceptions of corruption but rather what was revealed in Bill English’s reported pre-budget speech to the National Party’s Southern Region conference at the weekend. He signalled an intention to reduce the proportion of government spending to 26% of GDP over the next 6 to 7 years. The current level reported to be hovering at 30% already places NZ in the lowest quartile of OECD countries, having fallen from 35% of GDP in 2008. Most developed nations, despite kinder geography and greater economies of scale, spend a significantly higher proportion of GDP on government goods and services. Bill English’s reported statement (I cannot find the whole speech online) is probably the clearest indication yet of the general direction of the National Party’s policies in a new term.

When parties approach a third term in government the claim is often made that they have run their course as far as new ideas are concerned. There are no manifesto policy announcements yet from National so we just don’t know how it is proposed that this objective be met. However it does reveal that the National Party’s basket of ideas is far from empty and that it does not regard status quo spending as desirable. To achieve this would require extraordinarily high GDP growth, above historical averages which is very unlikely, or further large cuts to public expenditure.

For all those who hold dear the benefits to the wider population achieved by New Zealand’s Social Democratic programme of the last 70 years, this is where the election contrast between National and more progressive parties lies.

We do not know what cuts are proposed but the options identified below are either continuations of existing policy directions by the National Party or have been signalled through press releases, law changes or speeches as possible initiatives.

Further outsourcing of public sector services by competitive tender using the government’s ‘best sourcing’ model for delivering “Better Public Services’
A continuation of the policy of ‘digital by default’, replacing staffed offices with websites and 0800 numbers,
Cuts to the inequality reducing financial transfers to poorer New Zealanders – such as Working for Families.
Possible moves to means testing of benefits like pensions as was signalled in an article in yesterday’s Dominion Post
Weakening the roles of public agencies so they are less costly to run. The model here is the Department of Conservation’s change of role to focus on volunteering and tourism rather than policy advice and species and habitat protection.
Further privatisations, possibly using different models than the mixed-ownership model, including potentially beyond State Owned Enterprises like NZPost, Quotable Value and Kiwibank and into core services like for example the Land Registry as the UK has just done.
The adoption of different funding models (such as public private partnerships) for infrastructure projects such as roads, hospitals and schools which keep the cost off the government books in the short term but essentially mean that for generations the public buys the right over and over to use public infrastructure.

It will be interesting to see in the lead-up to the election whether this public spend to GDP ratio commitment is communicated . It seems to have been in a speech intended for party members and the bald fact of the lower ratio has not, so far as I can see, been signalled in other more public speeches.

References

Jan Rivers,
Public Good Champion in a personal capacity
www.publicgood.org.nz

72 comments on “National’s proposed public spending to GDP ratio – the election’s clear blue line ”

Comments are now closed

Colonial Viper 1

15 May 2014 at 9:32 am

And this is where Labour can hit back hard and fast. National has just given Labour a theme it can run with for the next 3 months.

Say that Labour believes that public sector spending is a crucial part of the economy, creates jobs and provides services that every New Zealander uses and which the economy depends on.

Say that National’s plan amounts to a turn down the path of ugly European austerity; Labour on the other hand will maintain Government spending around 30% higher than National at around 1/3 of GDP in order to give New Zealanders.

Labour will do this because it values giving New Zealanders a common wealth of health, education and other public sector services that they deserve, and because Labour believes in supporting our doctors, nurses, teachers, lecturers police, armed forces and tertiary students for doing a tough job every day, not trying to balance the books by short changing every day New Zealanders.
- Matthew Hooton 1.1
  
  15 May 2014 at 9:51 am
  
  “ugly European austerity”?
  
  Look at the graph. Spending as a percentage of GDP is higher in most European countries than in NZ. They haven’t had “austerity” in Europe, they have a correction from massive overspending.
  - kenny 1.1.1
    
    15 May 2014 at 10:13 am
    
    Tell that to the Greeks, Italians, Portuguese,Irish and French.
    
    What a wally!
    - Gosman 1.1.1.1
      
      15 May 2014 at 11:00 am
      
      The French???? They have attempted to avoid any cut backs for as long as possible and even looked at trying to get an even bigger slice of the economy in State hands with the aborted 75% wealth tax. How has that worked out for them?
  - KJT 1.1.2
    
    15 May 2014 at 10:48 am
    
    Don’t you mean a failure to address the necessary “correction” from massive under-taxing of the wealthy.
    
    Just like National.
    
    Borrowing for unaffordable tax cuts.
    
    Then having to run around like a bunch of destructive rodents gnawing at the foundations of New Zealand’s social and physical infrastructure, and putting sneaky taxes on the poorest to pay for it, to pretend they have a, wholly delusional, surplus.
    
    Leaving a swath of destruction that will take generations to fix.
    - Matthew Hooton 1.1.2.1
      
      15 May 2014 at 11:09 am
      
      Top tax rates are high in Europe: see http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates
      So how do you get that Europe’s problems come from under taxation of the wealthy?
      - Gosman 1.1.2.1.1
        
        15 May 2014 at 11:19 am
        
        Maybe because the French failed to raise taxes on the wealthy to 75%.
        
        Interesting that most austerity in Europe comes with increased taxes on the wealthy and not just cuts in spending. The left tends to ignore that inconvenient fact.
        
        North 1.1.2.1.1.1
        
        15 May 2014 at 12:34 pm
        
        Read and understand Kenny @ 1.1.1 you ugly fool Gooseman. The wealthy suffer austerity and the masses don’t ? True fanatical right wing liar you.
        
        Gosman …
        
        15 May 2014 at 1:27 pm
        
        Kenny tried to argue that the French have undergone austerity. He/she lost all credibility after that outrageous statement.
      - Ennui 1.1.2.1.2
        
        15 May 2014 at 3:03 pm
        
        Oh Matthew, do you really think that the wealthy pay tax at those rates in Europe (and elsewhere)? Check the maths, it does not add up. Being wealthy does not mean having to be taxed at a high rate, there are so many vehicles for avoidance. Do you really expect us to be so credulous?
      - Mike S 1.1.2.1.3
        
        15 May 2014 at 3:33 pm
        
        Because as you know very well Mathew, the wealthy don’t pay income tax because they don’t declare any income.
  - Colonial Viper 1.1.3
    
    15 May 2014 at 10:54 am
    
    “ugly European austerity”?
    
    Look at the graph. Spending as a percentage of GDP is higher in most European countries than in NZ. They haven’t had “austerity” in Europe, they have a correction from massive overspending.
    M
    
    Deliberately collapse the private sector and yes of course government spending will look bigger “as a proportion of GDP.” Come on Hooton, you know the tricks, and we do too.
    
    The obfuscation spoken earnestly like a true austerity advocate.
    
    There’s a simple clue as to when austerity is being applied Mr Hooton, and that is when a country’s unemployment rate skyrockets over 10% within the space of a couple of years even as the fat cats get fatter, and “democracy” is no longer run by the people, but the central banks, Goldman Sachs and JP Morgan.
    - Gosman 1.1.3.1
      
      15 May 2014 at 11:09 am
      
      The countries that underwent more austerity post 2007 generally have lower unemployment than those that have dithered over cutting back the size of the State. Witness the difference between France and the UK.
    - Gosman 1.1.3.2
      
      15 May 2014 at 11:14 am
      
      Latest information on UK unemployment
      
      http://www.bbc.com/news/business-27406457
      
      Latest news on French unemployment
      
      http://www.france24.com/en/20140326-french-unemployment-february-labour-ministry-hollande/#./?&_suid=140010923350308172963617936452
    - Matthew Hooton 1.1.3.3
      
      15 May 2014 at 11:16 am
      
      So you define “austerity” not by government spending as a percentage of GDP but by the unemployment rate?
      That means there has been no austerity in New Zealand since 1993 (see http://www.rbnz.govt.nz/statistics/key_graphs/employment/ ) but very considerable austerity in Greece through most of the 2000s (see http://www.craigwilly.info/wp-content/uploads/2013/01/greece-unemployment-rate.png )
      I’ll go for govt spending as % if GDP as my measure, if that’s ok.
      - Colonial Viper 1.1.3.3.1
        
        15 May 2014 at 11:20 am
        
        Oh FFS Hooton you may think that you will do OK by being allowed inside the friendly club house of the top 0.1% as an honorary member or hanger on, but the power elite is screwing everything and everyone in sight and no one is going to be better off for it in the long run.
        
        Ennui 1.1.3.3.1.1
        
        15 May 2014 at 4:18 pm
        
        CV, Matthew falls into that category known as “Useful Fools”. It is sort of analogous to the Clown Jester who ate from the kings tables and sat by the fireside. You get to partake until you are neither funny or wanted, then you go to live in the pigsty with the rest of the peasants.
        
        When Matthew speaks some words of the Bard come to mind that fit his role, and his ultimate insignificance.
        Life’s but a walking shadow, a poor player
        That struts and frets his hour upon the stage,
        And then is heard no more. It is a tale
        Told by an idiot, full of sound and fury,
        Signifying nothing.
    - Colonial Viper 1.1.3.4
      
      15 May 2014 at 11:17 am
      
      Gossie all your shit is irrelevant. NZ has the lowest unemployment of all those countries and we have mainly dodged austerity approaches. Which makes sense because austerity means pulling money out of provinces, towns and cities and everyone seems surprised when that results in massive unemployment.
      - Gosman 1.1.3.4.1
        
        15 May 2014 at 11:25 am
        
        The nations in Europe that actually did undergo a high amount of austerity like the Baltic nations have bounced back strongly. Those like France and Italy that have resisted efforts to pair back the size of the State have languished. This is at odds with your view that austerity is bad.
        
        http://www.forbes.com/sites/dougbandow/2013/04/15/the-triumph-of-good-economics-austere-baltic-states-outgrow-their-european-neighbors/
        
        Colonial Viper 1.1.3.4.1.1
        
        15 May 2014 at 11:40 am
        
        The “baltic nations” went through a fucking genocidal war, next you’ll be adding that into the recipe for “economic recovery.”
        
        And of course there is nothing “wrong” with austerity if you are in the top 5% who benefit from it (because they are the ones who structure and design the austerity programmes), not the bottom 50% who get smashed (also by design).
        
        Seriously do you think we were all born last night? FFS.
        
        Gosman …
        
        15 May 2014 at 11:46 am
        
        Ummm… what genocidal war did the Baltic nations go through recently?
        
        King Kong …
        
        15 May 2014 at 11:55 am
        
        Getting the Balkans and Baltics mixed up is an easy mistake to make however it makes you look a bit of a prat when stridently decrying an areas economic policies it turns out you are talking about completely the wrong place.
        
        Colonial Viper …
        
        15 May 2014 at 1:36 pm
        
        Ahhh right thanks KK. The Balkans got massive bribes from the EU and Nato to join, and their citizens got access to work in far richer European nations.
        
        It was part of the power elite’s plan to bring austerity to western Europe and reduce labour standards and wages there.
        
        Gosman …
        
        15 May 2014 at 2:25 pm
        
        What??? Jeeze CV you kind of lost it there. I generally place you in the reasonably sane hard core lefty but not sure you deserve your place there after that.
        
        Disraeli Gladstone …
        
        15 May 2014 at 12:08 pm
        
        Baltic states. Not Balkan.
        
        The Baltics have gone through their own Soviet oppression and civil unrest, but not at anything approaching a genocidal level as far as I’m aware.
        
        Colonial Viper …
        
        15 May 2014 at 1:38 pm
        
        Yeah I screwed up on that one, cheers DG.
        
        thatguynz 1.1.3.4.1.2
        
        15 May 2014 at 11:42 am
        
        Gos, one simple question. have you ever read “Confessions of an Economic Hitman” by John Perkins?
        
        Gosman …
        
        15 May 2014 at 12:00 pm
        
        No but from what I can tell it is one large conspiracy theory with minimal connection with reality.
        
        thatguynz …
        
        15 May 2014 at 12:09 pm
        
        Really, you drew that conclusion from NOT reading it? Interesting. Would that be a “conspiracy theory” in the same sense of GCSB’s involvement in the global surveillance apparatus?
        
        I’m sure you manage to rationalise a lot of things by drawing a line under them and labelling them a “conspiracy theory”. Doesn’t that become an issue for you when said theories become proven fact?
        
        Gosman …
        
        15 May 2014 at 12:26 pm
        
        Don’t know. Hasn’t happened yet. I’ll let you know when it does.
        
        thatguynz …
        
        15 May 2014 at 12:30 pm
        
        Sure it has – you’re just too blind to have seen it. Nice attempt at deflection however.
        
        Despite your assertions to the contrary, you seem to have little idea how the IMF and World Bank operate in the context of global debt markets. Clearly that must be a “conspiracy theory” too. Oh to have your world view..
  - Jan Rivers 1.1.4
    
    15 May 2014 at 11:57 am
    
    My point in writing the article was to point out that it would be good to have the potential governmental, social and spending impacts of a continuation of a sharply reducing ratio of government spend discussed as part of the budget and later the election debate.
    
    People may think a reducing ratio this is a good idea or not. Personally I think there are significant problems from the cuts to date that relate to increasing poverty and inequality as well as reduced resilience to the challenges NZ faces – climate change, aging population, and so on. Further limits in this direction are in my view are likely to increase the nature and scope of these issues in ways that many will find unacceptable.
    - Gosman 1.1.4.1
      
      15 May 2014 at 1:21 pm
      
      What are your thoughts on thelessons identified at the conclusion of this article then?
      
      http://www.forbes.com/sites/dougbandow/2013/04/15/the-triumph-of-good-economics-austere-baltic-states-outgrow-their-european-neighbors/2/
      - Colonial Viper 1.1.4.1.1
        
        15 May 2014 at 1:31 pm
        
        Forbes, the magazine of growth for the 1% and of course for the next 4% of hangers-ons, what a crock of shit.
        
        Austerity is perfect for them, it boosts their incomes, lets them acquire assets on the cheap, and dump workers and workers’ pay for extra corporate profits. What’s there not to like if you are part of the power-elite.
        
        As for the Baltic states, they bounced back from a genocidal war and state communism, so the fuck what does that have to do with Australasia.
        
        Gosman 1.1.4.1.1.1
        
        15 May 2014 at 2:17 pm
        
        What genocidal war???
        
        Colonial Viper …
        
        15 May 2014 at 2:24 pm
        
        Yeah I screwed the pooch on that one, sorry Gosman.
    - Wayne 1.1.4.2
      
      15 May 2014 at 3:06 pm
      
      Actually this is a good discussion topic.
      
      By the way the graph has all types of govt spending, including local govt, typically 4 to 5%. That is why the NZ is just below 40%. Since it relates to 2007, it effectively shows central govt expenditure at 35%.
      
      So Labour is happy with 35%, if not more. For the Nats, the figure for 2014/15 will be about 30%, which the Nats are typically happy with. I do recall that Bill Birch thought 27 to 28% would be better, making a total govt sector of 33%.
      
      In any event the 5% difference in the size of government between Labour and National is a worthwhile debate. It is around $10 billion a year. Labour would spend it through government programmes. And you can have a lot of programmes for $10 billion. Though under Labour, they will allow the state sector to lazily grow as a payback for their union supporters, so some, maybe as much as 30% of the $10 billion is soaked up by excessive bureaucracy, without any actual new services.
      
      National would leave that money in peoples pockets and for businesses to reinvest.
      
      Voters get to choose.
      - thatguynz 1.1.4.2.1
        
        15 May 2014 at 3:11 pm
        
        Absolute bollocks Wayne. Whilst the State Sector permanent employees may (or may not) have decreased under the current National government, the number of contract employees has grown dramatically.
        
        Rather than your “payback for their union supporters” dog whistle perhaps you could cite some actual figures to substantiate your position?
        
        Incidentally, as a rule of thumb the businesses don’t typically reinvest as you have alluded to here “National would leave that money in peoples pockets and for businesses to reinvest.” – they provide a greater return to their shareholders.
        
        Wayne 1.1.4.2.1.1
        
        15 May 2014 at 3:35 pm
        
        Well, three things happen with the $10 billion being left with citizens and businesses.
        
        Some, probably the majority, gets spent on consumption which flows through the economy. Some gets invested in to capital assets. And some is used to repay debt.
        
        However, I guess in fact the govt would spend a fair chunk of the $10 billion on debt repayment. You could halve govt debt by paying $3 billion a year for 10 years. And of course there are payments to build up the Super Fund.
        
        So at least half of the $10 billion will stay with the govt.
        
        thatguynz …
        
        15 May 2014 at 3:57 pm
        
        So your suggestion that “Though under Labour, they will allow the state sector to lazily grow as a payback for their union supporters” doesn’t really hold water then does it?
      - lprent 1.1.4.2.2
        
        15 May 2014 at 3:33 pm
        
        The graph selected was more my choice than Jan Rivers. It is a guest post, which means that one of us had to put it up. I looked and saw that there wasn’t a good visual draw in the text to highlight the point, so pulled a link out of the references. But I was in a bit of a rush so I took the first graph in the link..
      - Jan Rivers 1.1.4.2.3
        
        15 May 2014 at 10:25 pm
        
        Thank you. It is indeed a worthwhile debate. I think you are being disingenuous to say that lower levels of spending leave money in people’s pockets and for businesses to reinvest though.
        
        People: – The current levels of inequality and poverty are well documented. Even august bodies like the OECD, World Bank, and World Economic Forum as well as the United Nations are united in agreement about this. New Zealand is an extreme example of the inequality problem and hundreds of thousands of people here are socially dislocated to the point where they cannot play an active part in their communities including simple things like adequate food, warmth and clothing.
        
        Businesses: The work of people like Mariana Mazzucato, Ha Joon Chang and more locally Shaun Hendy has shown that the idea of courageous entrepreneurs bringing wealth to their own businesses is highly over-rated and very few small business either grow fast or employ many people. Unfortunately in New Zealand the profitability of investing in real estate and dairying absorbs far too much of the available capital leaving other sectors high and dry.
        
        As for your comment : “under Labour, they will allow the state sector to lazily grow as a payback for their union supporters, so some, maybe as much as 30% of the $10 billion is soaked up by excessive bureaucracy, without any actual new services.” I’d be interested to hear of any reputable research here or internationally that supports that assertion.
  - Johnm 1.1.5
    
    15 May 2014 at 1:46 pm
    
    Yes, it’s austerity in Europe. Public spending is still high because the public are paying to bail out the private casino banks, which should have been allowed to go bankrupt, while the public are being beggared. Try spinning that one! Natzis are following their pathetic contemptible neolibereal ideogy Key and English are overpaid smug flash suit parading idiots, and the types who vote for them selfish pack of bastards.
  - Puddleglum 1.1.6
    
    15 May 2014 at 3:08 pm
    
    The graph (I presume you mean the one in the post?) references the year 2007, Matthew.
- blue leopard 1.2
  
  15 May 2014 at 12:38 pm
  
  +100 CV
  
  Good idea
  
  Did you check out the new website that Karol pointed out?
  
  The website’s stated aim is to promote public discussion on important issues we face by providing information in the following manner:
  
  A group of writers have been assembled to write short briefing papers based on extensive research programmes and presented in a form that can be easily understood by the public at large.
  
  The first paper has been written by Brian Easton (13 May 2014), who I view as pretty mainstream and his article has stuck in my mind since I read it. Here is an excerpt (with my bold added)
  
  So the public rhetoric makes a fetish of economic growth which the research evidence concludes economic policy has little influence over (poor quality management aside – as the Rogernomic era demonstrates) and that, in any case, the material standard of living does little for individuals’ wellbeing. Ironically to pursue that [growth] goal demands that measures which actually address wellbeing should be cut back.
  
  That is why the debate on the budget will stress the need to restrain expenditure and pay little attention to a host of quality-of-output activities being reduced. The examples are too numerous to list but it is well to remember that the consequences may not become immediately apparent.
  
  The Website address: http://briefingpapers.co.nz/2014/05/the-purpose-of-economic-policy/
  - Ad 1.2.1
    
    15 May 2014 at 1:39 pm
    
    Fairly bracing for those of us who prefer more intervention to less:
    
    “…a fetish of economic growth which the research evidence concludes economic policy has little influence over…”
    
    Cheers for the Easton article – a whole lot of succinct common sense spoken there. I commend it to you all.
  - Tracey 1.2.2
    
    15 May 2014 at 2:03 pm
    
    thanks blue
  - Colonial Viper 1.2.3
    
    15 May 2014 at 2:56 pm
    
    🙂 BL
  - karol 1.2.4
    
    15 May 2014 at 5:43 pm
    
    Yes, bl, and excellent briefing paper that says succinctly pretty much what I think about the interaction between economic and social policy. It is good to see someone like Easton, with some fairly widely known credibility on the topic explain it clearly. I posted a comment under it.
    - blue leopard 1.2.4.1
      
      15 May 2014 at 8:21 pm
      
      I hope you get a response/start a discussion, that was an interesting question you asked.
Crunchtime 2

15 May 2014 at 9:39 am

First! 😉

EDIT: Dang, beaten to the punch by CV even as I typed my message 😛

How does the steady reduction in govt spending jibe with the massive increase in govt foreign debt over the same period?

Where is our money going??
- KJT 2.1
  
  15 May 2014 at 10:52 am
  
  To Nationals private contractors and asset strippers.
  
  Just like the third world countries we resemble where most of the borrowing and aid money goes straight back offshore to banks, oversea corporates and wealthy thieves.
  
  To ensure that National politicians get their lucrative figurehead jobs in the private sector after leaving politics. Which is how New Zealand politicians take their bribes.
- Gosman 2.2
  
  15 May 2014 at 11:04 am
  
  The increase in debt is as a result of the structural deficit that the last Labour led government left the country. A series of deficits that was predicted to last till 2018.
  - Colonial Viper 2.2.1
    
    15 May 2014 at 11:15 am
    
    In this case I actually think the deficit is good. Labour’s promise to move us into surplus is well meaning but totally misguided. English could have done a Ruthansia slash and burn to balance the books (I’m sure you would have loved that) but he didn’t, and that is something he deserves credit for from the Left.
  - framu 2.2.2
    
    15 May 2014 at 12:58 pm
    
    ha ha – thats bullshit
    
    bill english was borrowing more per week than he needed to remember – there was an entire series of stories about it in the MSM
    
    and yet again – the prediciton was made in 2008 – did it take into account events that occured after 2008 and what either party might have done or changed?
    
    the answer to that is “no”
    - Gosman 2.2.2.1
      
      15 May 2014 at 2:12 pm
      
      Ummm…. no hence why we are only 6 years down the track and are already back in the black as opposed to 2018. However I am curious what you think Labour would have done to reduce the deficit in a more expedious manner.
      - framu 2.2.2.1.1
        
        15 May 2014 at 3:02 pm
        
        Ummmmmm – your talking a bunch of crap that has nopthing to do with what i said or what you said before that
        
        ok – lets make it really simple for you
        
        you said
        “The increase in debt is as a result of the structural deficit that the last Labour led government left the country”
        
        i replied
        “ha ha – thats bullshit
        
        bill english was borrowing more per week than he needed to remember – there was an entire series of stories about it in the MSM”
        
        your reply of “no hence why we are only 6 years down the track and are already back in the black as opposed to 2018.” is irrelevant
        
        you said
        “A series of deficits that was predicted to last till 2018.”
        
        i said
        “the prediciton was made in 2008 – did it take into account events that occured after 2008 and what either party might have done or changed?”
        
        your reply of ” However I am curious what you think Labour would have done to reduce the deficit in a more expedious manner.” is irrelevant
        
        do you see how this language thing works?
        
        Gosman 2.2.2.1.1.1
        
        16 May 2014 at 1:19 pm
        
        How much more was Bill English borrowing and where did he use this extra money?
  - Tracey 2.2.3
    
    15 May 2014 at 2:06 pm
    
    zre you saying national saw the prediction of deficits til 2018 and the causes for it, and changed nothing, hence the 73billion debt?
  - newsense 2.2.4
    
    16 May 2014 at 12:10 am
    
    more political predictions that turned out to be complete BS then and make the Treasury in need of a check of party affiliation and bias more than any broadcaster- although oddly enough the former electorate chair of the PM and the former press secretary of a National PM in prominent management positions didn’t resurface during the latest hand-wringing (bias is only one way- PM forgets Paul Holmes and Dr Brash) , then you get Michael Bassett on the radio representing cough a ‘Labour’ point of view or at least introduced as a ‘former Labour cabinet minister’.
    
    yeh.
greywarbler 3

15 May 2014 at 9:47 am

OMG We’re a banana republic but we don’t grow bananas (so we’ll have to import them) and we are not a republic (so we will import the USA brand which comes in a plain wrapper, covertly). But we are also not really a developed country. Can a country like ours sink to being an emerging country after crawling from the water and after it has taken a large number of steps on dry land? It seems that this toddler has some disease difficult to diagnose causing it to regress. Dummy anyone?
Tracey 4

15 May 2014 at 9:57 am

has he said anything about 28% of gdp being financial services and agriculture 8%?
Philj 5

15 May 2014 at 10:34 am

xox
+ 1 Mathew for posting in your own name, if it is Mathew.
Matt, have you ever been terribly wrong in errors of political judgement? Please elucidate. Do you believe the USA system of corporate bought government is a total crock, and NZ is heading the same way? Interested in your opinion, if It is you, and not Pete George. Sheesh, it’s nice not having him around. I feel much cleaner.

[lprent: As far as I can see (which is pretty far), Matthew Hooton always posts under his own name. Most ‘public’ personalities do. And I tend to frown on people sockpuppeting, mostly because I have to release their first comments and I usually run a check on new handles to find out who they used to be. I’m mostly interested in when the handles for one person start talking to each other – which tends to receive permanent bans. But I also don’t like people changing handles too often (more work for me). Or when people start trying to astroturf topics using different handles. ]
- Colonial Viper 5.1
  
  15 May 2014 at 10:57 am
  
  Geee are you trying to reply to Matthew Hooton? He’s a long time PR man, trainer and consultant to National Party peeps.
aerobubble 6

15 May 2014 at 11:00 am

In Australia….

So they declare, they are for less regulation, less
government, and so the harder they work towards
that end the easier their work is, god what giants
of politics they are.

Yet what happens with hard times…

After thirty years of lowering standards, arguing
and then implementing banking deregulation, the world
enters a giant financial caused recession, and guess what,
not them, anyone but not them, not their policies.

Its the unions again, the left. But how? So…

Its you. And you have to pay with less services,
less government, less safety net, more of the same.

Imagine going to the supermarket, the quality which
has been falling, suddenly collapses. You were told
that to maintain prices you had to give tax cuts to
upper tax payers. Now those tax cuts have clearly not
worked, have not been working. But instead of removing
the bad incentives, instead of raising taxes on the
high end, they now raise the prices!

Not the wealthy who get more wealthy even during the GFC,
no not them, they should always win whether a growing or
falling economy.

You see they are right to be angry, they were expecting
to make the government smaller, easier to manage for them,
and now this, its frustrates them so much, and the
great unwashed must pay as they always pay somehow.

The young and poor especially.

You choose them, and they choose you to lose.

A vote for Abbott is a vote for a unfair go.

Now of course Abbott realizes this, and knows the Senete
will send him back to the voters, and knows he’ll get
a landslide for your toughness in the face of his pain.
Clemgeopin 7

15 May 2014 at 11:23 am

Good points in the article, but the graph is outdated by 7 years, being for the year 2007!
- kenny 7.1
  
  15 May 2014 at 12:13 pm
  
  Well spotted!
Jim 8

15 May 2014 at 12:17 pm

Having the argument as to what percentage of GDP government spending should be is good. It is not just an argument that less spending is better. Country’s that have high or low percentage GDP to government spending are not necessarily better performers, in fact some where in the middle is probably about right. How ever the Labour and National Government’s over the last 25 years have differed in the respect with National Government decreasing spending as a percentage and Labour increasing spending as a percentage. When you continually here of government services being run down, for example state housing, or depleting the railway links, you tend to think the pendulum has swung to far to the right. Yes I do think roads and railway lines are public goods and not commercial entities. I also think a state house for life is a better aspiration that making money out of housing for the poor.
blue leopard 9

15 May 2014 at 12:41 pm

Excellent article with very lucid points, Jan Rivers, thank you for the heads up.
- Jan Rivers 9.1
  
  15 May 2014 at 10:34 pm
  
  🙂 Thanks Blue Leopard.
Ennui 10

15 May 2014 at 2:31 pm

Just love the abstract arithmetic concepts here…

Do National intend to grow the economy to nearly double today’s whilst keeping Government expenditure capped?
Do National intend to shrink the proportion of Government expenditures to 26% of today’s GDP?
Do National want 26% to be the “standard rate” of Government GDP expenditure?

Who knows? I suspect not Bill and John.

PS Is this a requirement for the TPPA driven by some corporate privatiser somewhere in Wall St????