Nats running a $5b a year strategic deficit

Written By: - Date published: 8:38 am, March 18th, 2012 - 112 comments
Categories: debt / deficit - Tags:

Labour’s Revenue spokesman, David Clark, has picked up on a statement in IRD’s Briefing to the Incoming Minister that “2.5 percentage points of this decline [in tax take as a percentage of GDP] is attributable to policy changes”. 2.5% of GDP is $5 billion a year. So, a huge chunk of the record deficits that National is running is attributable to their tax cuts for the rich.

Next time you hear a rightie saying ‘we have to balance the budget with spending cuts or we’ll end up like Greece’, remember that it was National’s tax cuts for the rich that created the problem.* **

If they were really serious about getting the deficit down, National would just reverse the tax cuts that are causing the biggest slice of it. But they’re not. Instead, they’re cutting thousands of jobs and important public services – which just makes the economic and fiscal problems worse as public servants go on the dole and people have to turn to more expensive private options for those services.

And the Nats are using the giant pile of debt they’ve built up thanks, in large part, to the fact they’re borrowing $5 billion a year unnecessarily as a justification for selling our assets. Even though Bill English admits that assets sales would make the deficit worse to the tune of $100 million a year.

This just goes to show that National is not acting in the country’s best interests. They’ve run a strategic deficit by sending mountains of cash to the people who need it least – who just so happen to be themselves and their supporters. And now they’re using that deficit to justify their ideological agenda to starve public services and cut our assets.

* by ‘problem’ it’s worth noting that NZ has the 11th lowest level of net government debt in the OECD

** interestingly, it was tax cuts, not spending, that caused Greece’s unsustainable deficits in the 2000s, too.

112 comments on “Nats running a $5b a year strategic deficit ”

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  1. Kevin Welsh 1
    18 March 2012 at 8:52 am

    Nothing new here James. This has been ‘unofficial’ National Party policy for quite some time.

    http://www.scoop.co.nz/stories/HL0508/S00023.htm

  2. mouse 2
    18 March 2012 at 9:07 am

    “Next time you hear a rightie saying ‘we have to balance the budget with spending cuts or we’ll end up like Greece’…

    Here is Deborah Coddington in todays Herald, blathering exactly that!

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10792785

    • marsman 2.1
      18 March 2012 at 1:18 pm

      Is Deborah Coddington for real? What a piece of pathetic, patronizing drivel and downright nasty to boot.

    • Half Crown Millionare 2.2
      18 March 2012 at 5:48 pm

      Does anybody read or listen or take notice to the garbage Coddington writes or says?

      • Draco T Bastard 2.2.1
        18 March 2012 at 6:16 pm

        Probably, else she wouldn’t get published. Of course, it’s only the really simple minded idiots that do so.

        • Half Crown Millionare 2.2.1.1
          18 March 2012 at 6:53 pm

          I agree DTB and that is the problem, she is held up by the MSM as someone who has an intelligent point of view. My cat would have a better prospective and view on life than this person would ever have. As for her contributing to that other clowns web site Perigo, if she thinks Ayn Rand was so shit hot why does she not migrate to Somalia. A very free market, a stuff everybody society, a survival of the fittest country which should suit her down to the ground.

    • Georgecom 2.3
      18 March 2012 at 7:31 pm

      Don’t expect anything other than that from Coddington. The usual ‘primacy of the market’, ‘interests of global capital = interests of nation states’, ‘trickle down’ rhetoric. Obviously Coddington was asleep for all of 2008. A different ball game now, just that no pathway out of the mess has yet been drawn up. Coddingtons approach is akin to telling the obese person that eating more cream pies is the solution to their problems.

      • RedLogix 2.3.1
        18 March 2012 at 7:46 pm

        telling the obese person that eating more cream pies is the solution to their problems.

        Well actually I’ve just lost 20kg over the last six months… while eating all the cream I want.

  3. Jim 3
    18 March 2012 at 9:08 am

    Hi
    We need to expose John Key’s porkies, I agree wholeheartedly. His economic policy is tanking New Zealand. But it’s austerity economics that’s doing it, and that includes the absurd vainglorious pursuit of balanced books. And Labour has got the same bug.

    New Zealand lost a massive amount of GDP at the time of the global financial crisis. Demand has slumped and uemployment is high including most who have part time jobs who want to work full time (12%). The housing bubble has burst, so credit from banks is not augmenting stagnant wages. There is a slump in demand.

    What does this mean? We must dump talk of ‘unsustainable’ government deficits. All that talk about Greece is really about how the EU organises its currency and Germany’s greedy export policy to put countries like Greece into debt penury. But New Zealand has its own currency, and there’s no such thing as ‘unsustainable’ public debt until the economy is back on its feet with true full employment. We need to find another economic stick to beat National with, along with their banks, their rent seeking, their low wages and their bad employment contracts.

    Our real economic problems are about a housing bubble forced on people by the banks, high unemployment and government spending that’s too low to replace lost demand in the private sector. Government must create good basic jobs to expand the economy and that means the government must spend. That’s the stick we have, and we’re not using it.

  4. Chris Miller 4
    18 March 2012 at 10:12 am

    Iceland recently repaid just under $450m to the IYF – ahead of schedule. Iceland is also one of the few countries that didn’t resort to austerity as a reaction to the recession. Instead, they kicked out the bankers. We have an astounding amount of research and history showing that austerity doesn’t work. There’s really no excuse for it.

  5. KJT 5
    18 March 2012 at 10:15 am

    All part of the plan.
     
    http://kjt-kt.blogspot.co.nz/
    “”They certainly seem to be keen on precipitating an economic disaster.  The only possible reasons are either they have bought into their own propaganda, 

     
    OR they expect to gain by it.””
  6. Nick K 6
    18 March 2012 at 10:56 am

    We could tax everyone at 100% and run MASSIVE surpluses and be the world’s richest nation. Go for it, Labour!!

    • Colonial Viper 6.1
      18 March 2012 at 10:58 am

      You just have no idea, do you. I thought “conservatives” were supposed to be fiscally responsible, and I thought that working to balance income and expenditure would be a key part of that.

      Of course, National is these days just a neoliberal party for the rich, and has lost touch with its true conservative roots.

    • RedLogix 6.2
      18 March 2012 at 11:14 am

      Idiot strawman. The wealthiest and most decent nations to live in all tend to have total tax takes in the order of 35-50%. In other words they balance the private and public sectors to gain the maximum synergies from both.

  7. starlight 7
    18 March 2012 at 11:13 am

    Perhaps we need a ‘citizens initiated referendum’ to open up the books and see just
    what the true picture is,key and english are keeping to the same scare tactics to
    push their provocotive changes in services just to financially support their mates.
    Perhaps parliament needs a separate ‘watch body’ to see that ministers individual
    personal wants and views dont conflict with the right of the citizens,getting into
    parliament and using tax payers money is not a ministers right,it is a responsibility
    to use taxes legally and without favouritism.
    Key and english certainly have been negligent in managing the economy,they are
    taking nz to a very dangerous precipice.

    • Foreign Waka 7.1
      18 March 2012 at 1:15 pm

      You don’t need a referendum, just the opposition asking for it under the fiscal responsibility act. The question is, would the Joe Blogs on the street ever get to know the truth about our income and expenditure broken down item by item? We could insist….

  8. Clashman 8
    18 March 2012 at 11:47 am

    Doesnt it mean 2.5% of the DECLINE in the tax take not 2.5% of the total take.?

    • Hanswurst 8.1
      18 March 2012 at 12:29 pm

      No. It’s a somewhat awkward way of putting it, but what it states is that tax revenue has decreased by 4.1 percentage points (of GDP), 2.5 of which are attributable to policy changes. In other words, the interpretation in the post is correct.

  9. johnm 9
    18 March 2012 at 12:35 pm

    What the Nats are doing is classic neoliberal “Starve the Beast” economics where deficits are deliberately created through tax cuts to the rich and the business sector creating deficits which are then used as an excuse for spending cuts and austerity. Part of this also is Privatisation and attacking unionised workers who through their collective strength obtain fair remuneration for their work.

    It’s a tragedy that a once good country as NZ has adopted the politics of selfishness and greed with the attendant social destructiveness.

    Refer link on the U$$ experience where this cruel ideology began as far back in the 20s

    http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=6724

    http://therealnews.com/t2/index.php?option=com_content&task=view&id=33&Itemid=74&jumival=718

    • johnm 9.1
      18 March 2012 at 1:05 pm

      Further from above interview”

      “CROTTY: Yes, absolutely. That is the–the starve-the-beast theory is a theory which says that if you cut taxes enough and run up enough deficits, there’ll be this tremendous pressure which will develop to slash spending. We’re not going to slash defense spending, so it slashes all the New Deal spending. All the money that’s spent for schoolkids and poor families and, you know, Medicaid and–that’s what we’re going to cut. So it’s–starving the beast means shrinking the government, forcing the government’s social programs, which are an enormous component of the New Deal. The deficits help. See, deficits are a winner in this drive to generate the 1920s again.”

      • marsman 9.1.1
        18 March 2012 at 1:13 pm

        Nasty, nasty Bill English. He’s not ‘inept’ ,he is knowingly and blatantly plundering our nation’s wealth and handing it over to the likes of Goldman Sachs with no doubt a large pay-off for him down the line. It feels like treason to me.

        • johnm 9.1.1.1
          18 March 2012 at 2:20 pm

          Hi marsman
          I agree in effect when all the BS is siphoned off, that’s what’s being done. These people detest the social democratic redistributive model you wouldn’t believe, it’s frightening. Look what’s been done to Greece in a short time almost down to 3rd world poverty overnight.

  10. Fortran 10
    18 March 2012 at 1:18 pm

    I see that Ireland has found substantial oil just off its Atlantic coast, and it is being made ready to commercially pump. It is much larger than first thought. (Sunday Star Times).
    Will help the Irish economy. No Fracking here ?

    • McFlock 10.1
      18 March 2012 at 2:07 pm

      Should help redress some of the damage they caused themselves becoming a dotcom tax haven after the millenium.

  11. Maxamillian 11
    18 March 2012 at 1:25 pm

    As far as I’m aware there is absolutely no limit on how much The NZ govt can borrow. There’s no chance of default. Why we worry about rating agencies’ view on NZ sovereign debt baffles me. The RBNZ can always buy the bonds in the market – as much as they want. And so in a roundabout way, the govt can ALWAYS pay back it’s “debt”. The key is that the govt spends sensibly and correspondingly taxes sensibly to avoid inflation. Austerity is not sensible. It amounts to kicking the easiest to kick, when they’re already down. If the govt spends with a goal to increasing production, then they wont have to tax as much proportionally due to the added goods and services. In any case, I believe we don’t tax enough – specifically the wealthy; the govt has to clip the ticket for the free ride that the rentiers are getting. And I’m tired of the classic retort that increasing taxes inhibits innovation – bollocks….

  12. tsmithfield 12
    18 March 2012 at 2:16 pm

    “So, a huge chunk of the record deficits that National is running is attributable to their tax cuts for the rich.”

    If you had just stopped at “tax cuts” I would have agreed with you. The tax cuts were widely distributed. While those on lower-to-average incomes may not have individually got as much as some individual rich people, because there are a lot more in the lower-to-average group, the cumulative total of their tax cuts would have had a considerable hit on the government’s books. Perhaps cumulatively more than “tax cuts for the rich”.

    “If they were really serious about getting the deficit down, National would just reverse the tax cuts that are causing the biggest slice of it. But they’re not. Instead, they’re cutting thousands of jobs and important public services – ”

    That is where lefties have warped thinking. Government should be aiming to meet the needs of its citizens as efficiently and effectively as possible while leaving as much money in taxpayers hands as possible. Rather than take the easy step of pillaging tax-payers for more, this government is trying to address the cost size of the equation to eliminate the deficit.

    “which just makes the economic and fiscal problems worse as public servants go on the dole and people have to turn to more expensive private options for those services.”

    Lets assume efficiencies can be gained that means the government can do exactly the same with say 5000 less people. Is it then costing the government less or more to have 5000 more people on the dole rather than employed in government?

    • felix 12.1
      18 March 2012 at 2:40 pm

      “Lets assume efficiencies can be gained that means the government can do exactly the same with say 5000 less people.”

      Let’s see a single shred of real-world evidence to suggest that your pie-in-the-sky assumption is worth discussing first.

      • tsmithfield 12.1.1
        18 March 2012 at 3:31 pm

        “Let’s see a single shred of real-world evidence to suggest that your pie-in-the-sky assumption is worth discussing first.”

        What I am surprised about is that you automatically seem to assume that such efficiencies are unachievable.

        I guess the obvious evidence is the move from pen and paper systems to computerised ones. The question is whether such a leap is possible now. I would argue that it is. For instance, better computer systems and more integration between departments will probably lessen the opportunity for cheating on taxes and thus lessen the need for auditors. Improved transfer of information between departments through more effective computerisation will probably make mergers such as those being promoted at the moment by the government more effective and efficient.

        I can envisage that in the future those interacting with government departments will be able to access key people through the likes of skype rather than having to go in for face-to-face meetings, with interchange of documents in pdf format etc. Once we get fibre-optics through the country a lot of efficiencies will be possible in this respect. Actual physical offices will be able to be smaller and less in number.

        • felix 12.1.1.1
          18 March 2012 at 4:11 pm

          So to back up the number you pulled out of your arse you pull a bunch of other assumptions out behind it.

          Such as ‘the current level of service is sufficient’.

          Such as ‘the population is static’.

          Such as ‘a tech paradigm shift anywhere comparable to the “pen & paper to computer” one is available to us’.

          Why don’t you offer a single recent example of efficiencies being achieved in a govt department by cutting staff? That would be the obvious way to argue your point if it had any validity. It’s very telling that you don’t, seeing as the National govt of the 1990s spent 8 years slashing and burning.

          Do you have an example from that period that resulted in either an improvement in service or a reduction in costs after taking into account the cost of contracting out the workload?

          All your ideas have already been tried and found wanting tsmithfield. And they’ve all had to have been reversed at far greater expense later. When viewed over the medium to long term, it’s you and your shortsighted penny-pinching that are the inefficiencies in the system.

          • tsmithfield 12.1.1.1.1
            18 March 2012 at 5:34 pm

            “So to back up the number you pulled out of your arse you pull a bunch of other assumptions out behind it.”

            Yep. Have you ever heard the phrase “all things being equal”?

            “Such as ‘a tech paradigm shift anywhere comparable to the “pen & paper to computer” one is available to us’.”

            I have a nephew who spends a lot of his time setting up skype communication systems through organisations now. So, the future is nearly here and will have major implications for costs in organisations. Hence, why the government is so keen to push the broadband roll-out.

            • Jackal 12.1.1.1.1.1
              18 March 2012 at 6:05 pm

              LOL The broadband rollout. Is that a bit like the bicycle tracks all over New Zealand where we have some grand opening of a road that people have been riding bikes along for years. National has failed tsmithfield. Wake up to what they pulled out of their arse.

              The tax cuts (for the rich) had a very limited effect on middle income earners if you take into account inflation and GST increases. They had a negative effect on the poor. Therefore you can categorically say that they were tax cuts for the rich, because they disproportionately helped the already wealthy in comparison to the poor. The most immediate quantifiable reaction was New Zealand having the greatest increase in inequality of all OECD countries.

              The tax cuts for the wealthy were specifically made so that they could pay down private debt. Nick Smith even said as much. This has had a huge and disproportionate impact on those paying for debts they did not incur, and the government’s debt as well. It will again be social policy austerity that pays the debt National has incurred as New Zealand’s government on behalf of their rich mates.

              Could you tell me how many times New Zealander’s are going to pay for the elitist mismanagement?

    • Pascal's bookie 12.2
      18 March 2012 at 3:07 pm

      That is where lefties have warped thinking. Government should be aiming to meet the needs of its citizens as efficiently and effectively as possible while leaving as much money in taxpayers hands as possible. Rather than take the easy step of pillaging tax-payers for more, this government is trying to address the cost size of the equation to eliminate the deficit

      This interestingly backwards, but close enough to a truth that itmight be worth exploring.

      Government should be aiming to meet the needs of its citizens as efficiently and effectively as possible while leaving as much money in taxpayers hands as possible.

      I think that’s a pretty uncontroversial statement, as long as we define ‘needs’ in terms of ‘expectations from citizens of what government should provide.’

      ie, the government should meet the expectations citizens have of it as efficiently as it can, and it should levy taxation at a level sufficient to meet those expectations, and not more.

      If you accept that, and I think it’s pretty uncontroversial, then surely the way to go about tax cuts is to find further efficiences in the expectaion meeting side of the equation, and then cut the taxation levels to suit if the efficiences are found.

      Cutting the taxation levels first is surely, therefore, the backwards way of going about it, as political realities dictate that the expectations need to be either met, or fudged. Any fudging will eventually be found out, and the people will demand that their expectaions be met. It’s a recipe for deficits. Ooh, and look at the post, what’s that all about?

      • tsmithfield 12.2.1
        18 March 2012 at 3:33 pm

        I would agree with you in an ideal world. However, perhaps human psychology would thwart such efforts if the straightforward approach was taken. For instance, there is a lot more motivation to find ways to save money if you’ve just had a wage cut.

        • Draco T Bastard 12.2.1.1
          18 March 2012 at 3:59 pm

          For instance, there is a lot more motivation to find ways to save money if you’ve just had a wage cut.

          No there isn’t. If you’ve just taken a wage cut the total motivation is to tell the person responsible for the wage cut to fuck off and then slack off. Cutting peoples wages doesn’t motivate them to do better as you’ve just proven that, no matter how well they’re doing, all that’s going to happen is that they’ll get kicked in the goolies and told to do better.

          It’s called slave driving.

          • Colonial Viper 12.2.1.1.1
            18 March 2012 at 8:24 pm

            They can always pretend to pay us. And we can always pretend to work.

            If you look around our economy this is being put into action everywhere.

    • Vicky32 12.3
      18 March 2012 at 6:25 pm

      Lets assume efficiencies can be gained that means the government can do exactly the same with say 5000 less people.

      Aside from the fact that you ought to have said ‘fewer people’, why should we assume that?

    • handle 12.4
      18 March 2012 at 10:21 pm

      Cutting government spending will not fix private sector debt.

    • KJT 12.5
      18 March 2012 at 10:55 pm

      Tax cuts for low and middle income earners were more than offset by the rise in GST.
      Net tax cuts were only for the rich.

  13. Pascal's bookie 13
    18 March 2012 at 3:59 pm

    Are you suggesting that only in an ideal world does it make sense to not count your chickens before they are hatched? That, to me, seems quite precisely arse about face.

    For instance, there is a lot more motivation to find ways to save money if you’ve just had a wage cut.

    There may well be. But it’s a poor excuse to ask for a lower wage, and there is no necessity in the idea that the savings you are forced to make as a result will be good for you.

  14. Pascal's bookie 14
    18 March 2012 at 4:21 pm

    Also seem to recall that after the 08 elections the Bill English brought in some outside chaps to go over the public service line by line looking for efficiencies to make. Also seem to recall that at least one of said chaps wouldn’t accept his cheque on the grounds that he couldn’t in good faith accept taking money for not being able to find much in the way of savings to be made.

    Or perhaps I dreamed that.

    If that is what happened, or something very much like enough to be the gist, then it would seem that the people arguing that the efficiencies will be found if we just look, because they are just obviously there, just because, because it would be nice if they were, are the ones living in a dream world, weft of warped assumptions.

    • tsmithfield 14.1
      18 March 2012 at 5:35 pm

      See my discussion with Felix above. I am thinking more in terms of major technology advances that are currently being implemented in a lot of organisations now, rather than tinkering around the edges.

      • tsmithfield 14.1.1
        18 March 2012 at 5:58 pm

        Here is an example of how both costs can be cut and services improved at the same time.

        Imagine in the not too distant future that if you need to go and see WINZ for example, or talk to IRD, you just connect on to Skype at a time convenient to you for a face-to-face meeting.

        During the meeting, you need to sign a form. The form is scanned across to you where you sign it, scan it and return it. Any necessary identification such as licences, birth certificates etc can be scanned and sent across, or downloaded through secure links at the various government departments. An automatic filing system checks and stores the information rather than having admin people do it manually.

        When this sort of thing kicks in there will be a much smaller government, and less need for buildings etc. This will mean assets can be cashed up and returned to the government. Also there will be more people working from home, meaning much less travel and congestion. Government employees will be able to schedule to work at times convenient for them, and people will be able to make contact with the government at times that suit them, rather than having to interrupt their working day as it is now.

        This will be a much more cost efficient and user-friendly system in many ways.

        • Kotahi Tane Huna 14.1.1.1
          18 March 2012 at 6:10 pm

          There’s the problem with the right – you actually believe you can say “this will happen” and it just must be true because you believe your own argument.

          What percentage of beneficiaries have a broadband connection? Works meet spanner.

          • Pascal's bookie 14.1.1.1.1
            18 March 2012 at 6:14 pm

            Oh that’s not fair KTH. I’m certain as can be that ts would happily acknowledge that ensuring that everyone in NZ is readily able to access broadband in a practical and convenient way will be a prerequisite for the brave new world.

            In short, practical broadband access will be a basic right of citizenship.

            • Kotahi Tane Huna 14.1.1.1.1.1
              18 March 2012 at 7:21 pm

              Of course, how silly of me 🙂

              • tsmithfield …
                18 March 2012 at 8:49 pm

                But it will get cheaper. Broadband can already be prepaid for like mobile phones as well. So, it is not really such a huge expense.

                Of course there will always be a physical office for people who can’t afford broadband. However, there will be less of them.

                • Colonial Viper …
                  18 March 2012 at 9:52 pm

                  Of course there will always be a physical office for people who can’t afford broadband. However, there will be less of them.

                  There will be fewer who can’t afford broadband because incomes are going up and the cost of living is decreasing?

                  Don’t think so.

                  • felix …
                    19 March 2012 at 12:23 am

                    Yeah, and unemployment becomes less of a problem the more people we sack anyway.

                    You can say pretty much anything if every time you open your mouth you pretend you’ve never said anything else before. It’s fucking magic.

        • felix 14.1.1.2
          18 March 2012 at 6:27 pm

          “Imagine in the not too distant future that if you need to go and see WINZ for example, or talk to IRD, you just connect on to Skype at a time convenient to you for a face-to-face meeting.”

          I can imagine it, do you know why? Because that’s exactly how it works now you dimwit. You’re talking about taking a telephone call and adding video. zOMFG the efficiency.

          “During the meeting, you need to sign a form. The form is scanned across to you where you sign it, scan it and return it. Any necessary identification such as licences, birth certificates etc can be scanned and sent across, or downloaded through secure links at the various government departments. “

          Wow, imagine a world where you can send documents to govt departments over a phone line.

          Now you just need a snazzy, futuristic name for this incredible technology. Something short with a snazzy, futuristic “x” in it.

          We’ve done all that. We’ve banked those efficiency gains. All you’re talking about is tweaking around the edges and you’re so embarrassingly out of touch you don’t even know that’s what you’re doing.

          • Carol 14.1.1.2.1
            18 March 2012 at 6:38 pm

            “During the meeting, you need to sign a form. The form is scanned across to you where you sign it, scan it and return it. Any necessary identification such as licences, birth certificates etc can be scanned and sent across, or downloaded through secure links at the various government departments. “

            Yep done all that while talking on the phone to my ACC case manager… and others relevant to my injury…. but it was also helpful to have a face-to-face meeting with my case manager early on, and regular face-to-face meetings with my medical specialist.

            • tsmithfield 14.1.1.2.1.1
              18 March 2012 at 8:46 pm

              “Yep done all that while talking on the phone to my ACC case manager… and others relevant to my injury…. but it was also helpful to have a face-to-face meeting with my case manager early on, and regular face-to-face meetings with my medical specialist.”

              But if you were doing this in a face-to-face meeting over skype you are virtually in the same situation as in a live face-to-face meeting, in that you are able to communicate with body language as well as verbally. And you can do things such as walk through documents with the other person etc. So, I am not sure you have had quite the experience I am envisaging.

              • McFlock …
                18 March 2012 at 9:01 pm

                And when 0800 numbers came in they said it was as good as speaking face to face. And when phone robots came in they said it was as good as speaking to a real person.
                    
                So now we have the wonderful situation where someone comes into a WINZ office because they don’t have a phone, gets referred to the bank of phones in the WINZ office to call the WINZ 0800 number to make an appointment to see someone in the WINZ office that they’re already in.
                   
                I guess soon they’ll have a skype booth in every WINZ office.

                • felix …
                  18 March 2012 at 11:38 pm

                  You’ll just confuse him with this talk of so-called “people” who don’t have phones.

                  You might as well be talking about sea monsters and unicorns.

          • tsmithfield 14.1.1.2.2
            18 March 2012 at 8:36 pm

            “I can imagine it, do you know why? Because that’s exactly how it works now you dimwit. You’re talking about taking a telephone call and adding video. zOMFG the efficiency.”

            You are the dimwit, you dimwit. The great advantage of having video is that the person on the other end can talk you through a document etc, point things out, explain them etc in a way that can’t be done over the phone alone. In most respects it is the same as a face to face meeting.

            “We’ve done all that. We’ve banked those efficiency gains. All you’re talking about is tweaking around the edges and you’re so embarrassingly out of touch you don’t even know that’s what you’re doing.”

            At the moment this sort of thing tends to happen within/between businesses. However, there is no reason that it can’t be extended to the general public. I agree the technology itself is fairly rudimentary. However, it is the application of it on a wide scale that will generate efficiencies.

            • McFlock 14.1.1.2.2.1
              18 March 2012 at 8:46 pm

              You are the dimwit, you dimwit. The great advantage of having video is that the person on the other end can talk you through a document etc, point things out, explain them etc in a way that can’t be done over the phone alone. In most respects it is the same as a face to face meeting.

              The important point being “most”, not “all respects”. That’s why videoconferencing still hasn’t replaced real conferences or face to face meetings, except where travel costs become prohibitive.
                 
              With several government departments and companies, I’ve noticed that IT substitutesfor face to face meetings with case managers seem to be more about limiting contact with the client, rather than enhancing it.
               
               

            • felix 14.1.1.2.2.2
              18 March 2012 at 11:27 pm

              “You are the dimwit, you dimwit. The great advantage of having video is that the person on the other end can talk you through a document etc, point things out, explain them etc in a way that can’t be done over the phone alone. In most respects it is the same as a face to face meeting.”

              Oh bullshit. You started out evangelising about the great paradigm shift, the quantum leap just around the corner, and now the best example you can come up with is being able to look at a document on a screen while someone on a video call talks you through it instead of looking at the exact same document in your hand while someone on an audio call talks you through it.

              With every comment, tsmithfield, you show how grossly out of touch you are with the things ordinary people do every day.

            • lprent 14.1.1.2.2.3
              19 March 2012 at 9:21 am

              I’ve been using Skype since it got released for remote work. I sometimes use the audio, and rarely use the video. Mostly I use it for instant messaging and immediate file transfers for person to person work. I use voice and even video when doing conferencing, but that is mostly for the benefit of the people who recently shifted to digital.

              I ran programming teams remotely from 1997 to 2006. Since then I have been dealing more with hardware that puts me onsite. There are definite advantages and disadvantages to the different techniques.

              Video is the least effective technique unless you want to spend time dealing with the tech issues and examining people’s expressions of boredom. Voice is good for brainstorming allied with IM. You can also use voice to get together on the same page (if you can’t meet in person) but brevity is usually the key because it rapidly winds up like a political meeting – one person droning at a time.

              Instant messaging is the most efficient for working together on something. Email is the best when you want to have a considered discussion on design.

              But in all cases, like all communication techniques, it is a learned skill to do each effectively. I can’t see the efficiency gains in making someone who is functionally tech illiterate to use hardware, software, and communications techniques that they don’t know. Clearly whoever thought this up hasn’t spent enough time explaining how use tech to aged parents or the technophobic. I also can’t see the quired skill levels in the frontline public service to make it work effectively.

        • Vicky32 14.1.1.3
          18 March 2012 at 6:39 pm

          Imagine in the not too distant future that if you need to go and see WINZ for example, or talk to IRD, you just connect on to Skype at a time convenient to you for a face-to-face meeting.
          During the meeting, you need to sign a form. The form is scanned across to you where you sign it, scan it and return it. Any necessary identification such as licences, birth certificates etc can be scanned and sent across, or downloaded through secure links at the various government departments. An automatic filing system checks and stores the information rather than having admin people do it manually.

          Yeah, that’s going to happen, because all people applying for benefits have broadband, and their own faxes and scanners to hand… 😀 Businessmen who do have these things, already can do this – or get their admin people to do it for them (as my own experience in admin shows, bosses actually have minions to take care of the minutiae… )

          • tsmithfield 14.1.1.3.1
            18 March 2012 at 8:41 pm

            Computers are becoming like fridges/microwaves. More and more they are becoming basic essentials of life. Due to their quick devaluation due to new models continually appearing, it is quite possible for even a poor family to pick up a second-hand computer that is quite adequate for not very much.

            Printer/scanners can often be picked up for less than the cost of the cartridges these days, so there is not much cost there. A basic broadband plan isn’t that expensive and the costs will come down further. Also, it is possible to prepay for broadband which would enable even poor people to use it for necessities.

            • Colonial Viper 14.1.1.3.1.1
              18 March 2012 at 8:47 pm

              Get real mate, for lots of families the last $40 left at the end of a month is going on food for the kids and power to stay warm, not a broadband plan.

              • tsmithfield …
                18 March 2012 at 8:53 pm

                As I mentioned above, there will still be a need for some physical offices for those who can’t afford broadband. But we won’t need as many of them.

                • Jackal …
                  18 March 2012 at 9:01 pm

                  Is that because people who can’t afford cellphones, printers, scanners and broadband can afford to travel further tsmithfield?

                  • tsmithfield …
                    18 March 2012 at 9:04 pm

                    Last time I looked, bus fares weren’t that expensive.

                    • Jackal …
                      18 March 2012 at 9:09 pm

                      Many poor areas don’t have buses. But that’s OK because your brave new world isn’t about creating equality is it?

                    • tsmithfield …
                      18 March 2012 at 9:35 pm

                      If their income depends on it, they will find a way to get there.

                    • Colonial Viper …
                      18 March 2012 at 9:37 pm

                      Just makes life that much more unliveable though, doesn’t it. Wastes time and energy jumping through more and more pointless unproductive hoops.

            • Vicky32 14.1.1.3.1.2
              19 March 2012 at 3:53 pm

              Also, it is possible to prepay for broadband which would enable even poor people to use it for necessities.

              Oi, Marie Antoinette, get real! The cheapest prepay broadband plan I’ve seen advertised, is $75.00 a month. For an individual on UB ($180-200 a week depending on previous ‘debts’) that’s not affordable, when you take food/rent/power/phone etc into account. Even with a cheap rent courtesy of HNZ, I still end up in deficit every week and I am very lucky indeed to have this rotten dump to live in. I have a computer because my late brother gave it to us and scanner, printer etc for the same reason.

        • hateatea 14.1.1.4
          18 March 2012 at 11:22 pm

          You are assuming, of course, that the government will have ensured that every home will have the requisite computer, scanner / printer as well as broadband internet, I presume?

          I hope that the government will be providing this so that beneficiaries will be able to interact with the few humans still employed as civil servants 😉
           

        • Populuxe1 14.1.1.5
          19 March 2012 at 1:59 am

          In Nineteen Eight-Four, they called them telescreens… Just sayin’

      • Pascal's bookie 14.1.2
        18 March 2012 at 6:04 pm

        That’s great. Everyone loves efficiency, it’s completely non-controversial.

        The point though, is that you don’t know that skype and what-have-you will pay for the hole created bythe tax cut.

        Maybe the reorganisations this government are doing will make the system more efficient. Maybe they won’t. It’s been known to happen before.

        They might even be able to close the budget hole, but find that their reorganised public sector cannot fulfill the expectations the public has about government. In this case, exactly as in a case where they can’t find the savings to fill the budget hole, then all they have achieved is a false economy. All that will have to happen is that we will have to raise taxes and fix the expectation gap, and pay the interest on the borrowing.

        I think it’s ridiculous to calim that it is idealistic to say that taxes should be cut, only when you are sure the govt doesn’t actually need the money.

        • Colonial Viper 14.1.2.1
          18 March 2012 at 8:26 pm

          What’s truly efficient is an economy which doesn’t need most of its workers any longer.

          Guess how long that’s going to work for.

          • RedLogix 14.1.2.1.1
            18 March 2012 at 8:42 pm

            That is an interesting question. I don’t think it’s so much a case of ‘not needing it’s workers anymore’… as the nature of what we think of as work. And what value we place on it.

            Much of what we thought of as work 200 years ago, simply isn’t done anymore. Even my grandfather who was born in the 1880’s would barely recognise what I do for a living. It will be much the same for my grandchildren.

            It’s partly why a lot of traditional left-wing rhetoric doesn’t get the traction it used to.

            • Colonial Viper 14.1.2.1.1.1
              18 March 2012 at 9:41 pm

              It will be much the same for my grandchildren.

              Since I subscribe to the idea that our civilisation is entering ever steepening energy depletion, I suggest that the work your grandchildren (and probably more so your great grandchildren) end up doing will actually be far more recognisable by your grandfather, than your work is.

          • tsmithfield 14.1.2.1.2
            18 March 2012 at 8:43 pm

            Resources are freed up to be used elsewhere. My company is involved in automation. We have liberated many workers from monotonous jobs such as screwing bottle tops onto bottles etc. Hopefully those workers have now found more interesting, meaningful things to do.

            • Colonial Viper 14.1.2.1.2.1
              18 March 2012 at 8:49 pm

              Hopefully those workers have now found more interesting, meaningful things to do.

              Like going to Australia.

            • RedLogix 14.1.2.1.2.2
              18 March 2012 at 8:53 pm

              And I am an automation engineer ts. I’ve spent 35 years changing the nature of work. This has been a double-edged sword.

              Yes the resources have been liberated to free up people to do more meaningful things. Labour productivity has doubled, tripled or even quadrupled in many industries. Lot’s of mindless, soul-destroying jobs are now done by my machines, and that is a good thing.

              But unfortunately the capitalist economic system has captured almost all the gains from this productivity increase into a uber-wealthy elite. Most people got left out…. and that my friend is where I part company.

              • tsmithfield …
                18 March 2012 at 9:02 pm

                Don’t know if I agree with you. Up until the recent recession, unemployment has been very low, despite the increasing automation of systems. Therefore, it seems people are finding more interesting and rewarding things to do.

                • RedLogix …
                  18 March 2012 at 9:23 pm

                  No not all those jobs are all that rewarding or interesting.

                  A job is not the same a good employment. While labour productivity has been soaring…. real incomes have stagnated and below the median have gone backwards.

                • Colonial Viper …
                  18 March 2012 at 9:23 pm

                  Unemployment was low because the economy was being flooded with debt based credit.

                  Your assertion that people have found more interesting and rewarding things to do is the silver lining side of people having to settle for menial low wage jobs beneath their experience and training.

            • Draco T Bastard 14.1.2.1.2.3
              18 March 2012 at 11:06 pm

              Hopefully those workers have now found more interesting, meaningful things to do.

              The median wage of ~$30k would indicate that this isn’t true.

            • Populuxe1 14.1.2.1.2.4
              19 March 2012 at 2:01 am

              The capitalist reality is that mechanisation just creates more unemployment, not leisure.

        • tsmithfield 14.1.2.2
          18 March 2012 at 8:51 pm

          “They might even be able to close the budget hole, but find that their reorganised public sector cannot fulfill the expectations the public has about government. In this case, exactly as in a case where they can’t find the savings to fill the budget hole, then all they have achieved is a false economy.”

          Need drives innovation. Look at history. That is why it is important to reduce the funding first. Government organisations then have the need to innovate to provide the same services for less money.

          • RedLogix 14.1.2.2.1
            18 March 2012 at 8:56 pm

            No.. if the organisation I work for starved me of cash, the innovation would cease tommorrow.

            • tsmithfield 14.1.2.2.1.1
              18 March 2012 at 9:00 pm

              In that case your role would probably be disestablished and it would be contracted out to someone else who is a bit more motivated to innovate.

              • McFlock …
                18 March 2012 at 9:05 pm

                All that rigmarole for want of paying a decent wage in the first place…

                • tsmithfield …
                  18 March 2012 at 9:10 pm

                  I probably would contract that sort of role out anyway. Less conflict of interest that way.

                  • RedLogix …
                    18 March 2012 at 9:18 pm

                    For the first two years I was contracting my current role. I got plenty of ‘jobs’ done, but as a contractor I was fundamentally disconnected from the decision making process and it all lacked cohesion and strategy.

                    As a result much of the work I did was of limited value and when the opportunity came along to join the organisation I did so. Huge gains at every level.

                    Contracting out, unless it is very carefully managed, or relates to a very specific expertise… is almost always very poor value for money. This is 35 years of experience talking.

                    • Colonial Viper …
                      18 March 2012 at 9:20 pm

                      ts doesn’t get the idea that a loyal soldier will do far more for his nation than a gun for hire.

                    • tsmithfield …
                      18 March 2012 at 9:30 pm

                      We contract to a lot of our customers. We are motivated to do well for them because they will terminate the contract if we don’t perform. Also, poor performance is very bad for our reputation in the market.

                    • RedLogix …
                      18 March 2012 at 9:34 pm

                      Oh you may think you are performing… but in reality you are on the outside. You aren’t making the important decisions. Or if you are, then I’d have to ask who ‘owns’ this business.

                      And if your customer arbitrarily decides he needs your job doing ‘cheaper’… then you’re as disposable as toilet paper.

                    • Jassen …
                      18 March 2012 at 10:07 pm

                      Just a quick question Mr Red. 35 years experience in what sounds like a pretty good job. You must have benefited quite nicely from the last round of tax cuts me thinks.

                      Where are you donating this ill gotten money to?

                  • Colonial Viper …
                    18 March 2012 at 10:59 pm

                    Jassen. What right do you have to even ask. Who do you think you are.

                    • Draco T Bastard …
                      18 March 2012 at 11:09 pm

                      He’s just a typical RWNJ troll trying desperately to divert away from the points that show his beliefs to be wrong.

                    • Jassen …
                      19 March 2012 at 8:19 am

                      I have every right to ask any question I like. I read all of these blogs with interest because I find politics on both sides of the spectrum really interesting. I try not to comment on here because you just get attacked and called names. Nasty politics. Feels like kindergarten at times really.

                      But my point is, Mr Red and others on here, harp on about the tax cuts for the rich, but it sounds like he should be on a pretty good wicket himself, and I suspect you are too Viper, so I find it hypocritical, when you probably also benefited nicely from the tax cuts.

                      And for Draco, you have absolutely no fucking chance of ever knowing what my beliefs are, so how would you know they are wrong? Wanker.

                    • lprent []
                      19 March 2012 at 8:35 am

                      So? The mere fact that some dumbarse national politicians made a completely stupid set of tax decisions that benefited people like me doesn’t mean that we can’t see it was the decision made by fools. Sure it won them the 2008 election. It was still the wrong decision even before the financial meltdown.

                      Hell I opposed Cullen’s tax cuts. I’d preferred that the tax cut debate wasn’t one. It should have been about how to put regular adjustments into the income thresholds.

                      I haven’t read what the others have commented thus far. But on the basis of this single comment, you do look like ill informed and who needs to read more to understand the actual issues. If you get upset about being called on what you say complete with others opinions on you, then I suspect it is more a defensive reaction on your part to avoid displaying your ignorance.

                    • RedLogix …
                      19 March 2012 at 8:51 am

                      I try not to comment on here because you just get attacked and called names.

                      Followed up by:

                      And for Draco, you have absolutely no fucking chance of ever knowing what my beliefs are, so how would you know they are wrong? Wanker.

                      Mate you are off to a bad start here.

                      Besides if you don’t want to tell us what your beliefs are… then I feel less than zero obligation to tell you what I do with my income.

                    • felix …
                      19 March 2012 at 11:12 am

                      Why do right-wingers have so much trouble with this?

                      They’re always trying to imply that if you advocate for policy that might hurt you personally but benefit others then you’re a hypocrite of some sort, when by definition nothing could be be further from the truth.

                      Perhaps the very idea that a person wouldn’t act entirely selfishly at all times is so foreign to them that their reptilian alarm bells go off whenever they encounter it.

                      They never seem to be able to clearly state what the problem with not being a selfish prick is, but they just know that something isn’t right, dammit.

                    • Pete George …
                      19 March 2012 at 11:48 am

                      Felix, how many rightwingers do you think fit your description “the very idea that a person wouldn’t act entirely selfishly at all times is so foreign to them”?

                      Do you think left wingers always act entirely unselfishly? Or are they all a perfect balance?

                    • McFlock …
                      19 March 2012 at 11:53 am

                      Pete, the difference between right wingers and left wingers is that left wingers try not to be selfish dicks. Right wingers aspire for it to be their profession.
                         
                       

              • Jackal …
                18 March 2012 at 9:06 pm

                Motivated while being starved of cash… good luck getting innovation out of that equation.

  15. North 15
    18 March 2012 at 10:09 pm

    Really tsmithfield, I’ve been watching you getting more and more and more ridiculous in your propositions and responses. Cheap computers and scanners indeed. What a load of bollocks !

    The sophistry (I won’t say intellectual dishonesty) of your “let’s assume…..” (a fictional base to allow you to go on mouthing what you “want” to mouth), really has you sounding like someone who’s been caught out and knows he’s been caught out.

    Add to that a dispositional stubborness and an embarrassingly heavy prior commitment to the “imperative of austerity” lie, well, you’re incapable of acknowledging. Even when the lie is palpable.

    Get real mate. You are abysmally ignorant of the practicalities and forced logistics of the real lives of a vast number of New Zealand citizens. Underlying pomposity, inferential pejorative and judgment, ultimately your mad old wives’ tales about how folk might best “overcome….” – truly pathetic !

  16. Pascal's bookie 16
    18 March 2012 at 10:31 pm

    ts’ plan, as stated here, is “Borrow and hope”.

  17. KJT 17
    18 March 2012 at 10:34 pm

    The problem. Private debt.
     
    The answer. Increase private debt.
     
    LOL.
     
    By cutting public spending so tax payers have to pay more for the same services. AND selling assets to the private sector.  Mom and Pop investors are not going to borrow to buy shares. Of course.

  18. Tc 18
    19 March 2012 at 2:09 am

    The RWNJ twist themselves into all shapes justifying the Nats wrecking ball approach to nz.

    If you get to operate a well run business, good income, solid assets, no debt which was what they inherited in 08 of course you punch a hole in your revenue, bail out mates and borrow to keep the business paying its debts…..natonomics, at best it’s irresponsible but sadly for nz I fear this lot are wilfully selling us out in a very premeditated manner.

    They’re not stupid just totally uninterested in fairness and equity, more for us, f the rest.

  19. Kotahi Tane Huna 19
    20 March 2012 at 9:33 am

    “Treasury has appointed an external panel of experts, chaired by Victoria University’s Bob Buckle, to test its analysis of the Crown’s long-term fiscal position.

    Professor Buckle chaired the 2009 tax working group that led to the Government’s tax switch that saw personal taxes cut and GST rise to 15 per cent.”

    Conflict of interest much?