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Polity: Herald on Labour

Written By: - Date published: 10:08 am, August 27th, 2014 - 69 comments
Categories: Economy, labour, Politics - Tags: , ,

Here is today’s New Zealand Herald’s editorial on Labour’s self-imposed fiscal haircut (well, it is more of a bread trim, but there you go…):

The Labour Party has broken new ground in election campaigns by announcing cuts to spending that it had not announced. Leader David Cunliffe and finance spokesman David Parker called a press conference to say they had shaved $300 million from their plans after seeing the Treasury’s pre-election fiscal update last week. They said they had dropped six of seven commitments they had been planning to announce during the campaign, but they would not now say what they were.

What are voters to make of that?…

How about that Labour, as it has done since at least 1999, is committed to running a tight economic ship and living within our means? Nothing really new about that. Ask Michael Cullen.

It is now more important to them to appear fiscally responsible than socially generous. That could mean they rate their chances of becoming a government rather higher than they did before they saw the full effect of “dirty politics”…

It may be true that the disgraceful material revealed in Dirty Politics may have taken the shine off National bit, but Labour knows the only way to win is to persuade people on policy. Fortunately, Labour has great policy, while National has on-again off-again tax cut packages / announcements and shiny looking housing schemes that don’t work.

Labour is committed to raising the top rate to 36 per cent and introducing a capital gains tax on residential rental property. It also wants to use surplus revenue to resume contributions to the NZ Superannuation Fund, which would boost domestic savings. Without more big spending announcements, its claim to fiscal responsibility is getting better by the day.

That is, I think, a true reflection of public opinion, even if Labour’s fiscal credentials are, in fact, already well established.

69 comments on “Polity: Herald on Labour”

  1. Ffloyd 1

    I saw some silly little girl on tv3 couple of nights ago reporting that Labour has had to do an embarrassing trimming of some of their policies temporarily because of possible lack of money in the kitty. Well!! Silly little girl it makes perfect sense to not promise what might not be achievable and budget accordingly. I applaud David Cunliffe for having the sensibility to do this.
    Not like our esteemed pm who is SORT OF promising tax cuts with no details about how they will be achieved until AFTER the election. Ask him now where he thinks the money might be coming from. Or just ask his office!! You will probably get more sense from the office. As long as it is not from a REAL PERSON in the office. And ask him how much the country owes from the last tax cuts. He won’t open his mouth to answer that one.

    • Lanthanide 1.1

      Yeah, some weird reporting on this: Labour are terrible because they have slightly changed some of their previously-announced policies so that they fit within the financial reality they find themselves in!!!!

    • And why on earth should Labour be embarrassed that this government’s fiscal position is worse than this government claimed it was at budget time?

    • Enough is Enough 1.3

      Rather than cut spending promises, promises that will benefit the most vulnerable in society, wouldn’t it better to have another look at the tax policy.

      Who in society will have a lower standard of living if the top 3% pay 40% on income over $140,000? Absolutley no one. The rich can afford to pay more. A lot more.

      Time to prove you are a real party for the people and workers of Aotearoa. Do not cut spending. Adjust your tax policy, if you can’t afford what you intended to promise.

  2. Tautoko Viper 2

    Meanwhile, Key is hinting Tax cuts!!!!

    • It’s the tax cut election promise you have when you don’t have a tax cut election promise.

      • Lanthanide 2.1.1

        I think Key and English are being deliberately confusing on this (even I couldn’t really follow what English was saying this morning on MR) because the average voter just hears “tax cut” and at some point there’ll be a mention of a dollar figure (either from National themselves, or the media will do the simple calculation themselves and report it), but National don’t have to actually promise that they’ll implement it, just have to give the wider voting public the idea that they will.

    • Tracey 2.2

      throwing money at first home buyers and dangling tax cuts, with a 80bn debt. If labour did this it would be recless lolly scramble.

  3. Michael 3

    I disagree with Michael Cullen and everyone else who says it is more important now that Labour appears fiscally responsible than socially just. It never is. Just last week, David Cunliffe made lavish spending promises to the people of Dunedin that I thought were neither fiscally responsible nor socially just: what will happen to those promises and does Labour seriously think they will recapture the Party Vote in Dunedin South after this performance? What Labour must do, if it wants to obtain votes from lower-income New Zealanders, who are largely alienated and disengaged from politics, is provide clear, simple and credible policies that it can afford to implement and that will have a tangible and positive effect on their lives. So far, there has been little sign of this and far too many weasel words.

    • Lanthanide 3.1

      “What Labour must do, if it wants to obtain votes from lower-income New Zealanders, who are largely alienated and disengaged from politics, is provide clear, simple and credible policies that it can afford to implement and that will have a tangible and positive effect on their lives. So far, there has been little sign of this and far too many weasel words.”

      Because any such clear and simple policies will be boiled down by the right and the media as “social welfare for bludgers”, which National has trained the middle-class (who ultimately decide elections, given their bulk) to vote against.

  4. Lefty 4

    Fiscal responsibility is simply another way of describing neo liberalism.

    • One Anonymous Bloke 4.1

      Really? No.

      • Rob 4.1.1

        and in one sentence, Lefty has outlined why large parts of the voting segment are shit scared of a far left Govt.

        • One Anonymous Bloke 4.1.1.1

          Meanwhile, National does its best to pretend that includes Labour and The Greens, further cementing its reputation as the smear party of no ideas.

    • DS 4.2

      Walter Nash, Arnold Nordmeyer, and Bob Tizard are neoliberals now, are they? The only Labour Minister of Finance who ran massive deficits was… Roger Douglas.

  5. Enough is Enough 5

    It is a disgrace that Labour is postponing some policies and cancelling others using the excuse that the economy can’t afford it.

    For fucks sake David Parker wake up. Stop pandering to the neo-liberal media and look to your left.

    The Greens have a comprehensive audited set of policies that do not involve cuts to key policies.

    All it requires is asking the top 3% to pay their fair share.

    Set some reasonable tax levels. 40% will not kill the rich elite, yet it will allow you to run a fairer society.

    I really fear for the incoming government if Parker is allowed to continue this bullshit.

    • Wayne 5.1

      Enough is Enough,

      Why berate Labour for their policy because it is not the Green policy? If you want the Green policy, just vote Green. And presumably make them the largest party of the Left.

      • Enough is Enough 5.1.1

        I think is fairly clear will my vote will be going.

        I am trying to let other people know the issue with Labour’s neo-liberal approach to the budget, in the hope they also vote Green.

      • crocodill 5.1.2

        Correct. Labour is as Labour does. They’ve been “shock horror” shocked to hear treasury tell them there is nothing in the kitty (that can be used to follow up their more “humanitarian” plans) since forever. It’s an old Labour excuse.

        Fiscal responsibility… committed to running a tight economic ship… and living within our means? Sounds remarkably like script from the National playbook.

        And it wasn’t 1999 that it started happening. Take a watch of the short film in the sidebar: In a Land of Plenty. They told it to the incoming government then and the solution was, you guessed it, Rogernomics.

        Yawn. Labour, you yawn yawns. How can anyone see through your complex subterfuge. Yawn. “Labour’s fiscal credentials are, in fact, already well established.” For anyone with a memory, they sure are.

      • Rob 5.1.3

        But Wayne, if Enough is Enough actually goes about your advice, how will he fill in his day without constant moaning about everyone he won’t be voting for. I mean this event only comes around every three years , he has to make the most of it.

  6. Roy 6

    Labour revised their policies to make promises they can actually keep? And that is supposed to be bad, why?

    • Puckish Rogue 6.1

      Because even the Greens don’t believe Labours numbers and want them independently audited?

      • One Anonymous Bloke 6.1.1

        The good thing about numbers is that anyone can check them. If there were problems with Labour’s numbers, someone numerate would have told you about it by now.

        Or perhaps you’ll be the first to spot the mistake. Think of the accolades. Funny, all you’re able to do is smear instead. Feeble.

  7. Tom Gould 7

    Weird how the editorial big-wigs in our largest newspaper are surprised to find out that Labour are prudent and careful stewards of the public purse when they ran nine surpluses in a row and set up the Cullen fund with billions in it, and paid government debt down to zero. In stark contrast to the Key administration which gave away billions in tax cuts to the top end and borrowed $70 billion when export prices and volumes boomed, and have yet to actually run a surplus? Could it be that their ideological blinkers mean they can only see the world as “Tory good” and “Labour bad”? Looks like it.

  8. Valleyman 8

    The picture that accompanies this article is a blatant smear from national painting David Cunliffe as “Antichrist”

  9. Tracey 9

    Fran has written a condemnation of kim dotcom and money to buy elections.

    Can someone link me to an article she has written berating key and hoots and farrar and lusk and bhatnagar?

    http://m.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11313057

  10. Man in a Barrel 10

    As I live far from the madding crowd I’ve never seen a copy of the Herald so can’t judge it. Thanks to Rural Mail even our local paper is a least a day out of date when I get it, and I get Tuesday’s on Friday and Friday’s the following Tuesday.

    But from the years I lived and worked as a journalist in the UK I would say that most people are capable of recognising propaganda and bias when they see it, and of making allowances. Indeed propaganda is far more insidious when it is a lot less blatant than it appears to be from the pic of the Herald’s front page on the Home page’s link to this article.

    In UK the “Daily Mirror” was Labour to a fault, the “Telegraph” was known affectionately as the Torygraph (tho’ IMHO it had the best crossword). The “Observer”, at least in my day, did try to float above it all and not take a view which meant that it took all the colour and most of the flesh off its reporting leaving only the bare bones which made it a very difficult and dry if informative read. The “Sun” of course was only interested in matters of the flesh, preferrably female and unclothed while the “Times” occupied another planet altogether, somewhere to the right of Narnia.

    Personally I doubt a newspapers weigh much on reader’s political opinions. They might confirm them but I don’t think they lead them to any great extent and that, in part, is because people allow newspapers to have a political slant and allow for it. They even expect it. No regular Mirror reader is ever going to decide to vote Tory after wading through the Telegraph for whatever reason while no Torygraph reader was ever going to rush out and vote for Labour just because he picked up a copy of the Mirror by mistake – in fact I suspect a lot of the men in suits I saw alighting from their first-class carriages in London’s railway stations in the morning with the Times ostentatiously under their arms had a copy of the Mirror or Sun in their brief-cases for purusal in the privacy of their offices.

    Far more insidious to me is political slant on TV and radio news. This should be impartial and people expect it to be, and so often aren’t confident they have seen it when they suspect they have. I don’t think this is entirely the fault of the free-to-air TV and RadioNZ – I do believe they try to be impartial. To the extent that it happens I think it’s at the door of the individual personalities, their awareness, their professionalism and their competence.

    God knows it’s difficult. You can’t expect these people to be monk-like in their political views and wherever you stand on the political spectrum you tend to see it as the centre which can make it hard to know what makes for ‘balance’. Personally I don’t think the current crop are demonstrating the kind of competence I’d personally hope for, but it’s a big ask for a small country to throw up the kind of exceptional person who can do it. I’d credit most of them with at least trying – the exception being Hoskins who appears to be falling for the PR of his own greatness.

    What is unforgivable to me is for a journalist to pull his punches for fear of losing access but no TV1 or TV3 or RadioNZ journalist properly supported by management should fear that as a politician turning his back on them is cutting off an arm in the election race.

    By-and-large my default setting is to take all politicians with a pinch of salt – in the hope they’ll respond the way slugs do to a pinch of salt – and use newspapers for lighting the fire. I’ve also ditched TV current affairs as apart from John Campbell I’ve little time for any of the current presenters, and that makes me wary of Campbell too in case he’s just better than the others at disguising the slant.

    For the rest it’s just a matter of caveat emptor.

  11. infused 11

    “[Labour] is committed to running a tight economic ship and living within our means?”

    hahahahahaha

    • BLiP 11.1

      Blinglish wasn’t laughing, in fact he had to eat a dead rat . . .

      . . . Bill English had to swallow the proverbial dead rat this morning and effectively acknowledge that Michael Cullen had done something right in his stewardship of the Government’s finances in the past nine years . . .

      In fact, listen hear as Radio New Zealand’s Mediawatch explains how the DominionPost has done exactly what the New Zealand Fox News Herald has done today: sought to inject a false reality into the public discourse.

      • infused 11.1.1

        Yes, but that didn’t cover the 50% increase in core govt spending, or the big spend up at the end of 2008.

        • BLiP 11.1.1.1

          . . . Having condemned his predecessor for many years for paying off debt too quickly, English said: “I want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook.”

          “In New Zealand we have room to respond. This is the rainy day that Government has been saving up for,” he told reporters at the Treasury briefing on the state of the economy and forecasts . . .

          ^^^ December 18, 2008

          Hmmm . . . so, was Blinglish lying then or are you lying now?

        • framu 11.1.1.2

          “Yes, but that didn’t cover the 50% increase in core govt spending,”

          you mean that increase from a point where the nats had screwed things so badly that we barely had the resources to run an election? – is that the increase you mean?

    • dv 11.2

      Current debt clock infused

      86,034,881,581

      • infused 11.2.1

        So? How does that affect you?

        • dv 11.2.1.1

          Interest payments!!!
          How does it affect you?

          • infused 11.2.1.1.1

            It doesn’t. It kept a lot of people in work.

            • dv 11.2.1.1.1.1

              So
              Tax cut removed revenue and then we had to borrow to keep people in work.

            • Tracey 11.2.1.1.1.2

              so we should borrow 1 trillion then?

              • Nic the NZer

                infused is right. The government debt has no recognizable effect on people and the government spending this money pushes unemployment down.

                “Interest payments!!! How does it affect you?”

                This could be dealt with by stopping the treasury from borrowing, giving the treasury an open overdraft with with the reserve bank, and then having the reserve bank do all the selling of debt to the inter-bank market (the reserve bank issues reserve bank bills but would have to issue a lot more under this scenario). Do you think the reserve bank is going to be short an interest payment?

                Actually the current arrangements work pretty much the same way in any case. There is no problem getting interest out of an agent which issues the currency, which the NZ government does, it just issues the interest on top.

                The Labour party announces an end to neo-liberal management of the economy, and the progressive movement throws the unemployed under a bus! Not impressive.

                • Mike S

                  The NZ government doesn’t issue the currency, only the notes and coins which are only around 3 to 5% of the total NZD money supply.

                  • Nic the NZer

                    The Reserve bank issues (or lends) all forms of high powered money (which is the only form used in the interbank system). If you are paying tax its a payment of high powered money to IRD. If its payment from government its high powered money to a bank in the interbank system. But yes commercial banks issue new bank credit which is counted in the broader money supply.

        • disturbed 11.2.1.2

          Infused,
          You are unbelievable,

          If you had some credibility before you just lost everything..

          $86,034,881,581 Billion in crown debt, and you shrug it off as “SO”.

          Can you be serious?

          USA is chocking on a large debt and though it prints money still takes it serious.

          But your NATZ Government should also, but instead as you do, it shrugs our overleveraged debt in the same way as O/K or “SO”!!!!

          Your kids kids and our will be spending their lives struggling with the interest on this huge Debt.

          How can you accept that. “SO”.

          Nat’s have simply shrugged this off by claiming we have a slight surplus!!! Surplus of what??

          Under National.

          Borrowed $350 million a week to keep us afloat say Nat’s

          Result Crown debt ratio to GDP went from 6% in 2008.

          Debt .2014 Crown Debt ratio is now 26% in 2014.

          Is this now your answer. “SO”.

          • RedLogix 11.2.1.2.1

            You miss the point disturbed.

            National debt = So what.

            Labour debt = End of the world.

            Keep that in mind and the rest becomes explicable.

          • Nic the NZer 11.2.1.2.2

            “Your kids kids and our will be spending their lives struggling with the interest on this huge Debt.”

            The last time that the country decided to pay down debt was while Cullen was finance minister. Don’t remember the country struggling though in fact unemployment was at a recent low. Why would the economy be struggling with government debt?

            “Nat’s have simply shrugged this off by claiming we have a slight surplus!!! Surplus of what??”

            That’s more like it, its a surplus of NZ$ tax credits, why people are giving the government plaudits for collecting more tax credits than it gave out some year is beyond me. The Wellington cake tin collects more rugby tickets than they gave out over the week of a Super12 match there. Does this mean anything? No. The week before the match they gave out (sold) more than they collected, are they going to run out of Super 12 tickets? No (though they might run out of seats).

            A government budget deficit is private sector savings! Notice the economy has been short of savings for about 2 decades, and the government running countless ‘savings working groups’ to try to explain it? Why do you want to reduce private sector savings? Especially why now?

            • Mike S 11.2.1.2.2.1

              Because reducing private sector savings means the private sector is spending more which means the economy is boosted?

              • Nic the NZer

                Hard to tell if this is serious. Tell us about all the extra spending you are doing next time you see a pay cut.

  12. M. Ross 12

    In response to Michael’s post about Cunliffe’s promises to Dunedin, this area is in dire need, having seen so many of our jobs sent overseas. The railway car project, that should have been given to Dunedin, was given to China, who sent us railway cars laden with asbestos (poison.) Now the Nats are having (more jobs) China fix the problem. Also, the employment policy adopted for the filming of the Hobbit has marginalized the status of employment to the point that Polson & Higgs fired several employees, some of 25 years, to export the jobs to lower wage countries. These office employees were deemed contractual labor, even though they’d worked for the company for long periods of time. These are only examples of the greater problem we face in Dunedin. If David Cunliffe can adjust policy to make it beneficial for employers to keep jobs in NZ, that would be a step in the right direction. Reopening the railway contract would not only employ people, it would help the esteem of our down trodden community. Cunliffe is a smart cookie. I’m sure that he will figure out how to balance the budget so that the super rich start paying some tax, and the poor families get much needed help. I suggest eliminating GST on essential food items, to make fresh veges, milk products, and bread more affordable. The capital gains tax is a great idea! If you can afford more than one house, put some of that money into the coffers to help the poor. Presently the poor are paying for the rich to get “welfare.” Give Cunliffe a break, we know he’s willing to set things right. I think he’s smart not to show his hand until he has a full defense set up. The Nats don’t play nice.

  13. indiana 13

    Does this revised spending include potential coalition partner spending as well? After all the coalition partners are going to wing a fair chunk of the votes and the people that voted for them have an expectation that their policy promises will be delivered, otherwise that it may be a wasted vote.

  14. greywarbler 14

    No vote is a wasted vote in the wider context. Each vote placed indicates that here is another person who feels they have a stake in the country, an idea of what sort of country it should be, and that person is not giving up on this simple task because they are too lazy or ignorant to accept their place and opportunity to be a citizen. And all it takes is ticking some things, while bearing in mind the vote isn’t a magic wand to immediate personal satisfaction. It’s just another drop of oil facilitating smoother running of democracy.

  15. Sable 15

    Personally I think the Herald is a revolting little rag bur then show me a MSM paper or site that isn’t a Tory lovefest….

  16. halfcrown 16

    Personally I think the Herald is a revolting little rag

    As I have said on many occasion, don’t buy or read the Herald or any Far Fetch papers as we prefer to use good quality shithouse paper that comes in rolls.

  17. Nic the NZer 17

    This is awful, the Heralds (and Nationals) and apparently also Labour’s notion of fiscal responsibility is nonsense.

    Its the governments role in the economy to maintain sufficient spending to ensure full employment. With unemployment at 5.6% that is a lot more spending, either the government should spend more or collect less taxes until unemployment falls much closer to around 2% (or less).

    Unemployment is unlikely to fall until the government figures out that its idea of ‘fiscal responsibility’ is keeping the population unemployed. On the other hand since the NZ$ is a tax credit to the government (in NZ$), it can always maintain full employment if it wants to do so. The main trick of neo-liberalism seems to be that they have some how convinced people that the NZ government is some how going to run out of NZ$. Its shameful that the electorate allows itself to be duped like this for so long.

    • Puckish Rogue 17.1

      Being that unemployment is falling and has been under National I see no reason why it won’t fall just a little bit more, there’ll always be those that simply don’t want to work though

      • Nic the NZer 17.1.1

        Question: What causes unemployment to fall?
        Answer: An increase in spending (that’s GDP) which is distributed to more workers creating additional jobs (and income).

        Question: Where is the additional spending coming from (at present)?
        Answer: Government budget deficit, private sector credit growth (a.k.a housing bubble, and ChCh rebuild) and trade surplus.

        So, if the government goes from deficit to surplus where is the extra spending to grow GDP going to come from? Is it the presently shrinking trade surplus? Or do you intend for the housing bubble to accelerate further (the ChCh rebuild will gradually peter out).

        If you think anything like 5.6% of the work force simply don’t want to work you are clearly deluded.

        • DS 17.1.1.1

          The problem isn’t the existence of a deficit as such. The problem is that the deficit was created by National’s tax cuts for the wealthy: as far as economic stimulation goes, it’s incredibly weak.

      • Enough is Enough 17.1.2

        The economy has peaked in this cycle. It probably did around the start of this year.

        Unemployment will only run in one direction from here. Up, up and up

  18. Vaughan Little 18

    I’m a two tick, rusted on Labour voter (except for when I voted Maori Party in 05 because Labour was trampling on article 2 of the Treaty) but the figure of 80 billion, or any other figure for that matter, has no meaning without the proper context. in this case the context has two dimensions: the government’s ability to pay for the debt, and the return on investment that the borrowing will generate. it’s only a bad idea to borrow if the borrowing is value destroying.

    what’s delicious, though, is that the national party is doing something so contrary to their randian image – pursuing an effectively Keynesian set of policies. i.e., when business is down, keep the economy going by ramping up public spending. pretty damn leftist…

    • DS 18.1

      Reagan did much the same (ran massive deficits through the 1980s). Though Reagan, like Key, ran deficits by cutting taxes on the rich. And the rich tend to save more of their tax cuts than poor people do, so it’s less beneficial if you want to stimulate growth.

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