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PREFU

Written By: - Date published: 8:18 am, August 23rd, 2017 - 47 comments
Categories: economy, election 2017 - Tags: , ,

Today is the day for Treasury’s Pre-Election Fiscal Update (PREFU). Parties will know projected finances and be able to adjust their policies accordingly.

No doubt the Nats will try for some credit for a surplus – like the last Labour government ran for 9 years in office. The Nats have already blown $10b on misguided roads – what will Labour do?

Live: Opening the books, housing
Look at govt books could give parties room to play
Brace for the ‘show me the money’ moment as Treasury opens the books

47 comments on “PREFU ”

  1. Enough is Enough 1

    Compare today’s PREFU to the 2008 PREFU when Labour was last in government.

    In 2008 we left National with fantastic finances which they have managed to destroy year in year out.

    This is the result of 9 years of incompetence.

    Now bring on the election and lets remove these idiots.

    • kevin 1.1

      Bollocks – the 2008 PREFU was predicting a decade of deficits

      • infused 1.1.1

        Correct. Massive deficits. Far greater than anything we have today.

        • One Anonymous Bloke 1.1.1.1

          Keep telling yourself that. National has been “pushing a bow wave” of deferred maintenance. Like “saving” money by trying to live on 800 calories a day then complaining about the doctor’s bill.

        • Draco T Bastard 1.1.1.2

          Bollocks.

          I doubt if anything that Labour did would have come close to National’s borrowing for tax cuts.

        • Pat 1.1.1.3

          go and read the 2008 PREFU and see how many of the Treasury assumptions were incorrect…as most forecasts usually are.

          • alwyn 1.1.1.3.1

            Of course many of them were incorrect.
            They are based on the assumption that policy does not change.
            In 2008 we had a change of Government, got rid of the idiots on the Labour side and got a competent Government instead.
            Policy DID change and we did a great deal better because of it.
            The problem I see is that we now have a tired National Government but we do not have a competent lot in Opposition to replace them.
            The only consolation I have is that I expect the Green Party to miss out completely and we won’t have to worry about their Luddite views.

            • Pat 1.1.1.3.1.1

              lol….you really don’t get it do you….they were wrong about interest rates and the oil price….two of the largest factors, not some piddling details….and as you said all PREFUs are based on business as usual..yet we had a change of gov that year with the accompanying change in policy direction (by your awesome fiscal managers no less) and with austerity managed to shave a whole 12 months off those 10 years of deficits….lmao, business as usual probably would have done the same if not better, especially on the back of lower than forecast interest rates and fuel prices

            • Nic the NZer 1.1.1.3.1.2

              Treasuries forecast was primarily wrong because its model of the economy doesn’t have any concept of unemployment. Government policy didn’t change much but the economy had just altered state massively and the modelling needed recalibration between the ‘equilibrium’ nonsense and what was actually going on.

              https://larspsyll.wordpress.com/2016/07/25/lucas-rapping-and-new-keynesian-models-of-unemployment/

            • Draco T Bastard 1.1.1.3.1.3

              Policy DID change and we did a great deal better because of it.

              You have no evidence for that. Especially when you consider that labour would have changed policy settings for the changed situation as well.

              In fact, we probably would have done better with a Labour led government than under this one even if they had kept to the failed neo-liberal paradigm.

    • Ovid 1.2

      I want a change of government. But things weren’t hunky dory in 2008. Labour did carefully manage its money, they paid down debt and acted responsibly with the purse strings. I think their actions did much to shield us from the worst of the downturn. But the 2008 PREFU predicted lower tax revenue and higher public spending.

  2. dukeofurl 2

    National has been seen as delaying big ticket items from even going into forward estimates such as Manawatu Gorge, Dunedin Hospital etc so as to ‘Flatter the Prefu”

    The cutoff point was probably a week or two back!

  3. patricia bremner 3

    Tax cuts by National with spare cash.
    OR
    Infrastructure build, houses, schools, hospitals, light rail regional development & R&D.
    By LABOUR.

  4. Ad 4

    $3.7billion surplus.

    National now has full counterstrike capacity against Labour on tax.

    Next 48 hours is big.

    • Andre 4.1

      That was fast. Did you sit through the whole poetry reading from Prostetnic Vogon Joyce?

    • Pat 4.2

      on the contrary…..it accentuates nationals record of underfunding those basics that the majority of kiwis expect.

      • AB 4.2.1

        Yep. Bogus surplus built on the back of:
        – public sector austerity
        – economic activity from high immigration but without adequate supporting infrastructure for the population increase
        i.e. house of cards
        And all done deliberately to create an illusion of competent economic management

        • lurgee 4.2.1.1

          This line will get us nowhere.

          English forecast, back in 2010, that he would deliver a surplus in 2016. He duly did so, and here’s another one.

          Rather than making ourselves look like idiots by pretending this isn’t a real surplus or whatever, fight over what should be done with it. People will respond to that, not to esoteric flibbertigibbet.

          • One Anonymous Bloke 4.2.1.1.1

            Or maybe it’s possible to do both: point out the predicted effects of National’s cynical incompetence and demonstrate better ethics.

          • AB 4.2.1.1.2

            Sure – I hear what you are saying. However that approach supports the narrative that the surplus is a result of English’s economic brilliance – whereas really, it’s a result of his puritanical hatred of humanity and the belief that a dose of suffering is just what the lower orders need.

  5. greywarshark 5

    Pref-4-u (Pref-abricated needs an acronym), and that’s the one that I’d be really glued to hearing more about. Prefabricated housing that is.

    Did anyone hear Cameron Bagrie on Radionz this morning? Fast delivery, slick comments, like the sleaziest sort of third-hand car dealer.
    http://www.radionz.co.nz/national/programmes/morningreport/audio/201855759/treasury-accounts-opened-weeks-ahead-of-election
    money politics

    Treasury accounts opened weeks ahead of election
    From Morning Report, 8:09 am today
    Listen duration 7′ :06″ Add to playlist
    Treasury will today open the government books to give the public a deeper look into the Crown’s accounts, and whether parties can actually fund their policies.

    The Chief Economist at ANZ, Cameron Bagrie, says the concern is what the books will look like three to four years ahead. “If I have a look at the broad spirit of where the numbers are going to be, they’re going to be in pretty good shape,” he says.

  6. Descendant Of Sssmith 6

    And don’t forget their theft of money from ACC funds and Kiwisaver by making them”invest” in various SOE’s, etc such as Kiwibank who then pay the funds as a “special dividend”.

    It would be interesting to know how many special dividends have been paid to this government year on year and by whom to prop them up.

    Housing NZ have been paying them on a regular basis while having to defer maintenance and building new homes.

    They of course have paid more since selling off houses.

    Power companies have sold each other assets (making no one but the banks better off) to take on more debt to pay such special dividends.

    And remember of course they made Solid Energy buy Pike River. Great investment that was:

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11491328

    But of course the private sector got a very good price given the circumstances didn’t they. Investment my ass.

    Lots and lots of debt taken on by the SOE’s to pay these dividends!

  7. Ad 7

    I cannot think of another New Zealand election in which Labour could conceivably attain power when the forecasts were like this:

    “Treasury forecasts unemployment to drop to 4.3 per cent by June 2020 and for the average annual wage to increase from $58,900 at March 2017 to $65,700 by 2021, a $1300 per annum improvement on the Budget forecast.”

    If by some astonishing miracle there is a change of government, they will be in the rare position of having few major economic problems, and lots of money to spend.

    • Anne 7.1

      … they will be in the rare position of having few major economic problems, and lots of money to spend.

      I seem to remember something similar occurring in 2008. Bill English himself acknowledged the excellent ‘state of the books’ at the time.

    • Stuart Munro 7.2

      “few major economic problems…”

      Flat wage growth & rising cost of living. Pull out migration and GDP growth has been less than 1% for a decade. If you think the housing crisis isn’t economic, you’re dreaming – if most of the country weren’t doing it hard they’d build or relocate. They don’t have the funds.

    • One Anonymous Bloke 7.3

      All your right wing dreams have come true. Pity they don’t mean anything.

    • KJT 7.4

      We used to cast chicken bones.

      Now we have economists in treasury.

      No difference really.

    • KJT 7.5

      You really do live in a fantasy world, Ad.

      The economy is only OK, in National’s world of lies, fake statistics and propaganda.

      One hour a week is employment??. Yeah right.

      A surplus dependent on cutting infrastructure, and essential services, flogging off income earning assets, and sending the bill for excessive immigration down the road.

      If National were managing a business, they would be in jail for fraud.

    • One Two 7.6

      Not clear of you’re serious, so will assume that you are…

      Employment stats = re-defined to fit
      Average wage = ‘CEO uplift’
      Average wage increase = ‘CEO uplift’

    • TootingPopularFront 7.7

      Few major economic problems?!? Housing crisis, Health crisis, Environment crisis, Poverty crisis, Education crisis, Access to justice crisis, prison crisis, Police crisis…

  8. Carolyn_nth 8

    So neither Nats nor Labour are concerned about the needs for major funding increase for health and education, transport infrastructure, benefit increases, state housing, etc, etc, etc.

    They seem to be living in a different NZ from me.

    • greywarshark 8.1

      +1

    • Zeroque 8.2

      I’m a bit concerned that if labour do get in that they will find they don’t have the money needed to sort out our public health care system. I think the CTU estimate that an extra $2b more per annum is needed in vote health just to get it funded to 2008 levels in real terms.

  9. Nic the NZer 9

    National should have full credit for the irresponsible fiscal surpluses. With a 13 percent labour under-utilization rate, NZ’s low savings rate and underfunding of critical public sectors such as the health system the last thing a competent economic policy requires is to shrink total spending.

    http://bilbo.economicoutlook.net/blog/?p=36631

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