Should the Government spend massively more?

Written By: - Date published: 3:18 pm, August 8th, 2019 - 58 comments
Categories: business, capital gains, capitalism, kiwisaver, treasury, uncategorized - Tags:

With yesterday’s announcement by the Reserve Bank to cut interest rates by 1%, some are suggesting that the government should embark on a massive public works spree to stimulate the economy while increasing national debt at low interest rates.

This RBNZ move is by some measure a strong intervention by the Reserve Bank. As National’s media release noted, the only times in its history there has been cut of this magnitude has been “after the 9/11 terrorist attack, during the Global Financial Crisis, and after the Christchurch earthquake.”

The Reserve Bank’s primary concern is to get households and businesses spending more, to get more dynamism back into the local economy.

Wage rises are low, business investment is low.

But the crisis the RBNZ is signaling simply hasn’t happened. It’s nowhere near happening. We have about as many people able to be employed as we are going to get. GDP growth in the economy is still going at around 2.5%, and we remain in one of the longest cycles of sustained growth since World War 2. If there is a crisis to come, far better that government pay down debt now, increase social spending now, gently push up minimum wages, and keep even more stimulus for when it really does hit. That has been Robertson’s theme for this government, and he’s right.

Groups such as Infrastructure New Zealand want to see huge new projects get off the ground to stimulate the economy.

But there are no workers to be had to do any more infrastructure work.
Projects such as City Rail Link’s new Alliance are about to suck over
1,500 people both locally and internationally out of labour hire and consultancy businesses. If Auckland Light Rail got the green light tomorrow, the skill shortage would mean that most staff would need to be imported, even if some were pulled from the South Island. We haven’t even got the Auckland-Northland rail upgrade decision, but if we did there are no more rail workers to be had anywhere either.

After the limited effect of government interventions in the housing market, this government is not motivated to spend more of its political capital and ministerial careers chasing bulldozers uphill to corral families to buy houses they just can’t afford.

And in 2020-2021 we have additional stimulus in America’s Cup, APEC, and a slew of big sporting events.

So no, the government does not need to try a big debt-spree.

I am also skeptical that any stronger-directed plan from the massive Provincial Growth Fund would necessarily generate superior outcomes to what it’s already delivered. I’m sure there are Treasury and MBIE cone-heads who are running defensive counterfactuals about what the economy would be like without it, but that’s a mirage.

By any measure PGF is a big intervention, and there’s no sign adding more interventional cash would actually give a big marginal increase in private sector investment.

The other move the Reserve Bank is implying is stronger wage rises. We have to be honest and admit that there won’t be any sector-wide wage awards this term. The instruments to do it no longer exist and are just being slowly rebuilt. The remaining unions in New Zealand with any strength have fought and won the increases they are going to get.

There is otherwise no labour-side pressure on employers to increase wages. Even with such labour scarcity, wages are showing weak rises even now.

No, the lesson the New Zealand economy is going through is this:

Lead yourself.

Too much of the limited private savings that we have is lazy. Far too much of Kiwisaver is in default conservative settings. Instead of looking at pushing for compulsory Kiwisaver, and annual sit-downs with your investment manager to check on their health, public officials are just tooling around with ethical reforms.

Even an average-quality Kiwisaver should be able to show you every company you are invested in.

If government wants to stimulate the economy, it should force the entire Kiwisaver regime to work far harder. It could go for compulsory Kiwisaver, and it could go for a higher level of savings out of wages, such as going for 5% private + 5% compulsory business contribution.

Pump up the volume. Doesn’t have to go for the Australian 9% compulsion standard. But annual savings meetings with advisors would mean we lead ourselves to make our own money work harder in our own economy.

The second area of absent leadership is from business itself. Fonterra and Fletchers are very seriously damaged. We have few remaining large locally-owned businesses left, and still more of them like Westland Milk are leaving or being sold off. The previous 9 years have had few world-beating companies rise up, because private capital was all sucked into the housing speculation boom as mortgages. So there’s no new Icebreaker generation pushing through the ranks. We have thousands and thousands of tiny businesses, and on average they are getting smaller.

We have actually zero leadership from our New Zealand Stock Exchange, or Business New Zealand. No one wants to list, and the rare few who are prepared to list such as Xero prefer Australian listings. Nor is there any will shown by the likes of Business New Zealand to engage hard on cross-sectoral engagement with the government. They are a bunch of fucking lazy self interested moaning bastards.

Can anyone remember the last time a business leader stood up and said:
follow me, I know completely what businesses in this country needs? Me neither.

Business, buck up and lead yourself.

New Zealanders and New Zealand businesses will have to figure out themselves how to burn off their own mortgage burden and redirect their own money into businesses they want to see grow.

I hope Minister Robertson says to every critic this coming week:

You want strong economic leadership? Look in the mirror and start.

58 comments on “Should the Government spend massively more?”

  1. Ad 1

    Correction: "… cut interest rates to 1%…"

    • joe90 1.1

      … cut interest rates to 1%…"

      For now…

      It’s longer retirements, stupid.

      That, in a nutshell, is why negative bond yields might not be a nonsensical bubble ready to burst but actually natural, according to Joachim Fels, Pacific Investment Management Co.’s global economic adviser. More people in developed economies are living longer and need to save for decades of retirement, which, according to Fels, is causing a radical shift in how people prioritize immediate spending compared with future consumption. 

      In a blog post this week on Pimco’s website, he laid out perhaps the most concise and straightforward case I’ve seen yet for what structural changes are behind this phenomenon of paying for the privilege of purchasing debt:

      Once upon a time, economic theory maintained that people always value today’s consumption more than tomorrow’s consumption – and thus display positive time preference. People would therefore always demand compensation in the form of a positive interest rate in order to forgo current consumption and save for the future instead. People were viewed as impatient, and the more impatient people are, the higher the interest rate has to be to make them save.

      This made sense in a world where people usually died before they retired and struggled to satisfy basic needs. However, it can be argued that in affluent societies where people can expect to live ever longer and thus spend a significant amount of their lifetimes in retirement, more and more people demonstrate negative time preference, meaning they value future consumption during their retirement more than today’s consumption. To transfer purchasing power to the future via saving today, they are thus willing to accept a negative interest rate and bring it about through their saving behavior.

      https://www.bloomberg.com/amp/opinion/articles/2019-08-07/is-pimco-right-that-negative-yields-make-sense

  2. Stuart Munro. 2

    "We have about as many people able to be employed as we are going to get."

    Those of us who recall the full employment of the late seventies and eighties will recognize this as the usual pathetically lazy neoliberal cant. NEETs still need a livelihood, and the unsuitability of the gig economy is amplified by the constraints of living on a small group of poorly governed islands.

    • Ad 2.1

      It's the second time this century that unemployment has been this low.

      https://teara.govt.nz/en/graph/24362/unemployment-1896-2006

      The other time was at the end of Helen Clark's era.

      Nostalgia ain't what it used to be.

      • Stuart Munro. 2.1.1

        Only because it's measured dishonestly.

        Prior to Rogergnomics, 1 hour a week wasn't misrepresented as a job. When Labour tells the truth they can be better than National, but when they resort to lying there is no choosing between them.

        • Ad 2.1.1.1

          If Te Ara the official history site of New Zealand has a conspiracy on unemployment stats going, you should let them know what it is.

          • Stuart Munro. 2.1.1.1.1

            If they're not capable of keeping an honest ledger without my help they shouldn't be in the job. They'll have their numbers from Stats of course, and anomalies like the thousands of extra jobs in Whangarei posted during the term of the previous government showed that there was no rigour whatsoever in their numbers. Fatuous claims of record employment by the Clark government fool no-one. They were better than the Gnats under Shipley, but that is all.

  3. indiana 3

    Why not refinance the current national debt and pay less interest instead?

  4. woodart 4

    good comment about economic leadership. all the free market wonks want and have had hands off driving from successive governments, so piss poor local private economic leadership is a case of" beware what you want" and ,as you say, look in the mirror. the call for big works runs slap bang into not enough workers, and no housing for those non existant workers. too much money sitting in term deposits doing nothing. but what to do with it. ? crappy local business management (shipley, etc), and crappy penalties for that management have scared many Kiwis off investing in share markets, and aussie banks dont give much confidence. investing in retail real estate is not a goer, with internet shopping and earthquake rules killing that off..Im thinking of taking my term deposits out and buying driftwood. thats about as stupid as doubling the population to increase growth, but without the environmental damage, and longterm downside.

  5. R.P Mcmurphy 5

    correct in every assumption advantage.

    GR is new zealands themistocles.

  6. greywarshark 6

    Look at getting prisoners working.   I know it isn't supposed to be done, but it may be that is not the best policy to keep them locked up when there are tensions.    Perhaps cycle the jobs;  a few from each area, and then give others an opportunity to work with    It would give them a break.

    • Stuart Munro. 6.1

      It's a good idea – maybe for seasonal demand like orchards. But the thing is not to exploit the prisoners. Pay them the same as others, maybe limit their access to the money till they're released, but make it so their experience is positive, and it will go some way to rehabilitating them. 

    • SPC 6.2

      Building homes is where they should be employed and related trade skills – electric fit out etc. 

      Either at a prison prefab factory or bused to a pre fab factory. 

      They are doing this small scale now – but just one home at a time training.

  7. Pat 7

    The government very much do need to engage in an infrastructure spend…but not so much for the fiscal stimulus though I expect that will be necessary soon enough….this is the time to convert the foundation of our infrastructure away from fossil fuels and given the fact it will take decades to achieve there is time to direct and train the required expertise (even though it should have begun years ago)…having said that the expectation anything resembling this will occur is about nil

    • UncookedSelachimorpha 7.1

      I would vote for a social spend. Education, health care, poverty. There are huge, unaddressed, problems in NZ.

      • SPC 7.1.1

        Some are advocating handing out money to people to spend – imported goods and holidays – which is truly stupid.

        We currently hand out over billions of dollars a year in super to people who are working, instead of fully funding health and education (pay and staffing and equipment) and Pharmac, lack of state houses, poor support to those sick and dsiabled, 90% abatement over $80 for those on ben benfits etc etc.

        • greywarshark 7.1.1.1

          The handing over superannuation to people who are working is part of a serious situation concerning the number of older people who do or not contribute to society.    It is not helpful to throw around emotive unsourced  statements like "currently hand out over billions of dollars a year in super to people who are working,".    It is important to think about this and if you wil give us the figures and how the demographic is rising for some years for comparison, then we will be able to see the extent of this situation.

          • SPC 7.1.1.1.1

            Yeah na. 

            Nothing emotive about facts. It is the case and it is getting worse year by year because the number of people 65-70 is larger and larger each year and more of them are working in these years than in the past.

            It's already over $3B pa and will soon be over $5B pa and that is after tax paid.  

            People who are disabled get less than super and get taxed 90 cents in the dollar on any work income. Talk about injustice.

            • greywarshark 7.1.1.1.1.1

              I do not agree that there is nothing emotive about facts.   There are ones that I feel very strongly about and rightly so.

              So you are saying that superannuation paid to those who are working is $38 billion per annum and soon to be $58bpa (paid work for how many hours pw – 30 hours full-time equivalent?)

              If you would give a source for the above to assist looking into it that would be helpful.   I am very interested in the situation of getting a truly collaborative society going, with all people contributing their talents as appropriate.    And the problem in a poorly paid society that has resulted from deliberate actions of the government, is that if older people work on after retirement age, the younger people who could move up to the better paid level of seniority are blocked from gaining this period of decent pay and saving a little for their retirement.

              Fair treatment for the disabled, and indeed for working parents, both of whom have difficulties to cope with in life, should be looked at by any decent people-centred democratic political party.  

              • SPC

                I'll get around to it. For now – the amount paid in super to those still working is over 3 billion per annum 3B pa and will grow to over 5 billion per annum 5B pa within a decade or so (on current trends).

        • mike 7.1.1.2

          land lords will  just suck up the extra money there a real block on makeing any progress to affordbility

      • Pat 7.1.2

        An infrastructure reset has the potential to concurrently address many of those issues…social housing, public transport, retraining would all b major components of a reset and given the scale and timeframes it would require more than a gig economy

    • greywarshark 7.2

      Pat   I think we are at end times for our present society.    We cannot afford to throw our hands up in the air and say resignedly the likelihood of action is about nil.

      Now is the tipping point.    The fact that lprent is commenting about himself that he needs to get his arse into gear etc. is a sign of how we all are aware of urgency, and we should be looking for leverage to get things done, not be resigned.   Unless we want to resign from our present planet.

      If we got going on infrastructure with the single-mindedness and almost fury of the Chinese, and we do the right things in the right way keeping in mind likely sea level rise and fault lines etc and adjust anything we do to match these with perhaps limited life for some, then we will boost the economy, and give jobs back to people who need them.  

      We can have special training for supervisors who know how to manage those who have grown an idle backbone while they have been shelved like broken toys, and eventually have a resilient country ready for the various disasters that will come.  

      And we can be developing new technology, getting southern agencies for overseas tech innovations, of a physical and practical nature, not all things on screens that are just symbols about things and vanish without electricity or batteries to keep them going.  

      Keep growing our own food locally and mostly in NZ;  build apartments with allotments round them that the owners or lessees work which can be a co-operative food farm for the local area.  This tipping-point can result in a flowering of ideas that normally get over-ridden by know-it-all consulting superiors.

      • SPC 7.2.1

        The thing is we are doing the opposite in some of these areas – we are building houses on the best growing land for our winter vegetables for example. 

        https://thedailyblog.co.nz/2019/08/08/guest-blog-bryan-bruce-your-vegetables-just-became-more-expensive/

      • Pat 7.2.2

        GWS….as SPC noted in reply the indicators continue in the wrong direction and hitting your head against a brick wall not only becomes self harming it achieves nothing.

        Grant me the serenity to accept those things I cannot change

        The courage to change those things I can

        And the wisdom to know the difference

        • greywarshark 7.2.2.1

          Cripes wise one.   Stand on the train tracks and spend precious time deciding whether it is best to jump into the river on one side, or the dense forest on the other.     It is wise people like yourselves, uncontaminated by harsh reality as you make your sane and measured plans that bring us to this crisis.   

          I remember a journalist with deep knowledge of the African continent talking about a fast-presenting crisis of farmine in Biafra I think.    The Red Cross had the matter in hand and would be prepared in about 4-6 months to mount aid.   But he said with emotion, there is only an estimated 2 weeks sufficiency of food left.

          Action now is needed, and bright young minds better get onto it, because the cholestorol rate is high amongst many commenters who have the time and capacity for comment and criticism.   Help yourselves, because NZ will only react to crisis, not pro-act in an intelligent way.

  8. Nic the NZer 8

    "We have about as many people able to be employed as we are going to get."

    Fark sake, the unemployment rate is 3.9% which means 1 in 25 people in the work force answer yes to I would take a job if i could find one. That is in no way insignificant and worthy of casual dismissal.

    This and the wage question indicates the government should setup a job guarantee program, to provide full time work to anybody who wants it.

    Finally on the question of NZs savings rate, most of what is mentioned is 100% irrelevant to the problem if not harmful. For exampe raising mandatory savings to 5% takes the difference is consumption spending away. This reduces aggregate demand which if anything lowers economic activity (not as implied raises it). On the other hand if you can get all that saving converted into consumption spending then this raises demand and what kicks in then is businesses borrow (which automatically creates the monies) and invest to capture that demand. Your "suggestion" works in the opposite direction and would exacerbate problems.

    • lprent 8.1

      I haven't for a while looked at the long-term unemployment stats nor the household survey looking at people who'd like to work. If I can get it, I prefer to look at those by region to get a sense of where the persistent problems are.

      Anyone looked at them recently? Any comments about the residual finagling of them that National so loved to do – like booting people off the roll temporarily with courses and makework?

      I should get off my lazy coding arse and have a peek at them for the last few years.

    • SPC 8.2

      It could go for compulsory Kiwisaver, and it could go for a higher level of savings out of wages, such as going for 5% private + 5% compulsory business contribution. Pump up the volume. Doesn’t have to go for the Australian 9% compulsion standard. 

      Yeah I agree this would do nothing to increase aggregate demand

      Requiring increased investment locally might but at the risk of lower returns on the savings. 

    • Ad 8.3

      Kiwisaver funds are placed into companies. On average this is more productive for NZ than encouraging consumption and mortgages, which is the direction Mr Orr pointed us to. It's not a meal it's a sugar rush.

      We won't get higher wages unless we earn it through higher productivity. 

      So there's plenty of scope for Min Finance in Kiwisaver both in rates and in investment direction, if he chooses, to get mechanisms working harder, and spending more in our economy in the right way.

      • SPC 8.3.1

        It's really only in buying up new share issues that Kiwi Saver can assist with  increased investment – and obvious sure fire wins here could and should be being financed via bank loans with interest costs so low. 

      • Nic the NZer 8.3.2

        "On average this is more productive for NZ than encouraging consumption"

        This is either dead wrong or at best depends on a rather weird definition of productivity (e.g what is your operative definition of productivity). If we take a reasonable definition such as, income per hour of work, then its dead wrong. Most businesses have significant slack and therefore can increase output without significant extra (mostly wage) cost directly due solely to selling more output per unit time (e.g higher consumption turnover). That makes complete fiction of your central claim.

        Also, as you highlighted increased productivity has most recent times just flowed into higher capital share and not fallen into most pay packets anyway. Until that is being addressed the concern about the growth in the productivity rate remains spurious. Productivity is at present substantially out of whack with the median wage rates due to decades of political neglect of this concern.

        • Ad 8.3.2.1

          New Zealand will be a high productivity society when:

          – we make continuously smart choices about savings and investment versus instead of focusing on current consumption;

          -dynamic and competitive markets, which we don't have because so many of them operate like near-cartels

          -openness to trade and to international connectedness, which we do pretty well at;

          –  high awareness of external influences, which we are narrowly good at;

          – rapid uptake and smart application of new technologies, which we do really badly on average at given we make so much bulky and heavy commodities still

          – and increasing demand for highly skilled and creative people.

          Don't take my word for it. Ask the Productivity Council. As for my point about the importance of capital shallowness upon business productivity in New Zealand, this article was useful:

          https://ojs.victoria.ac.nz/pq/article/view/5080/4524

          My experience in the infrastructure, construction, and local government funding agencies like NZTA and AT and water companies is that there's no slack anywhere. They are one of the few lively economic growth areas still.

          Also in central government broadly, health, education, and Defence get plenty of new capital but there's no effect on the economy for years because they don't have the people to do it. It's exactly the opposite of slack .

          Your theory sounds good. But in the practice of those two dominant business sectors of our economy right now, it's simply not borne out in reality.

    • mike 8.4

      as a gen x i have had to pour money into saving for retirement way beyond 10 percent more like 40 percent because i just dont beleave super will be there for us its easy to say spend spend spend but when you feel that gen x is going to be stripped of super to pay for the boomers there  is a crises of confidence to do any spending at all and most of kiwsaver money is sent off shore .

  9. UncookedSelachimorpha 9

    We don't need more jobs – we need better paid jobs.

    Low unemployment with low wages is a huge problem…and is actually very similar to slavery. The power of capital has been used to manipulate politics to yield exactly this outcome – wages are decoupled from labour availability.

    • SPC 9.1

      It's $17.70 MW now and will be $20.00 MW in April 2020. That should apply upward pressure on wages c $18.00-22.50 (was 50% premium on MW at $15). 

      If it does not then we will have a large proportion of the workforce on or near the MW (and solely because we allow employers to bring in workers from offshore, rather than train up locals). 

      • Nic the NZer 9.1.1

        The wage discussion (in sectors where the minimum wage is relevant) is actually about part-time roles and limited available hours more then it is about the minimum wage rate.

        The government should setup a job guarantee which will provide up to full-time work to anybody who wants it at the minimum wage. Providing that alternative will immediately create pressure on minimum wage business to provide a more favorable alternative (higher wage, better conditions or more enjoyable work or maybe more flexible hours).

  10. SPC 10

    There is one quite quick way to increase economic activity. 

    Sort out

    1. the consents for small (mobile) homes – as a mobile building.

    2. a legal framework for the placement of these buildings/mobile homes on existing sections (sans subdivision – lease of the land off the existing title holder). 

    There is a lot of spare section space available for this – and it makes for a increase of land supply required to make a difference. 

    • Dukeofurl 10.1

      Thats not an answer at all.

      You have so many suppositions

      'one quite quick way"  Nope ,  the clue is tiny houses are  tiny economic activity

      What we have  is poor quality housing of a low standard ( thats what not following existing consents means- I have heard others say here some of our housing standards are too low !)

       'lot of spare section space available for this'-  a dream!

      This will create future slums-  a general term for mass housing  built without regard for  basic building consents

      • SPC 10.1.1

        You are so very wrong. 

        Quickly built homes are productive activity – not just because they house people the most quickly (especially the factory built) but because they reduce rent costs and thus improve the aggregate economy.

        And kickstarting the home building factories in this way (by creating some demand) develops the basis for a major change to our home building costs in general.

        A tiny home is often very high quality (affordable quality). 

        There is a lot of unused land on the front of sections and there is no way placing such new homes on this land would turn a street a few are on into a slum – no more than a few back of section infills would do (most of the owners are going to be first homeowners before they have children or oldies downsizing).

        The higher density means a much lower cost to councils in infrastructure and they would get more rates (off the higher capital value with the small home – whose owner pays a lease for the land).   

  11. SPC 11

    Are wage rises low (4% in the past year) – or just low compared to rent increases? 

    As for work.

    1. we are not utilising the large prison population
    2. there are many casuals and those on contract work being exploited (paid to work less than they do and travelling between jobs unpaid and at their own expense).
    3. there are those under-employed on casual contracts or in part-time work – thus we under record full-time unemployment (significant in a high rent housing market)
    4. we have those on benefits unable to work part-time without 90% abatement on their work income
    5. we have major under-investment in labour substitution because labour is exploited so cheaply – which means we have a larger working population for the work output than we should – thus immigration and pressure on infrastructure.

  12. cleangreen 12

    Yes Ad,

    We should now fund another ‘public works infrustructure rebuild’ of our sick infrustucture now, as the following position I set out here speaks why, and it is backed by the ‘local government’ because they are now caling for funding local bodies to takle the coming climate change.

    We are seaking up for this.

    “Government must use rail for climate change mitigation.”

    The latest political polls suggest that Labour are losing support for a second term Government.

    We at CEAC have been for 19 years fighting to restore the regional rail services on the East Coast from Gisborne to the ‘main trunk line’ at the Palmerston North rail hub, so we can use rail to export-import/distribute our 35% of all NZ’s export products that we in Gisborne/HB collectively produce every year.

    Rail is a far more fuel efficient mode of transport to move every tonne each km than truck freight is, while rail emits far less GHG (greenhouse gases) to help fight climate change, and produces no tyre dust air pollution which causes cancer and nervous system damage as tyres are made from petroleum and is a form of plastic synthetic nylon, while trains have ‘steel wheels on a steel track’ = no wheel air pollution being emitted.

    Today on the news we see that the Local Government (LGNZ National Council) is calling on the Central Government to put into place a “National climate policy” and give financial support for the regions to use to combat the effects and causes of climate change.

    We searched for a Government financial policy for regional local Governments to request assistance from and only found this older (mfe) ‘Ministry for the Environment’ document.

    https://www.mfe.govt.nz/climate-change/climate-change-guidance/guidance-local-government-preparing-climate-change

    This Local Government (LGNZ National Council) call to Government to produce a clear National Climate Change policy fits exactly what our CEAC Environment Centre has been requesting of successive governments for all those last 19 years and we commend local Government for making the call today.

    We recall;

    PM Jacinda Ardern stood on the Auckland Town Hall Podium in that memorable first pre-election speech in September 2017 saying “Climate Change is our generations nuclear moment” and said “lets do this” but so far we have not seen any real “National climate policy” even in the Governments ‘year of delivery’ before the 2020 election which is fast approaching, so we are reinforcing the local Government (LGNZ National Council) call to Central Government to get a ‘National Climate change policy’ in place now.

    Firstly Government now needs to heed the recommendations in the ‘Parliamentary Commissioner for the Environment’ (PCE) 2005 report to Government https://www.pce.parliament.nz/media/pdfs/Hawkes-Bay-Expressway-Noise-and-air
    -quality-issues-June-2005.pdf

    The (PCE) report (link above) calls for a more integrated approach that promotes alternatives such as buses, cycles, and trains and a greater co-ordination between land use and transport planning.

    So as history shows; that when the last Labour Government in 2005 under PM Helen Clark received the PCE report above from the PCE in 2005 with those recommendations to make more use of rail then on ‘HB export transport activities to Napier Port’ recommending to use rail to reduce the increase of the national truck fleet inventory, Labour did respond then, as PM Helen Clark and Michael Cullen as Finance Minister moved to buy back our former NZ Rail infrastructure in 2007/8 which was a great start for restoring our regional rail infrastructure again after years of languishing in a dysfunctional privatisation model that did nothing but “defer all maintenance” on the rail infrastructure and sell parts of it off slowly until the whole network was at risk of collapsing. – During the National Government nine years rail was left to die a slow death with most of the regional rail funding redistricted to the Auckland/Wellington passenger rail services only.

    So finally Winston Peters our Deputy PM, and Leader of NZ First is now with his Minister of Regional Development the Firebrand MP Shane Jones actually the only part of Government who are actually promoting rail by using the Regional Growth Fund (RGF) to lower our carbon footprint from overuse of truck freight still today expanding unchecked today.

    Government should instead restore all adequate funding for our restoration of all regional rail to all our regions that produce all of NZ’s exports such as Gisborne/HB does, to increase our economic wealth, while lowering the GHG emissions from transport that is still not being reduced since Labour took over in 2017.

    “Lets do this”

  13. SPC 13

    After the limited effect of government interventions in the housing market, this government is not motivated to spend more of its political capital and ministerial careers chasing bulldozers uphill to corral families to buy houses they just can’t afford.

    The major problem is there are only so many first home buyers who can afford to buy a new build. 

    They need to increase the number who can buy.

    1. they should include those who bought one bed room apartments and flats as starter homes to get onto the market

    2. those who already own (larger) family homes but who are downsizing to a lower maitenance smaller sectioned Kiwi Build. 

    Promoting Kiwi Build as affordable family homes for first home buyers was a mistake. 

    3. The most radical option would be to sell some to first time landlords as an investment option (given the low bank deposit rates and fuilly valued stockmarket) 

    Of course there are also shared equity and rent to buy alternatives – but they have a different cost structure than the Kiwi Build programme. 

    • greywarshark 13.1

      Couldn't the government start a first house buyer saver program for young people who are working and earning?    Whatever they can save in two years, the government put in the same as a deposit, and give them a ten year low interest mortgage?    And allow them to have boarders – this could mean that they could buy some of the larger homes and take in family members who could contribute.     This would use up big houses which may be sitting empty, get reliable working and saving people housed in stable communities hopefully, and also provide housing for others which would reduce the pressure on rentals.

  14. SPC 14

    If there is a crisis to come, far better that government pay down debt now, increase social spending now, gently push up minimum wages, and keep even more stimulus for when it really does hit. That has been Robertson’s theme for this government, and he’s right.

    I agree with this somewhat. It’s classic management of the economic cycle

    A MW boost, improved social spending – enhancing government delivery capability (public health and education and housing and conservation etc), some social justice in pay and benefits is just what a first term Labour government is required to do.

    The government has adjusted its debt target out to 2023. But should as Greens have suggested move from the 30% GDP spending cap (for 2017-2020) as well to increase flexibility for any downturn. 

    However the problem with government boosting spending on infrastructure later in any downturn is that we are already at workforce max in this area. Thus it is important to invest now in increased workforce capability. 

  15. soddenleaf 15

    So because those nearing retirement save more than spend, we will be getting negative rates. That presupposes that we have the same population spread. I thought that was why we have 2+% because we haven't the old's others do.

    Hey makes sense, be paid to borrow to get educated, paid to borrow to buy a home, but unlike to happen here, Japan sure.

  16. Jenny - How to Get there? 16

    Should the Government spend massively more?

    By: ADVANTAGE

    Hi Ad, The Government are already spending massively more…..

    Wait for it……

    On the military

    NZ military $20b shopping list: Planes, boats, soldiers, satellites and drones

    Stacey Kirk11:31, Jun 11 2019

    Defence Minister Ron Mark made the announcement alongside the release of New Zealand's Defence Capability Plan, which lays out more than $20 billion in planned spending – detailing timelines and expected budgets for major new pieces of military hardware….

    https://www.stuff.co.nz/national/politics/113363745/nz-military-20b-shopping-list-planes-boats-soldiers-satellites-and-drones

    No austerity here

    And nobody bats an eyelid.

    Suggest the same amount of extra spending on Health or Housing or the Climate and witness the screams of outrage from the Right.

    • Dukeofurl 16.1

      Military have always had fanciful 'shopping lists' but you are right to raise that issue.

      The reality is  within the defence budget there is capital spending of say $600-700 mill per year.  Any purchase have to come out of that.

      Stacey Kirk used to work in Business development for a defence  supplier Thales before she  went into journalism… so its a bit of rah rah in that.

       Hospitals  would have way more spending than that 'over 20 years' which is what the defence stuff is about

      • Jenny - How to Get there? 16.1.1

        Hospitals  would have way more spending than that 'over 20 years' which is what the defence stuff is about

        Dukeofurl

        Granted.

        But the $20 billion gifted to the military is on top their normal operating budget.

        The hospitals haven't been gifted an extra $20 billion to spend over 20 years on top of their normal operating budget.

  17. sumsuch 17

    Fuck yes. To the headline. You're not a demo-crat if you believe otherwise. If you are opposed to the force majeur that delivered the anglophone countries to laissez-faire and the rule of the rich then you must be for a strong government acting for the people, not to mention, the general interest.

  18. sumsuch 18

    Advantage, we want to throw off the 84 imposition. Nothing else is good. Revolution. That elite carries on because we are divided, atomised to the max. They've been proved wrong, just need a whiff, and now the [deleted] chairman of the Reserve Bank is saying 'be gone', resisted by a [deleted] Labour mental case economics minister (see Chris Trotter). 

  19. sumsuch 19

    I can be harsh about the details people above, but I would conscript them all to run govt. Geez (my B.A. brother won't respond to a recent letter cos of that 'word in vain', I assume, despite him recently nearly killing himself by his unrealism) dear human Bruce Jesson was successful in the world. Prepare your stutters and humanity, detailers for humanity above.

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    BeehiveBy beehive.govt.nz
    40 mins ago
  • Bill to refresh superannuation system passes first reading
    Social Development Minister Carmel Sepuloni has welcomed the first reading of the New Zealand Superannuation and Veteran’s Pension Legislation Amendment Bill. “Every New Zealander has a stake in New Zealand Superannuation and Veteran’s Pension,” says Carmel Sepuloni. “They are our most common form of social assistance – nearly 800,000 New ...
    BeehiveBy beehive.govt.nz
    3 hours ago
  • Government announces next steps in fight against measles
    Babies in Auckland aged six months and over can receive a free vaccination and children will all have access to vaccines, Associate Minister of Health Julie Anne Genter announced today at Papatoetoe High School.   The move comes as part of Government efforts to step up the fight against measles. ...
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    3 hours ago
  • Speech to the New Zealand Institute of International Affairs, Pacific Futures: Connections, Identity...
    ***Check against delivery*** Good morning. It is a pleasure to be here, and to have the honour of opening this important conference on behalf of the New Zealand Institute of International Affairs. Let us take the opportunity to acknowledge all the people who have helped make today possible, including our special ...
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    4 hours ago
  • Police trial new response to high risk events
    Police Minister Stuart Nash says the safety of frontline officers and members of the public will be the focus of a new trial of specialist Police response teams in three of our largest urban centres. Police have this morning released details of an initiative to be trialled in Counties Manukau, ...
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    5 hours ago
  • New awards celebrate fisheries sustainability
    The Minister of Fisheries is calling for entries for a new public award to celebrate innovation in our seafood sector. “I have established the Seafood Sustainability Awards to recognise and celebrate those throughout industry, tangata whenua and communities who demonstrate outstanding dedication and innovation towards the sustainability of New Zealand’s ...
    BeehiveBy beehive.govt.nz
    6 hours ago
  • More progress for women and we can do more
    Minister for Women Julie Anne Genter welcomes leaders in the private sector taking action on closing their gender pay gaps to ensure a fairer workplace for all New Zealanders. Ms Genter today launched a new report, Addressing the gender pay gap and driving women’s representation in senior leadership, from the Champions for ...
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    10 hours ago
  • Proposals to curb environmental damage help our coasts and the oceans
    Government Ministers today welcomed the release of a marine environment report highlighting the four key issues affecting our oceans, estuaries and coastlines.  The release underlines the importance of government proposals to combat climate pollution, ensure clean freshwater, protect biodiversity, make land use more sustainable, and reduce waste and plastic.    Environment ...
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    21 hours ago
  • New mental health facility for Waikato
    The Government has approved funding for a new acute mental health facility for Waikato which will provide better care and support to people with mental health and addiction issues. Prime Minister Jacinda Ardern and Health Minister Dr David Clark announced the $100 million project to replace the aging Henry Rongomau ...
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    1 day ago
  • 500 new te reo Māori champions in our classrooms
    The Government is making progress on its goal to integrate te reo Māori into education by 2025, with over 500 teachers and support staff already graduating from Te Ahu o te Reo Māori,  Associate Education Minister Kelvin Davis announced today. Kelvin Davis made the announcement at an awards ceremony in Waikanae today, for ...
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    1 day ago
  • Minister James Shaw welcomes 2018 Census first release
    Statistics Minister James Shaw has welcomed the first release of 2018 Census data. The first release of data today, 23 September, includes key data on population, regional growth, the number of homes and the size of different ethnic groups in New Zealand. Data from the 2018 Census will support the ...
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    1 day ago
  • Driving transparency, ethics and accountability in government use of algorithms
    Minister for Statistics James Shaw today announced a public consultation on a proposed algorithm charter for government agencies. The charter has been developed by the Government Chief Data Steward in response to growing calls for more transparency in government use of data. Computer algorithms – procedures or formulas for solving ...
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    1 day ago
  • New Zealand and the Netherlands working together on climate change
    Agriculture Minister Damien O’Connor, Climate Change Minister James Shaw and visiting Dutch Prime Minister Mark Rutte co-hosted a business roundtable in Auckland this morning focused on working together to address climate change.  “The Netherlands is an important partner for New Zealand. We share a strong agricultural history. Sustainable agribusiness and ...
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    1 day ago
  • Protecting fairness for workers and businesses
    The Government is taking action to build an inclusive economy where more of us receive our fair share at work and businesses can compete on great products and services, not undercutting wages and conditions, Immigration and Workplace Relations and Safety Minister Iain Lees-Galloway says. Two consultations launched today seek feedback ...
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    1 day ago
  • Indigenous Freshwater Fish Bill Passes
    The future for New Zealand’s threatened indigenous freshwater fish looks brighter with the passing of the Conservation (Indigenous Freshwater Fish) Amendment Bill in Parliament today said Minister of Conservation, Eugenie Sage. “Until now, our freshwater fish legislation has been 20 years out of date. We have lacked effective tools to ...
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    2 days ago
  • Kiwis to take part in world’s biggest earthquake drill
    At 1.30pm tomorrow, hundreds of thousands of Kiwis will join about 65 million people around the globe in ShakeOut, the world’s biggest earthquake drill. The annual drill is to remind people of the right action to take during an earthquake which is to Drop, Cover, Hold, and to practise their ...
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    2 days ago
  • Rising wages and low inflation supporting Kiwis
    Kiwis are benefiting from higher wage growth and low inflation under the Coalition Government. Stats NZ data out today shows the rise in the cost of living remains low, as annual Consumers Price Index (CPI) inflation fell to 1.5% in September from 1.7% in June. “The low inflation comes as ...
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    2 days ago
  • NZ economy strong amid global headwinds
    New Zealand’s economic strength and resilience has been recognised in a major update on the state of the global economy. The IMF’s latest World Economic Outlook released overnight shows a reduced global growth forecast over the next two years as issues like the US-China trade war and Brexit take hold. ...
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    2 days ago
  • Keeping New Zealanders safer with better counter-terrorism laws
    Justice Minister Andrew Little has today introduced a new Bill to prevent terrorism and support the de-radicalisation of New Zealanders returning from overseas. The Terrorism Suppression (Control Orders) Bill gives the New Zealand Police the ability to apply to the High Court to impose control orders on New Zealanders who ...
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    2 days ago
  • Improved succession and dispute resolution core of Ture Whenua changes
    A Bill that proposes targeted changes to simplify the processes for Māori land owners when engaging with the Māori Land Court has had its First Reading today. “The approach taken by the Government is to ensure that the protection of Māori land remains a priority as we seek to improve ...
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    2 days ago
  • Speech to CTU Biennial Conference
    Let me first thank all the new unionists and members in the room. There is nothing more important to improving people’s working lives than people making the decision to care, to get on board and help, to take up the reins and get involved. Congratulations to you. You bring the ...
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    2 days ago
  • Minister ensures continued Whenuapai flight operations
    Minister of Defence Ron Mark has signed a certificate exempting the activity of engine testing at Whenuapai Airbase from the Resource Management Act 1991. The Act gives the Minister of Defence the power to exempt activities for the purposes of national security.  The certificate will mean the recent Environment Court ...
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    2 days ago
  • NZ joins Coalition of Finance Ministers for Climate Action
    Finance Minister Grant Robertson has announced New Zealand will join the Coalition of Finance Ministers for Climate Action while attending APEC meetings in Chile. The objective of the 39 member Coalition is to share information and promote action to tackle climate change. It was formed in April this year, in ...
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    2 days ago
  • Feedback Sought – Section 71 – Hagley Oval
    Hon Minister Poto Williams Associate Minister for Greater Christchurch Regeneration   MEDIA STATEMENT       Tuesday 15 October 2019 Feedback sought – Hagley Oval The Associate Minister for Greater Christchurch Regeneration, Poto Williams, is seeking feedback on a proposal about Hagley Oval. The proposal was developed by Regenerate Christchurch ...
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    3 days ago
  • CTU speech – DPM
    Ladies and gentlemen, NZCTU President Richard Wagstaff, members of respective unions – thank you for the invitation to speak to you today. This might be preaching to the choir, but the importance of trade unions in New Zealand’s historical arch is difficult to understate. And it is my belief that ...
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    3 days ago
  • Police Association Annual Conference
    "Let’s start by acknowledging that it has been a huge year. " Police Association Annual Conference James Cook Grand Chancellor Hotel Wellington Nau mai, haere mai. Tēnā koutou, tēnā koutou, ka nui te mihi, ki a koutou katoa. President of the Police Association, Chris Cahill; Members of the Association and ...
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    3 days ago
  • New Zealand announces a further P-3 deployment in support of UN sanctions
    Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark have announced the New Zealand Government’s decision to again deploy a Royal New Zealand Air Force P-3K2 (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea. New ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • New Zealand deeply concerned at developments in north-east Syria
    Foreign Affairs Minister Winston Peters says New Zealand continues to have serious concerns for peace and stability in north-east Syria. “Recent reports that hundreds of ISIS-affiliated families have fled from a camp are deeply concerning from a humanitarian and security perspective”, Mr Peters says. “While we acknowledge Turkey’s domestic security ...
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    3 days ago
  • Government on high alert for stink bugs
    Biosecurity Minister Damien O’Connor is warning travelling Kiwis to be vigilant as the high-season for the crop-eating brown marmorated stink bug (BMSB) is under way. “We’re on high alert to stop BMSB arriving in NZ. The high season runs until April 30 and we’ve strengthened our measures to stop stink ...
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    3 days ago
  • Better protections for students in halls of residence
    The Government is moving swiftly to change the law to improve the welfare and pastoral care of students living in university halls of residence and other tertiary hostels. Cabinet has agreed to several changes, including creating a new mandatory Code of Practice that sets out the duty of pastoral care ...
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    4 days ago
  • New trapping guide for community and expert trappers alike
    The Minister for Conservation Eugenie Sage has launched a new comprehensive trapping guide for community trappers to help them protect our native birds, plants and other wildlife, at Zealandia in Wellington today. ‘A practical guide to trapping’, has been developed by the Department of Conservation (DOC), and was launched during ...
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    4 days ago
  • Widening Access to Contraceptives Welcomed
    Associate Health Minister Julie Anne Genter welcomes PHARMAC’s move to improve access to long-acting reversible contraception (LARCs). PHARMAC has today announced it will fund the full cost of Mirena and Jaydess for anyone seeking long term contraception, lifting previous restrictions on access to Mirena. “I welcome women having greater choices ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Major upgrade for Taranaki Base Hospital
    The Government has approved the next stage of a major redevelopment of Taranaki Base Hospital, which will deliver new and improved facilities for patients. Health Minister Dr David Clark has announced details of a $300 million dollar project to build a new East Wing at the New Plymouth hospital. It ...
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    5 days ago
  • Extra support for rural families
    Extra funding will allow Rural Support Trusts to help farming families, says Minister for Rural Communities and Agriculture Damien O’Connor. “I know that rural families are worried about some of the challenges facing them, including the ongoing uncertainty created by the Mycoplasma bovis outbreak. “Those concerns sit alongside ongoing worries ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Howard Leaque Beekeeper programme graduation
    Thank you for the opportunity to be here to present certificates to the 16 graduates who have completed a beekeeping course delivered by the Howard League.  Let us start by acknowledging Auckland Prison’s Deputy Prison Director Tom Sherlock, and Acting Assistant Regional Commissioner of Corrections Northern Region Scott Walker - ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Finance Minister to attend APEC meetings
    Finance Minister Grant Robertson leaves this weekend to attend the APEC Finance Ministers meeting in Santiago, Chile. Discussions between APEC Finance Ministers at the meeting will include the effects of the current global economic uncertainty, risks for APEC economies and sustainable development of the region. While at APEC Grant Robertson ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Pacific languages are a source of strength, they ground us and build confidence
    The Minister for Pacific Peoples Aupito William Sio says for Pacific people, language can be a source of strength. It can help ground us and give us confidence. When we speak them, our languages provide us with an immediate and intimate access to our identity and our story - and ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Major boost to support disabled people in sport and recreation
    The Coalition Government has announced an action plan to improve the wellbeing of disabled New Zealanders by addressing inequalities in play, active recreation and sport. The initiative includes training to develop a workforce that understands the needs of children and young people with a range of impairments, advocacy for fit ...
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    1 week ago
  • More prefab homes to be built as red tape cut
    The construction sector is being freed up to allow more homes to be built more quickly as the Government cuts through some of the red tape of the Building Act.  “Every New Zealander deserves a warm, dry, safe home and old inefficiencies in the Building Act make building slow and ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Further details of Prince of Wales and Duchess of Cornwall visit to New Zealand
    Prime Minister Jacinda Ardern has welcomed further details on the Prince of Wales and Duchess of Cornwall’s visit to New Zealand next month. Their Royal Highnesses will visit New Zealand from 17-23 November – their third joint visit to New Zealand and first in four years. They arrive in Auckland ...
    BeehiveBy beehive.govt.nz
    1 week ago