Surplus 2014/15: an excuse for not doing what needs doing

Written By: - Date published: 7:50 am, May 6th, 2013 - 30 comments
Categories: babies, debt / deficit, families, health, housing insulation - Tags:

John Key’s excuse for the planned veto of the extension of paid parental leave is that it would put the 2014/15 surplus at risk.

There’s four answers to that: 1) if you believe Treasury’s numbers, there still would be a surplus, 2) Treasury’s margin of error on government spending and revenue is hundreds of millions per year, which is much larger than the $66m surplus they’re projecting or their projected $55m annual cost of extending the paid parental leave, 3) you could just delay the extension for a year to be ‘safe’ and 4) most importantly, why is going just under or just over some arbitrary line in the Crown’s books the Nats’ one aim for the economy? The truth is, Key’s using the surplus as an excuse for not doing the right thing.

Farrar was praising Key yesterday for getting being on track to surplus but so what? Being in surplus is the easiest thing in the world if it’s all that matters to you – just spend less than you take in. If you don’t care about anything but spending less than you take in, that’s simple – just cut shit until you’re in the black. But, as you know from your own household budget, there’s instances where spending a more than your income is the best option.

The extension to paid parental leave (and, for that matter, the home insulation scheme that also looks set for the chop) are perfect examples of Key putting getting just, just over that surplus line ahead of things that really matter.

Key wants to be able to say ‘we spent 0.07% less on operating expenses than we made in operating income’ rather than ‘we spent 0.01% less on operating expenses than we made in operating income’  – and that matters more to him than giving something like 30,000 babies a year 3 months more with their parents at home.

If they don’t give the home insulation scheme a new round of funding, then it’s because Key wants to be able to say ‘we spent 0.07% less on operating expenses than we made in operating income’ rather than ‘we spent 0.02% more on operating expenses than we made in operating income’ and the 60,000 households a year that don’t get insulated (with a payback of $5 in health improvements for every dollar spent) can go get fucked.

Let me put in a graph for you visual types: here’s the debt/surplus and net debt forecasts without and with the extension of paid parental leave

paid parental leave extension effect

30 comments on “Surplus 2014/15: an excuse for not doing what needs doing”

  1. Colonial Viper 1

    Good analysis JH, but this line of argument is electorally useless. At most it can only comprise 10% of the case made by the Left as it simply buys into our current widely held monetarist-macro economic framing, and its a game that Labour/Greens will always lose because this is the NATs home territory.

    Instead the line needs to be the same as NZ Power – this is a change that ordinary NZ families need, it puts the resources of the country where it can do the most good, and yes, it is very affordable because what is affordable is a matter of priorities and these are the priorities that the Left has.

    • Ben 1.1

      “what is affordable is a matter of priorities”

      Exactly. This is the line which should be used to fend off the charge that surplus is more important than the welfare of our children.

  2. Ad 2

    In this Salon article there are pretty stark comparisons to the handling of the Depression and all the accumulated public debt, and the current situation in the US.

    http://www.salon.com/2013/05/05/austerity_never_works_deficit_hawks_are_amoral_and_wrong/

    Anyone for a go at a counterfactual that Helen Clark won the 2008 election? IMHO by 2009 Cullen would not have sold state assets, but would have put either interest-free student loans or Working For Families on the block.

    • infused 2.1

      Well something would need to go. You can’t keep spending more than you earn forever.

      • One Anonymous Knucklehead 2.1.1

        So why do you support the party that consistently does exactly that? Is it cognitive dissonance?

        • felix 2.1.1.1

          Because you’re not thinking like a tory.

          It only counts as “spending” when it’s spent on things that benefit ordinary people. When it benefits the rich, well that’s just wealth being returned to its rightful place.

          • Polish Pride 2.1.1.1.1

            Interesting Felix – Given that both the left and the right are actually in the business from taking from one group and giving to another…
            and the result is what effectively plays a large part in us bouncing from left to right and back again roughly every 6 – 9 years…..

            So with that in mind why is it that you continue to support one end of spectrum at the expense of the other?
            Why is it that we are not looking for a solution that takes from no one yet gives everyone what they need and want and puts in place something to deal with true scarcity?

            • Colonial Viper 2.1.1.1.1.1

              bouncing from the political right to the just right of centre

        • SomeSuch 2.1.1.2

          Sheesh. You’re big on generalisations that are factually incorrect. Now if you’d said ‘Government’ rather than ‘party’…

          • One Anonymous Knucklehead 2.1.1.2.1

            Picky picky. If you insist on being so pedantic: “The party which in government, consistently does exactly that?”

            • Tim 2.1.1.2.1.1

              (Pedantry ….. common amongst ideologues, especially those trying their best to prop up failed ideologies).
              Sheesh …… How’s that for a generalisation.

              • SomeSuch

                Stupid. The NZ government has run a operating surpluses for 15 out of the 19 years since 1994 (that year chosen as that is the year we shifted to GAAP). During that time a number of parties have been in government. One could say that the current government has consistently run operating deficits but one cannot say that the ‘tory party’ has.

                • Pascal's bookie

                  Well, we know that when the last Labour led govt was running surpluses the then opposition was bellyaching about it and demanding tax cuts. So there is that.

      • Colonial Viper 2.1.2

        Well something would need to go. You can’t keep spending more than you earn forever.

        Yeah except governments can decide how much they earn and can even print their own pay packets; you or I can’t.

      • Arfamo 2.1.3

        Well something would need to go. You can’t keep spending more than you earn forever.

        You’re right infused. The best solution is to increase the earnings of the lower paid so they are not forced to spend more than they earn to survive when faced with costs they simply cannot meet. The way to do that is to restructure the economy so that it is aimed at full employment and a livable minimum wage that enables ordinary people to save rather than have to use credit. Did you read Ad’s linked article? If the only way to do that is reinstate the tax cuts, then they should simply be reinstated. The well off were doing well enough – many of the middle income mugs who voted National are hopefully now regretting losing their comfortable jobs and bemoaning their declining prosperity.

        • Arfamo 2.1.3.1

          Whoops – I meant the next decent government which governs for the well-being of all its citizens should reverse (not reinstate) the Natsy’s tax cuts.

        • Polish Pride 2.1.3.2

          “The best solution is to increase the earnings of the lower paid so they are not forced to spend more than they earn to survive when faced with costs they simply cannot meet.”

          No the best solution is to put in place a system where the goal of the system is to ensure that peoples needs and wants are satisfied to the best of its ability.

          “The way to do that is to restructure the economy so that it is aimed at full employment and a livable minimum wage that enables ordinary people to save rather than have to use credit.”

          No the best way to do that is to understand and recognize what it is that actually makes people happy and then build your system with its primary objective being to provide an environment that emphasizes this (rather than GDP as we have now). That would mean not only giving up on the notion of full employment, but completely flipping the entire employment paradigm on its head and actually having the goal of society and the system to FREE people from having to work wherever possible. This can be achieved through better design, automation, robotics and eliminating any jobs that are no longer needed.

          “Did you read Ad’s linked article? If the only way to do that is reinstate the tax cuts, then they should simply be reinstated. The well off were doing well enough – many of the middle income mugs who voted National are hopefully now regretting losing their comfortable jobs and bemoaning their declining prosperity”.

          Yes and then the will vote left who will implement their version of wealth redistribution to fund welfare whilst they are in power over the next 6-9 years until voters in the middle decide they are being taxed too much, hat the government is too big, is wasting tax payers money, (add what ever additional reason/s you feel are needed here)and again vote right who will resume their wealth redistribution policies to fund versions of welfare. Then in 6-9 years we will again be in a similar position to where we are now or worse and…… well you can pretty much repeat the above as many times as you feel you need to until you..

          A: wake up to the actual realities of the system and why it is unlikely to ever be able to solve the problems you really want it to
          or
          B: pass on, at which point it will no longer matter and your children will be left to deal with the same problems and the same system.
          Lets hope that collectively they are smarter than us and change things.

    • Lanthanide 2.2

      Um, by 2009, Cullen wouldn’t have given the richest in NZ a massive tax cut.

      • Ad 2.2.1

        Agreed, astonishingly stupid move by English. But he would not have been able to withstand the pressure for no tax cut at all. With the national resources that we have, and events that have transpired, are we not able the best public-finance position we could be right now?

  3. Rich 3

    The legislative veto is just a standing order of the House. It isn’t an entrenched part of the constitution, it can be suspended or amended by simple majority.

    If Dunne and the Maori MPs were up for it, they could vote to do that and hence allow this legislation to proceed. Their confidence and supply agreements say they will “advise the government” before withdrawing support on a procedural matter, not that they will give such support unconditionally.

    Of course the government could regard paid parental leave as such an affront that they throw their toys out of the pram and call an early election. Bring it on.

    • tamati 3.1

      By commiting a government to spend against it’s own wil, you are effectivly denying supply. Key would be forced to call an election, and Kiwis would probably punish the opposition for pointlessly brining down a government.

      • One Anonymous Knucklehead 3.1.1

        Bring it.

      • Lightly 3.1.2

        or, or, National could vote for the Bill.

      • Rich 3.1.3

        No you aren’t.

        Denying supply is a refusal to vote for the annual continuance of the government’s ability to raise taxes, causing it to be unable to govern effectively. Making them spend 0.05% less on tax cuts, holiday highways and spying isn’t a denial of supply.

  4. Ad 4

    PM up in Auckland on Friday.
    Will they finally “get” Auckland, prior to Budget 2013?

  5. xtasy 5

    Well, Russel Norman has put a good dampener on the news out on the government earning more in tax than expected:

    http://www.scoop.co.nz/stories/PA1305/S00052/focus-on-surplus-distracts-from-failure-on-rebalancing.htm

    Yet these figures will let the government get away with their business, while failing though to actually develop a smarter, yet more diversified and value added economy:

    http://www.stuff.co.nz/national/politics/8538105/Govt-on-track-for-surplus-English

    http://www.tradingeconomics.com/new-zealand/balance-of-trade

    Now, where are Shearer’s or Parker’s comments and press-releases, one asks yet again. Maybe Mana will beat them to it?

    I wonder how much more of the taxes were earned on sales (GST) of newly imported goods like home appliances, gadgets for entertainment, cars and the likes, as a fair number of NZers appear to take advantage of the high exchange rate to buy more imports over the last months? Recent sales appear to have been up a bit.

    GST earns the government a fair bit by the chart found under this link:

    http://www.ird.govt.nz/aboutir/external-stats/revenue-refunds/tax-revenue/revenue-refunds-tax-revenue.html

    Whatever, tax take only shows one aspect, and the over-reliance on exports with low values added, not leading to wider job creation and better paid jobs for most, this leaves NZ poorly prepared for a more challenging future.

    Kicking people off benefits, cutting public service jobs, cutting back on student allowance spending, using firmer collection methods to collect taxes and student debt, that naturally does show in the books.

    Sorry, the Nats will after that nutty ACT Party be the last taxi off the ramp, when it comes to extending parental leave, for sure.

  6. Ruobeil 6

    Gee, all this money sloshing around. Brilliant.

    How do i get my hands on some of it?

    Oh, i know, do some breeding; that’ll be a good earner.

    How many kids will i need to fund a decent lifestyle? Two? Ten? Why not twenty?

    Now, if i can abdicate my responsibility to the state i should be able to live in the style i’ll no doubt grow accustomed to.

    Free housing, free student loans, free food, free clothing, free, free. Brilliant.

    Why didn’t i think of that?

    Hang on. Where does all this free money come from?

    Do i have to do anything in return, or just stick my hand out?

    Fill in an income and expenditure report like i would if i borrowed from the bank?

    Can i continue my SKY subscription?

    Cigarettes?

    Booze?

    Union fees?

    And i guess if this all becomes to unaffordable we can just crank up the money printing presses.

    This is such a good little scheme, i better get down to business (wink, wink, nudge, nudge).

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    Newsroom today has an excellent, in-depth article on pine trees as carbon sinks. The TL;DR is that pine is really good at soaking up carbon, but people prefer far-less efficient native forests instead. Which is understandable, but there's two problems: firstly, we've pissed about so long on this problem that ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • No freedom of speech in Turkey
    Canan Kaftancioglu is a Turkish politician and member of the opposition Republican People's Party (CHP). Like most modern politicians, she tweets, and uses the platform to criticise the Turkish government. She has criticised them over the death of a 14-year-old boy who was hit by a tear gas grenade during ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Speaker: Tadhg Stopford: Why I’m standing for the ADHB
    Hi there, just call me Tim.We face tough problems, and I’d like to help, because there are solutions.An Auckand District Health Board member has nominated me for as a candidate for the ADHB, because her MS-related pain and fatigue is reduced with hemp products from Rotorua.  Nothing else helped her. If I ...
    1 week ago
  • Good little vassals
    The Inspector-General of Intelligence and Security has published their report on whether the SIS and GCSB had any complicity in American torture. And its damning. The pull quote is this:The Inquiry found both agencies, but to a much greater degree, the NZSIS, received many intelligence reports obtained from detainees who, ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Who Shall We Turn To When God, And Uncle Sam, Cease To Defend New Zealand?
    Bewhiskered Cassandra? Professor Hugh White’s chilling suggestion, advanced to select collections of academic, military and diplomatic Kiwi experts over the course of the past week, is that the assumptions upon which Australia and New Zealand have built their foreign affairs and defence policies for practically their entire histories – are ...
    1 week ago
  • The Politics of Opposition
    For most of the time I was a British MP, my party was out of government – these were the Thatcher years, when it was hard for anyone else to get a look-in. As a front-bencher and shadow minister, I became familiar with the strategies required in a parliamentary democracy ...
    Bryan GouldBy Bryan Gould
    1 week ago
  • More expert comments on the Canadian fluoride-IQ paper
    The Green et al (2019) fluoride/IQ is certainly controversial – as would be expected from its subject (see If at first you don’t succeed . . . statistical manipulation might help and Politics of science – making a silk purse out of a sow’s ear). Anti-fluoride campaigners have been actively promoting it ...
    1 week ago
  • The return to guerrilla war in Colombia
    by Gearóid Ó Loingsigh On August 29th a video in which veteran FARC (Revolutionary Armed Forces of Colombia) commander Iván Márquez announced that they had taken up arms again was released. There was no delay in the reaction to it, from longtime Liberal Party figure and former president Uribe, for ...
    RedlineBy Admin
    1 week ago
  • Air New Zealand identifies this enormous plot of unused land as possible second airport site
    Air New Zealand couldn’t believe its luck that this seemingly ideal piece of real estate had so far gone entirely unnoticed. Air New Zealand’s search for a site to build a second Auckland Airport may have made a breakthrough this afternoon, after employees scanning Google satellite imagery spotted a huge, ...
    The CivilianBy admin
    2 weeks ago
  • Redline on the Labour Party
    No-one on the anti-capitalist left in this country today puts forward a case that Labour is on the side of the working class.  There are certainly people who call themselves ‘socialist’ who do, but they are essentially liberals with vested interests in Labourism – often for career reasons. Nevertheless, there ...
    RedlineBy Admin
    2 weeks ago
  • New Fisk
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Labour’s failure
    When National was in government and fucking over the poor for the benefit of the rich, foodbanks were a growth industry. And now Labour is in charge, nothing has changed: A huge demand for emergency food parcels means the Auckland City Mission is struggling to prepare for the impending arrival ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Ardern attempts to vaccinate Clarke Gayford live on television to prove that it’s safe
    Gayford, pictured here on The Project, before things got wildly out of control. A bold public relations move by the Government to encourage parents to vaccinate their children has gone horribly wrong. Prime Minister Jacinda Ardern appeared on tonight’s episode of Three’s The Project, where the plan was for her ...
    The CivilianBy admin
    2 weeks ago
  • Has Mr. Whippy gone too far by parking on our front lawns?
    Mr. Whippy’s business model has driven it down a dark road of intimidation. Residents in major centres around the country are becoming disgruntled by the increasingly aggressive actions of purported ice cream company Mr. Whippy, who have taken to parking on people’s front lawns and doorsteps in a desperate attempt ...
    The CivilianBy admin
    2 weeks ago
  • Cleaning up the water
    Today the government released its Action Plan for Healthy Waterways, aimed at cleaning up our lakes and rivers. Its actually quite good. There will be protection for wetlands, better standards for swimming spots, a requirement for continuous improvement, and better standards for wastewater and stormwater. But most importantly, there's a ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Fronting up
    Today I appeared before the Environment Committee to give an oral submission on the Zero Carbon Bill. Over 1,500 people have asked to appear in person, so they've divided into subcommittees and are off touring the country, giving people a five minute slot each. The other submitters were a mixed ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Politics of science – making a silk purse out of a sow’s ear
    Anti-fluoride activists have some wealthy backers – they are erecting billboards misrepresenting the Canadian study on many New Zealand cities – and local authorities are ordering their removal because of their scaremongering. Many New Zealanders ...
    2 weeks ago
  • Democracy – I Don’t Think So
    So, those who “know best” have again done their worst. While constantly claiming to be the guardians of democracy and the constitution, and respecters of the 2016 referendum result, diehard Remainers (who have never brought themselves to believe that their advice could have been rejected) have striven might and main ...
    Bryan GouldBy Bryan Gould
    2 weeks ago
  • Government says it will now build just one really nice home
    Following publication of this article, the Ministry has requested it to be noted that this supplied image is not necessarily representative of what the final house will look like, and it “probably won’t be that nice.” As part of today’s long-anticipated reset of the Government’s flagship KiwiBuild policy, Housing Minister ...
    The CivilianBy admin
    2 weeks ago
  • Imperialism and your cup of coffee
    Over the next week or two we will be running three synopses of parts of the opening chapter of John Smith’s Imperialism in the 21st Century (New York, Monthly Review Press, 2016).  The synopsis and commentary below is written by Phil Duncan. Marx began Capital not with a sweeping historical ...
    RedlineBy Admin
    2 weeks ago
  • Still juking the stats
    The State Services Commission and Ombudsman have released another batch of OIA statistics, covering the last six months. Request volumes are up, and the core public service is generally handling them within the legal timeframe, though this may be because they've learned to extend rather than just ignore things. And ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Hard News: Time for a New Deal: 25 years on
    In 1994, I was editing an ambitious street mag called Planet, from a fabled office at at 309 Karangahape Road. The thirteenth issue of the magazine was published in the winter of that year and its cover embodied a particularly ambitious goal: the end of cannabis prohibition.I wanted to do ...
    2 weeks ago
  • Not impressed
    KiwiBuild was one of the Ardern government's core policies. The government would end the housing crisis and make housing affordable again by building 100,000 new homes. Of course, it didn't work out like that: targets weren't met, the houses they did build were in the wrong place, and the whole ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Solar beats coal
    As the climate crisis escalates, it is now obvious that we need to radically decarbonise our economy. The good news is that its looking easy and profitable for the energy sector. Wind is already cheaper than fossil fuels, and now solar is too:The levellised cost of solar PV has fallen ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • A Step Too Far.
    A Crown Asset? For reasons relating to its own political convenience, the Crown pretends to believe that “No one owns the water.” To say otherwise would re-vivify the promises contained in the Treaty of Waitangi – most particularly those pertaining to the power of the chiefs and their proprietary rights ...
    2 weeks ago
  • Where Money Comes From
    Most people would say, no doubt, that they have a pretty good idea of what money is. They live with the reality of money every day. It is what is needed to buy the necessities of life and to maintain a decent standard of living. You get money, they would ...
    Bryan GouldBy Bryan Gould
    2 weeks ago
  • Banned by the Green Party leadership: Jill Abigail on women’s rights and trans rights
    The article below was an opinion piece that appeared in the Spring 2019 issue of Te Awa (the NZ Green Party’s newsletter) and on the Greens website.  In keeping with their policy of hostility to women defending women’s right to female-only spaces, Green bureaucrats have since removed the opinion piece.  ...
    RedlineBy Admin
    2 weeks ago

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