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The borrow and hope budget

Written By: - Date published: 10:00 am, May 19th, 2011 - 108 comments
Categories: bill english, budget 2011, class war, Economy - Tags:

It’s only taken two and a half years of mismanagement and reckless tax cuts from John Key and co to run the country and the government into a mountain of debt. The questions now: how bad have they let things get, who will they make pay for their mistakes, and how rosy will the forecasts their plans hang on be? Rolling coverage through the day.

*David Cunliffe has laid out the tests for a successful budget:

The budget will be a success if it shows that National has realised it cannot go on as it has: borrowing and splurging on tax cuts for the wealthy, then asking the rest of us to pick up the bill…

..A successful Budget will be one that confronts the fundamental problems of this country’s economy head on, rejects the “borrow and hope” mantra of John Key’s National Government, and protects important public services while asking all Kiwis to contribute their fair share to the cost.

To do so it must pass four crucial tests:

First, it would build a stronger export-oriented economy through investment in skills, innovation and R&D; matched with the necessary monetary reform to bring policy up to date with best practice.

Second, it would invest in savings to help build up a domestic capital base, so that we can own our own future, rather than becoming further indebted to foreign banks. In doing so it would keep the Government’s side of the bargain with the 1.7 million Kiwis who have joined KiwiSaver.

It wouldn’t pretend that selling public assets to tackle Government debt makes any more sense than selling your house for scrap to pay off your mortgage.

Third, it would recognise that our greatest asset is our people and that Kiwis need more jobs with better pay. It would contain a fair tax plan that would close the loopholes that allow too many wealthy New Zealanders to avoid their fair share of tax.

And fourth, it would contain a credible plan for debt reduction that was part of an integrated economic reform plan that left our economy in better not worse shape to innovate, invest, employ, and earn a great living in a competitive modern world.

But we’ll have to wait until 2012, and the first budget of the sixth Labour-led Government, to see a budget like that.

*John Armstrong yesterday praised Labour for returning to a focus on the big economic issues (not that Labour ever stopped talking about them, and not that the ministerial expense scandals weren’t about a big issue – the government’s hypocritical elitism). Today, he devotes a whole column to laughing along with National as it focuses on the smallest of possible stories – a poll that accidentally went up too early on David Cunliffe’s website and was hijacked by righties. I smell a Pulitzer, John.

*The Maori Party is worried about pretty much everything in the Budget. They’ll vote for it though, because they’re gutless scoundrels.

*Campbell Live‘s cost of living series in the last week has been interesting. They had a family of four live on a single full-time average wage, and a person live on the pension. What was interesting was not so much that that it’s hard to get by on so little but that this was a revelation in the eyes of the media. To hundreds of thousands of families it’s called every day life, and it has been getting harder under National.

*Tracy Watkins and Vernon Small write about Key’s strategy. By pushing the hard decisions past the election he is trying to present the public with a deal he thinks we will take: ‘if you want more of my smiling mug, you have to vote for these policies, and if you vote for them, you can’t complain’. And, by leaving everything until later, the unpopularity of the decisions doesn’t crystalise into lost votes as much until after the election by which time Key, if re-elected, will already be planning is 2013 retirement. It’s a hell of a way to run a country.

Watkins/Small also write: The Government will start pushing laws through Parliament under urgency this evening putting the KiwiSaver and Working for Families changes in train – but they will not take effect until next year at the earliest

Why the hell would you need to go into Urgency to pass legislation that won’t even come into effect until after the next Budget? Contempt for democracy is the only explanation.

Update 1: Davide Cunliffe has been doing some great posts on Budget FAQs over at Red Alert. The last two (5 & 6) in particular should be required reading for every budget analyst and commentator.
Budget FAQ #6: Why the Deficit Hole?
Budget FAQs #5: Growth Hockey Stick
Budget FAQs #4: National’s Growth Gap
Budget FAQs #3: Kiwisaver
Budget FAQs #2
Budget FAQs

Update 2: All much as expected so far, but plans for privatisation are set out in more detail:

What is new is the Government for the first time detailing its plans to raise between $5 billion and $7 billion by partial privatisation of its four state owned energy companies and extending private ownership of Air New Zealand.

Starting next year, the Government wants to sell off stakes in Genesis Energy, Meridian, Mighty River Power and coal company Solid Energy. The exact proportion of private ownership has not been decided but the Government will retain a majority shareholding.

Its plans are to sell shares in the companies through a public offering, with New Zealanders “at the front of the queue”. There is no mention of any foreign ownership restrictions.

Update 3: Families are hit harder than expected:

There were few surprises though the Working for Families cuts reach further down than expected and will hit middle income households as well as those on higher incomes.

The size of public service cuts – $1 billion over three years – was also unexpected. The sweetener for the KiwiSaver cuts is an increase in the employer contribution to 3 per cent, matched by the employee, and a firm date for the resumption of payments to the so-called Cullen Superannuation fund in 2016/2017.

But many families, including middle income families, will be worse off – despite the Government’s earlier suggestion that only high income earners would be targeted by its cuts.

The Government says the cuts are modest – just a few dollars – and will be phased in over 7 years to lessen the pain. But for a middle-income family earning around $70,000-a-year the combined effect of Working for Families cuts, and the requirement to top up their KiwiSaver contributions, will leave them about $20 a week worse off.

$20 a week worse off? That must be about the third or fourth time that ordinary families have had to spend their modest tax cuts. But apparently there is a modest increase for some low income families – so some good news.

Update 4: Gower on the hidden sting in the KiwiSaver cuts:

And there’s a nasty wee surprise – the employer contribution will now be taxed before it gets to you. Sneaky.

You pay more, but get far less bang for your buck. It’s a hammer blow. The biggest hit of the budget.

And summing up:

Is it bold? No. Does it really address the record $16.7 billion deficit? It is a start – tinkering. But the real question is – will it keep John Key’s Government popular? Because that’s the plan.

Update 5: Even the Nats’ fans think it’s weak. Their scorecard:

Audrey Young: 6/10

Bill English’s plan to return the country to surplus sounds good but feels flimsy.

It is based on heroic assumptions of a strong economic economy, high wage growth and and nothing going wrong. …

It will be funded mainly through a combination of revenue raising, through a tax on KiwiSaver contributions and cuts in the public sector of $326 million a year for the next three years, as well as asset sales.

The Government will claim there is no new tax – just an existing tax exemption on employers’ contributions being lifted.

It amounts to a new tax, however, and the Government collecting tax on something it didn’t before.

If this Budget had a deep dark secret, it is that. …

Overall, the Budget rates a 6 out of 10. Its savings targets feel more like wishful thinking than realism and the Government has left the really hard decisions to the public sector itself.

John Armstrong: 6/10

Bill English’s third Budget will stand or fall on one thing and one thing only.

For his and National’s sake, the Treasury had better have got it right this time with its forecasts – that the economy really has stopped contracting and the recovery is finally under way.

If not, the Budget will be thrown back in English’s face come election time.

These are predictions which Gordon Campbell describes as having “the same predictive accuracy as your daily horoscope”. See how well they’ve done recently

108 comments on “The borrow and hope budget ”

  1. vto 1

    If you only have hope then you have nothing.

    • ZeeBop 1.1

      GST was inflationary, government moved the burden from high income earners
      and private businesses, and onto middle NZ. Driving down the value of their wages.
      Argument given that private sector was awash in debt and needed a break.
      Well I live in a Democracy and in a Democracy when you give something up
      to pay for the mistakes of others (debt addicts) government is suppose to
      making it hard for debt addicts to get their debt fix. And without a CGT we
      end up rewarding those who take on debt! So fairs fair, tax reform is
      now owing to middle NZ.

  2. fraser 2

    re: campbell live

    last night they claimed that living on the average wage was what 40% of NZers did.

    could this be a statistical sleight of hand?

    Im sure that its something like 70% are below average wage.

    what gives?

    • Colonial Viper 2.1

      They probably conflated household income with that figure. A household with one partner earning $100K p.a. and the other earning nothing, well you could say that both people lived on above the average wage, even though only one person is actually receiving above the average wage.

      This bears out in all the asset ownership statistics for NZ’ers – couples own far more assets as a unit than singles do.

      • Lanthanide 2.1.1

        A family with 2 parents earning $50k each full-time will have significantly different dynamics than a family where 1 parent earns $100k. In the latter case they’ll also be paying more in tax, however.

        To simply average out the individual/household income like that is missing all of the unpaid house-keeping that one parent is doing in the latter case, as well as all of the other things about family life that aren’t easily quantified into $ amounts like stress and spending time with the children etc.

        • stargazer

          and if you’re a single parent earning $100,000, you pay more tax plus do the unpaid housekeeping as well as all of those other things that can’t be quantified, including a lot more stress.

  3. joe bloggs 3

    Today, he devotes a whole column to laughing along with National as it focuses on the smallest of possible stories – a poll that accidentally went up too early on David Cunliffe’s website and was hijacked by righties.

    I can’t manage my website but let me manage our $120b economy

    Fabulous comment – really confidence inspiring Mr Cunliffe!

    • Colonial Viper 3.1

      Hey Bloggs, did you like the way English skimmed an extra $20/wk in tax payers money for his housekeeping?

      I guess that means you think that English is the man for the job then eh?

      Cunliffe is on the ball. National has taken NZ so far backwards in just 2 1/2 years that we will soon be catching up with Australia. Australia of the 1970’s that is.

      • Jim Nald 3.1.1

        Double Dipton got his own priorities right?
        There was a global finance meltdown then and we were convinced he was busy sorting out the issues as Minister of Finance .. for New Zealand, not home affairs.

    • Draco T Bastard 3.2

      This is the standard hey, look over there… distraction that has become normal for RWNJs – especially since all their dreams of the economy rising on the backs of Atlas (Aka, Rich Pricks) after they received their tax cuts came to nothing as predicted by those on the left.

  4. Bush put through tax cuts for the rich. The aim was to impoverish the state, justifying cutting services and bringing in the private sector.

    We know how successful Bush was at breaking the state. He did a great job.

    Our own government appears to be following the same template. There is no way they can’t know about how things have gone in the US. They can only want to repeat that process here.

    Nothing else makes any sense….unless they are that tragically stupid and incompetent that can’t see the combined effects of tax cuts and high spending on the US over the past decade.

    But hard to blame the politicians when it is quite clear Kiwi voters are every bit as clueless. Maybe they really are simply grossly incompetent.

    • johnm 4.1

      Hi Steve Withers
      My understanding as well. Our governments thinks if the kleptocratic U$ does it then it must be right-also selfserving for the already rich here in NZ. The U$ has offshored 40,000 factories to make more profit for Wall Street while ordinary Americans are headed for 60,000,000 existing on food stamps. Obama has told flood victims of the Missisipi they’re on their own-a chance to show self responsibility while trillions have bailed out the crooks on Wall Street.

    • RobC 4.2

      Unfortunately Steve you are right – kiwi voters are clueless. We get what we deserve.

  5. r0b 5

    Updated post with some links to David Cunliffe’s excellent posts at Red Alert.

  6. Bunji 6

    Why the hell would you need to go into Urgency to pass legislation that won’t even come into effect until after the next Budget? Contempt for democracy is the only explanation.

    They’ve scheduled the budget for 2pm on Thursday so they can have urgency all friday and hopefully saturday so that Labour’s Congress is overshadowed. Their MPs can’t participate and their policy revelations and messages are drowned out in the media.


    • Lanthanide 6.1

      One wonders why setting a conference date so close to the budget date was really a good idea.

      • Colonial Viper 6.1.1

        Lanth, FYI there are a few other things going on in the calendar this year other than National’s frickin no hope Budget.

        And just bear in mind that its National’s misuse of urgency which is the issue here, not the date that Labour has set for its Congress.

      • Draco T Bastard 6.1.2

        You may not have noticed but the urgency isn’t required.

        • Lanthanide

          Sure. But why give an unscrupulous government like this one, that has shown it doesn’t mind abusing the parliamentary process, the opportunity to screw up your conference?

          • Hanswurst

            Although, if they have anything big to announce, they may be able to put themselves in direct and stark contrast with the budget while it is fresh in people’s minds, and have a good go at the government for misusing urgency while they’re at it.

            Unfortunately, I’m not holding my breath that they will have anything big to announce.

  7. randal 7

    something has gone dreadfully wrong allright. There is no social contract and the thieves have taken over. Is this what is really meant by democracy. a gang of plutocrats gorging themselves on the public purse but pretending they are doing it for the public weal. this nation is not a nation of fools but a nation of imbeciles. some folks like the meat and others pick the bone but thes b*st*rds just want everything.

    • Jim Nald 7.1

      The tricksters and gangsters are raiding the country.
      But it’s not all lost yet.
      Each of us still has a vote.
      The many of us outnumber them.
      And they have been adding more to our numbers.
      Each of us need to get ourselves, family, friends and workmates to the ballot boxes come 26 Nov.

      • terryg 7.1.1

        Darn it Jim, I thought that was a poem. you’re right though. Hopefully this well publicised boot on the back of the neck will wake NZ from its torpor

      • Blue 7.1.2

        “The many of us outnumber them”, well not according to the polls. 57% of us outnumber you by some considerable way. Ignore the majority at your peril.

        • mickysavage

          You mean the majority with landlines?

          And should a majority opinion be confused with what is right??

          • terryg

            you mean the majority with landlines that are home when the poll is conducted, answer the phone and choose to participate in the survey?


  8. chris 8

    Labour will not win any election with Goff as leader. Sorry to keep reminded you. Its like the elephant in the room – it just won’t go away no matter how you dress it up. Not too late to put Cunliffe in charge you know.

  9. lprent 9

    And they’re off. Listening to NatRad on the iPad via WiFi. Turned out this morning that the only radio I have is the one on the emergency torch. But I do have a NZ Radio app for the iPad..

    • terryg 9.1

      ROFLMAO! a few billion transistors, and perhaps a million lines of code, to replace 6 transistors and a handful of discrete components. Now thats what I call progress.

      We have a radio, and the damned thing keeps drifting off station. If only some clever person would invent Automatic Frequency Control (like Alec Harvey Reeves did in 1930).

      The stereo also has a tuner, but the stereo uses the TV for its user interface 🙁

      • lprent 9.1.1

        Yep – but I also use this thing to read and write this blog (and others), read the newspapers, listen to the radio, play music, read and write e-mail and it currently has about half of my tech and fiction library on it. 

        I just loaded an encrypted copy of the current code on it using subversion because I have an irritating bug to locate tonight.

        Now does anyone have a link to the budget text? Ah http://www.treasury.govt.nz/

        Oh I forgot. At home I also use DLNA to stream video to it from my home server to watch TV, and stored programs in bed (after the offending code has been found).

        Those few million transistors do a lot. BTW: Someone else brought me the toy. What I’m finding freaky is how far it intrudes into my daily routines

        • felix

          S’pose you can’t wait for Apple’s CENTiPAD…

        • terryg

          Hi Lyn,
          thats totally cool. I like the idea and love the HCI, but as you know I’m hopelessly ignorant about computery-things (other than designing the hardware) so am resisting the urge – plus I’m not OK with ceding authority/ownership to Apple.

          You can doubtless circumvent the evil that is itunes etc, but for me thats harder than drawing recognisable pictures (I got so angry when itunes snotted my ipod touch that I gave it to daughter and went back to CDs. bastards could have warned me).

          Yeah, that seems to be a common theme – thought it was crap, a day later its the cornerstone of life. After the eleventy-seventh person says this, it starts to sound convincing. guess theres a reason Apple is now bigger than MS – who would have picked that last century?

          sorry about digression……NACT are bastards (whew, back on topic)

          • lprent

            iTunes sucks with a massively flawed design and extreme blotware. Toolkit on ubuntu has bypassed most of it with better software. I have to use iTunes for firmware updates only these days.

            But iTunes is the Bill English of software. Overly inflated crap that doesn’t get close to the hype when you look at performance. Why does it take so frigging long to run software updates over USB. Our code does it in a fraction of the time on the hardware we’re using, and the processor is slower and the development footprint is similar.

            • ado

              Enjoy your flash toys while you can. Come the sale of the energy companies, 5 min on the iPad will be a weeky treat. Will it be Jim Mora or This Way Up? Save those razor blades for your crystal set…

            • terryg

              ya. the ipad is almost enough to make me overcome my loathing/inability and put the effort into re-learning OS’s et al (long gone are the days of writing multtasking RTOS’). almost.

              But iTunes is the Bill English of software

              QFT 😀

              I’m pretty sure I read a reason for the embiggened slowification of iTunes on arstechnica.com a while back. but alas I carefully forgot it 🙁

              probably something daft like double handshaking, using the entire memory space as the handshake tokens or something equally mad.

              USB is a fairly sucky protocol – in the early 90’s I studied it in detail to see if it would do as a backplane for pluggable I/O modules in a new range of industrial gear. its like the data comms version of a 64-bit fully object oriented dynamically relocatable toaster controller (implemented in an FPGA using schematic capture). Thankfully I’ve managed to suppress those memories, but the pain lingers on…..theres a reason why CANbus kinda won in industry (not that we used that either)

              I did a design with a little TUSB3210 micro from TI a while back (IRL coded it – heh). that was really simple to get going. shame the firmware was in an external IIC EEPROM (not very secure really)

  10. outofbed 10

    how can Goff defend asset sales?

  11. Bunji 11

    Nasties from the ‘sub-zero’ budget:

    WFF cuts will kick in at $35k, abatement rate 25c instead of 20c. That’s most families hurting there.
    (the 70K family $20 worse off only has 1 child btw)

    KiwiSaver: now they’re taxing your employer contribution – so really the increase from 2c to 3c there is going to the government, not you. They halve their contribution, and you get to pay more, like it or not.

    Student loans: part-time full-year students tightened out of the scheme. They still have costs, even if they can’t study full-time. Attack on Knowledge economy, as are cuts to R&D.

    $1billion cut from Public Service over 3 years: 4% wage growth for the economy when public service isn’t getting any? Dunno how that works.

    The sell off of Power company, solid energy and Air NZ shares – it makes no economic sense. As Gareth Hughes says: it’s like a cafe selling off their coffee machine for a bit of upfront cash.

    Increases in Health and Education aren’t actually enough to maintain current levels of services. Particularly Health with our ageing population needing increased care.

    ACC costs reduced by stopping counselling for sexual abuse victims (cue applause from Nat MPs)

    Take Treasury’s tax predictions over the IRD’s: An extra $4billion magic-ed up so they can reach surplus earlier.

    Pretty much everything else cut cut cut. No plan to grow economy, just to cut public sector…

    • terryg 11.1

      Bunji, nasty is a bit of an understatement isnt it? Oh thats right, sexual abuse victims are probably all just lying to get free counselling. silly me.

      Next we will see legislation about “forced rape” (no I am not joking).

      re. selling the assets – perfect analogy. In an associated newsflash, Mainfreight is today auctioning off all their trucks to raise enough capital to finance a nationwide expansion.

      thats the old “sell the assets, take an immediate profit, and pay to rent the assets back forevermore” – aka the karma credit plan (sell now, pay forever).

      and the resultant windfall, in total, is less than one years debt servicing IIRC.

      why arent the MSM pointing out the bleeding obvious? why the hell would anyone buy them if they weren’t making money? Aaargh.

    • Lanthanide 11.2

      “WFF cuts will kick in at $35k, abatement rate 25c instead of 20c. That’s most families hurting there. (the 70K family $20 worse off only has 1 child btw)”
      But it’ll be phased in over a crazy 8 years! Cutting the costs from $2.8B to $2.6B a year. So it’s not really a cut. The *real* cut is that for these figures to make sense, it means they aren’t going to adjust them for inflation. At all.
      “KiwiSaver: now they’re taxing your employer contribution – so really the increase from 2c to 3c there is going to the government, not you. They halve their contribution, and you get to pay more, like it or not.”
      Yeah, I’m struggling to work out exactly how this will work. At the moment you pay 2% and the employer pays 2%. My pay slips show that my employer is matching exactly what I put in – but theirs are untaxed while mine come out of my before-tax income (hence I am paying tax on it). After this change, does it mean that numerically on my payslip my $ figure will be larger than theirs? Or will they still be identical, in which case my employer will now be paying the same amount of cash to me, but paying extra to the government on top?

      “ACC costs reduced by stopping counselling for sexual abuse victims (cue applause from Nat MPs)”

      What, again? Didn’t they just bring that back?

      • Bunji 11.2.1

        You’ll probably see the whole schimozzle on your pay slip, so it’ll be clear it’s a new tax no matter what Blinglish says. The employer only pays 1% extra, not 1% plus the tax. So if you’re on the top tax rate you receive nothing extra from your employer. Less than that and you’ll keep a small slice.
        Employers are already complaining about the extra compliance costs of it. Would be better for them if there was a (v small) rise on the company rate, rather than have to do a whole heap of new accounting with a new tax… But that would mean Bill backing down on part of his tax cuts.

        Somehow there’s still space for $10.7 billion on 7 uneconomic roads of National significance though.

        • Lanthanide

          Yeah, seems to me like the on-going roads are contributing a big whack to the deficit. It was budgeted as something like $10b over 10 years. They should simply can any that haven’t started actual work yet.
          The one in Christchurch (which I can see being built outside my window right now) will actually end up being worthwhile due to the expected new developments out west, since the earthquake. But that’s just a silver lining from the quake – it too would probably have been a waste of money otherwise.

        • PeteG

          rather than have to do a whole heap of new accounting with a new tax

          It’s not a new tax, ESCT (Employer superannuation contribution tax ) already applies to employer contributions over 2% – some companies contribute more than the minimum.

          The employee minimum increase will not affect everyone, I don’t know what the numbers are but there will be quite a few employees that already contribute 4% or more – you needed to do that if you don’t earn more than $50k-ish and wanted to get all of the matched government contribution.

          • Lanthanide

            You could easily contribute the minimum 2% and then top it up to the $1042.86 and get the full matching government contribution. National was considering changing that in the 2009 budget, but didn’t.

          • Rich

            There’s also a little clause in the legislation where employers can offset their contribution during pay negotiations and I understand that is currently happening.

  12. Tom Gould 12

    Does putting the privatisation into the Budget mean they can spend public money on arranging it and promoting it?

  13. Carol 13

    Fiery speech from Goff. Key & Nats treat it as though it’s all a big joke, with key doing a stand-up comedy routine.

    • Treetop 13.1

      Key’s response to Goff’s response to the budget: Key was shouting his head off and came across as being childish in a ranting manner, (I would have hung my head in shame with a 16.7 billion deficit). Key was shown up a good one, there was no vision other than reneging on promises made prior to the election to fix the EXTRAVAGANCE of excessive overseas borrowing for tax cuts. Middle NZ now know what a tax cut does for them and how pointless getting a tax cut is. The projected forecasts of the last two budgets came home to roost. Does Key really think that the projected forecasts of growth, spending and borrowing are accurate this time?

  14. Samuel Hill 14

    This budget is notable more for what is doesn’t do, than what it does. Tinkering with Work for Families and Kiwi Saver doesn’t do anything to put people into work, lift wages, or bring people out of poverty.

    Electricity prices are sure to rise. Domestic flight prices are sure to rise.

    Australia last week announced 500,000 new apprenticeships. We’ve just had a government announce 170,000 new jobs – but they have failed to mention where these jobs are going to come from.

    I’m sure we all can understand the need for frugal economic management, but there is now an extreme risk of losing a generation of young New Zealanders.

    The knowledge economy has been abandoned. Contact your local land-owning aristocracy now for low-wage work opportunities.

    • Colonial Viper 14.1

      I’m sure we all can understand the need for frugal economic management, but there is now an extreme risk of losing a generation of young New Zealanders.

      Already happened unfortunately. One in six New Zealanders have already left this country.

  15. ak 15

    Tinker and Hope and pawn the silver.

    NZ face down in a dangerous place playing dead.

    The Planking budget, by Plonker & Wankey.

  16. Anthony 16

    Will growth have tanked enough by election time? I’m betting they will sell the ChCh rebuild of 2012 and world cup stimulus that won’t be accounted for until after the election.

    They don’t have to deliver on any of it before November just promise that it’s just around the corner, it will be whether voters believe them or not.

    • terryg 16.1

      world cup stimulus is an interesting way of describing the huge debt we have signed up for. luckily its an order of magnitude less than a typical olympic games stimulus…..o_O

  17. RobC 17

    That’s it. My vote has just been decided.

    Amy Adams just in the house – along the lines of “Labour would rather look after their union mates rather than hard-working NZers”

    Most workers in unions are hard-working NZers you toffee-nosed bitch.

  18. chris73 18

    Well being that it won’t come in until after the election (Labour would have just rammed it in before the election) we’ll all have our say about what we think and return National to power

  19. Toby Keith 19

    The spending didnt help much from previous governments.

    • Lanthanide 19.1

      Previous governments got us into a net asset position for the first time in decades.

    • Colonial Viper 19.2

      2 1/2 years in and all Toby can do is blame the last Labour Government 🙂

      BTW that’s exactly the same as what the clueless planless Bill and John can do 😀

    • Draco T Bastard 19.3

      Net position after last government = Balanced (Zero net debt)
      Net position after two budgets from this government = Imbalanced (record and increasing net debt)

      Going into election the previous government promised another budget in December to balance the books due to the global recession
      Going into the election this government promised all the same spending plus tax cuts north of $50/week for people on the average wage

      It wasn’t the previous government that put us in financial stress but the one we have. National even promised to do it although I’m sure that most people who voted for National didn’t realise that was what they were voting for.

  20. Carol 20

    Oh, my! The photo that stuff is using on their main page right now, to headline their Budget coverage:



    Looks like a real love-fest between Key & Blinglish, with Simon Power the jilted lover.

  21. RobC 21

    National do have a plan. It’s a great plan.

    Give tax cuts to the rich. Give them a couple of years to build a war chest. Sell public assets to “mum and dad” investors. Only investors who can afford said assets are the rich who received tax cuts.

    Result? transfer of public assets owned by all to the rich pricks.

    It’s brilliant. “Mum and Dad” have no clue.

  22. RobC 22

    Someone do some figures please.

    4-5% wage growth over next 1-2 years?
    Public sector employees will get f all growth (public sector needs to fund superannuation out of existing budgets which aren’t increasing)

    Ergo, private sector wage growth will need to be … what … 6%? Anyone seriously believe that’s going to happen???

    170,000 net new jobs over 4 years. Public sector will probably have job losses. So private sector expected to provide ….. what …. 180,000 net new jobs? 190,000? Really???

    • felix 22.1

      Ah but you’re forgetting the cycleway (which has already provided more than four public sector jobs btw.)

      Once it’s fully operational there’ll be opportunities for around two million cycleway-related private sector jobs up and down the length of it, mostly in the bicycle maintenance and lycra industries.

  23. Tom Gould 23

    Someone must have voted for Armstong. No way he gave his benefactor less that 9 out ot 10.

  24. RobC 24

    John Key on Campbell Live when pulled up on Treasury projections:

    “Treasury could be under-cooking it”

    Seriously, this guy is no better, probably a lot worse, than a used car salesman.

    • MrSmith 24.1

      RobC comparing our leader to a used car salesman is a bit disingenuous.

      At-least the used car salesman is selling you a piece of shit, key on the other hand can only talk it.

      • RobC 24.1.1

        My apologies 😀

      • terryg 24.1.2

        Sorry MrSmith, but you’re quite wrong there.

        At-least the used car salesman is selling you a piece of shit, key on the other hand can only talk it

        at least the used car salesman is selling you an actual piece of shit.

        Shon Key is selling you a decent used vehicle, and having it stripped while you do the paperwork. by the time you sign on the dotted line and go outside, its up on blocks, missing wheels, seats, and anything else they managed to whip off while you were inside. And when you complain the prick charges you a storage fee, and a towing fee to get it off the lot.

        FIFY 😀

  25. tsmithfield 25

    It seems that Labour doesn’t want to sell assets, doesn’t want cuts to Kiwisaver, doesn’t want cuts to WFF, doesn’t want cuts to the public service.

    The only solution I have heard proposed is to tax the wealthy more. Well, that option doesn’t generate anywhere near enough revenue to put the country back into surplus any time soon. So, if Labour won’t make the cuts mentioned above, then how will they fund the deficit? More borrow and hope?

    • Lanthanide 25.1

      Putting up tax for the rich, and giving some marginal tax cuts to the poor (first $5000 tax free, GST off fruit and vegetables). Investing in job creation programmes.

    • PC Brigadier 25.2

      Well, if they were to reverse those tax cuts they might, perhaps, invest in productive areas of the economy that make money. For example, electricity generation makes money. Imagine if NACT reversed its tax cuts and invested in those (rather than selling them); that could produce wealth rather than borrowing it. Yes, Labour may not have the kahunas…but NACT certainly doesn’t. The Greens however…

    • MrSmith 25.3

      TS you appear to be stumbling about in a room fool of mirrors and sound bites, What Labour wants to do is beside the point, your government has had plenty of time to show us that they had a plan, but they are nothing more than used car salesmen in two thousand dollar suits.
      They keep doing the same old thing over and over and over again namely ripping off the average Joes and spiting in our faces, these people, National are parasites and should be shown the door, do you really believe they run this country, a bunch of sheep could run this country, Oh hang on they are.

  26. Sookie 26

    I’m so glad I saw the writing on the wall 2 years ago and got the hell out of the public sector. I feel terrible for my old department and colleagues, poor overstretched, demoralised bastards, trying to do mostly good for this country with absolutely f*ck all. Well, the Nats have laid it all out on the line now. If NZ is stupid enough to vote for that shower this year, they deserve everything they get. Key was a transparent bullshit artist on Campbell tonight, and yet the mob thinks he’s a ‘top bloke’ who ‘tells it like it is’. Deep, heavy sigh.

  27. Sam 27

    I dare someone to give me an objective definition of the words “fair” and “equality”. These words are everywhere but they mean different things to different people. Go on, I dare ya

    • Lanthanide 27.1

      fair: free from bias, dishonesty, or injustice
      equality: the state or quality of being equal; correspondence in quantity, degree, value, rank, or ability

      There you go, objective definitions.

      • Sam 27.1.1

        So taxing the wealthy more to generate revenue isn’t fair, because according to your definition people who earn more arent being taxed to the same degree as those of lower income. There’s nothing more unequal than the equal treatment of unequals.

        • mickysavage

          Feck Sam I can’t work out if you are a comrade or a RWNJ.

          I think you are saying that everyone should pay the same tax.  Over the past 30 years the very wealthy have done outstandingly well and the rest of us have suffered.

          The world’s environment is suffering because of this, as are many societies.  So do you mean that the wealthiest and the poorest should pay the same or do you mean something else?

          • Lanthanide

            “I think you are saying that everyone should pay the same tax. ”

            No, he’s saying precisely the opposite (whether he meant to or not):

            “There’s nothing more unequal than the equal treatment of unequals.”

            We shouldn’t treat unequal (rich and poor) equally, eg flat-tax, because that’s unequal.

            • mickysavage

              Thanks L

              I agree entirely with you Sam.  Requiring the rich and the poor to be treated “equally” means that very few rich and many poor will be charged with living under bridges.

              • terryg

                thats exactly right. and guaranteed to tip an RWNJ into full-blown apoplexy at the merest mention.

                But Im not sure that is what Sam means – its not consistent with the first half (nor for that matter is the first half) which doesnt help, but IMO Sams OP@27 reads as full-blown RWNJ prose.

                Not that I ever let cognitive dissonance stop me, so why should anyone else….

                [edit to remove gender assumption]

                • Lanthanide

                  I agree, I don’t think that’s what Sam meant at all. But that’s what he said.

        • terryg

          WTF Sam?!
          the only rational item in your post is this:
          There’s nothing more unequal than the equal treatment of unequals which is very, very true.

          the rest is incorrect verging on nonsensical.

          Your conclusion does not in any way follow from La’s definitions. Lets rip it to shreds eh?

          So taxing the wealthy more to generate revenue isn’t fair, because according to your definition people who earn more arent being taxed to the same degree as those of lower income

          1. Reading (your own post) Comprehension Fail: you dont even use the word “equality” so why ask for a definition of it?

          2. Consistent Terminology Fail: initially you refer to “the wealthy” and then “people who earn more” (also known as “the wealthy”) thereby obfuscating your argument.

          re-writing your argument to fix this gives:

          So taxing the wealthy more to generate revenue isn’t fair, because according to your definition the wealthy arent being taxed to the same degree as those of lower income

          3. Consistent Terminology Fail: you refer to “the wealthy” and “those of lower income” aka “the poor” – again obfuscating your argument.

          re-writing your argument to fix this gives:

          So taxing the wealthy more to generate revenue isn’t fair, because according to your definition the wealthy arent being taxed to the same degree as the poor

          4. Consistent Terminology Fail: you initially state “so taxing [them] more” and later write “[they] arent being taxed to the same degree”. That [they] are not being taxed to the same degree is indeed true – [they] are, as you initially stated, “being taxed more”. This yet again obfuscates your argument.

          re-writing your argument to fix this gives:

          So taxing the wealthy more to generate revenue isn’t fair, because according to your definition the wealthy are being taxed more than the poor

          5. Reading (your own post) Comprehension Fail: La’s definition of “fair” doesnt define the wealthy as being taxed more than the poor – YOU do, in the first 5 words (which I have not altered) of your post! Bwahahahahaha! you just pwned yourself (or in more archaic prose, methinks thou art hoist by thine own petard) 😀

          aside from that minor tiny gaping hole in your feeble argument, lets press on – there is more joy to be had. We can fix fuckup #5 by removing “according to your post” to give:

          So taxing the wealthy more to generate revenue isn’t fair, because the wealthy are being taxed more than the poor

          at long last.

          And now that the obfuscating terminology has been cleared away, we can make some progress, simply by substituting each of La’s definition of “fail” into your (de-mangled for intelligibility) argument, one at a time:

          a) “free from bias”

          So taxing the wealthy more to generate revenue isn’t free from bias, because the wealthy are being taxed more than the poor

          removing the negative for clarity:

          So taxing the wealthy more to generate revenue is biased, because the wealthy are being taxed more than the poor

          6a. Circular Argument Fail: Using La’s first definition “free from bias” the unobfuscated version of your conclusion is circular – it is by definition biased to tax the wealthy more than the poor.

          b) “free from dishonesty”

          So taxing the wealthy more to generate revenue isn’t free from dishonesty, because the wealthy are being taxed more than the poor

          again removing the negative for clarity:

          So taxing the wealthy more to generate revenue is dishonest, because the wealthy are being taxed more than the poor

          6b. Unwarranted and Incorrect Conclusion Double Fail: not only do you offer no proof whatsoever that taxing the wealthy more to generate revenue is dishonest, but it clearly is not dishonest – tax rates are both enshrined in law and widely publicised.

          c) “free from injustice”

          So taxing the wealthy more to generate revenue isn’t free from injustice, because the wealthy are being taxed more than the poor

          again removing the negative for clarity:

          So taxing the wealthy more to generate revenue is unjust, because the wealthy are being taxed more than the poor

          6c. Unwarranted and Incorrect Conclusion Double Fail: not only do you offer no proof whatsoever that taxing the wealthy more to generate revenue is unjust, but again it clearly is not unjust – tax rates are both enshrined in law and widely publicised.

          would you like to play again?

  28. Pete 28

    Man, aren’t we lucky the labour clowns aren’t running the show. We’d all be bankrupt yesterday.

    • Sookie 28.1

      Oh yeah, because we were doing soooo badly when Labour was in power, what with that continuous growth and annual surpluses and shit. NZ really sucked back then. RWNJ’s, you may be able to confuse cretins on Stuff with your bullshit astroturfing comments, but you’re wasting your time here.

    • Yep Bloody Michael Cullen paid off all of the country’s debt so that by 2008 NZ Crown was debt free and good old boy Blinglish today announced borrowings of $16 billion over the next 12 months.  Pete you really need help with remedial economics, in fact screw that you need help with remedial maths.  You could start with taking your shoes and socks off, that will give you greater counting power …

    • Mac1 28.3

      Mmmm…. nine years of surpluses, nine years of low unemployment, nine years of growth, – such a nine years that Bill English himself acknowledged the good state of the economy in 2008.

      Pete, what do you call our economy now, with huge deficits, large unemployment, and borrowing three hundred and eighty million a week to sustain the tax cuts for the already well-off?

  29. Pascal's bookie 29

    So for the people who are struggling to put 2% into kiwisaver, and looking at either the extra money having to go in vs not bothering and keeping that 2% that they could currently spend on groceries;

    and considering that the govt says it’s hunky dory for employers to take their kiwisaver contributions into account when setting wages,

    I’m guessing when those people pull out of kiwisaver they get an automatic payrise right?

    cf: “love to see wages drop”

  30. JAS 30

    This single income household just lost $37 a week by the time these changes all take effect. Just wonderful when prices continue to increase for basic essentials like fuel to get to and from work, food, and electricity.

    Employer contributions to kiwisaver are a direct deduction from my base salary, so I get to wear the increases to both employee contributions AND employer contributions. (a combined total of roughly $16 a week). A quick calculation using the published abatement levels equals approx $21 less a week of working for families.

    To think a few weeks ago I was overjoyed with a small salary increase, sadly it wasn’t enough to cover what will now be lost.

  31. Jum 31

    What % ownership is needed in our assets to control what happens to them?

    • Jum basically 100%.

      Air New Zealand a few years ago shut down Christchurch’s engineer’s depot.  The Labour Government was asked by the Engineers Union to intercede and preserve a skill base.  Cullen refused.  Even though the Government owned 83% of the shares if it made a decision that affected the company’s profitability then the minority could jump up and down.

      So if you want a Corporate to worry about anything but profit the state have to own 100% of the shares. 

      Selling power company shares will mean that to them burning coal is way better than building windmills …

      • Colonial Viper 31.1.1

        Even though the Government owned 83% of the shares if it made a decision that affected the company’s profitability then the minority could jump up and down.

        The majority shareholders have full control over the Board of Directors, should they choose to exercise it.

        If you’re going to be timid and defer to the minority shareholders you get what you deserve.

        Just remember that the last Labour Government was essentially a centrist Government.

        • mickysavage

          I hear you CV but the Companies Act talks about “fraud on the minority” which means that if a majority shareholder makes decisions that are not commercially justifiable then the minority can sue their asses …

          This is the problem with corporatising and selling shares …

          • Draco T Bastard

            Thanks for putting it so plainly.

          • terryg

            wot DTB said. and with a sad face 🙁

          • terryg

            Hmm, thanks MickySavage, that really got me thinking.

            “fraud on the minority” is the corporate version of [struggles to find correct term] the democratic principle of “tyranny of the masses”. literally.

            the difference being that corporations are only concerned with profit.

            whereas (in theory) governments are concerned with people.

            whats the difference between theory and practice?
            In theory there isnt one
            In practice there always is

          • Colonial Viper

            if a majority shareholder makes decisions that are not commercially justifiable then the minority can sue their asses …

            Its the NZ Government and the case would be heard in NZ courts.

            So let them try 🙂

            Further, its not that hard to commercially justify something, if you are single minded enough 🙂

  32. Jum 32

    I would like to see some examples of wealthy people’s income and tax on that income; you know, the ones with accountants, John Key living next door, overseas bank accounts…

  33. Jan 33

    From the budget speech today

    “The expected revenue from offering minority stakes in these five companies (Power SOES and Air New Zealand) is between $5 billion and $7 billion. This will therefore fund about one-third of the core Crown’s increased investment in social assets in the period to 2015.”

    Another way of looking at this would be to say “If we take the average of the $380m and $300M increase in government deficit each week – (let’s says its’ on average about $333M /week to keep the sums simple) then use the capital raised by selling 1/2 the energy companies into private hands to reduce the government deficit it will be all spent up in 21 weeks under the best case scenario or 15 weeks if only $5M is raised,

    In contrast reversing the tax cuts ($140M each week) would have achieved the same result in 50 weeks under the best case scenario or 36 weeks if the lower amount of money is realised from the privatisation.


    http://thestandard.org.nz/choices-choices-3/ and the budget speech

  34. Georgecom 34

    Deliver billions of dollars in tax cuts based on highly optimistic forecasts of economic growth
    Lead the economy back into recession
    Borrow Billions to pay for your tax cuts
    Announce asset sales to pay the your tax cuts

    Someone tell me why Bill English is not the least competent Minister of Finance for a long time. really, Bill fails the test of competence.

    A new Billboard is needed I think:

    Finance Minister 2012.

    Bill English

    or Someone Competent, like David Cunliffe.

  35. John Key on Close Up tonight said something like ‘we need to reward the top 13% who pay 50% of the tax. He just doesn’t get the other side of that does he – that 13% must EARN half the money!!

    • Hanswurst 35.1

      “Earn” is probably not the word for it. Besides which, the argument is immediately fallacious. Every time you reward them with a tax-cut, their share of the total tax payment is reduced. Therefore, he’s saying “We need to reward them by encouraging them to do less of what they are being rewarded for.”

  36. Carol 36

    John Key, the used car salesman, trying to sell us a very old and well-used neoliberal vehical as a solid road-worthy piece of machinery. It’s been slightly cusomized, with some unusual added features, by a couple of untrained mechanics (led by an ex-farmer, aided by a bully-boy ex woodwork teacher). The vehicle has been in at least one major crash, but this team has just hammered out the dents & painted over the cracks, hoping no-one will notice if they do a bit of an unorthodox, but well-choreographed song & dance routine beside the vehicle while customers are examining it.

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