Readers will no doubt recall Liz Truss, the former UK Prime Minister who enjoyed the shortest reign in the office and who was famously outlasted by an iceberg lettuce.
She has recently released a book ominously titled “Ten Years to save the West”.
Reviews of the book that I have read treat it with the same level of derision that was poured onto her reign as PM.
This review in the Guardian by Stuart Jeffries is a piece of fine art. Especially this passage:
The then prime minister is livid about how a cabal of Cinos (pronounced “Chinos” – Conservatives in name only) and other blob-adjacent political invertebrates were trying to nobble the week-old mini-budget she devised with her chancellor of the exchequer Kwasi Kwarteng. By means of this reform, a new globally competitive post-Brexit Britain would emerge. This “unchained Britannia” would be unconstrained by planning regulations, free to frack as never before and able to explore the North Sea for oil despite the ululations of virtue-signalling eco-zealots and the rest of the anti-growth wokerati. This would be a Britain where the super-rich were less hamstrung by corporation or inheritance taxes, and in which the 45p income tax rate (what she calls here the “anti-success tax”) would be little more than a bad memory.
What Truss didn’t seem to understand, now as then, is the handbrake had long ago come off and that both she and Kwarteng, like some latter-day approximations of Thelma and Louise, were barrelling towards oblivion. At Birmingham, in the face of objections from fellow Tories and serious market jitters, Kwarteng U-turned on that tax break for the rich. Later, the pair’s whole plan for growth was junked. Why? Truss is keen to tell us it wasn’t her fault. It was the fault of the economic establishment, apparently, whose members include the Bank of England governor Andrew Bailey, her fellow Conservatives, the IMF and President Biden, not to mention the Office for Budget Responsibility whose “overegged” prognostications of the disastrous impacts hastened speculative panic. They were the reason Britannia had to be chained back up again.
The primary feature of the budget was a massive tax cut for the rich funded by borrowing. The theory was that the rich would then invest all of their newly found money into the UK economy and generate huge growth rates and we would all be rich. It was in essence yet another version of trickle down.
The plan failed. The markets were spooked, the pound slumped, interest rates spiked and it all ended in tears. Truss sacked her old friend and Chancellor of the Exchequor Kwasi Kwarteng by tweet. Shortly after this she was also gone. The longest surviving entity was the lettuce.
In Aotearoa New Zealand we are going through a not dissimiliar experience. The Government is laying waste to the public service, non Government Organisations, Housing Corporation, the enviroment, families with members who have disabilities, in fact just about everyone you can think of.
The onslaught of bad news is profound. Just this week we have witnessed the following:
And that was just this week.
And in news indicating how bizarre things are getting:
Perhaps the most jaw dropping piece of recent news is that Willis is planning to borrow to pay for tax cuts. She is trying to say that since the cuts in services will pay for tax cuts and the Government will then be borrowing for new initiatives the tax cuts will not be inflationary. I am sure the market will disagree.
Craig Rennie describes her concession in these terms:
“This admission is in direct conflict with the statements made by Nicola Willis in opposition that the tax plan requires no additional borrowing. Yet today we discover that additional borrowing will be happening,” said CTU Economist Craig Renney.
“The Minister is still insisting that the additional borrowing will not pay for tax cuts, even though it’s clear that without these tax cuts, additional borrowing would not need to take place. The obvious lesson from all of this is that the government is borrowing to pay for tax cuts.
“The economics of this make no sense. Given the economic circumstances that New Zealand is in, if we are borrowing, it should be for investments that will lead to long-term productive growth. It should be for infrastructure, R&D, and public services. Instead, we are providing yet more money for landlords, and more money for higher-income earners.
We have deteriorating confidence and increased unemployment. Important infrastructure required to address climate change is being cancelled. Thousands of public servants have lost their jobs and the flow on effects of the job losses and of cuts to services will be disastrous.
The budget could be for Christopher Luxon and Ncola Willis their Liz Truss and Kwasi Kwarteng moment. Their relentless pursuit of tax cuts for landlords and rich people has the potential of wrecking the economy.
Powered by WPtouch Mobile Suite for WordPress