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There is no alternative?

Written By: - Date published: 8:49 am, June 4th, 2012 - 77 comments
Categories: budget2012, education - Tags:

We all know National is on a record borrowing binge. But when they say they need to slash education investment to balance the books, what dumb spending are they leaving untouched?

Which leaves the obvious question: why were these Tory sacred cows protected while public education was cut?

77 comments on “There is no alternative? ”

  1. Richard 1

    This does nicely show how trifling the “savage cuts” actually are. It is amazing that people can be so shrill about things that are so meaningless.

    • They are trifling in terms of overall spend but severe in their effect.  This makes them far worse.

      • Dr Terry 1.1.1

        Exactly, mickeysavage, this is right to the point. Well done.

        • Colonial Viper 1.1.1.1

          A bit of Tory brilliance that, saving fuck all money but managing to dog whistle and kick the poor and the vulnerable at the same time.

    • mike e 1.2

      JH not to mention the damage alcohol and gambling to the economy which should be user pays.
      This would bring in a couple of billion a year.
      Cutting Education and health shows is National being corrupted by these two lobby groups.

      • Vicky32 1.2.1

        not to mention the damage alcohol and gambling to the economy which should be user pays.

        Yes, let’s start with taxing alcohol to the same extent cigarettes are taxed! Alcohol does incalculable damage… 🙁

  2. Eddie 2

    In terms of the education budget, they are severe. They amount to a education system going backwards, where it should be the main target of our investment.

    Instead, we’re spending the money on useless roads.

  3. Ad 3

    It would be interesting to see a central government budget subject to the same level of democratic scrutiny that local government is required to have through their Long Term Plans. Everyone has a right to be heard. Everyone gets to write in.

    It would be particularly good to see a government – any government – take the challenge of generating an Auckland Plan for New Zealand. Of course it would be hard and controversial. But Auckland did it (including an implementation framework with actual goals), for a third of the country’s people and economy, and the sky did not fall in.

    We need an ambitious government. I am really wearied of politicians whose sole ambition is to finally make it back up to zero.

  4. But when they say they need to slash education investment

    What is the overall education budget and how much has it been slashed?

    This doesn’t look like slashing – tertiary tuition University funding up 13%

    • mike e 4.1

      yeah the money is from cuts else where pernacious guile

    • mike e 4.2

      yeah the money is from cuts else where pernacious guile.
      gulible git you’d believe anything from joyce the master of Nactional and unbridled failures spin

      • Pete George 4.2.1

        They are published facts on tertiary tuition funding.

        But you’re right, some areas of education spending increase so savings have to be made in other areas. Or what is the alternative?

        • bbfloyd 4.2.1.1

          Wrong on all counts little pete….. Why do cuts have to be made that disadvantage the very people we need to keep this country moving forward when there is ample room to shift spending away from wasteful, profligate, and ultimately self destructive spending designed to do no more than reward nationals support base….??

          Because that’s what happens when corruption takes over any political system…

          Sad that you insist on pushing your role as obsequious tory asslicker #3 down peoples throats….

          You have become a “black hole” in the blogosphere … Sensible debate disappears up your ass at ever greater speeds the longer you hang around….

          The sad thing is that big pete is now starting to waffle as much self serving drivel as you have been since i first saw you on here….. God help him if he’s taking his cues from you now..

        • Lanthanide 4.2.1.2

          “Or what is the alternative?”

          See any of those big blue blocks in the graph? Any single one of them could be canned and make up for the drop in education at least 5 times over.

          Duh.

        • Almost all education spending returns significantly more money than is spent on it. We could just spend EVEN MORE on education, and have a larger surplus in five to thirty years time. (depending which stage of education you spend on)

          The problem with right-wingers is that they don’t really understand the concept of “investment” in governing, which is rather sad given the amount they talk about investments.

          • Draco T Bastard 4.2.1.3.1

            RWNJs only care about investment if it means that they personally and directly benefit. If it’s an indirect benefit then they just don’t see it, all they’ll see is the cost and they see that cost as them losing.

    • Dr Terry 4.3

      Pete. University funding up maybe. STUDENT funding well down (especially post graduate from whom the government want to find “better qualified teachers”). As usual, government wants things both ways.

      • DH 4.3.1

        It’s not even that. Read his data and it states clearly some, all or most of the ‘ extra funding’ is from an increase in student numbers. It’s like saying wages have increased in a business that just employed an extra worker.

        I’m a bit sick of bullshit spin like that. Has funding increased by 13% between 2008 and 2011 or have student numbers increased by 13% in that time? And what was inflation in that period?

    • Eddie 4.4

      pete. were smoking dak while watching the queen again?

      The Nats have made it impossible to get a student allowance while doing post-grad, they’ve made it more expensive to study, and staff:student ratios have worsened by at least 10% under National – http://thestandard.org.nz/joyces-latest-brainfart/university-class-ratios/

      • Pete George 4.4.1

        You’r getting your facts fuddled again, I’m neither a dak smoker nor queen watcher.

        staff:student ratios have worsened by at least 10% under National

        Really? Overall, tertiary, secondary, primary? Can you show the stats that back that claim? If you’re right I’ll climb into the campaign.

  5. Carol 5

    As the graph above highlights, this right-wing, neoliberal NAct government uses the mask of fiscal “responsibility” and “rebalancing the economy”. This is to cover for a very ideologically-based cluster of policies that amount to social engineering of a society that benefits the few, already wealthy and powerful, at the expense of the many.

    In reality there is no fiscal responsibility, nor an aim for a “balanced” economy.

  6. Foreign Waka 6

    The graph clearly shows that Farmers are subsidized, in a different way but still. So if the true cost of irrigation, pollution (nitrate and water way clean up) are put onto the farmers, would this increase the cost of food for New Zealanders? I am all for “user pay” in that field but the minimum wage would have to raise significantly to cover the cost being transferred to the consumer.

  7. burt 7

    James

    It seems you missed the memo; Labour were going to borrow more than National if they won the last election. But let me guess, borrowing is good when Labour do it!

    • bbfloyd 7.1

      earth to tory asslicker #2…. try harder next time….. i can still smell the substances you had to wipe off this statement before presenting it…

      • muzza 7.1.1

        Actually BBF, Burt has a point…

        Until there is talk about “printing” NZ’s sovereign currency for specific targets use, to benefit NZ, then all parties are addresing the wrong issues, when talking about funding, borrowing, spending etc!

    • JH 7.2

      You seem to have missed every economic and fiscal announcement since your idols came to power, which show a stagnating economy, rising unemployment, and record borrowing.

      But don’t let the facts stand in the way. Instead, concentrate on your pathetic ‘it could be worse’ scenarios.

      • John72 7.2.1

        This is emotional criticism. There are no facts quotedin this post.

        • Draco T Bastard 7.2.1.1

          Plenty of fact in JH’s post. All you need to do is open your eyes and you’ll see it.

          None in yours though.

    • Lanthanide 7.3

      burt, the issue is what the borrowing is for.

      Borrowing for roads, for tax cuts for the richest and private prisons is considerably “worse” than borrowing to fund education, health and child poverty and superannuation.

    • Dr Terry 7.4

      Burt. Maybe it all depends on HOW THAT BORROWING IS USED. Aside from which, I would like you to provide the precise evidence to back up a mere supposition. You request, “Let me guess” – you are possibly as good at the “guessing game” as Bill English. I will never accept “guesses” as anything like something that is trustworthy.

    • mike e 7.5

      Burt taxing alcohol and gambling capitol gains tax is not borrowing to subsidize the damage done to our economy that you and your cohorts are happy to allow. While our economy stagnates and is in recession which means borrowing blingenglish has to borrow more than he has already.

    • mike e 7.6

      Burt they were also going to pay it back sooner and retain the earnings from the most valuable assets we own as taxpayers.But burt you want your hand on those undervalued assets i guess so the rest of us who loose out on the long term earnings, infact we the rest of the taxpaying public will be subsidizing your wealth socialism for you .Shifty shonkey Nactional rip of like Goldman sachs rip off just like they’ve done in Europe.

  8. pictish 8

    What a clear illustration of the agenda behind the deficit-hawk blather. The point is to use deficits as a pretext for shrinking the government in obedience to neolib ideology. Krugman has been making this point lately for Europe and the states:

    http://www.salon.com/2012/06/02/paul_krugman_european_celebrity/

  9. maffoo 9

    Slashing the ‘roads of national importance’ should be the first to go. We are wasting money propping up the car economy in this time of diminishing use. The last thing we need is a 4 lane highway from Puhoi to Wellsford.
    a 2% tax increase for those on over $150,000 p.a. would be a nice start to redressing the imbalance as well.

    • Colonial Viper 9.1

      0.20% asset tax on net assets over $1M. We can’t just keep hitting wage and salary earners while ignoring the massive economic wealth out there in the form of financial assets.

      a 2% tax increase for those on over $150,000 p.a. would be a nice start to redressing the imbalance as well.

      39% income tax rate over $150K
      49% income tax rate over $580K (this is 20x the median NZ income)
      59% income tax rate over $870K (this is 30x the median NZ income)

      • Red Rosa 9.1.1

        A property tax – simply an extension of the existing local body rates to central government – has big advantages over trying to extend the present capital gains taxes. Stable and transparent database already in place, minimal scope for evasion… might even rein in the kiwi enthusiasm for over-investment in housing.

        • Ad 9.1.1.1

          Quite an idea REd.

          Have you tried that out on Cunliffe or Norman? Would be interesting to hear them on it.

          Probably it would need to come in fast to offset the much lower income from a broader capital gains tax.

          • Red Rosa 9.1.1.1.1

            I’d hope those in the policy loop would have this on their list of serious options. CGT’s have conceptual problems – realized or unrealized CGs? and what about capital losses? So the tax code has to cope with these, and the resulting compliance costs are significant.

            The bigger businesses, and those who legitimately seek to make capital gains, probably cope OK. But extending CGT further means real problems.

            My guess is that most Western economies have great reliance on property taxes than NZ, and we should be studying this option further.

      • Liberal Realist 9.1.2

        0.20% asset tax on net assets over $1M. We can’t just keep hitting wage and salary earners while ignoring the massive economic wealth out there in the form of financial assets.

         
        How about a 0.5% FTT on all transactions, business and personal?

  10. Ed 10

    It would be good to have the amounts of each of the above columns included with the chart, to have ‘savings’ show as negative spending (yes that means showing a small block below the base line), and it would also be good to give the source of the numbers – where is the documented number for the cost of greenhouse polluter subsidies for example?

    I agree that the Roads of National significance should be stopped – they do not meet normal government requirements for return on capital, even if they meet National’s Lower Standards of political expediency – wouldn’t a rail link from Auckland to Tauranga be of greater significance to our economy anyway?

    • JH 10.1

      all sourced from the Budget except the 2010 tax cuts, which is the annualised amount of the $2b in the first 18 months cost.

      The cost of greenhouse polluter subsidies is the cost of the ETS.

      I toyed with making the savings negative, or the spending negative but found the visual story was easier to interpret the way it is.

  11. What should worry everybody is that for some reason this government has seen fit to invest or lock $112 BILLION in in Derivatives. And is keeping those Derivatives off the books. Guess who will have to pay that money when the 1.2 Quadrillion in Derivatives collapses taking the above with it. This is how John Key made his money and he is doing it again this time with the future of your children and children’s children. This is how they did it in Greece and they are doing to every country connected to the central banking fiat money system.
     

    • Gosman 11.1

      Yeah, whatever Travellerev. It would be good if you actually understood derivatives rather than spouting errant nonsense. Quoting derivative face values is as irrelevant as quoting the insured value for J-Lo’s butt at $300 million.

      • Colonial Viper 11.1.1

        Best to hide your derivative liabilities off balance sheet then you don’t have to quote their values at all.

      • mike e 11.1.2

        Goldman of Sachs man which derivatives are BSing. Derivatives are not insurance Jlo’s butt is asset insured for a set sum futures trade are a gamble on a future value if not met people loose i don’t see jlos butt in that light.
        No wonder you worked for GS .

        • Gosman 11.1.2.1

          Please explain why derivatives aren’t insurance?

          I’d be interested in your explanation.

          • Colonial Viper 11.1.2.1.1

            Derivatives were indeed originally designed to have practical hedging and insurance features.

            Of course today they are simply highly speculative, highly leveraged bonus making mechanisms for investment bank executives.

            • Gosman 11.1.2.1.1.1

              Everything that can be bought and sold can be used for speculative purposes. Someone who hoards scarce goods is doing so. Whether this is wrong or not is a value judgement.

              • Colonial Viper

                Yep, time to bring societal value judgements back to the derivatives market.

                • Gosman

                  All this scare mongering of derivatives have yet to come to pass CV. The current problems have been far more related to old school asset price bubble economics. Derivatives can cause confusion around market pricing of risk but it doesn’t look like it has caused more problems than in the past.

        • Gosman 11.1.2.2

          If I sold J-Lo the insurance on her butt for 300 million USD and then onsold that to other people for 250 million USD what would the total size of the J-Lo butt market be mike e?

          • Colonial Viper 11.1.2.2.1

            Who cares about her ass as long as you keep the derivatives off balance sheet, refuse to mark to market, then rehypothecate the face value of the asset to double your leverage.

            • Gosman 11.1.2.2.1.1

              Trouble is CV there is actually two values you are talking about and the one that Travellerev , (and others), are using isn’t the value that has an impact on the real economy. It possibly might do it is true but only in a worse case scenario and even then it isn’t anywhere near the impact made out.

              • Colonial Viper

                And if the highly leveraged derivative play wins, the investment bank execs get their hundred million dollar bonuses.

                And if the derivative play loses billions and makes the bank insolvent, the tax payer and mum and dad investors get raped with bailouts and corporate welfare.

                Zero risk banker capitalism, it makes my eyes tear up.

                • Gosman

                  Funnily enough I completely agree. Socialisation of loss is unacceptable. Banks should be taught a lesson about following proper risk management.

                  • Colonial Viper

                    Taught a lesson? Force banking into becoming the boring, low profit, socially focussed endeavour that it should be, and split off all other high risk speculative activities into independent hedge funds which can safely fail with zero real economy impact.

                  • mike e

                    Goldman Sachs type lesson you can get away with conning small economies and large banks to borrow and to those who can’t afford it then get the large economies and banks to take a haircut then goldman sachs wins huge bonuses as well as wiping out most of the competition.
                    loan sharks of the world

      • Poission 11.1.3

        Derivatives are problematic causal instruments in the death by a thousand cuts,that will persist in the financial markets.Haldane ad May 2010 convincingly argued.

        Events external to the banking system, such as recessions, major wars, civil unrest or environmental catastrophes, clearly have the potential to depress the value of a bank’s assets so severely that the system fails. Although probably exacerbated by such events, including global imbalances (China as producer and saver, the United States as consumer and debtor), the
        present crisis seems more akin to self-harm caused by over exuberance within the financial sector itself. Perhaps as much as two-thirds of the spectacular growth in banks’ balance sheet over recent decades reflected increasing claims within the financial system, rather than with nonfinancial agents. One key driver of this explosive intrasystem activity came from the growth in derivative markets.

        In 2002, when Warren Buffet first expressed his view that ‘‘derivatives are financial weapons of mass destruction’’16, markets—although booming— seemed remarkably stable. Their subsequent growth, illustrated in Fig. 1, has been extraordinary, outpacing the growth in world gross domestic
        product (GDP) by a factor of three. In some derivatives markets, such as credit default swaps (CDS), growth has outpaced Moore’s Law

        The primary outcome is that they destabilize the market.where as they are “designed” to stabilize risk,a good recent example is the JR Morgan fiasco .

  12. captain hook 12

    thids is government of prissy little anal retentive kneejerks.
    they know every tirck there is to know about socring a cent off every turn and sucking up to the real power brokers but apart from that they are mediocre non-entities in charge of something tht is too big for them.
    oh and if they have any money they what kwee wee did and buy a house in Omaha so they can duck roun to Warren Buffets for a hambureger and coke.
    ha ha f8cking ha.
    what a joke.
    who did Buffet buy the new zealand franchise off?
    He sold New Zealand rail off to one of his pals who drove it into the ground.
    was it auctioned off at JP Morgans before the derivative nitwit nearly sank that firm?

  13. stever 13

    Watch Krugman try to put a couple of Tories right.

    Could we get him to debate against Bill English (or some other NZ austerity-lover) and, say, the chair of the BRT??? That would be even better than watching these two struggle against him!

    His main point: the private sector is not suffering from too much debt or too large a public sector.It also has no constraints on capital or on labour. What it is suffering from is lack of demand. And “austerity” is just making that worse, since spending is depressed.

    Worry about paying off debt when you have an income!!!!

    • Colonial Viper 13.1

      Krugman is smart no doubt, and I like the points he brings up about aggregate demand in the economy, but overall he’s off on a wrong tangent.

      And precisely where he has lost the plot is that he is ignoring the concept of the “balance sheet recession” and he is using the neoliberal assumption that increased debt is usually no problem because one persons debt is simply another persons asset, so the effect cancels out. Krugman also ignores the influence of the massive financial sector on the real economy.

      Richard Koo on the balance sheet recession

      The economics dispute between Assoc Prof Steve Keen and Paul Krugman

  14. captain hook 14

    thats all well and good but who gets the frigging money?

    • mike e 14.1

      ch its just a figment of the free market.18 months ago the g8 were looking at how to make the problem go away.

  15. infused 15

    By all means, decrease those subsides and see what happens.

    It sums up the left. Short term thinking.

    • mike e 15.1

      confused the only short term thinkers are from the right who using the MSM con people with silly homespun lies trying to equate economies to the home budget idiots like you are sucked in by these types ie sarah palin

    • felix 15.2

      Confused, I don’t think you understood the graph.

      If you did, you’d realise that by decreasing those subsidies by a tiny amount we could stop cutting education and health.

      Then our nurses wouldn’t have to buy their own thermometers.

    • Draco T Bastard 15.3

      Considering what those subsidies actually do – we’d be far better off both in the short term and the long term.

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    Carmel Sepuloni, Minister for Social Development and Employment, has activated Enhanced Taskforce Green (ETFG) in response to flooding and damaged caused by Cyclone Hale in the Tairāwhiti region. Up to $500,000 will be made available to employ job seekers to support the clean-up. We are still investigating whether other parts ...
    BeehiveBy beehive.govt.nz
    2 weeks ago