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Treasury provides cover for Nats’ rightwing agenda

Written By: - Date published: 9:07 am, October 30th, 2009 - 19 comments
Categories: economy, national/act government, public services, spin, tax - Tags:

National’s favourite public servant (who got himself a nice pay rise), John Whitehead, has been offering dire warnings of the future. $2 trillion in debt by 2050! Something must be done!

Naturally, the Treasury has an extreme right-wing solution – cut everything: cut health – yeah, a less healthy workforce that’ll be great for the economy. Cut education – yup, that’s the route to a high tech economy. Cut superannuation – you’re going to die anyway, why not die a pauper? Even cut taxes – yup Treasury reckons part of the solution to the government not taking in enough money to cover its costs to to cut its revenue.

I could go on about the silliness of trying to project 40 years ahead when you can’t get projections for the next year right. I could point out the methodological flaws, which Treasury acknowledges, that make this more an exercise in ‘ain’t maths fun’ than a crystal ball to the future. I could point out that the reversing the upper class tax cuts and introducing a land tax would pretty much solve the ‘problem’. I could say ‘$2 trillion sounds astronomical now but GDP is meant to be $1 trillion by 2050, so it’s a lot less than it sounds. I could lament the fact that Treasury takes no account of peak oil or climate change – even the conservative projections of the international authorities. But the immediate politics of the thing is more interesting.

Treasury’s recommendations are so ideologically extreme that the Government can reject them, propose smaller cuts instead and be lauded as moderate (it’s the same ploy as they’re using on ACC). Meanwhile, the warnings are so apocalyptic that they are a fig leaf for National to do just about whatever it wants.

This isn’t about 2050, it’s about 2010. It’s all about creating the political conditions for National to begin the wholesale slashing of public services and the selling off of assets. Look for Bill English to bring up the $2 trillion bogeyman as he announces the sale of bonds by SOEs, freezes on core spending, and more insidious programme cuts in next year’s Budget. Look for the talking heads to nod gravely and congratulate National on its moderate, pragmatic approach as they drift further and further to the right.

19 comments on “Treasury provides cover for Nats’ rightwing agenda ”

  1. So Bored 1

    Ask the questions “in debt to whom” and “why do they want to loan us the cash” and “whats in it for them”? Oldest story in the world, the best way to subdue the masses, and to sieze the ownership of everything is to keep the masses highly indebted to you.

  2. Clarke 2

    At the rational level, it’s a bit hard to take Treasury seriously given their demonstrated lack of success as prognosticators. I note that they failed to provide any useful lead-time on predicting the recession, and only three years ago were certain that the long-term price of oil would be around US$25 per barrel. Their projections of GDP growth are woefully inaccurate, and their estimates are inevitably less useful than the private sector economists.

    However this government is clearly not swayed by rational argument, so Treasury’s lamentable lack of accuracy is unlikely to be a hindrance, as you point out.

    And I’m reminded of the old saying: “The analysts were diametrically opposed to the initiative, because despite clear evidence that it was working perfectly in practice, they knew it would never work in theory.”

    • prism 2.1

      clarke great quote!

    • Draco T Bastard 2.2

      and their estimates are inevitably less useful than the private sector economists.

      You’ll find that the private sector economists don’t do any better.

      • Clarke 2.2.1

        You’re entirely right – although in the race to the bottom of the accuracy league tables, Treasury inevitably wins.

  3. Bill 3

    Can I suggest folks not already familiar with National/Acts strategy go off and read Naomi Klein’s ‘Shock Doctrine’ for a fairly insightful analysis of this ploy?

    What I find particularly depressing is that this rushing through of one legislative change on top of the next was done in the 80s as well as the 90s. On both occasions the left was swamped by the magnitude and speed of the change and totally ineffective in its challenges or protests.

    I can understand the non-preparedness of the 80s; less so the 90s and can see no excuse for the left being so awry in the 00s.

    I’d like to think that the ACC lesson will be learned : that you don’t ghettoise your protest by focussing on a detail of a proposal, no matter how outrageous and important that detail may appear to be.

    I’d punt that all upcoming contentious changes will contain utterly untenable details designed to first of all suck in and then neutralise protest through the particulars around the detail being ceded.

    Protest has to keep an eye on the big picture at all times or it will be, not just neutralised (as in ACC) but contribute to a false environment where a feeling exists that the government is being responsive and held to account when in fact they are simply playing the whole fucking lot of us.

    • snoozer 3.1

      “you don’t ghettoise your protest by focussing on a detail of a proposal, no matter how outrageous and important that detail may appear to be.”

      very very astute

    • So Bored 3.2

      Ghettoising protest is one dead end……I read a brilliant book by a gent called Allistair McIntosh who stopped development of super quaries in the Hebrides. He used a technique that basically goes as follows;
      * only engage in the process on your own terms and language.
      * make the opponent answer your questions.
      * dont engage with their questions as the answers are already framed.
      In Allisdairs case the courts were made to ngage in gaelic and Bardic prose……Liberation theologians (Catholic priests etc) in central America utilise very similar tactics.
      The lesson for us with Treasury and the Right in general is to make them engage in plain non mystified language and to make them challenge our assumptions / models on our terms. They must be made to realise that we utterly reject debating their orthodoxies. If we do go there we wont address the real issues because its all on their terms.

      • Bill 3.2.1


        Get them to explain how the hunger and wont and the wars etc arising from Capitalist market economies means that Capitalist market economies are ‘good for us’.

        And keep asking and demanding an answer.

        Then when they want to wank on about details of the economy, we just interrupt to demand an answer to the big picture question again.

      • RedLogix 3.2.2

        These last few comments are among the most crucially pertinent I have ever read.

        • SHG

          That may be, but the comments describe tactics that the present Labour Party will never employ. The party of Goff, Cunliffe, Mallard, and Hodgson will keep relying on personal attacks, and it will keep being rejected by the voters. The Labour old-schoolers don’t know how to do anything else.

  4. aj 4

    The right’s obsession with the Laffer Curve concept – that lowering taxation rates wil lead to increases in growth {and by default, tax revenue} once again mets the rock of reality. If Bill English really beleived that to be the case then he would have not cancelled the next round of tax cuts.
    The fact that Treasury clings so tightly to discredited theorys shows how tightly they are held by the grip of the weathly business elite. My only surprise is that they didn’t sing the ‘trickle down’ song.

  5. greenfly 5

    Bill – your assessment is entirely correct and has been my view also. The sight of the bikers being ‘granted’ the promise of a concession by Nick Smith was almost too galling to take. The challenge is, how to alert the groups chosen to play the suckers role, to act differently. Swift contact and advising is the way, but who will do it … ?

    • Bill 5.1

      The bikers or whoever don’t have to act too differently.

      By simply pushing the point that theirs is only one voice and one concern among many: by reaching beyond their own constituency to the other concerned constituencies : by rejecting the politics of the elevated centre….this all contributes to the building of a sustainable dynamic movement.

      In a recent speech Sue Bradford correctly pointed out the need to work with church groups and community orgs. I wholly agree that there is a need to move beyond the tired old shite of the centralised left as parodied by Monty Python in ‘that’ sketch.

      It’s actually not very hard to do. The only obstacle in my experience, has been the inability of the authoritarian left to ‘let go’; to cease in their seeking of a position of command and control of protest thereby limiting protest to single issue politics that are easily co-opted , contained or defeated. ( ‘Stupid fucking white man’ egos)

      Movements demand diversity…individuals and groups working across constituencies and avoiding the vulnerability that comes from elevating one particular concern or detail to a position of primacy.

      btw You do not want a single agency playing the role of advisor to different protest groups. With all the best will, that quickly degenerates to a ‘many people, one voice’ command and control nonsense.

  6. randal 6

    The treasury is proof positive of freuds theory of anality.
    they are the sort of people who would paint a used bicycle and give it to their second child as brand new for xmas. they select people like bill english to train up for public life. They know all the tricks of saving your money and spending it on themselves. neat eh!

  7. Zaphod Beeblebrox 7

    Until they can show they understand social theory, their economic models are a waste of time. Economic theory is merely a minor subset of social theory- so next time you see and economist suggesting that we have to cut class sizes or welfare payments you may want to enquire if they really know what they are doing.

  8. Ari 8

    While I personally share many of your criticisms of some of the economic wisdom behind Treasury’s ideology, I’d have to say that something does need to be done about funding or cutting super, and it needs to be done relatively soon. Treasury suggested several options, of which the only fair and tenable cornerstone is to increase the retirement age.

    That sucks, because seniors definately deserve support and dignity, but if we start spending smarter on them instead of spending more all the time, that might help. They already get a double share of government spending compared with their percentage of the population as it is.

    Besides, I think it would be pretty unfair for the current generation to dine out on long super payments after having trashed the environment and spectacularly failed to implement anything approaching a sustainable economy. No more inter-generational pillage, please.

  9. Quoth the Raven 9

    I think bringing in a land tax is a good idea, but it should be made revenue neutral by cutting income taxes from the bottom up. It could make up part of a green shift in taxes in view of removing income taxes altogether.

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