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Wrong headed _and_ incompentent

Written By: - Date published: 5:21 pm, June 29th, 2012 - 39 comments
Categories: debt / deficit, national - Tags:

So here is the story that will probably summarise this government in the history books.  The whole cabinet delegated responsibility to John Key and Bill English to achieve their promised land of surplus in 2014/15.  They defined themselves as the only party that could deliver this goal, even though Labour said they’d do it too.

And they’re not going to succeed.

The Reserve Bank says so, with numbers more up to date than the budget/Treasury’s.  Any economic forecaster worth their salt doesn’t seem to be willing to bet on it.  John Key is already having to lay the groundwork for failure.

They promised a “Brighter Future for New Zealand” in each of the last 2 elections, and they’ve not delivered.  Instead all other goals have been jettisoned to try and achieve a single number, to keep our already low government debt low – even at the expense of our high private debt, that actually is a concern to ratings agencies.  Sure, they’ve run up some record deficits, but they started with zero net debt, so it’s not our main problem.

Remember them stopping the exodus to Australia?   All those jobs that came out of the Job Summit?  All that growth they delivered?  How exports rose and our current account deficit was solved?  How they rebuilt Christchurch?  Are you enjoying all that ultrafast broadband 4 years in?  How about that pay cut north of $50/week and no rise in GST?

Is it me, or did all those other goals not happen?

And now, even though it shouldn’t have been their main aim (how about jobs? getting the economy going? getting kids out of poverty? saving us from climate change?), they’re not even going to achieve that either.

Incompetent and wrong-headed.

39 comments on “Wrong headed _and_ incompentent ”

  1. prism 1

    Now the forward forecasts say that there is a baby bulge and the advice to the NACTS is that this relatively wealthy country can’t afford to educate them! WTF. First is it an unforeseen bulge or would a glance at well defined demographics and social science shown that a drop has been caused by women putting off motherhood for some years so they can get a track record in paid employment or a profession. Motherhood doesn’t seem to be regarded as the basic training for just about anything that it is. Social scientists would know about this and how it would affect a cohort of women and that they would all start having babies around the same time.

    Then the NACTs were thinking of dropping teacher appointments by 1000. Is there nothing that is stable and straightforward in people requirements in government these days. We don’t want to keep changing our jobs each ten years or so to match some frenetic practice dreamed up by change agents on high salaried contracts.

    • Anne 1.1

      <i.Then the NACTs were thinking of dropping teacher appointments by 1000.

      You beat me to it prism

      How about this:

      http://www.3news.co.nz/Hekia-Parata-lied-about-teacher-cuts-says-Labour/tabid/370/articleID/259602/Default.aspx

      It’s hard not to cry sometimes.

      • seeker 1.1.1

        “It’s hard not to cry sometimes.” Too true Anne.

        Could not believe my ears when I heard this on the news tonight. I veer between anger and seething fury at the ignorance and sheer incompetence of this government. This coupled with their arrogance, deceit and greed makes me really fearful for the future of this country. “Brighter future”- more like try and survive this ‘Ever Darkening Present’ if you want to have a future at all for far too many of us, especially our young ones. Have these nactionalufs no shame or conscience??? Are they even human?

        • seeker 1.1.1.1

          Came across this as well today:

          http://www.stuff.co.nz/dominion-post/news/7189881/Schools-tell-Parata-why-league-tables-are-negative

          Marian Blandford made strong, valid points:

          “Bishop Viard College board chairwoman Marian Blackford told the minister she did not believe reporting based on national standards could help students’ self-esteem. ……….
          …….”We have worked hard for a lot of years to keep them all moving along. I see a lot of what is happening at the moment is going to be really unhelpful to their continuing to believe that they can achieve.”
          Others agreed and said achievement tables tended to play to the fears and prejudices people already had, and the data was not valid because it could not be compared effectively between schools. ”

          Hekia Parata “admitted the quality of the information was inconsistent but said the public expected to know what was happening.”

          So what is the point of making our children, their parents and our teachers suffer anxiety and stress over an unnecessary and poorly thought out policy in order to feed the ‘all important public’ inconsistent information that will give no real idea of what is happening at all ?
          What a complete waste of time and space this government and it’s soppy simplistic ideas are. ( By the way I think Junkey, as my God daughter in England named him yesterday, dreamed National Standards up.)

          • marsman 1.1.1.1.1

            ‘The public expected to know what was happening’ ???? If they can’t shove things through they fall back on ‘the public wants’ if they can shove things through they don’t give a stuff what the public wants.

            • seeker 1.1.1.1.1.1

              More distasteful ‘on behalf of national’ propaganda pushing the ‘the public wants’ meme from Audrey Young in the Herald today under the headline:
              ” Publish school results, says majority.”
              http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10816479

              Her ability to publish this disgraceful article as fact rather than opinion is because she can point to the outcomes of a simplistic and rather questionable Herald digi poll.and then weave her poison. Unfortunately it’s headline and resoning jeopardises our children, hence “disgraceful.”

        • prism 1.1.1.2

          seeker
          You have stated my feelings, and I think that of many others who aren’t comforted by immense clouds of justification, self-satisfactiion and prejudice about the bad things happening.

          I’m fond of analogies as a snapshot of a situation and I think NZ is like a person with psoriasis where the outer skin peels off constantly so exposing the essential body made fragile and open to infection by the process.

          • seeker 1.1.1.2.1

            We’ve certainly been infected Prism. I would really like to discover a cure for the ‘blind mind’ disease of nactionaluf voters and the party members themselves.Perhaps a vaccination of conscience containing ‘love thy neighbour awareness’ and antigreed could do the trick?

    • darkhorse 1.2

      It is worse than wrong headed and incompetent.  It is actively immoral.  These guys are doing this for the short term self-interest of a narrow sector of society.  

      Labour needs to be coming up with better ideas and new plan.  It needs to acknowledge that this mess was the spawn of its own loins – Roger Douglas and his cohort were the source of this evil code, it is current Labour’s legacy to right this wrong.  National are really only Roger-zombies they have no philosophy nor moral compass, they just consume the innocent until there are none left.

      http://howdaft.blogspot.co.nz/2012/06/selling-our-future-for-pennies.html

  2. Old Tony 2

    And still we prefer them to you lot! Why is that? Because you are so unbalanced in your commentary that you cannot acknowledge that these are special times both nationally (earthquake) and internationally (GFC).

    It is simply not credible to discuss the politics of NZ without that context and yet week after week this site produces the same drivel caricaturing the government as on some mad campaign to produce hardship for its own sake.

    To me the situation is quite simple. Balance the books and endure some difficulty along the way but position the country to determine its own future, or fail to do so and endure the same pain because of a catastrophic rise in interest rates but with a much-longer period of debt-induced recession as well.

    Anyone who thinks its possible to “magic” away austerity is in my view dreaming. I’m with the Germans!

    • DJL 2.1

      “position the country to determine its own future” absolutely. Some financial pain..no problem. Borrow billions and sell power genetators to pay for tax cuts…fucking stupid.

    • Ed 2.2

      In terms of the projected results of an election, it is still fairly finely balanced – and quite a way until the next election. Current polls put Labour/Green slightly ahead of National – particularly with both ACT and United Future possibly disappearing.

      Yes they are special times. Regarding the earthquake it has been clear for a long time that some would leave Christchurch, but that there was a need for new housing areas. I have been saddened at stories of skilled tradesmen leaving to find work in Queensland after their floods as they could not find work in Christchurch. Some coordination was needed, but Fletchers appear to be the only company around able to do many things – I know of architecture firms elsewhere in the country that are short of work but cannot get any work in Christchurch. A few small areas of temporary houses were built, but there do not seem be any new subdivisions away from the areas that were badly affected by the earthquakes. Yesterday we heard of a further 280 homes red-stickered – where are the suburban alternatives for the people in many of those houses to go? Where are the innovative designs for energy efficient, modern, low cost houses to enable people to stay in Christchurch. Instead we saw yesterday a story of landlords getting huge rents for poor condition houses due to shortages, and Brownlee saying it is better for people to freeze in cars than be allowed to squat in munted but still insulted and largely intact houses. (Many red-stickered houses are in areas where services cannot reliably be provided in future – the houses themselves are unlikely to fall over, but are either not worth repairing, or it appears not worth moving to more stable areas..

      Following similar tough times many years ago, we saw a building boom to accommodate soldiers returning from the war and the resulting baby-boom. Some of those developments were encouraged by government in facilitating the opening up of land. Now we have virtually no finance companies prepared to finance private development; the bank cartel is wary of high house prices and would need support for large developments; Kiwibank is not being funded to pick up any of this sort of financing.

      Meanwhile trades training has not been increased anywhere, but it seems to be no more active in Christchurch than it was before the earthquakes – classes are being filled, but changes in curriculum have disrupted some from completing programmes, and new apprenticeships are hard to find.

      New Zealand was in a very strong financial position at the start of the global problems – but taxation reductions for the wealthy were not the answer – they resulted in banks being repaid some poor loans to wealthy people, but did nothing for our economy; while increased GST did not help tourism (which was going to reduce due to the global position anyway) – that increase did however slow the domestic economy further, and with most of the population now having lower spending power, reductions in demand sent many companies broke or into a low-down where staff were laid off. Again only yesterday Cavalier Carpets announced significant job losses.

      The combined tax changes forced some borrowing (around $2 billion?) as they were not tax neutral as was promised, but our government borrowing has been much much higher – where has that money gone? Largely to pay for a larger government sector as a percentage of teh economy, with the growth areas being the increase in unemployed, increase in other beneficiaries, increase in social welfare problems, increase in prison spending (but not because of more prisoners; just to replace existing state prisons with a new private prison), more money to private schools (more than offsetting cutting out most adult education courses and cutting support for early childhood education), and road works while actual road usage either declines in some areas or grows very slowly (while starving local government of funds for cheaper public transport, where usage is growing).

      We did not need to balance the books, but that position is being squandered on frippery and crony capitalism, where many parts of the productive sector (and especially small companies) are struggling while friends of government are being actively assisted (large companies) or protected (polluting farmers, particularly dairy). Important though they are strategically, the Asset sales make very little difference to our overall economic position – they are just a distraction for continued good times for the very wealthy, the consultants and merchant bankers who do not generate the exports that we need to prosper. The government is busy with distractions – our education system did not need “National” standards, the Auckland Supercity has cost millions instead of delivering savings, the cycleway a joke. These have been wasted years and wasted opportunities – with the government even dreaming up problems as a distraction and finding someone to blame (were you worried by all the asylum seekers that were not arriving on our shores).

      I cannot identify one goal / objective promise made by this government that has been met. By their own measures, this government is a failure. It is correct for that failure to be criticised, but Labour and the Greens have gone further – they have suggested positive steps to help our country turn around and get people working productively again. Sadly the current government is not listening – their history is that they do not want to listen to business, to industry, to other politicians, to Maori, to churchs, to community groups – they shut down debate early, use urgency for non-urgent business, rather than discuss, explain, and improve proposed legislation. New Zealand deserves better

      • deuto 2.2.1

        +1. An excellent summary, Ed.

        I so wish this was published widely, such as in place of John Roughan’s sychophantic (yet again) article in today’s Herald. (Don’t usually bother reading his columns but was half asleep and clicked on it by mistake).

      • Old Tony 2.2.2

        Good response Ed. Much I agree with. But probably unhelpful to write a book boring everyone with a blow by blow rebuttal of the bits I don’t agree with.

      • Dv 2.2.3

        +1 Ed

      • Old Tony 2.2.4

        Oh I can’t help myself. I’ll just pick a few things to respond to.
        1. It is simply not true that NZ was in a strong financial position at the start of the GFC. There is an excellent article in one of the English newspapers (not the Guardian!) about how we love to emphasise one side only of Keynesianism. We want to spend our way out of bust cycles but do not want to save during booms. Labour is an example albeit much better than most. Kiwisaver was excellent and so too the Cullen fund. But entrenching higher costs through no-interest student loans, de facto extensions to ACC coverage and extending working for families etc created a dead-weight for the economy that was always going to cause trouble when the music stopped.
        2. We have no Finance companies because Labour lost the plot. I well remember reading the increasing concern being expressed by some commentators two years before the first one failed. A total failure of political and financial management.
        3. To draw a linkage between the government and increasing numbers of beneficiaries is to confirm one of my original points. We are not in a vacuum, the world economy has consequences and those include an impact on our economy.
        4. References to “distractions” and abuse of process etc are simply irrelevant. Every government does that. The manipulation of electoral law by Labour to its advantage stands as one of the most putrid examples of the depths to which governments can fall.

        That will do for now. Pretty random but something for you to be getting on with while I enjoy the glorious sunshine and feel thankful for where I live – despite it all!!!

        • Pascal's bookie 2.2.4.1

          Thanks OT, good comment and I hope you come back to it.

          You’re quite right that context is all important, so I’d like to add some that I think is relevant to some of your points.

          On Keynesianism, you are dead on that pollies too often avoid its logic in the good times. And while I note that you agree that Cullen wasn’t the worst in this regard, I think you absolutely need to consider the context.

          For I can’t remember how many budgets, the headlines leading up to the big day were “Will there be tax cuts”, and the article would quote Cullen saying that “No, there will not”. The day after budget, the headlines would be that no, there were no tax cuts. The opposition would be lamenting the lack of tax cuts and so on. It was a long running theme. Running surpluses came at a huge political cost to the government.

          But that’s not all the opposition was talking about. We should be more like Ireland, John Key was telling us. I seem to recall that Brash was quite taken by some of the exciting things he saw happening in the US finance industry. Deregulation on Wall St had allowed the banks to develop innovative ways to deal with risk, and thereby open up much more lending capabilities.

          In that political context, it’s not hard to imagine how moves to more heavily regulate our own finance sector would have gone down, even if he could point to a few cassandras saying we needed to do it.

          There are definatly things to learn by comparing a government to what an ideal government, in hindsight, might have done. But when judging them, it’s most important to compare them to what other potential governments at the time would have been doing.

          I’ve not seen any studies or thinkpieces about how we would have looked in 08 if Brash had won in 05 and put Key into the finance job. But what we know about what they were thinking in 05, I think an argument that we dodged a bullet wouldn’t be all that hard to make.

          cheers.

          • prism 2.2.4.1.1

            PB
            It was a long running theme. Running surpluses came at a huge political cost to the government.

            My feeling about Cullen was that he make a mistake by holding firm and playing the hard father looking after the nation’s finances and refusing any concessions on tax. People were complaining about being lifted to the higher tax bracket by inflation creep on their wages. Indexing the higher tax wage level would have been sensible, responding to public feeling without loss to the government coffers and still enabling the surpluses. People then couldn’t say that Labour was doing nothing for the people.

            • Pascal's bookie 2.2.4.1.1.1

              That was definately a part of it, but I doubt fixing it would have changed anything politically. Remember the “chewing gum tax cut”?

              It was called that before it was cancelled. The political problem wasn’t bracket creep, which only had a small effect on people’s actual take home pay, (unless they went from an average wage to a massive one, but if they did that they would still have seen a massive increase in take home pay). Bracket creep was a hook, it was the language used to cut through to voters. The political problem was the surplus. Running surpluses was what the right hated. They considered it theft; the idea being that any govt running a surplus was, by definition, collecting too much tax.

              They’ve changed their tune on that for the nonce, but it’s an idea that I guarantee will rear its head again, from the right, about a year after we return to surplus. The language they use to cut through will be different, but the idea that a surplus means overtaxation in some form or another will be there. Debt be dammed.

              • Draco T Bastard

                +1

                The RWNJs are consistent in their objection to the government actually managing the country well.

              • prism

                Thanks PB for the explanation.

                I am interested in how other small economies behave. Has there been an analysis of ones of similar size to us for instance, the Danish and other Sandinavians, other democracies looking at all the continents, that you can direct me to?

                Is this drive to skim the tax cream to the point of gluttony related to an imbalance between a very large farming and extractive sector compared to a smaller one of the secondary industries and brain driven ones? Are we locked in to the approach of a smirking self-congratulatory winner running with the ball for the try rather than a cohesive nation moving together? We keep getting governments that undo schemes set up by the previous one and following paths that cannot, looking at them with a practical eye, achieve the good outcomes forecast.

                I wonder if we are bound to become a broken country like a graph with a gap in it with the high rollers at the top and the low incomes separated from meaningful decision making. Perhaps all our ideas of being in the forefront of the thinking and clever nations choosing directions enabling us to overcome present difficulties and the climate problems to come, are just sterile dreams.

          • Old Tony 2.2.4.1.2

            Mea culpa. I was one of those who wanted tax cuts. I now accept that had they occurred they would have been stimulatory and would have created a worse boom than we actually had, and consequently a worse bust. However there is one other dimension to that. The re-imposition of the 39% tax rate after Labour came to power created the step difference between personal and other tax rates and contributed significantly to wealthier people taking up negative gearing in the property market. Westpac did some research which showed that a high proportion (I forget the precise figure) of the rise in house prices during the noughties was attributable to this. In hindsight maybe the tax levels across trusts, highest personal and companies should have been equalised and gone in tandem with Cullen’s parsimony.

            • mike e 2.2.4.1.2.1

              Old Tory have a capital gains tax set at the same rate as business tax!

              • Draco T Bastard

                Finally getting round to reading The Big Kahuna and I do like their idea of a flat rate capital tax that is applied to all capital and the way that it effectively includes a CGT.

            • Draco T Bastard 2.2.4.1.2.2

              In hindsight maybe the tax levels across trusts, highest personal and companies should have been equalised and gone in tandem with Cullen’s parsimony.

              When using a progressive tax scale then all entities (natural and legal) should be on that tax scale otherwise you get tax dodging. That seems so obvious it’s not funny and yet no government ever seemed to realise it.

        • Draco T Bastard 2.2.4.2

          4. References to “distractions” and abuse of process etc are simply irrelevant. Every government does that.

          Ah, no, only this government does that and even if other governments did it it still doesn’t excuse them.

          The manipulation of electoral law by Labour to its advantage stands as one of the most putrid examples of the depths to which governments can fall.

          You’re talking about the law that NACT called an attack on democracy and then reinstituted it afterwards.

        • mike e 2.2.4.3

          Old tory.
          same old bullshit sTory.
          1. after 9 years of tax cuts for the well off NZ families ended up being the poorest in the OECD
          and the economy had stagnated at less than 1% per annum right through the nineties except on three occasions 6 months out from the elections. Spreading a bit of money around the economy through trickle up rather than down works 3 times better with an average growth of over 3% under Cullen and Clark. The Howard govt followed the same policy with good results,funny that they were a conservative govt.
          2.Finance companies 2003 Clark govt tried to introduce more regulation in the finance sector the financial industry kicked up a stink and said they would self regulate. yeah right.
          3 spreading a bit of money around instead of a few well off helps your economy grow Keynesian.Australia did this and was the only western nation not to go into recession!
          4 Nactional has more skeletons in the closet

      • Ad 2.2.5

        Lovely writing Ed.

    • mike e 2.3

      Neo liberal bullshit Old Tory.
      Germany is not practising what bit preaches .
      with huge stimulus to German industry.
      Germany was the first country to breach the 3% budget debt cap.
      Most of the loans to Greece ended up as purchase of German product the biggest being huge armament purchases from the German arms industry

    • Draco T Bastard 2.4

      To me the situation is quite simple. Balance the books and endure some difficulty along the way but position the country to determine its own future…

      You mean the same pain that we went through in the 1980s,90s and 2000s and are now getting even more of? Yeah, we’re sick of the pain especially when it only ever seems to fall on the most vulnerable and the rich just seem to get richer.

    • seeker 2.5

      Even the Germans aren’t with the Germans anymore Old Tony- youhooturn
      http://www.3news.co.nz/Mario-Monte-gets-good-deal-out-of-Merkel/tabid/417/articleID/259659/Default.aspx

      “To me the situation is quite simple. Balance the books…”
      Simple ideas are not working. Surprise,surprise.

  3. Phil 3

    I’ve just read this mornings Herald, amazingly it really is as Old Tony would have us believe. The garden is exceptionally rosy, no really. Armstrong told me so.
    What a relief.

    • Anne 3.1

      And what’s more Phil, dumb Labour don’t even understand what Key and Co. are trying to do. After all, its all for our long term good (ours remember – not theirs) but Labour won’t admit it. Labour thinks that the reason the guvmint has been coming up with all these new fangled, contentious policies lately is because they were trying to distract the public’s attention away from the passing of the Asset Sales legislation. I mean, really. Talk about conspiracy theories. What’s more, these new fangled policies National are going to pursue are really Labour-type policies anyway. Armstrong says so.

  4. GLG 4

    This of course is what happens when policy decisions are made (by whom we have not yet acertained) and then eveidence gathered to support the decision after the fact. Actually the Ministers should be calling for advice first and (ha ha ha) make their decisions based on that.

  5. Ad 5

    Presuming to write history is a great weekend sport.

    National were never going to be good at rebuilding a city like Christchurch – they are never “nation builders.”

    Key could well get a political spear through the heart from Audit over interfering with the Convention Centre process, but barring that, I think we will evaluate him as a better Prime Minister than Bolger, and as good as Clark, but managing a weaker government than either of them.

    I agree with Armstrong this morning that previous Labour and National governments in the 1980s and 1990s were far bolder.

    Key will probably take the “finish the Treaty Settlements” crown.

    Rightly or wrongly he will take the award for “Didn’t turn NZ into Greece or Ireland during the Great Recession”.

    In terms of an aftertaste of wealth-generation, Clark’s years were the boom years, like Clinton’s, whereas Key’s just haven’t lifted us.

    Neither Clark nor Key were bold. Clark had a much stronger team, and it showed on the record.

    However in terms of evaluating whether one left the state stronger, Clark’s Labour administration is far superior. His common touch is astonishing, but just not enough to get up there even into the top half of our best.

    Would be tough to see this changing if Key got another term. His best is well behind him.

  6. happynz 6

    His common touch is astonishing

    Now, this is something I have found bewildering. Perhaps because I’m not someone who grew up in this country I am missing something that makes the average punter find John Key to be such a ‘nice’ man. My first impression of the man wasn’t positive. He struck me as a practitioner of double speak and evasiveness. His shoulder shrugging, sucking of air, nose wrinkling dismissal of, well, just everything shitty that happens under his watch and that he’s relaxed about it…astounding that he gets a free pass. How is it that he is seen as having a common touch? I don’t get it.

    • Draco T Bastard 6.1

      Damned if I know. I always had a similar reaction to him as you.

      • Anne 6.1.1

        Disliked him the first time he appeared on the telly. The eyes said it all. So shifty. And he seemed devoid of any real feeling or passion. A political sociopath in the making.

  7. Ed 7

    All confidence merchants can be plausible, pleasant and “nice”. John Key is well practiced at being “nice”, but is in reality a money trader out of his depth. He was chosen by central casting as having the right look, the right back story, and the Right aspirations. In another time he would have appealed to the pubic fascination with “Greed is Good”, but even National know that is an ideology best kept quiet.

    I really don’t think Key will be evaluated by history as being as good as Clarke, or even Bolger – yes he may happen to be there when some of the last treaty settlements are finished, but that is a mere accident of history – the political ‘crowns’ for that go back to ministers in a number of previous governments. As far as economic performance is concerned, I believe it will be seem as a ‘missed opportunities’ period, with hopefully the last of the ‘trickle down’ and ‘small government’ ideology – at least for this political cycle. In reality Key has grown government in a lot of wrong ways, but most importantly for New Zealand he has turned strength into weakness, and done nothing about structural issues such as private debt, increasing inequality (although to be fair that is an (unstated) aim of this government), growing poverty (linked to the previous), lack of R&D, a distorted basis for taxation, and a slackening of skills building

    Looking for Key’s best, it is hard to choose between the two election results. To an extent a 3 term government will always have trouble making a 4th term – his achievement was coming into government with no visible policies or platform that differentiated National from government except in terms of platitudes. The second election result may well be regarded as a greater achievement; in the face of failure in nearly every part of his government National successfully blamed others. While the result was much closer than most New Zealanders realise, to have held on having achieved no economic targets set by themselves, was a triumph of media manipulation, and spin over substance – despite the blunder over the Tea Cups. Being able to play he ‘left’ parties off against each other has been matched by effective takeovers of coalition parties – not being prepared to tolerate diversity will ultimately be a failure of courage that is becoming a key issue for New Zealanders.

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    5 days ago
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  • Address to the Treaty on the Prohibition of Nuclear Weapons First Meeting of States Party
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  • Pre-departure tests removed from June 20
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