English reluctant to give the surplus promise its last rites
Finance Minister Bill English has all but buried his pet policy of returning to surplus this year. Worse, the fall-back option of a surplus next year is also looking tough given the May 21 Budget will likely put it at around $500 million – well inside the fiscal danger zone.
If you get a group of NZers and put them in a room and ask them who runs the economy better, National or Labour, and by bewildering numbers, NZers regurgitate the line that National are the best managers of the economy.
I say bewilderingly because all the economic stats prove that Labour is better for the economy as a whole, where as National are great for corporations, monopolies and the already stinking rich.
National get away with it because they talk small business morality (independence, self-reliance etc etc) when in reality is National’s policies benefit crony capitalism, corporate welfare and tax cuts for the rich.
The entire financial system of NZ could melt down before the sleepy hobbits click that National’s interests are the rich and not them. Unfortunately the myth is so engrained that National can generate 7 deficits and miss their surplus and still no one will call them on it.
If it’s a rock star economy, the audience are deaf stoners who aren’t sure when the gig started or when it will finish.
Regarding the comment about how most New Zealanders automatically think National in the debate about whether Labour or National are the better managers of the economy.
I’ve given that a lot of thought, and I have concluded that it is because National talks about little else but money. National is all about money, they live, breath, think and sleep money. To National, everything has a price tag and a perceived monetary value. National’s entire philosophy is about how to make more and more money for me (not us). They know the price of everything and the value of nothing. If something cannot be assigned a monetary value then it has little significance in the National scheme of things. When you do little else but talk about money then you become identified with money and I think that is why the National-money association is so strong.
Of course, just being interested in money does not necessarily make you a good money manager, just as being interested in football does not necessarily make you a good player. But National has carefully crafted an enduring image for itself – that of the sober white businessmen in smart suits who you can trust. Be honest, who are you more likely to trust with your money? a- clean cut businessman in a smart suit who says all the right words and tells you what he will do for YOU or a person dressed casually in a t-shirt and track pants telling you that your money will go to a greater community good? I bet that nearly everyone would choose the first.
That’s the image that National have created in the public mind. It is not based on reality or truth, but that does not matter to National – it is all the mind, as long as people believe it, it does not have to be true.
And, of course, the myth has been amplified in the popular press, not just in New Zealand but pretty much all over the world. The MSM feed the myth because it protects their main source of revenue – advertising.
And we come to the main problem – like it or not, people generally believe what they read, because it is easier to believe than to disagree.
National are not better economic managers than Labour, New Zealand history is full of incidents of both parties making good decisions and bad decisions, often based on forces outside their control eg. depressions, oil shocks.
I hope the sleepy hobbits of the shire of New Zealand wake up one day and smell the coffee and start asking questions.
Yeah right!
I’ve often thought Bill English’s surplus was a ruse.
Remember when John Key said something vague about believing something very special for New Zealand may be just around the corner?
It’s always just around the corner, like Bill’s next surplus, because Tory govt’s are almost always in repair mode, claiming to fix the economic debacles of the previous government.
Take the UK Conservatives rhetoric: steady as she goes, nearly there, with one more term we can make certain of some unspecified economic windfall.
NZ National: steady as she goes, we’ve nearly cracked it! something special is just around the corner
If English actually posted a surplus would people think ‘oh good, we’re back in surplus, not doing too bad, maybe we can afford to have nice things again’ ? Like a Labour govt?
Point being, with National we always seem to be on the cusp of some economic utopia, but so far the stats don’t live up to the ‘rock-star’ hype do they?
Yes Norman . Quite right!
Also about 4 years ago Key said they were ‘ front footing ‘ things and they would soon be ‘aggressively’ becoming out of recession and into surplus.
Unfortunately the foot has gone straight into the mouth !
Quite right Norman – English’s surplus is Emperor’s New Clothes Spin-Doctoring stuff and which shell is the peanut under?
But at least the non-existent surplus takes a little attention off the fact that spin doctors have told Key to say he’d also play (‘casually) with men’s hair?
Sports heroes that once threw their tweets behind Mr Key on election day, must be itching to send out a few more tweets distancing themselves from the PM, with the new revelations today on stuff.co.nz
Asked if he would have done it to a man, he responded: “I could have.”
Getting Judith Collins back into cabinet as soon as possible, is the best way that Key can reassure female voters that he bears no grudges towards women, especially after the way that the Honourable Judith Collins was treated last year.
“Getting Judith Collins back into cabinet as soon as possible, is the best way that Key can reassure female voters that he bears no grudges towards women,”
Somehow, I am not reassured.
Like gaining Paula Bennett’s attack pitbull, really.
Or, is that the best they can offer?
Hi Martyn.
“If it’s a rock star economy, the audience are deaf stoners who aren’t sure when the gig started or when it will finish.”
Well conscripted choice of words that Don McLean could have fashioned it into “Bye Bye – American Pie,”… and the music died.
Bye Bye Mr rock star man,
the audience are gone,
the economy has died,
and this will be the day that it died.
Hay CG
Rock Star Economy???
The management is ripping off the band and there are no general admission tickets to the gig, corporate boxes only dude…
Actually neither of them are much good. Cullen was competent – the only one in the last forty years who was. But no-one is doing the things a sensible government concerned with our long term best interests would.
Economics has been a convenient rhetoric – but NZ’s economic position continues to deteriorate as false growth – immigration boosts to notional GDP, and real estate inflation displaces productive activity. NZ needs to look at Zimbabwe – that’s how prosperous we’re going to be if we leave these muffins in control.
Didn’t the opposition (Cunliffe/Parker) point out to Key that selling our assets leaves us all with no future crown income stream from them, and just for the 49% sale of Electricity generators that was at least $1-2 billion annually. ?????
It’s all coming home to roost now you idiots Mr English/Key, and now my mind is clear because we told you so!
How about the $300 million a week, you are still borrowing from overseas?
You are digging a hole for us now so that we can never escape from?
Latest Treasury Crown Debt report says our Crown debt is reaching almost 96 billion now as it has dramatically increased from just 8 billion in 2008.
Crown debt projected to peak at 6.7 per cent of GDP in 2007/08
Crown debt projected to peak at 26.5 per cent of GDP in 2014/15
The myth is a cornerstone of transNational’s identity and is preserved at all cost by the party, the media and the party faithful. For if the natural party of business (business being the astute handling of money and resources to produce profit) was indeed less competent in this endeavour than others it would be a severe threat to their legitimacy across the board.
This government is a triple threat. That’s why they find it so hard to reach surplus.
Here are the three:
1.Focus on big businesses exporting low value commodities to a small number of markets and then give tax cuts to the well off, while essentially ignoring both small to medium business and value-added manufacture. Allow rents to rise to add to the feeling of well-being for those who own houses in Auckland.
2. Control wages and benefits and reduce all government expenditure in the hope of achieving surplus.
3. Sell government assets to get more money in the hope that this will also help in achieving this.
Counter-intuitively, leaving less money with the poor and middle class while tying up ever larger amounts of cash in banks or off-shore provides nothing but a sinking lid of expenditure and consequently reduces income and income tax.
A dollar spent at the bottom level of the economy may go through many hands and increase activity and consequently tax revenue. Money spent at the top level will go off-shore, into the paper mills or, at best, into luxury goods which will be the same as either of the former destinations.
Similarly, low value exports, and the disposal of state assets, while enriching a very few, reduces the tax take and the liquidity in the system.
The way to a surplus is…….well maybe John English should just go and ask Michael Cullen.
1000% Nick,
Give yourself a medal, you have cracked Key culture now.
See now how could a mere low life currency trader who doesn’t deal in actual comodities but just speculation have ever known what someone like Michael Cullen knows?
Key couldn’t have an astute educated doctorate of finance Cullen had known and demonstrated?
Key made the biggest mistake of his life putting Michael Cullen in an outside post as Post office/Kiwi bank executive and now a Waitangi treaty negotiator.
Key should have snatched Dr Michael Cullen quickly when he took over in 2008 when the Crown Debt was only a poultry 8 Billion and placed him in the same job of finance Minister he had under the Clark Government as he proved to be the only effective Finance minister we ever had this century so far.
What a fool you are John Key.
As Forest Gump once noted so succinctly , and it can be related to Key , English, Joyce and Brownlee…. ” Stupid is … stupid does!”
It was ‘game over ‘ for this Government when they did their ridiculously short sighted ‘tax switch’, immediately snookering themselves behind the 8 ball and triggering a negative tax take from which they will never recover.
Then in desperation, compounded the problem by selling prize assets earning the taxpayer 19% per annum at fire sale prices.
I’ve looked and I don’t think there’s a word in the dictionary that actually describes this level of stupidity and incompetence!
the assumption that the national party doesn’t know what they are doing with the economy is wrong. they know exactly what they are doing, the words crony capitalism says it all. they are basically a bunch of crooks with no interest in the welfare of this country, just their own and their “friends” bank balances. except bill english, he actualy is stupid and is just doing what he’s told.
http://www.johnpemberton.co.nz/html/total_debt_.html
nz total debt is 509 billion dollars
nz households are 3rd most indebted in the world higher than the us its frighting
New Zealand’s debt clockl
Says it all about the great work Mr English and Mr Key are doing.
Spin and smoke and mirrors, and endless attacks on the poor, while talking about “supports” for those on benefits to get into work, that is what we get from Key and his gang.
Years ago they offered tax cuts favouring the high earners and wealthy, and on the other hand hit the poor and middle income earners with higher GST.
Now they are even denying dental cost advances to beneficiaries needing urgent emergency dental treatment!!! Beneficiaries are pressured into precarious jobs, zero hours are worked in at Parliament, and now the poor have to beg or borrow to have teeth treated!?
Yes, believe it or not, I could not believe it myself, when I stumbled across this Radio NZ National report, first mentioned on Morning Report today, 05 May 2015:
http://www.radionz.co.nz/national/programmes/morningreport/audio/201753044/advocate-warns-beneficiaries-could-be-going-to-loan-sharks
http://www.radionz.co.nz/news/national/272803/shrinking-winz-dental-loans
Dental costs are only covered up to 300 dollars per year, which does with some dentists not even cover an ordinary filling anymore! What if you need a root treatment, a crown or so? You may have to resort to having it pulled. Then poverty will show again, in beneficiaries and working poor not being able to afford any decent dental treatment.
This they have at WINZ already been doing since last year, and NOBODY mentioned it!
No wonder they “nearly” balanced their budget, with nasty little tricks like this. Their rich mates do well, can speculate on property, get more credit, expand portfolios and earn more than others earn working, doing just that.
Others cannot find affordable homes to rent or buy, and live in garages or caravans, now others will also have to live with gaps in their dentistry, more of the “others”, being many of us reading here.
FFS, get rid of these jerks in government, voters, wake up, and stop your fantasy daydream with FJK!
Thanks, Mike.
Looks like we’re heading back to the past when kids left school at fifteen, had all their teeth out before they were twenty one, and smiled at the world through false teeth. Cheaper than going to the dentist.
Do we have anyone at all in Parliament who we can count on to both oppose and get these issues out beyond the Beneficiaries Advocacy groups?
Are Sue Bradford and the Auckland advocacy group still speaking out and battling – or are matters too immediate and grim for dental care to be prioritised over roofs over heads and food in bellies?
I regret this, but I have to retract from my earlier comment!
MSD’s OIA department seems to be in utter chaos, as they released “incomplete” information. They misinformed Radio NZ (which I bet was NOT the first time), and have not even publicly announced that the report was incorrect, due to them providing wrong information themselves. They only informed a few inquiring persons.
So they simply leave the the public with the impression, that now advances for emergency dental care are no longer available, which serves their purpose of achieving more cost savings.
Jan Logie wrote this yesterday, explaining the mess, and also offering the true OIA info by way of a downloadable PDF:
https://blog.greens.org.nz/2015/05/06/oia-chaos-in-the-ministry-of-social-development/
The surplus is a ruse, everything National does is a ruse to distract from the truth of what’s happening. What about the sale of those state houses going to a company in Tamaki that’s appeared out of nowhere. And then we find out Bill English and Nick Smith, both National MP’s, are shareholders of 29% to this company, along with the Auckland City Council holding 41% of shares in the company. So basically, Bill English has sold 2800 state units to himself and Nick Smith, as well as the Auckland City Council, as a means to make profit from obviously. I wonder if this could also explain the now out of control price rises for housing in Auckland?
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