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Prime Minister John Key is lowering expectations about measures to combat child poverty in this week’s budget.
Mr Key says there’ll be “some support” for those suffering material deprivation.
“But you’d appreciate that there’s a limited amount of resources that we’ve got in very tight financial conditions,” he told reporters on Monday.
Key has driven home the lack of “resources” (ie; money) in this year’s budget. On the Paul Henry show – that great bastion of critical thinking –
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– Key was his usual relaxed self as he casually informed his host;
“We don’t have a lot of money. But again what I’d say to you is that we already do a lot, but there could be more we could do.”
And just to drive home the point, again casually;
“When you go to a Budget, you don’t have a lot of cash – and we haven’t, because we’ve been wanting to get the books in order.”
Of course National doesn’t “have a lot of money“.
Remember the tax cuts that Key promised during the 2008 general election? That was the money National gave away in 2009 and 2010.
2008 was election year, and National’s aspiring leader, John Key, was pulling out all stops to win. His promises of tax cuts were the lynch-pin of National’s campaign strategy.
On 2 August 2008, National announced;
National will fast track a second round of tax cuts and is likely to increase borrowing to pay for some of its spending promises, the party’s leader John Key says.
But Mr Key said the borrowing would be for new infrastructure projects rather than National’s quicker and larger tax cuts which would be “hermetically sealed” from the debt programme.
The admission on borrowing comes as National faces growing calls to explain how it will pay for its promises, which include the larger faster tax cuts, a $1.5 billion broadband plan and a new prison in its first term.
On 26 September 2008, the Herald reported;
GDP shrank 0.2 per cent in the June quarter, confirming what everyone already knew – that the country is in recession. The smaller than expected June quarter decline followed a fall of 0.3 per cent in the three months to March, so the country now meets the common definition of recession: two consecutive quarters of economic contraction.
Undeterred by the country entering into recession, on 6 October 2008, Key promised;
John Key has defended his party’s planned program of tax cuts, after Treasury numbers released today showed the economic outlook has deteriorated badly since the May budget. The numbers have seen Treasury reducing its revenue forecasts and increasing its predictions of costs such as benefits. Cash deficits – the bottom line after all infrastructure funding and payments to the New Zealand Superannuation Fund are made – is predicted to blow out from around $3 billion a year to around $6 billion a year.
With a looming election only a month away, on 14 October 2008, National maintained it’s commitment to tax-cuts;
National will not slash spending at a time when people are looking to the government for a sense of security. In developing our economic management plan, we have concentrated on the fundamentals of the economy, and particularly on laying the foundations for a future increase in productivity.
National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing.
Over the next term of government the total cost of National’s personal tax cuts is balanced by the revenue savings from:
• Changes to KiwiSaver.
• Discontinuing the R&D tax credit.
• Replacing Labour’s proposed tax cuts.Overall, our fiscal policy does not result in any requirement for additional borrowing over the medium term.
National won the election on 8 November 2008.
By 6 March 2009, the Global Financial Crisis had crashed New Zealand’s economy;
Budget deficit worse than forecast; debt blows out by NZ$15.4 bln
The New Zealand government’s operating balance before gains and losses (OBEGAL) for the seven months ended January 31 was NZ$600 million, which was NZ$800 million below the pre-election update and NZ$300 million below December forecasts, Treasury said. Tax revenue and receipts during the period were NZ$500 million lower than the pre-election forecast. Meanwhile, Treasury also disclosed a NZ$15.4 billion rise in Gross Sovereign Issued Debt to NZ$45.4 billion (25.3% of GDP) from the pre-election forecast. This included fresh Reserve Bank bill issuance to mop up the liquidity from lending to the banks against securitised mortgages.
Despite falling tax revenue, and increased borrowing by the government, the tax cuts went ahead regardless. First, on 1 April 2009. The second trance on 1 October 2010.
The cost of these tax cuts was in the billions.
According to Key, the 2009 tax cuts cost the government $1 billion;
“…The tax cuts we have delivered today will inject an extra $1 billion into the economy over the coming year, thereby helping to stimulate the economy during this recession. More important, over the longer term these tax cuts will reward hard work and help to encourage people to invest in their own skills, in order to earn and keep more money.”
And according to information obtained from Parliamentary Library, and released by the Greens, the 2010 tax cuts cost the country an additional $2 billion;
The Green Party has today revealed that the National Government has so far had to borrow an additional $2 billion dollars to fund their 2010 tax cut package for upper income earners.
New information prepared for the Green Party by the Parliamentary Library show that the estimated lost tax revenues from National’s 2010 tax cut package are between $1.6–$2.2 billion. The lost revenue calculation includes company and personal income tax revenues offset by increases in GST.
All up, National gave away an estimated $3 billion – per year – in tax cuts.
That is why John Key has reneged on his promise – made on 22 September 2014, on TV3’s ‘Campbell Live‘ – that his third term would be spent combating child poverty.
No money.
Not only will National abandon any serious work to alleviate growing child poverty in this Country of Plenty, but it seems that the viability of community organisations doing invaluable work are threatened by chronic under-funding.
These community groups are often the ones on the front-line, picking up the pieces after government programmes are cut back or cancelled entirely. Even as our Brave New Free-Market World widens the wealth-gap even further, year after year.
Since National came to office in 2008, their cuts to community organisations has been systematic and dire.
From Women’s Refuge;
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Then it was the turn of Rape Crisis;
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To medical clinics serving our most vulnerable, in-need youth;
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A Radio NZ report on 19 May revealed that yet another community organisation has become the latest victim of National’s mania to starving community organisations of funding;
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Relationships Aotearoa is facing closure as Radio NZ outlined on 19 May;
Relationships Aotearoa, New Zealand’s largest provider of counselling services, says its funding has been cut by $4.8 million since 2012 and the situation is increasingly dire with no assurance of more government funding.
The organisation posted a $271,000 deficit for the year ended 30 June 2014.
[…]
Relationships Aotearoa spokesman John Hamilton said since 2012 its funding from government agency contracts had fallen by $4.8 million – a fall of about 37 percent from $13.1m to a forecast $8.2m.
“There’s been no grants or injections to the bottom line … there’s been no CPI increase for MSD services for seven years but there has been increasingly complex demands in reporting requirements.”
Mr Hamilton said the situation was increasingly dire and more than 120 staff and 60 contractors would potentially lose their jobs if went goes under.
A funding cut of $4.8 million…
A deficit last year of $271,000…
Staff cuts of 46…
When interviewed on Radio NZ’s Morning Report, Minister Anne Tolley’s outright denial of any cuts to Relationship Aotearoa’s funding – despite evidence presented to her – left seasoned journalist and interviewer, Guyon Espiner, frustrated with her moronic semantics game-playing;
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Tolley’s exercise in word-games beggars belief and if she thinks any intelligent person listening to her comments gave credence to her obvious avoidance-tactics, then she is delusional. There is a world of difference between Radio NZ’s critical audience – and those who stare stupified and lobotimised at ‘X Factor‘/’My Kitchen Rules‘/’The Block‘.
As Key lamented,
“We don’t have a lot of money. But again what I’d say to you is that we already do a lot, but there could be more we could do.”
“When you go to a Budget, you don’t have a lot of cash – and we haven’t, because we’ve been wanting to get the books in order.”
Though there is always cash for really important things that “matter to New Zealanders”.
Things like corporate welfare;
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Or like a flag referendum – $26 – $27 million;
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And even spending $6 million of taxpayer’s money to build a sheep farm for a Saudi millionaire;
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Key will always find money for things that matter to his government.
Child poverty just doesn’t happen to be one of them.
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References
NZCity News: PM lowering expectations on child poverty
NZCity News: Child poverty targeted in budget
TV3 News: Child poverty targeted in Budget – John Key
NZ Herald: Nats to borrow for other spending – but not tax cuts
NZ Herald: Recession confirmed – GDP falls
NZ Herald: Key – $30b deficit won’t stop Nats tax cuts
Jo Goodhew MP for Rangitata: Newsletter #41
Interest.co.nz: Budget deficit worse than forecast; debt blows out by NZ$15.4 bln
Parliament: Hansards – Tax Cuts – Implementation
Scoop media: Govt’s 2010 tax cuts costing $2 billion and counting
Dominion Post: Women’s Refuge cuts may lead to waiting lists
NZ Herald: Govt funding cuts reduce rape crisis support hours
TV1 News: ‘Devastating news for vulnerable Kiwis’ – Relationships Aotearoa struggling to stay afloat
Fairfax media: Government may let Relationships Aotearoa fold
TV1 News: Relationships Aotearoa hanging on at ‘awful’ 11th hour
Radio NZ: Counselling service rejects claim it’s badly run
Radio NZ – Morning Report: Min. Tolley responds to potential collapse of counselling (alt. link) (audio)
NZ Herald: PM defends $30m payout to Rio Tinto
NZ Herald: John Key defends cost of flag referendums
TV1 News: NZ Government gifts $6m to offended Saudi businessman
Other blogs
Local Bodies: Government Kills Relationships Aotearoa
Previous related blogposts
“It’s fundamentally a fairness issue”- Peter Dunne
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john campbell has done a lot to raise awareness of the issue of child poverty, and organized support for the children, key is instrumental in the attempt to shut down campbell live (by bailing out mediaworks with citizens money not keys personal money) , whats the message here? government money which is citizens money, has higher priorities than children, citizens organizing assistance for the children are a threat? so its ok to touch children pony tails, but not ok to care for them? wtf is he
He went into bat for hedgehogs last week too…
First they came for night classes ……
“My brain is dead” – says dear leader.
“I can’t remember” is all I keep saying but why don’t people understand I am actually saying “my brain is dead”
Yes the cupboard is bare, and todays overnight dairy dropped again almost another 1%, so this will well and truly shut down any promised “Brighter future” that I (PM Key) used in the election promises, but I forgot to tell you I was lying then. Ha Ha.
http://www.actionstation.org.nz/emailmediaworks?utm_campaign=breaking_cl&utm_medium=email&utm_source=actionstation
Campbell live is under threat today as Mark Weldon is reportedly meeting either today or tomorrow to finalise the sacking of Campbell live so sign the petition and send it everywhere.
It’s not often we send two emails in one day, but this is urgent. MediaWorks are about to make a decision on the future of Campbell Live [1]. We’ve been told the decision could be made as soon as tomorrow.
We need to flood the inbox’s of Mark Jennings and Mark Weldon who are making the decision right now, and be loud and clear that we want them to commit to Campbell Live: http://www.actionstation.org.nz/emailmarkjennings
Mark Jennings is the head of news at TV3, and Mark Weldon is the head of MediaWorks. Collectively they have the power to save Campbell Live or see it go.
It’s come out that they are about to make the decision whether to cut Campbell Live or allow it to continue giving a voice to everyday Kiwis. Our overwhelming response to MediaWorks so far, with over 76,000 of us signing the petition to save Campbell Live, meant they delayed their review of the show. After waiting for the media attention to die down it seems they are hoping that they won’t have to deal with us demanding the show be saved.
We need one last demonstration of people power to demand they commit to John Campbell and his team for the long term, allowing them to continue telling our stories and holding our politicians accountable. Click here to send an email to Mark Jennings and Mark Weldon demanding they commit to Campbell Live.
The flag referendum and the Rio Tinto payment are and were a total waste of taxpayers money, and as you point out could be far better spent elsewhere. I disagree with you on the tax cuts, however. Tax cuts are used to stimulate a recessionary economy…putting more money in peoples pockets is pretty standard fair when an economic growth is slowing or reversing. Also, am I right in recalling that one round of tax cuts was to compensate for a rise in GST?
Tax cuts put money in people’s pockets…
A very temporary residence as every vital cost of living took off for the stratosphere straight after. (Petrol, electricity, public transport, rates and rents…)
The miserable pittance allowed by ‘tax cuts’ was eaten and exceeded very quickly. And the ongoing bludger tax of GST…
If the government really wanted to ‘help’ then a cut in GST (a tax of recent occurrence) to the original 10% would be helpful.
Tax cuts to stimulate the economy is one thing, Dave. Borrowing to fund those same cuts is another matter entirely. In effect we’re borrowing savings from other nations to put into the pockets of taxpayers here in NZ. If a left wing government had suggested such a thing, the Right would be up in arms, screaming “election bribes” paid by borrowing.
As for tax cuts compensating the rise in GST – no. Tax cuts benefitted the well-off.
The rise in GST impacted worse on low income families, who did not receive anything near the benefits that high-income earners did.
Brilliant summation Frank. I might be a tad picky but you forgot the handouts to Warner Bros and the Americas Cup!
One of the biggest groups of “losers” under this government’s slash and burn is the unemployed, with funding for programmes that provided community support to this group now almost non existent. So, whereas there once were courses and options for education and self improvement, now there is isolation, and exclusion. The benefits of these programmes were not just educational. They met a social need as well.
But, knowing what we now know about the Key gang and their lack of ethics, should we expect anything more from them?
Also frank,-
Also forgot was the massive bailouts of South Canterbury Finance, and the failed insurer AMI, also Solid energy, and Novapay to name a few more!!!!!
About a collective amount of perhaps a 7+Billion or more???
I remember reading a quote a while back that essentially said, the rich and the poor behave as badly as each other, the difference is that the rich have the resources to pick up the pieces afterwards. This in response to the idea that the poor are somehow morally weak or inferior.
Counselling is essential for some families. The rich can afford it, the poor can’t.
The Tax cuts in 2009 were not promised by National.
The Income Tax cuts in 2010 were accompanied by an increase in GST (which you continally fail to mention)
Thanks for reminding us about the increase in GST, Gosman. I guess they had to offset the tax cuts with something as well as all the borrowing. Fact is, GST impacts on the lower income earners more as they have little or no disposable income and so spend their entire income on essentials, of which GST is a now greater component.
You are incorrect, Gosman.
Quoting John Key, from his speech on 8 October 2008;
Source: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10536469
I have consistently referred to National’s increase of GST from 12.5% to 15%, as one of their (many) broken promises;
https://fmacskasy.wordpress.com/2015/03/27/that-was-then-this-is-now-27-john-key-on-gst/
https://fmacskasy.wordpress.com/2011/08/21/that-was-then-this-is-now-2/
Thank you for allowing me the opportunity to remind readers of Key’s mendacity and increasing lack of credibility.
Good summation of the Poor House Frank, which NZ has become over the past seven years. Sounds like a decaying, dying, drugged out to the max “rock star” economy to me!
But let’s not forget, there will always be plenty of money there for corporate welfare 🙁
Now where has that money gone from the asset sales, which were supposed to be the cure all for the nation’s economic and social ailments …. ?
Do you support the Government subsidising a private sector organisation to provide Relationship services?
I support the provision of the service.
After that is the usual muddle of bureaucracy and ticket clipping by state agencies and ‘private’ providers – neither of which can provide a sufficiency of service to meet the needs within a practical and effective timeframe.
They’re both useless.
Ah, but you didn’t mention the secret cupboard accessible only to National and their cronies. This cupboard contains magic cups that always appear to be full or overflowing, but when you take off your rose tinted spectacles you see nothing in them. Also plates of gold with tasty tempting treats which are brought out every three years and waved tantalisingly in front of voters before being put back in the cupboard for another three years.
Also in this cupboard is a hefty stack of magic cash bills. These are the ones they use in the old joke about how to double your money: take it out of your wallet and fold it in half. When they stay in the light too the picture of the Queen starts to resemble Mao Tse Tung.
Then there is the wizard’s robe. It works well as an invisibility cloak, it hides anything and anyone that National doesn’t want seen.
Also therein lies the magic hat. It is showing signs of wear and tear by now, having been used so often for dispelling rabbits on command, but there are a few bunnies left in it, to be sure.
Where is this magic cupboard that is never bare? I don’t know where it is but I know how to get there. Simply double tick National at elections and the cupboard will always be there for you, even if you don’t need it. If you don’t vote that way, then you will have to fight for scraps from the ordinary cupboard along with old mother Hubbard.
Nationals Tax cuts went to the rich …………….
The poor paid for them with the increase to GST …..
The Nats take from the poor to give to Sky City, Rio tinto and other flash crooks.
They do keep the booze cheap though …………. and protect roastbuster types.
An old bent Key has opened the door to a pretty ugly future …..
Here is the National strategy established after they won their first election:
1. Tell all government departments that they have to either cut their budget by 5% or increase revenue. Or both.
This is the lazy man’s cost cutting. Make it someone else’s problem so they will get blamed when they fail. It also pushed the police to redouble their revenue raising traffic policies as almost all their money goes on staff.
2. Try to bribe or please international players in the hope they will either like us and or trade with us, or not pick up their marbles and leave. (But not dare to ask them for much).
3. Pick winner (s), well there was only one they picked. Milk to China. Then sacrifice all else to encourage that. (And hope it doesn’t fail).
It was a great success. The damage they were doing to the environment and to infrastructure could be overlooked. These were happy days.
After the second win. Blow me down they chose the same strategy. The cuts were starting to hurt and to affect the efficiency and efficacy of services. Somehow, the majority of the population, themselves unaffected, decided all was well (for Jack).
But the rudderless ship was sailing on towards the shallows.
I suspect that it will be almost impossible to turn it around, now. The big recession is almost inevitable. Milk powder crashes, the exporting manufactured goods section, the export-substitution sectors emaciated, if they have even survived until now, and a house price bubble about to burst when the speculators see a collapse of the dollar on the horizon and the rush to get out becomes a flood.
At this point Labour will be re-elected.
Thanks for that.
The cupboard is far from bare when needed to fund military ventures and schmoozing up to mega-corporate and overseas interests. The cupboard is pretty bountiful when wanting to waste millions on a flag referendum that not many really care about. But the cupboard is bare when it comes time to fund what really needs the proper and genuine support and that’s the organizations that help those in need and programs that work instead of Nationals lame ineffective plans.
Privatize the management of social services and see what a disaster that will end up being. One screw up after another from a government out of control and out of touch with its people. Then we hear these idiots say — ” The NZ people want this and they want that ” — like they even come close to being aware of what we want. The majority of us citizens, did not vote Donkey Jonkey in nor do the majority of us want to pay for this flag referendum and salary hikes for the politicians. But the majority of us want an end to war and we want justice for all and fairness for all and to help out those who genuinely need the help. The majority of us do not want more war and for Donkey Jonkey to suck up to Saudi Arabia and the likes of the corporate owned terrorist Obama and his madness with Drones and helping his war profiteering buddies continue this insane perpetual war. Every child and grandmother in the middle east who is killed with a drone creates tons of terrorists. Who are the biggest terrorists in the world – The United States of America and John Key
is Obamas little lap dog. The National government are the biggest lot of arrogant elitist idiot brains in this country and they have no clue what is really going on outside their booze soaked lunches and waste of time biased and ineffective parliament Q & A sessions.
No wonder the good folks are so glad to get out of the same room with these rude and insulting white men with Joyce at the helm.
No – the cupboard is either full or empty depending on the crooks priorities and how quickly our sold out politicians genuflect when the greedy pro-TPPA and petro-oil and big pharma etc. corporations enter the room. Get your knees down on the floor.
Quick, bow down to your master and then tell the people of NZ and her rivers and her seas and her environment and the elderly and the disabled and the starving children that our cupboard is just too bare right now. Rock Star economy my a___.
The flag referendum had the support of the left.
The moon landings were fake
Dan – my regards to the people on your planet.
Oh Frank you gave me a laugh when I was depressed, so thanks this.
“Dan – my regards to the people on your planet.”
😉
No money left? Yeah right…
In spite of the presence here of right wing bean counters on a left wing blog who say otherwise (all the bloody time), money is not the issue.
Priorities are.
Your choice of priorities at present are absolutley disgusting and totally without morals or ethics. You look after your own at the expense of the down and out and deny that it is happening. You claim money is tight yet you spend unnecessarily on multi-national bailouts, foreign oil wars and flag referenda. It offends me greatly that you parade this garbage around as if it were a great accomplishment…
But the thing that offends me most is how many of you unethical fuckwits could vote this kind of peurile idiocy into power in the first place. By doing so you have become party to and accomplice of the evils that are now befalling all who live here.
Your selfish parsimony has created the poverty that exists here in NZ.
You can no longer call it ‘Godzone’; the other side has dibs on it…
Well said. I agree wholeheartedly.
Yes JS Bark,
While the Nat’s are busy closing down regional rail while spending big tax payers money on truck roads.
Yes their priorities are crap and very dangerous for us all and the future.
Poor old Espiner. Tolley TOLD him and TOLD him – obliquely. Silly old counselling service had to shove people off the books and ‘live within their means’ – not ask for more money.
It didn’t matter what he’s seen with his own eyes (the agency had lost funding) – the question really was – which programmes are being cut and how many people are going to be left desperate because the service they need has been axed?
And the numpty at counselling can stop trying to drive his remnant team into the ground to meet a burgeoning need. Pick the most-popular/acceptable to The Righteous and Virtuous of this great little nation of ours (aka National/ACT voters) and funding should be there. Unless it’s needed somewhere else for PR purposes.
Triage. It’s all about triage.
PS Those anti-spam questions are getting tougher for this maths struggler. I had to use my fingers! 😉
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