Prefu reveals state of the books: The next government faces tough economic trade-offs
Prudence is going to have to underpin the next Government’s approach towards managing the economy if getting the books back in surplus is a priority.
The Treasury’s latest set of economic forecasts show fulfilling pledges already committed to, without borrowing more or increasing taxes, will require the economy ticking along relatively well over the next few years.
Undertaking ambitious spending commitments, or responding to another crisis, would require serious trade-offs.
The Government’s books are in worse shape than they were in May, when Finance Minister Grant Robertson released the Budget and the Treasury published its last set of forecasts.
Grant has saved the PREFU from a total collapse.
China’s slow down has impacted revenue which has impacted tax take but thanks to cleaver accounting tricks and and enormous amount of hope, we won’t have financial armageddon.
Grant has studied the ship enough to make bold claims that the Right can’t undermine.
Yes Labour borrowed a huge amount of money to save 6000 lives over Covid, but the resilience saving those lives has meant the economy has stabilised.
It’s a remarkable achievement for Labour, but for many it will still feel like armageddon.
Food inflation is still ‘sticky’ we are very open to new global shockwaves and Banks are threatening another
Thanks to mass immigration, rebuilding from catastrophic climate change events and the Housing Ponzi scheme, the NZ Economy lives for another day.
1 more geopolitical shock, earthquake or climate event however and we are really fucked.
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What a classic, Seymour has quietly stated that they will have to reconsider the extent of their tax cuts. This is despite Perfu being better than anticipated. For months he has been banging on about the economy being dire and still offering his flat rate tax. Now it’s less dire and he’s back tracking? BS!
Erm so PREFU still shows $9b more of spending than at the budget required. It was predicted to be closer to $10b – $15b which is quite a wide range.
Nevertheless, Seymour’s plans were based on the numbers as at the budget. They are now updating them…. Just to be clear, PREFU is still worse than at the budget, it’s just ‘less worse’ than other indicators released between the budget and now had been suggesting. Not unreasonable to wait until you actually see the detail to act no? Or do you cancel and refix your homeloans whenever the economists change their estimates about future interest rates? lol
Not so quiet when he announced it on the TV3 News.
I think National was extremely foolish to ‘promise’ tax cuts before they saw the state of the accounts. As always, the Left has been an economic wrecking ball, with the national debt soaring to cover the disastrous effects of largely unnecessary lockdowns and all their brain fart policy failures.
Regardless of who wins next month, we face several years of austerity to claw back the debt.
Wheel, you are right on track.
Both National and Act have said that they will now have to go away and adjust their figures despite the PREFU figures actually being better than all the forecasts.
Going by National and Acts logic that would surely mean that they could now offer even bigger tax cuts.
The fact that Labour supported all those small and large businesses and saved 1000’s of lives over a 2 year period during the most serious worldwide pandemic in a century and have come out of it with such strong books is a huge credit to Grant Robinson’s stewardship.
The spin by National and Act and certain sections of the media, that Labour have not been good economic managers has just been blown well and truly out of the water!!
There was no good news yesterday. We might reach a surplus in 2027 under the current regime, might. All its done is empower austerity junkies. Robertson has failed and Labour look even bigger duds than they did already.
Worth noting that the predicted surplus is if the government spends no more in real terms than they have in the last budget. TBH I find that highly unlikely under either Labour or Nats lol
You’re floating. Don’t fuck it up.
Well, Seemore needs a billion for his new prisons and then he needs guards maybe he can use robots and automate everything. Now I probably shouldn’t be giving this sicko ideas.
Cant we just gate Epsom – National voters love that sort of shit.
Grant pretty much got us to this grim point and from what I’ve read and from what some economists are saying, Grants story of everything is just getting better is a fantasy. I see nothing saved here! In fact we are going ballistic on the sugar high of mass immigration, something Labour were against.
Things are not all kosher with the Prefu.
Interest servicing is now so high it is costing more than corrections, police and justice to service and is likely to balloon out to equate to the cost of the entire healthcare system by 2027.
Assuming the Govt pays interest at 2.5% (suspect it is higher than this??), that is around $15.50 for every person in NZ, every week for decades.
Our favourite economic blogger Bernard Hickey also has this to say:
“But the PREFU isn’t all ticketyboo. Yet again, Treasury does not include the very real liabilities being stored up for future generations in the form of higher public health, climate, education and housing spending because of the systematic and ongoing underinvestment in infrastructure, relative to population growth of 1.5% to 2.0% per year, which is being pursued by both sides of politics in an unacknowledged, undebated and unplanned-for way …
Both sides of politics are betting on higher migration and tax cuts to keep themselves in power, but by doing so are freezing in place an unsustainable structure of our tax system and Government that is starving the nation of investment. In essence, Labour and National are consuming today’s cash profits, rather than reinvesting surpluses to help the young deal with a more difficult future, let alone improve their health and wealth. It’s a selfish, short-sighted and fundamentally sociopathic approach to governing”.
Cant say I disagree.
And I forgot to mention inflation, ours is higher than most of our comparison countries and dropping much slower. It will continue to stay high fed by a steady stream of low value migrants who need housing and feeding.
PREFU – Prudence. Resile – Economic Fuck Up?
Dear Prudence – the Beatles, and we, beg…
“Dear Prudence”
Dear Prudence, won’t you come out to play?
Dear Prudence, greet the brand new day
The sun is up, the sky is blue
It’s beautiful and so are you
Dear Prudence, won’t you come out to play?
Dear Prudence, open up your eyes
Dear Prudence, see the sunny skies
The wind is low, the birds will sing
That you are part of everything
Dear Prudence, won’t you open up your eyes?
Dear Prudence, let me see you smile
Dear Prudence, like a little child
The clouds will be a daisy chain
So let me see you smile again
Dear Prudence, won’t you let me see you smile?
Look around round
Look around round round
Look around
https://www.azlyrics.com/lyrics/beatles/dearprudence.html
Grant Robinson is lying like a flatfish – have a listen to this guy.
https://www.iheart.com/podcast/1049-kerre-woodham-mornings-po-46787367/episode/robert-macculloch-auckland-university-professor-of-123096259/
Grant doesn’t write the prefu you gronk.
Is this the Grant you are talking about? Better get the name right and the identify too, where there are more of the same name,
Grant Murray Robertson (born 30 October 1971) is a New Zealand politician and member of the Labour Party who has served as the minister of finance since 2017 and served as the 19th deputy prime minister of New Zealand from 2020 to 2023. He has been the member of Parliament (MP) for Wellington Central since 2008.
Grant Robertson – Wikipedia Wikipedia
https://en.wikipedia.org › wiki › Grant_Robertson
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