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.
Increasingly having independent opinion in a mainstream media environment which mostly echo one another has become more important than ever, so if you value having an independent voice – please donate here.
If you can’t contribute but want to help, please always feel free to share our blogs on social media
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!
@ Wheel. Great stuff. Go you.
seymour’s a paid performer. He’s all piss and wind until the narrative goes off-script and when that happens his puff goes with him.
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.
Not sure where you got your economics degree from but if you think that’s a good outlook then you better start saving up for that bridge.
It has been described as more art than finance and
“Robert MacCulloch, Auckland University Professor of Macroeconomics, told Kerre Woodham that in his opinion, how Grant Robertson described the update didn’t add up.
He said that Robertson argued that the GDP was growing, and wages were going up faster than inflation and as a result kiwis should be feeling cost of living pressures less, which doesn’t feel right. ”
It doesn’t feel right because it full of “ifs”.
Perhaps you need to also look at what economists think of Nationals tax policy and how they are 530 million short. This doesn’t add up.
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!!
“..thanks to cleaver accounting tricks and and enormous amount of hope, we won’t have financial Armageddon”.
That is nothing to praise, accounting tricks and hope is not a plan nor is it tough decision-making.
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.
Firstly, Labour must denounce and renounce roger douglas’s neo-liberalism then asset strip then deport the four foreign owned banks. At gun point if necessary. After all, isn’t that why we have a military? To deter foreign enemies.
Gather together a multi-national panel of forensic accountants to go up our 14 multi-billionaires and the 3118 multi-millionaires like a rat up a drainpipe then employ a team of fiscal historians to delve into AO/NZ’s banking and investment sector spanning the last 87 years. Why 87 years? Because that was the dawn of the national party.
Wikipedia.
The National Party.
National formed in 1936 through amalgamation of conservative and liberal parties, Reform and United respectively, and subsequently became New Zealand’s second-oldest extant political party.[11] National’s predecessors had previously formed a coalition against the growing labour movement. National has governed for five periods during the 20th and 21st centuries, and has spent more time in government than any other New Zealand party.[12][13]
After the 1949 general election, Sidney Holland became the first prime minister from the National Party, and remained in office until 1957. Keith Holyoake succeeded Holland, and was defeated some months later at a general election by the Labour Party in 1957. Holyoake returned to office for a second period from 1960 to 1972. The party’s platform shifted from moderate economic liberalism to increased emphasis on state interventionism during Robert Muldoon’s National government from 1975 to 1984. In 1990, Jim Bolger formed another National government, which continued the radical free-market reforms initiated by the preceding Labour government. The party has since advocated free enterprise, reduction of taxes, and limited state regulation. Following the first MMP election in 1996, the National Party governed in a coalition with the populist New Zealand First Party. National Party leader Jenny Shipley became New Zealand’s first female prime minister in 1997; her government was defeated by a Labour-led coalition in 1999. ”
This is the bit I like the most:
“Jim Bolger formed another National government, which continued the radical free-market reforms initiated by the preceding Labour government. ”
Let me dwell on that one.
” … which continued the radical free-market reforms initiated by the preceding Labour government…”
Closer still.
“…initiated by the preceding Labour government…”
” …the preceding Labour government…” !
There you have it. The dawn of neo-liberalism being Roger douglas, at the behest of National slithered into Labour under the pretence of a friendship with Lange and dealt the fatal blow. Douglas Trojan Horse’d himself into Labours guts as a two term finance minister then from under the dull gaze of the News media’s glass eye he did his dirty work.
Behold! 14 multi-billionaires, 3118 multi-millionaires with personal NETT wealth in excess of $50 million each and now four foreign owned banks artificially inflating domestic housing stock just to shut us up, read slavery. We also have child poverty, the looming spectre of foreign ownership, homelessness and skyrocketing basic costs of living.
We’re being disempowered, enslaved and rendered impotent and fearful by hyper-riche people who own the politicians we trusted with our vote. That must stop.
Solution. Drugs. Fuck it. Get high as fuck and stay up there. Sober, ground level’s getting tedious. Also; Request that the governor general conduct a public Royal Commission of Inquiry and Cc in King Charles.
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.
Seymour and Luxon were claiming that Labour is economically incompetent and now are backtracking on their tax policies!
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.
Not sure where you got your economics degree from but if you think that’s a good outlook then you better start saving up for that bridge.
It has been described as more art than finance and
“Robert MacCulloch, Auckland University Professor of Macroeconomics, told Kerre Woodham that in his opinion, how Grant Robertson described the update didn’t add up.
He said that Robertson argued that the GDP was growing, and wages were going up faster than inflation and as a result kiwis should be feeling cost of living pressures less, which doesn’t feel right. ”
It doesn’t feel right because it full of “ifs”.
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 has saved the PREFU from a total collapse. ”
The immediate outlook is better than many believed it would be including myself when I commented about the result being really bad which would give the NACT NASTIES the excuse to implement an austerity program that would safeguard the entitled and burn everyone else below $100.000 a year.
Robertson has shown he can manage the neo liberal free market economy within its parameters but not deliver real reform or relief for so many starting with taxation to correct what has become a seriously imbalanced economy that serves only certain groups but not the majority of hard working people and our destitute retirees and there are many of them which will only increase in the years ahead for all of those locked out of the housing market find that they have no paid off asset to ensure they have some financial security when they have to live on what the state funded pension gives them.
Willis inspires no confidence at all and it would not surprise me that she has a picture of Ruth hanging in her office.
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
So Nat assumptions are under huge scrutiny on property tax which in the scheme of grunters debt burden is chicken feed, also let’s just ignore the blue sky assumptions by treasury in PREFU. Its all academic anyway, labour are busted flush, no one’s listening, people just want them gone, they simply now just trigger the average voter, not as bad as Jacinda but still bad enough
Comments are closed.