This National, ACT and NZF Government can not keep pointing to the money the previous Government borrowed to protect us from a once in a century pandemic as the reason the Economy is in free fall!
This National, ACT and NZF Government decided to borrow more than Labour did for tax cuts we couldn’t afford creating a hollowed out Austerity Budget that cut the supply of constant infrastructure work and has led to an exodus of skilled workers to Australia.
The economic results are grim and damning…
“The data showed that the economy is growing more slowly than forecast just six months ago. Next year GDP growth was forecast to 1.7% at Budget, now its 0.5%. GDP is $20bn lower by 2028. Unemployment is higher in every year of the forecast – with 20,000 more people on jobseekers support by 2026. OBEGAL absent the new tricks of accounting – never comes back into surplus across the forecast period. Net Core Crown Debt increases across the forecast period by $58bn.
“The Budget Policy Statement signals that we are in for more cuts in the next few budgets. There is only $700m available at the next Budget to pay for everything outside health. That bakes in likely cuts to public investment and to the public sector workforce every year for the next few years. All to pay for the tax cuts that have now passed. The folly of that decision is now being uncovered.
…this isn’t Labour’s previous Covid spending, this is a direct result of the actions and virtue signal stunts of this Government!
Treasury’s Chief Economist Dominick Stephens warned yesterday the recession was worsening to be deeper than the one seen in the Global Financial Crisis and widening the Budget deficit. His comments echoed those of a group of 15 economists who yesterday called for a suspension to Government spending cuts, saying they weren’t needed and were creating a negative feedback loop of economic contraction.
Stephens couldn’t have been clearer:
Economic growth has proved slower than anticipated. Weaker economic growth means a smaller economy and less tax revenue, increasing the challenge for the Government in balancing its books. Treasury’s Chief Economist Dominick Stephens in a speech to the Chartered Accountants Australia and New Zealand (CAANZ) Annual Tax Conference.
…the austerity of this Government is causing public services to collapse because this Government hasn’t borrowed for public services, they’ve borrowed for tax cuts!
Economists call for end to Budget cuts
A group of economists, including former Treasury Chief Economist and former Productivity Commissioners, published a letter to PM Christopher Luxon this morning calling for an immediate suspension of budget cuts to avoid further worsening a recession they say is hollowing out businesses and conflicts with the Government’s goal of doubling exports.
They argued fiscal policy was needlessly worsening the recession, saying there was no clear rationale for projected budget cuts and little consideration about the short-term effects. They wrote:
For example, your Government’s cancellation of key infrastructure projects and sinking-lid cuts to the public service are powerful contributors to the current severe and prolonged recession. This is substantially worsening the contractionary effects on the economy of the Reserve Bank’s use of the Official Cash Rate to contain inflation.
It is important to recognise that even prior to cutting back expenditure, government consumption spending was close to 20% of GDP. This covered spending on health, education, defence, administration, justice, transport, and culture. In addition, deferrals and reductions in projected infrastructure spending has further reduced employment and intensified the economic recession.
There is ample evidence that government spending, including the necessary infrastructure and allied networks, has for many years fallen well short of that required for population growth and demographic changes. The Infrastructure Commission has stated that New Zealand has a $104 billion infrastructure gap at present – and that this picture will significantly worsen given current spending projections.
These accumulating shortfalls put the nation in a poor position to improve its long-run economic resilience and to prepare for future challenges. If nothing is changed now, this under-funding simply passes the burden of adjustments, and investment spending, to future generations.
Failure to correct this course will lead to higher economic scarring, with the costs borne by those with the least ability to pay, as has been demonstrated repeatedly in New Zealand’s history. It will also undermine the resilience of the private sector – particularly exporters – and will continue to constrain the capability of firms to scale up. Economists letter to PM Christopher Luxon
They argued a focus on government debt ignored the impacts on private sector debt and external debt and also lacked a clear rationale.
They argued the Government’s fiscal policy of trying to get public debt and the size of Government both under 30% of GDP also conflicted with its aim of doubling the value of exports over the next decade
They called for an urgent suspension of spending cuts and further delays in infrastructure funding, along with “a clear economic rationale for fiscal policy” in next year’s Budget.
All National have as economic philosophy is whatever the fuck their donor interests are, and their donors interests are all about deregulation so they can rape the environment without having to talk to da Maaaris.
This Austerity is literally killing us!
Look at the official annual Health Survey released last week for the last year under this National Government:
- One in four children (27.0 percent) lived in households where food ran out often or sometimes, up from 21.3 percent in 2022/23
- 10.7 percent of adults had an unmet need for professional help for their emotions, stress, mental health or substance use in 2023/24 – more than double the rate of 4.9 percent in 2016/17
- One in 11 adults (9.1 percent) and 8.2 percent of children aged 2-14 years ate the recommended amount of vegetables
- Fewer than half of adults (46.6 percent) met physical activity guidelines, ie at least 2.5 hours of moderate-intensity activity in the past week – down from 50.9 percent five years ago
- One in three adults (1.5 million) classified as obese, rising to nearly half of those living in the most deprived neighbourhoods
- Nearly half of adults (44.9 percent) reported unmet need for dental care due to cost. Rates were worse for Māori, Pacific, disabled, people living in the most deprived neighbourhoods and those aged 25-54 years
- One in four adults (25.7 percent) and one in five children (18.5 percent) reported that “time taken to get an appointment was too long” as a barrier to visiting the GP in the 12 months prior to the 2023/24 survey. This is higher than the previous year (21.2 percent for adults and 14.8 percent for children). In 2021/22, the figure was 11.6 percent.
This Government’s Austerity Agenda is killing New Zealand economically, culturally and literally.
Using small business morality to pimp for venal corporate profit, selling out the common good for donor interests and using divisive race baiting stunts to eclipse the economic collapse by using culture war revenge fantasies masquerading as social policy to keep everyone divided IS NOT a fucking solution!
We are a better people than this hateful anti-Māori, anti-Treaty, anti-worker, anti-renter, anti-beneficiary and anti-environment agenda.
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While these clowns keep chasing the deluded idea that growth will just keep happening we are fucked .Willis is borrowing 20 billion a year chasing that dream and the only thing she and treasury can point to is the hope that house prices rise to the crazy levels of a couple of years ago .Stanford is doing her bit by making it easier to employ imported labour by lowering what the now have to be paid and allowing other families to work for even lower wages
The picture paints 1000 words ,I dont give a fuck Im just trying to deliver a bigger scrap heap of kiwis than Ruth ,so I can say I delivered something while minister of misery creation .
The horse had bolted by the time this government had got in. What the last year has shown is just how much of the economy was dependent on government funding which even prior to this government was unsustainable.
Sadly there isn’t a short term fix outside of a re-starting of the ‘pump-and-dump’ immigration ponzi scheme favored by Clark and Key (and initially Ardern) and this as we know will only widen the current fault lines in the economy.
7% growth and companies makiing 66% bigger profits 3 years ago ,but clearly your dementia has let you for get that .And im sure they had growth 99% of their time in office .What have we got now after one year ?a disaster .
“7% growth and companies makiing 66% bigger profits 3 years ago”
>100 Billion of borrowed stimulus will do that for you. Alas like spending on a credit card there is only a finite amount you can do before reality hits. Think of the current economic condition as the hangover after the party. Government interest payments are now over $1 billion per annum. Not the debt – the interest for the debt.
Sure the current government’s approach to this is akin to a firefighter watching the house burn down but the previous government was the one that lit the match and then applied gasoline to make the fire larger.
It was not unsustainable at all. The coalition are the ones that have tanked the economy. A chunk of the reduced government spend was already built in by the last government. Willis has said this herself when it suits her. With no tax cut the books would be far better. To make matters worse this government has offered no solutions for issues like water infrastructure, then laughing are reducing local council democracy anyway! They are con artists
Nonsense, if the horse had bolted why the waste on tax cuts and landlord rebates whilst absolutely gutting the health system. No Frank you are so far wrong you are embarrassing.
Barbara Edmonds,
I note the problems you had with the Morning Report interview today.
The problem is, as Luxton said is depending on 30 yr old economics. So do journalists who are unaware of economic faults.
I studied economics in 1981 so I know about the errors in economic theology and how they become zealots. I say theology purposely as that what it is. Checking with AI, I have some confirmation.
There are numerous cults with some obvious cult leaders: Marx, Keynes, Friedman, Hayek, etc. Have you found any NZ economist who foresaw the GFC? The heterodox economists are shut out in the same way cults use babble, special language, cancelling cliches etc to silence critics. Government economists are harmful ideologues. The basic supply and demand criss-cross meme of neo-classical economists is false. AI failed to find any peer reviewed evidence of their graphs! Have you read “The Deficit Myth.”? It covers the lack of economics understanding of double-entry bookkeeping, the creation of credit by banks (increasing demand and money supply) in addition to the Government right to create its fiat currency to spend into the economy for the public good. (MMT, modern money theory should be MME modern money explanation) The revenge government by cutting everywhere is triggering economic disaster. Austerity leads to economic failure. It has been tested (accidental scientific testing) and proves it fails.
The fantasy that a ‘surplus’ reducing the ‘deficit’ is wrong. A surplus for the Government means a deficit for households, business, and local bodies (who must ‘balance the books’) and ‘live within their means’. The Government must spend the money it can create into the economy so there is money to circulate in the economy, provided there are resources to mobilise (otherwise inflation- Liebig’s Law applies).
Productivity? – is that labour, capital, resources, technical, or energy efficiency? Economists do not include energy in their economic analyses and do not understand the laws of thermodynamics (absolute like time). I have checked many books, textbooks, and internet courses. Nothing happens without an energy process going on. Hope you have some scientists , accountants, and mathematicians in your MPs.
Thank you. Like finding a diamond in the mud. There are so few economists who have any clue about macro economics and fiat currency operations that it is frightening. When I hear NZ economist Brad Olsen saying the government has to cut it’s spending because households and business were doing the same I cringe with embarrassment for the man. Never mind MMT it’s as though the well established understanding of counter cyclical deficit spending to support a weak economy never happened. It seems so obvious that if the largest employer and investor in the economy begins to withdraw then the economy will contract – the same as if a large business was cutting back.
Trying to understand MMT is difficult and challenging but once you do it’s very hard to unsee the bigger economic picture. But explaining MMT concepts to someone who has a neo classical understanding of economics is very painful – the government spends money into existence before it can be taxed. Taxes and government bonds do not fund government spending, they are inflation tools to take money out of the economy.
There is an excellent movie called ‘Finding the Money’ which explains these ideas really well – fiat currency operations and the nature of government deficits was well understood through WW2 and into the 70’s.
Deficits are not the problem provided there are sufficient resources and labor in the economy to absorb the spending without causing inflation.
https://www.youtube.com/watch?v=HDioPeH48b8
When you have Seymour reported in Stuff saying “The real accounts were worse under Labour than were published at the time.” It is glaringly obvious that they do not have a clue. While we criticise Robertson for only offering GST off fruit and veggies it was a major sign that the budget was tight yet Willis pushed on with tax cuts for those who didn’t need them and increased cost for those under financial pressure.
They fully deserve the crown for worst NZ government in my lifetime and to think that they have achieved it in about 1 year has me concerned about what the future holds.
Totally agree Bonnie. …an own goal by Seymour …and it shows that he does not really understand how things work… How can you have anyone in power who does not actually understand how government actually works.
It’s an ’emperor’s new clothes’ moment …It was not possible for Labour to hide anything as it is Treasury that that calculates and publishes the accounts … What a complete fool…but then again….we already knew that.
Yes … the future under them looks… terrible…there’s no coming back from this with them in control.
They are actually doubling down on what is already not working … super bright idea…
You couldn’t actually make this stuff up!!
Bonnie – the Crown needs to go to Muldoon. The country was about to default on a foreign loan and he wouldn’t cooperate with the then incoming labour government.
but it took him longer than a year these clowns failed within the first 100 days .
I was at uni when Muldoon was in charge and while he made a lot of mistakes starting with cancelling the Labour superannuation scheme and I always thought that his would be the worst government as GW says the current clowns have only had 12 months and are getting worse.
As sure as night follows day this was inevitable…
The Coalition of Chaos living up to its name…
They talked up a big game…spend millions of big donor money on marketing it….but it was, in the end, ,and always shall be, an illusion…amen..
Smoke and mirrors (aka…bullshit and bravado ) gets you 1 km down the road of a marathon steeple chase.They have fallen at the first hurdle…left sprawling eating dirt…there’s no coming back from this.
They never were fit enough or smart enough for this gig.
The Gucci shoes ,Amarni suits and corporate gobbledeegook talk hdon’t work in the real world.
Well conceived, properly thought through ,scientific based researched actions are what really works.
Short termism is a road to nowhere.
Luxon’s a real nowhere man
Living in his nowhere land
Making all his nowhere plans…for nobody
He’s as blind as he can be …just see’s what he want to see.
Thinks he’s just like you and me
What a shame for this country.
This is the result of out of control spending for decades.
Neither Labour nor National have the political will to sort the situation out.
Both parties are full of incompetent morons. The last two labour governments under Adern and Hipkins and this National government are of the same cloth. Focus group the shit out of policy and end up doing nothing.
The worst is when politicians resign and you finally get the truth out of them. They didn’t believe a word they said while in office.
Zero accountability…. It’s shit house.
The Wellington bureaucracy is still out of control. It needs to be slapped down. The only solution any of them have to a crisis is “more money for us”
The worst words spoken in this nation “the government should pay”
Simple solution, turn back the clock to before Douglas and his cronies ruined the economy in the first place (and arrest and try everyone involved for high treason).
Where are the media headlines calling for Willis and Luxon to be fired .Even when we had 7% growth you were saying Robertson was shit and he should be gone .No we are going down the sewer there is silence.
At least we are at the bottom of the world already and will soon have an economy to match .
The wicked witch of the west Nicorette Willicide is thinking that-
YES, she’s getting the economy back on track, the toll road track, the familiar well trodden track of artificial growth through inward immigration, and downward pressure on wages through lower increases to the minimum wage and imported cheap labour, and the inexorable rise in house prices to house these newcomer work units, that benefit the absentee landlord class like her boss Mr Capital Gain, while actual productivity is stagnating, and infrastructure such as the Interislander get run down, and council infrastructure is ignored because three waters is no more, and making everything so harsh that the most talented kiwis are now headed to Aus.
YES, it’s back on the same old National track, of kicking the can down the road when it comes to important issues like climate change or electricity generation, and tizzying up the figures when it comes to stats like surgery waiting lists, or even changing the stats when the actual stats don’t suit, or no longer even keeping the stats to keep us all in the dark.
YES she truly is the Atlas Minister that those who voted for her deserve. The only part the economy she’s boosted are foodbanks. Which makes her the front runner for the gong show polished turd award. How on earth will they not be a one term govt – easy, for there is no austerity when it comes to election year, with her creditcard in overdrive, she’ll simply bribe us by borrowing 15 $billion for another tax cut, or she’ll have a brainwave and borrow 50000 $billion to give us all a $million, and then declare NZ the banana republic, that she’s fast tracking us into!
Willis and her mates are clueless.
They are driven by some stupid notion that Debt has to be at some arbitrary percentage of GDP.
Why, can someone answer me that?
Why, when they currently allow Local Government to have debt at 287% of assets and are going to allow that to go to 500% to enable funding of 3 waters.
And this is after they have created council controlled organisations to shift debt off council books just like has happened with ACC and others like Kiwi Rail and PPS that built Transmission Gully. And we can all see where that is headed. They also have allowed a huge increase in personal debt by failing to invest in fairly priced housing and infrastructure. This failure alone has guaranteed that many households are servicing debt levels far higher than Willis thinks is sensible for government. Many households are carrying debt in excess of 10 times their income all based on a capital gain dream.
If councils and the CCOs and PPPs can carry that debt why can’t the Government, after all they are sovereign issuers of finance so their debt can be easily disposed of if required. They also don’t seem to get that by tanking the economy they naturally reduce their income.
Be like my business seemingly overloaded by debt so I cut production to save money hence reducing my ability to pay my debt because I have less products to sell.
In NZs case you could argue that the debt was caused by Covid and this is partly true.
I would argue that we do not have a major debt problem but a shortage of cash because money has been distributed unwisely by the creation of private power and Telco companies, the destruction of rail in favour of trucking, building of unnecessary roads and the tax cuts for the wealthy. There is no incentive for the average Joe to be anything but that as he or she knows they will not get a fair share of the increased profits they generate.
‘Anything Ruth could do, I can do better.
I can be meaner, much meaner than her.’
Personally, I think MK above, has a good point. It is high treason and sensible people remember that it didn’t work well in the past and it won’t work now.
What I don’t understand is, why it’s those who are already struggling who have to make the most sacrifices.
The already wealthy including Mr. I’m rich and I’m sorted, isn’t making any kind of cutbacks in his own household, I’m sure. Their Christmas will still go with a bang because they’re sorted.
No-one in that Coalition of Waste and Chaos will be needing non-existent food banks etc. They’re fine, they’re sorted!!!!! They all got tax cuts they didn’t need and didn’t even notice. Austerity never affects them.
So what, if a lot of govt. money was propping up the economy. By removing it they have un-propped the economy and many thousands of households as well. On top of that, many badly needed infrastructure projects have been abandoned which costs us even more in the long run.
They can be dishonest and cook the books as much as they like. We all know why they’re doing it and they look petty and childish for thinking people don’t notice. It doesn’t change the result. The result is still Chaos and Waste and no Dunedin hospital or ferries and everything deteriorating fast.
The Coalition of Waste, with Seymour’s extravagances going unchallenged. CoW, how fitting.
Nicola will be remembered for that alone. Allowing such grandiose waste while poor people suffer.
Half of New Zealanders receive more from the government than they pay in tax (https://www.thepost.co.nz/business/350235625/kiwi-tax-system-remunerates-bottom-half-new-research-shows). Obviously that cannot continue. Labour couldn’t fix it. It’s a bit too early to write National off. Sure people are desperate but the money tree has had enough. Left leaning economists can whinge all they like. There needs to be change.
and the top 10% received 2x the amount the ones that need it did .If the 10% were paying decent wages and not buying every house they can then the others you speak of would not need the government money would they .You need to look for what has caused that situation and without much effort you will find it is the result of greed which in turn creates poverty .You know the old saying for every action there is a reaction ,and in this case the reaction is low incomes and poverty .
Gordon, we need a capital gains tax that actually gets the wealthy and makes them pay. On the other hand that does not prevent the poor from making better choices and helping themselves. The current system picks on employees earning mid to high salaries while letting the poor and wealthy off with tax relief. They are sick of it.
Wrong. We’re going to take creeps like Peter Thiel who may or may not have done something to cause their special friends to meet an unfortunate end, and we’re going to (legally and with due process through democracy) shake all the money out of their pockets.
Hard for a country to get richer when most people are in jobs that produce little value.
Whoar!!!! isn’t the school ma’am just luverly! Meanwhile this:
https://norightturn.blogspot.com/2024/12/can-government-change-its-mind-on.html
Probably not. What I’d say unto Thee is that it’d most likely take a crowbar to separate it from it’s ego and pride
Let’s hope Pride comes before a Fall.
Still pushing their ideology in the face of this huge amount of evidence and opposition from much better informed people than themselves, says they are not fit to govern. Crowbars at the ready.
They now owe all of us a huge apology for being so inept and wantonly destructive.
Labour made mistakes although their handling of covid was exemplary.
At least they had a little humility and could admit they were wrong occasionally.
Robbo and chippie started the mess. And it’s got worse under this lot.
Robbo and Chippie were investing in New Zealand for the benefit of New Zealanders. These wreckers are just in it for their mates and fleecing taxpayers.
R&C didn’t get it right though. They followed the ideology of the demented instead of looking for pre-Rogered basic goals and successful methods ie State housing loans would have ensured people working hard for a sure outcome favourable to themselves, ie an affordable house. Something definitely positive in life; Labour minions helped us limp along the opposite highway.
Why isn’t NZ a high per capita wealth nation anymore?
National’s Economic Record on the road to ruin.
Muldoon scrapped Kirk’s sovereign wealth fund in 1975
Richardson destroyed people and businesses with a mother-of-all budgets
Key introduced over-immigration
Willis’s Mileism austerity is creating a depression.
The only 2025 bright spot could be friendly Aussie bankers demanding her head like The City Of London demanded Truss’s.
And
The local bakery is not going to bake and sell dozen lots of Xmas mince pies this year because “no-one has any money”, not even $20.
Merry Christmas.
https://www.nzherald.co.nz/nz/politics/attorney-general-writing-to-judicial-conduct-commissioner-over-judges-disruption-of-nz-first-function/YP4K53SRXBB4TBZJHCZISRRNDU/
Apparently National only likes free speech when its favorable to them.
Why would you look at stripping someone’s title for telling the truth.
The irony is this is a shit government and should be stripped given the carnage they have done.
That was frikken great eh! I grew up with Galler and have had Michael Reid and his wonderful spouse represent me (even though I might not completely agree with their politics or the company they keep).
I can’t stop laughing at Judith’s pearl clutching.
Some of those old-school Nats must be watching the destruction of their party in despair. McKinnons, Finlaysons, Spud Bolger and a few others. They really should be giving the current crop a rark up
As for Winnie, the worst mistake he ever made is, and was Shane Jones. Hopefully he’s drowning His sorrows in the lap of Jonny Walker and the Marlboro man.
When you lay on your back as Willis has clearly done for so long , you either have babies or you do nothing, Willis has done both.
Actually the New Zealand economy has been inexorably declining since the nineteen seventies. The fundamental reason is that New Zealand has chosen to remain politically and economically subordinate to the UK, US and Commonwealth of Australia. To that end it opened itself up to foreign capital and de-industrialized through the late twentieth century and into the twenty first. No one political party is to blame. The entire colonialist regime concurred in these policies, and the consequences for New Zealand capitalism are proving to be catastrophic. Past governments have been able to finesse their way out of the difficulties created by de-industrialization and unconditional surrender to the demands of foreign capital, but the current government has run out of room to maneuver. Therefore the economic decline can be expected to greatly accelerate during its term of office.
Masterly – from like a camera obscura position here you have summed up the spectrum of our past I think. Thanks GF I think you’re pretty right – as a Kiwi would say.
She knows exactly what she’s doing. She’s no idiot. It premeditated theft of wealth from the people and nation of New Zealand in response to the demands of their backers.
For the span of almost exactly a century, from the late nineteenth until the late twentieth, the colonialist state achieved remarkable feats of capital development. It built roads and railways, a telephone network, a public broadcasting system, schools, hospitals, civic buildings and military bases. It brought in farmland from the bush, planted exotic forests on a scale rarely seen in the world, commissioned saw mills, a pulp and paper mill, a steel mill and an oil refinery. It mined coal. It ran two airlines, a shipping company, a railway company, a fleet of buses, a tourist hotel company, a postal service, an insurance company and a bank.
Then one day, suddenly and quite unexpectedly for some, the state went into retirement. It alienated most of its accumulated assets in a reverse mortgage deal which was intended to see it right for the rest of its days, and to be fair it has spun that money out pretty well. A century of working followed by forty years of reasonably comfortable retirement. Not too bad really. But now the funds from the reverse mortgage are running low and the colonialist is getting a bit doddery. You could say that he seems to be losing his marbles. A younger guy is now making the running. We can call him Tangata Motu. He seems to be making better decisions than the old man. He has a way to go before he can match the political and economic achievements of his predecessor, but hey, it is still early days.
So what happened to New Zealand colonialism? Did it betray and then disinherit us? You could say that, but I prefer to think that it just got tired and threw in the towel. This tiredness afflicted the entire body of colonialism. The right and the left, National and Labour, the state and private capital. The collective unconscious of the entire colonialist regime was saying “We are not long for this world”. While the state was disposing of its assets, private capital was giving power of attorney to corporate raiders like Ron Brierley, Bruce Judge and Alan Gibbs. That didn’t work out too well because the attorneys were on to a fiddle, and the younger brother, colonial capital, saw its hard won wealth ebb away even faster than that of the older brother, the colonialist state. (Yes, that is right, despite what some Marxists may try to argue, in a colonial society the state is the older brother to capital).
So this is the big picture. It is not about National, ACT or New Zealand First. It is not about Labour or the Greens. It is about us and our relation to the colonialist entity which has ruled us for nearly two centuries but has now exhausted whatever capacity it once had to do good.
You keep spelling it out in a way that shouts truth GF. It is as good as listening to some 70’s music I’ve got or Queen hits that really hit the mark for now, if you listen to the words.
What about setting your ideas to music, perhaps more could take it in GF? Or what about it, theatresports, new-style immediate drama, tour up and down the country with GFs themes showing vignettes of Mum and Dad and young people of Kiwiland writhing in the grip of modernity with its thumb on our collective jugular.
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