Time to suck it up you sleepy hobbits, Secret Treasury paper warns of Governments cost cutting agenda…
Treasury warning: Kiwis must accept lower quality public services to hit Government spending goal
The Government’s goal of reducing public spending as a share of the economy could require the public to “accept a lower level of public services provided in some functional categories”, or wholesale changes to the types of services offered, according to a previously secret Treasury paper.
This may involve “reducing access to health and education services” and an “implied reduction in their quality”.
Hitting the spending goal might also mean freezing inflation adjustments to things such as Working for Families, which would reduce the real incomes of more than 300,000 households receiving the tax credits.
The Government set itself a fiscal strategy goal to reduce “core Crown expenses towards 30% of GDP over time” from about 32.7% currently.
In December 2024, Treasury officials wrote a paper that probed what would need to happen to spending on public services in order to hit that goal. The department fought hard to stop the paper from being released.
In January the Herald requested a copy of the paper under the Official Information Act. This request was refused outright by Treasury.
The Herald appealed that decision to the Ombudsman, which saw a version of the paper released with extreme redactions.
The Herald continued to pursue the release of the paper with the Ombudsman.
On Friday afternoon, Treasury released the entire paper, with only minor redactions.
…The NZ Herald had to make several calls to the Ombudsman to release an un-redacted version of this – now why did the Government work so hard to hide this briefing?
Treasury warned that Hitting the spending goal might also mean freezing inflation adjustments to things such as Working for Families, which would reduce the real incomes of more than 300,000 households receiving the tax credits.
Many, many, many whanau depend and rely on those working for family tax credits, how would a real wage reduction there impact family?
Very, very, very badly!
The Government’s neoliberal 30% debt straightjacket would cause cascade failures to public services to the point that there would be a total downgrade of the entire public service!
Why on earth are we amputating the services that so many of us are reliant on for a narrow Libertarian view on debt?
How do we explain to whanau living in cars that we can’t do anything for them because the Milton Friedman Gleeclub is concerned about our GDP debt ratio?
The Right wing lie used to justify these debt levels is that a Government has to budget like a household, but the Government is not like a household at all because it can just make money – why are we underfunding our public services to the point of permanent downgrade?
Isn’t it time to pause and actually demand to know what the bloody hell is going on?
Surely you can’t still be so bitter post-Covid about vaccines and lockdowns to still support this ideologically extreme right wing Government?
How much more evidence do you need to see National’s extreme economic agenda is hurting you more than Jacinda ever did?
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Excellent article. Every time Kiwi voters choose tax cuts the revenue available to government for redistributive public services contracts and undermines current and forward looking investment.
This is something we as an electorate have chosen – every tax cut comes with commensurate cuts to public services. That’s the explicit agreement we make.
It is very much about the ‘sorted’ (the older aged middle class) protecting their own incomes by ensuring that the next generation get as little as possible from a well funded and future facing public services.
Treasury really are a traitorous bunch.
Time for Labour and NZCTU to start speaking out, if Chippy won’t do it-replace him!-pronto.
If our government have to budget like a household how come our PM spent 44 thousand on a helicopter ride for his tik tok show
And why gifts to landlords as they were never going to stimulate the economy with the trickle down effect. Once again another election bribe.
The capitalists and their government are certainly trying to make working people pay for the crisis of their system, but there’s one solution proffered here that wouldn’t work.
” …but the Government is not like a household at all because it can just make money.”
If only this was true, capitalism’s problems would be largely over. But unfortunately it’s not. That’s the lesson of the 1970s. If the government creates too much paper money in an attempt to stave off recession, the money capitalists begin to lose confidence in the currency and move into gold, causing the currency to depreciate against gold, accelerating inflation. Interest rates, which the government thought they could lower by increasing the money supply, rise as the money capitalists seek compensation for the lower value of their money holdings. There’s no incentive for the capitalists to invest in production, so you get the worst of both worlds – stagnation.
The price of gold has doubled in the past two years, from $1800 an oz. to $3,600. We have not seen such a steep and persistent rise since the 1970s. That was one reason for the conflict between Adrian Orr, the now-ex head of the Reserve Bank, and Luxon and Willis, the same conflict that Jay Powell, the head of the Federal Reserve in the U.S., is having with Trump. The politicians want a sugar fix for the economy through a looser monetary policy, but the central bankers are resisting, because they have not completely forgotten the lessons of the 1970s.
Can I correct myself.I should have written “ …the worst of both worlds, stagflation”, not “stagnation.”
Just out of interest, assuming household income is equivalent to GDP, assuming a household has a mortgage what is its debt to GDP ratio? The answer to that question shows the nonsense of trying to run a country like a household. The theory behind the debt to GDP ratio is that higher government spending ‘crowds out’ the private sector. Hence they are meant to take over when the government downsizes and lays off thousands of people. Unlike that theory which has been proven false many times over, there is another one which advocates the same or higher government spending during a recession so that it carries businesses through the down turn. Guess which one we are trying?
And if every house hold only had 30% debt the country would be booming .Instead the average house hold as 148% debt to income .$540 billion house hold debt =15 billion in interest going off shore yearly
Yes, Gordon because some stupid people brought houses when they were overpriced (FOMO) instead of waiting like others, now they are suffering. And too many NZers put everything on their credit card instead of living within their means. Some NZers need to stop being the Joneses.
Why aren’t these secretive little Treasury grey suits locked up for blatant abuse of the OIA which is one of the few safeguards we have any more to hold the government and public officials to account.
Or even worse, was it a minister who ordered them to refuse and then redact public documents.
Kiwis need to wake up sure but one of the first things we need to understand is just how corrupt this government has become in response to kiwis being so easy to govern, according to Karl Popper.
And he wasn’t being complimentary.
Why aren’t people calling for Willis’s head. She is no finance minister and has fucked everything up at every turn. There can be no debate on that.
By comparison Robertson was a fucking genius!
Yeah they are running the nation like a business and the new company accountant lost a $1 billion on a deal on her first day in the job and they let her have a second day!
Yes, Grant she is a fucken liar and tells big porkies regularly she also seems to believe her own spin and talks herself up a like she is an expert.
Oh CIP, he had to impress Albanese somehow. We know his scintillating conversation wasn’t going to be enough.
He didn’t want to feel like the poor relation and let on that we are all just bottom-feeders, him too.
And feeding Albo a Pav, it was just a little dig Luxon wanted to get in.
It all yells INSECURE EGOTIST.
Yes, Joy he is very fake and to me it looked like he was showing off at our expense.
But Hang On????!!!! Doesn’t this government Claim that Everything will be All Fine and Dandy as Daffodils by the Summer Months in the Economy????!!!!
Are that group of Troughers on the NZ Taxpayers purse Trying to Find the Next Train of Economic/Growth Recovery that is supposed to be “Back on Track”???!!! Or Are they looking out for the Locomotive on Track to Bringing Inflation Emblazoned Upon its Front like an Out of Control Locomotive that in their Unreasonable Minds will Blame Someone Else But themselves for Their Pure Stupidity and Of Course Self Greed?????!!!!
At any time will this government Finally Do the Adult Thing and Hold ITSELF to Account instead of resorting to the Childish and Outdated Habit that is Renowned with National of Blaming Everyone Else but Themselves????!!! In other words Will They Finally Grow Balls and Accept they have made Mistakes and Must be Held Accountable for Their Actions????!!
I think when it comes to this current batch of government MPs they have Embarked on a National Party Titanic of Shifting the Deck Chairs(in cost cuttings)and taking the Great Leap Backwards whilst as per usual blaming others for THEIR mistakes.
And so no amount of starting into the distance, into a pair of binoculars and other forms of Economically Short Sightedness actions they do they Will Just Don’t Get It that Their actions and Obsession for Self Greed isn’t going to ‘Cut It’ with the NZ voters.
They have hit the Ice-berg and will hopefully sink beneath the waves of Their Very Own Corruption. Long may they linger in the Abyss.
Don’t worry they are saying growth, growth, growth.
Whoops, delivered a contracted economy in the most recent quarter.
Justme this CoC lot they don’t do apologies it’s not in their DNA
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