OnPoint by Keith Ng

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OnPoint: Budget 2011: Now with 70% less wordiness!

45 Responses

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  • Sacha, in reply to giovanni tiso,

    I'm not expecting socialism any time soon

    Ak • Since May 2008 • 19745 posts Report

  • giovanni tiso, in reply to Sacha,

    I'm not expecting socialism any time soon

    There are about a thousand discrete steps between "yes, the Tories are right that we need to cut spending, but here are some tax credits for R&D" and "socialism".

    Wellington • Since Jun 2007 • 7473 posts Report

  • Kumara Republic, in reply to Ana Simkiss,

    But my question is this: isn't it private debt that NZ ought to be worried about? as I understand it private offshore debt has been the concern of the ratings agencies, and our government debt is not very alarming in an international context.

    Indeed it is. But it's been deliberately misrepresented as public debt - hence the 'strategic deficit'. Hardly any bullshit has been called on the issue, and I suspect it's the case because the banks (mostly run from Oz) have too much to lose.

    The southernmost capital … • Since Nov 2006 • 5446 posts Report

  • Greg Dawson,

    Interesting article in the guardian on the results of slashing public spending in a recession (recently, as opposed to the all the earlier evidence).

    Currently I'm petrified of a repeat of the early 90s, but I can't see how we're going to dodge that bullet given the performance on both sides of the house.

    Wellington • Since Nov 2006 • 294 posts Report

  • Ian MacKay, in reply to Kumara Republic,

    Indeed it is. But it’s been deliberately misrepresented as public debt – hence the ‘strategic deficit’. Hardly any bullshit has been called on the issue, and I suspect it’s the case because the banks (mostly run from Oz) have too much to lose.

    Andrew R supplied me these figures. Not quite what the Government points out.
    At the end of last year debt was like this (from Reserve Bank figures):

    Household $183 billion 94% of nominal GDP

    Business $72 billion 37% of nominal GDP

    Agriculture $48 billion 25% of nominal GDP

    Government $56 billion 29% of nominal GDP

    Bleheim • Since Nov 2006 • 498 posts Report

  • Sacha, in reply to giovanni tiso,

    There are about a thousand discrete steps

    Thank goodness for MMP

    Ak • Since May 2008 • 19745 posts Report

  • Bart Janssen, in reply to Greg Dawson,

    Yup, dogma says, in a recession government spending should increase, decreasing spending causes an even bigger drop in taxes which leaves everone in the poo.

    Dublin's policy of ferocious cuts to public services, pay and welfare were the model to be emulated

    What I find sad is that in NZ we never seem willing to believe that what is found to be true in other countries - we have to learn it for ourselves :(.

    Auckland • Since Nov 2006 • 4461 posts Report

  • James Butler, in reply to Bart Janssen,

    What I find sad is that in NZ we never seem willing to believe that what is found to be true in other countries – we have to learn it for ourselves :(.

    We don't even seem to learn that way.

    Auckland • Since Jan 2009 • 856 posts Report

  • 81stcolumn, in reply to Sacha,

    I'm not expecting socialism any time soon

    I believe it is still used for bailing out broken banks and financiers.

    Nawthshaw • Since Nov 2006 • 790 posts Report

  • Greg Dawson, in reply to James Butler,

    We don’t even seem to learn that way.

    Well exactly. We've done this before, but it seems to be mostly forgotten what happened. The intervening boom has removed all memory of a time when things were not-so-great.

    Wellington • Since Nov 2006 • 294 posts Report

  • Matthew Poole, in reply to giovanni tiso,

    yes, the Tories are right that we need to cut spending

    Depends where one cuts the spending. Cutting spending on Roads of Dubious Significance in order to spend money on social policies is objectionable to you? You'd rather than the RODS and the social policies were funded?

    National have fucked the economy in a craptacular fashion. Economic incompetence on a grand scale. Even Craig doesn't dispute that English qualifies for an "F" for "Fucking useless" when it comes to how he's handled the economy - though the precise phrasing of the crimes is open for debate.
    Given that, Goff doesn't have a hell of a lot of wiggle room. National have been pre-loading debt, for one thing, so a lot of the borrowing has already occurred and must now be serviced. The best we can really hope for is a shuffling of spending priorities to try and minimise the damage and hopefully get the recovery going properly.

    Auckland • Since Mar 2007 • 4097 posts Report

  • Islander, in reply to Matthew Poole,

    National have fucked the economy in a craptacular fashion. Economic incompetence on a grand scale.

    Totally agree, and also with your last paragraph.

    Big O, Mahitahi, Te Wahi … • Since Feb 2007 • 5643 posts Report

  • bmk, in reply to giovanni tiso,

    So long as the other major party in Parliament fails to come up with coherent and recognisably different policies from National’s, it makes perfect sense for people to choose the leader who projects a more competent image

    Yes. That's why when they say this I just keep quiet.

    Since Jun 2010 • 327 posts Report

  • Sacha, in reply to 81stcolumn,

    I believe it is still used for bailing out broken banks and financiers.

    touche

    Ak • Since May 2008 • 19745 posts Report

  • Bart Janssen, in reply to Matthew Poole,

    pre-loading debt

    Worth noting debt in itself isn't bad. It's just that the use National made of that debt was ... well .. useless. Instead of using the debt to stimulate the economy they ... heck I'm not certain wtf they did with the money but it's gone.

    The Spanish example suggests that the only way out of this mess is to increase govt spending particularly in welfare areas but also in infrastructure projects. That may mean more debt, but may also mean some more taxes - but more taxation tends to depress economies. It won't be easy finding a balanced path.

    Note the Spanish got called all kinds of dipshits for their approach ... until it worked.

    Auckland • Since Nov 2006 • 4461 posts Report

  • Matthew Poole, in reply to Bart Janssen,

    heck I’m not certain wtf they did with the money but it’s gone.

    Some of it hasn't been spent. It's just sitting there, accumulating servicing costs. English said as much a couple of weeks ago, when he said that some of the borrowing recently has been far in excess of need in order to take advantage of the interest rates available.

    more taxation tends to depress economies

    It can't depress our economy much further than the slash'n'burn approach taken by National has already achieved, and if it's spent wisely on transfer payments to the lowest-income families and on training people for the Christchurch reconstruction then the growth effect should be fairly significant.

    One of the most infuriating aspects of how National have buggered things up royally is the absolute refusal to impose a levy for Christchurch. It would be accepted by most people, particularly if it had an entrenched expiry clause, and would deal with a reasonable chunk of the projected borrowing.

    Auckland • Since Mar 2007 • 4097 posts Report

  • Bart Janssen, in reply to Matthew Poole,

    absolute refusal to impose a levy

    Yeah I've seen various discussions of why it's a bad idea mostly centred around the cost in administration of such a one time levy.

    But to me the value of it is that it emphasizes the direct nature of how we give our money to the government. Most folks just pay tax blindly and then ask the government for money equally blindly never really connecting the two activities. But the levy would be crystal clear ... money comes from my salary and goes to CHCH.

    Hey what if all my taxes were so obvious?

    <conspiracy theory> The cynical side of me suspects that's the real reason the government don't like such a levy because it only leads to more direct levies/taxes which ultimately take control away from the powerbrokers </conspiracy theory>

    Auckland • Since Nov 2006 • 4461 posts Report

  • James Butler, in reply to Bart Janssen,

    <conspiracy theory> The cynical side of me suspects that’s the real reason the government don’t like such a levy because it only leads to more direct levies/taxes which ultimately take control away from the powerbrokers </conspiracy theory>

    Well exactly, it's one bit of revenue which they couldn't get away with turning into a top-end tax cut. I hope.

    Auckland • Since Jan 2009 • 856 posts Report

  • Matthew Poole, in reply to James Butler,

    Well exactly, it’s one bit of revenue which they couldn’t get away with turning into a top-end tax cut. I hope.

    I suspect their objection is more grounded in the fact that the Greens dared to suggest that such a levy could be rated progressively. And I have to say, a lot of people on Your Views got very bitchy about the whole "we're in this together" only being applied to people earning at least the median wage instead of being applied at the same rate to everyone who has any income whatsoever.

    Auckland • Since Mar 2007 • 4097 posts Report

  • Matthew Poole, in reply to Bart Janssen,

    it’s a bad idea mostly centred around the cost in administration of such a one time levy

    Yeah, nah, not buying that one. Yes it'll cost to administer, but it'll still raise a hell of a lot more money than it costs.

    Auckland • Since Mar 2007 • 4097 posts Report

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