Archive

Posts Tagged ‘government debt’

St. Steven and the Holy Grail of Fiscal Responsibility

30 November 2017 3 comments

.

 

.

National’s Steven Joyce is up to his old tricks, pontificating and lecturing the new Coalition government on “fiscal correctness”

.

.

Which called for this timely reminder to the former Minister of Finance…

.

from: Frank Macskasy <fmacskasy@gmail.com>
to: NZ Herald <letters@herald.co.nz>
date: 22 November 2017
subject: Letter to the editor

.

The editor
NZ Herald

.

Former Finance Minister, Steven Joyce, rails against the Coalition government’s plans to introduce a regional fuel tax for Auckland, claiming;

“Because if they controlled their costs properly they’d be able to have the sort of money, the $150 million a year that a regional fuel tax would generate, they’d have that in surplus if they just ran the council properly.

… ‘hey get your costs under control’.” (Radio NZ: “Auckland Council could avoid fuel tax – National Party”)

This is the same minister whose previous government racked up $70 billion in debt during their nine years term – exacerbated by two unaffordable tax cuts in 2009 and 2010, and increasing debt by $2 billion each year. (Scoop media:  “Govt’s 2010 tax cuts costing $2 billion and counting”) In effect, National borrowed money – up to $450 million per week in 2009 – from offshore to put into the pockets of mostly top income earners.

Which made a mockery of John Key’s claim in August 2008 that National’s planned tax-cuts would be “hermetically sealed” from the rest of National massive borrowing plans. (NZ Herald: “Nats to borrow for other spending – but not tax cuts”)

Let’s hope the Auckland Council doesn’t follow National’s appalling record of “controlling their costs properly”. It would bankrupt the city.

.
-Frank Macskasy

[address and phone number supplied]

.

Each time the Nats open their mouths to carp about the Coalition’s reforms, it is a delight to remind them of their own pitiful track record over the last nine years. And for Steven Joyce, I offer his very own:

.

.

.

.

Postscript

It appears that Mr Joyce has taken offence at something I’ve said. The poor fragile flower has blocked me from his Twitter account;

.

 

.

It is highly reassuring to know that  I have been noticed by those in high office. And amusing to realise just how incredibly thin-skinned they are.

My work continues.

.

.

.

References

Radio NZ:  Auckland Council could avoid fuel tax – National Party

Scoop media:  Govt’s 2010 tax cuts costing $2 billion and counting

ODT:  Government now borrowing $450 million a week – claim

NZ Herald:  Nats to borrow for other spending – but not tax cuts

Twitter:  @stevenljoyce

Other blogs

Werewolf: The Myth of Steven Joyce

Previous related blogposts

Joyce, TPPA, and wine exports

Key & Joyce – competing with Paula Bennett for Hypocrites of the Year?

Steven Joyce – Hypocrite of the Week

Letter to the Editor – Steven Joyce, Hypocrite of the Year

Steven Joyce rails against low mortgage interest rates; claims higher interest rates “beneficial”

Dollars and sense – Joyce’s hypocrisy

.

.

.

.

This blogpost was first published on The Daily Blog on 25 November 2017.

.

.

= fs =

Advertisements

Observations on the 2017 Election campaign thus far… (wha)

11 September 2017 2 comments

.

.

Who paid for the Budget surplus?

.

The 2017 Pre-Election Fiscal Update (PREFU) revealed that the Nats had achieved a respectable $3.7 billion surplus – contrasting sharply  with the $1.6 billion forecasted surplus in the May 2017 Budget.

How did National achieve such a remarkable feat, despite reduced revenue from tax cuts in 2009 and 2010 and the re-build after the Christchurch and Kaikoura earthquakes?.

One doesn’t have to search far to find one possible answer where cuts were made to achieve their much-vaunted surplus;

.

.

.

.

.

.

.

.

.

.

The answer has been revealed in an editorial in the New Zealand Medical Journal last year;

New Zealand’s health budget has been declining for almost a decade and could signal health reforms akin to the sweeping changes of the 1990s, new research claims.

Six prominent industry health leaders and researchers contributed to the editorial in the latest edition of the New Zealand Medical Journal, after several months analysing Government documents and data.

Their analysis showed Government spending in health had steadily tracked downward since 2009, despite constant reassurances from health ministers that spending was increasing year-on-year.

The $16.1 billion 2016 Health Budget, announced on Thursday, was $170 million more than last year, including $124m for Pharmac, $96m for elective surgery and $39m for a new bowel screening programme.

However, the researchers’ analysis of Budget data from 2009-10 found the country’s health budget had fallen short of what was needed each year to cover new services, increasing costs and the Ministry of Health’s cost-weighted index, which accounted for population growth and ageing.

The accumulated “very conservative” shortfall over the five years to 2014-15 was estimated at $800 million, but could be double that, Canterbury Charity Hospital founder and editorial co-author Phil Bagshaw said.

Writing for Fairfax,  Ashleigh Stewart  pointed out;

Vote Health’s operational expenditure decreased from 6.32 per cent to 5.95 per cent as a proportion of GDP in the same five years.

Government expenditure was set to continue falling overall, with New Zealand ranked 26th out of OECD countries for spending as a proportion of GDP in 2013.

This meant further cuts for health spending, which was estimated to drop by about 4 per cent a year.

“The continued under-resourcing of our health services . . . is not owing to unaffordability; it is a policy decision to reduce government expenditure overall and introduce tax cuts,” the editorial said.

Anyone who  harbours illusions that tax cuts are beneficial should think twice. Especially if  they have to face  waiting months or years on hospital waiting lists for critical surgery, or turned away because the system is stretched to breaking point;

.

.

Then again, those like Bill English – who stands to gain the most from tax cuts – are also the most likely to be able to afford private health insurance.

National’s tax cuts should come clearly labelled;

.

.

Because they really are.

.

Steven Joyce – Pot. Kettle. Hypocrite.

.

In the Dominion Post on 5 September, Steven Joyce was ‘doubling down’ and digging his hole deeper, as he steadfastly maintained National’s spin (aka, lie) that Labour’s Budget had a “$11.7 billion hole” in it;

.

.

Joyce’s claims have since been rubbished by various economists – including, surprisingly, the right-wing think-tank, the NZ Initiative (formerly Business Roundtable);

.

Acknowledgement for above graphic: Newshub

.

More damning still was another remark Joyce made about Labour’s fictitious $11.7 billion “hole”;

“That level of spending and increased debt can only lead to one thing – higher interest rates for Kiwi mortgage holders.”

Which is risable as National has borrowed  eight times Joyce’s figure of $11.7 billion;

.

 

.

That’s right;

“Government annual operating expenditure in these forecasts increases from $77 billion to $90 billion over the next four years, which is sufficient for significant ongoing improvement in the provision of public services,” Mr Joyce says.

And interestingly, during National’s massive borrowing-spree, interest rates have remained low. Joyce’s contention that borrowing leads to higher interest rates for mortgage holders doesn’t seem to have happened (yet) – and National has borrowed like there’s no tomorrow.

By making up outright lies about Labour’s budgetary plans, Joyce has not only revealed himself as as deceptive  – but drawn unwanted attention to National’s own irresponsible borrowing over the last nine years.

Well done, Steven;

.

.

 

Peter Dunne. Ohariu. Coat-tailing.

.

If it hasn’t been said already, the seat of Ohariu has become irrelevant.  Whether Brett Hudson or Greg O’Connor wins is now academic. Once again, it is the Party Vote that counts.

When Dunne was standing, the coat-tailing provision made him a valuable asset to National. If Dunne breached the 1.2% threshold as well as winning Ohariu, he would’ve dragged in another MP off the United Future party list.

It is the same reason National offered patronage to David “H” Seymour to gift him Epsom: the possibility of an extra ACT MP via MMP’s coat-tailing rule.

This is why Judith Collins doubled-down and stubbornly refused to implement the Electoral Commission’s recommendations in 2013  to eliminate the coat-tailing provision.

The Green Party was thus correct to stand a candidate in Ohariu. Whilst the Greens are not seeking to win the electorate, they are chasing Party Votes – and Ohariu is another opportunity to remind voters that the Greens are vital for this country’s environmental well-being.

Simply put; to be healthy we need our Greens.

.

National’s fiscal hole?

.

Bill English’s announcement on 4 September on TV3’s Leader’s Debate that his party would raise 100,000 children out of poverty in the next three years appears to have been policy made-on-the-hoof.

Because it’s not a matter of simply raising incomes for poor families. As English pointed out in the Debate, it is far more complex, requiring support from an array of social services;

“There’s two things you need to do, one is lift incomes the other is get inside the very toxic mix of social issues which we know are family violence, criminal offending and long-term welfare dependency. We’ve got the best tools in the world now to support rising incomes with cracking the social problems.”

This comes on top of National’s other pledges to improve access for social services;

National have pledged 600,000 low-income New Zealanders will have access to $18 GP visits. 

National will also expand the community services card to an additional 350,000 people, with low incomes and high housing costs.

Alongside free GP visits for under 13s and the Very Low Cost Access (VLCA) scheme for GP visits, which were already in place, National’s new policy would mean more than half of New Zealanders would be eligible for either free or cheap doctors visits. 

Health Minister Jonathan Coleman also chucked in a few more lollies from Labour’s lolly-jar;

“As well as getting access to cheap GP visits, 350,000 more New Zealanders with lower incomes and high housing costs, will receive cheap prescriptions, free emergency dental care and free glasses for children through their new community services cards.”

Plus National’s $10.5  billion “Roads of National Significance”.  (Called that, because those Roads are Significant for National to be re-elected.)

The obvious question is: has Steven Joyce checked if  it’s all been costed?

Are there any lurking micro-Black Holes in National’s Budget?

Wouldn’t it be ironic if…?

.

.

.

References

Radio NZ:  Govt’s books show one-off $2bn boost

NBR:  Budget 2017 – Government forecast surpluses narrow on family package, capital spending

NZ Herald:  Report shows 170,000 people who need surgery are not on waiting list

Radio NZ:  Patients suffering because of surgery waits – surgeon

NZ Herald:  700 surgeries postponed as Auckland hospitals struggle to cope

Fairfax media:  Southern patients may be dying while waiting for surgery – Labour

Radio NZ:  Prostate cancer patients face wildly varying wait times

Radio NZ:  Southern DHB in a ‘slow motion train crash’

Scoop media:  280,000 New Zealanders waiting for surgery, wait times up

Fairfax media:  Thousands left off surgery waiting lists suffering indefinitely – study

Fairfax media:  Who is missing out on surgery? Government releases first figures of ‘phantom waiting list’

Fairfax media:  Researchers claim NZ health budget declining, publicly-funded surgery on way out

Fairfax media:  Busy Hamilton clinics turn away ambulances

Newsroom:  Election 2017 Live – Leaders clash in fiery debate

Dominion Post:  National accuses Labour of $11.7b spending plan error, Labour says National got it wrong

Mediaworks:  Economist consensus – there’s no $11.7b hole in Labour’s budget

National Party:  Pre-Election Fiscal Update 2017 (alt. link)

Fairfax media:   Government’s MMP review response slammed

Mediaworks:  Newshub Leaders Debate – Bill English commits to poverty target

Fairfax media:  National pledges $18 doctors visits for an extra 600,000 New Zealanders

Fairfax media:  National announce $10.5 billion roading plan

Previous related blogposts

Observations on the 2017 Election campaign thus far… (tahi)

Observations on the 2017 Election campaign thus far… (rua)

Observations on the 2017 Election campaign thus far… (toru)

.

.

.

.

This blogpost was first published on The Daily Blog on 6 September 2017.

.

.

= fs =

The Mendacities of Mr Key #3: tax cuts

2 March 2014 9 comments

.

john key lying

.

3. Tax cuts

Background

19 May 2008

In the bitterly contested lead-up to the 2008 general election, National promised three tax cuts, to be spread over three years.

These were prompted by the nine consecutive Budget surpluses that Labour’s Finance Minister, Michael Cullen, had posted between 2000 and 2008. The public perceived that the government had too much of our money and demanded tax cuts.

Cullen resisted, as his main priority was continuing to pay down billions in debt that Labour had inherited in late 1990s.

.

.

Key  and  National Party strategists heard the insistent  calls for tax cuts, and duly obliged – even though by November 2008, the global financial crisis had plunged the world into a recession, with only Australia and China escaping the worst effects.

In May 2008, Key promised voters tax cuts ‘‘North of $50‘‘.

April 2009

On 1 April 2009, National delivered the first of two rounds of tax cuts (a third round had been scrapped, as by then the recession had blown a hole in the government’s revenue).

This is what the 2009 tax cuts delivered.

.

tax-cuts-april-2009

.

Anyone earning under $40,000 received nothing. Not even close to “north of $50”.

October 2010

The following year, the second round of tax cuts was implemented,

.

Tax rates October 2010

.

Susie Nordqvist wrote in the Herald on 20 May 2010,

* Average income household – $24.71c per week better off

* Average wage worker – $15.91c per week better off

* Couple receiving New Zealand superannuation – $10.77c per week better off

* Professional property investor with 25 properties – $288.18c per week worse off

* Couple saving for their first home – $40.38c per week better off

* Domestic purposes beneficiary – $2.45c per week better off

* Minimum wage worker – $6.36c per week better off

* Student – $2.66c per week better off

* Business owner structuring income to claim for Working for Families – $153.03c per week worse off.

As the reader can easily determine, very few in the above group were receiving “north of $50”. When the rise in GST was taken into account, the actual real cut in  taxes for average workers’ and families was reduced even further.

The only tax bracket that received a tax cut “north of $50” were those earning around $80,000 or more. Such as government ministers. And John Key.

When you factor in the rise in GST from 12.5%  to 15% – even fewer got the much promised “north of $50”, except the wealthiest.

.

Key defends tax cuts for wealthy

.

Conclusions:

  1. Key had no choice but to cancel the third round of tax cuts (scheduled for 2011), and to reduce the amount on offer. The GFC and recession were biting into our economy so badly, that National was borrowing $450 million a week by the end of 2009. Adding the 2010 tax cuts into the mix eventually left this country with a $60 billion fiscal hole.
  2. Key knew that the tax cuts were unaffordable during the 2008 election campaign. The world was deeply mired in the global financial crisis and recessionary effects were beginning to hit economies around the world. To pursue the promised tax cuts was the height of irresponsibility.
  3. Key bought the election with unaffordable promises.
  4. Our debt will have to be re-paid. (Foreign creditors insist.)

Beware of politicians bearing promises and gifts. We will be the ones paying for it.

Charge: broken promise/deflection/half-truth/hypocrisy/outright lie/mis-information?

Verdict:  Outright Lie, Broken Promise

 

.

*

.

References

NZ Herald: Cullen – Tax cuts but strict conditions

Trading Economics:  New Zealand Government Debt To GDP

Dominion Post: Nats set for $50 tax cut trump

Otago Daily Times: Key says donate tax cuts to charity

NZ Herald: Budget 2010: What the tax cuts mean for you

NZ herald: Key defends tax cuts for wealthy

Parliament:  Tax System Changes—Impact on Operating Balance

Otago Daily Times: Government now borrowing $450 million a week – claim

Radio NZ:  English confirms national debt set to rise

Previous related blogposts

Labour: the Economic Record 2000 – 2008

The Mendacities of Mr Key #2: Secret Sources

.

*

.

Vote these traitors out

Above image acknowledgment: Francis Owen

.

.

= fs =

National prescribes bad medicine for the poor

.

Frank Macskasy Blog Frankly Speaking

.

National’s tax cuts are coming back to bite us firmly on our collective arses.

In April 2009 and October 2010,  National cut income tax and raised gst from 12.5% to 15%.  Key and English insisted that the tax cuts/gst rise were “fiscally neutral”.

Like so many of National’s statements, that “fiscal neutrality” turned out to be a fiction,

The Green Party has today revealed that the National Government has so far had to borrow an additional $2 billion dollars to fund their 2010 tax cut package for upper income earners.

New information prepared for the Green Party by the Parliamentary Library show that the estimated lost tax revenues from National’s 2010 tax cut package are between $1.6-$2.2 billion. The lost revenue calculation includes company and personal income tax revenues offset by increases in GST.

“The National Government said that their signature 2010 income tax cut package would be ‘fiscally neutral’ – paid for increased revenues from raising GST. That hasn’t happened. The net cost for tax cuts has been about $2 billion,” Green Party Co-leader Dr Russel Norman said today. “

See:   Govt’s 2010 tax cuts ‘costing $2 billion and counting’

As taxation revenue dropped,  National’s deficit has risen alarmingly,

The government took in $1.57 billion less tax than expected in the first nine months of the fiscal year, reflecting a tepid economy, Treasury figures show – reflecting what the Finance Minister says has been a ‘difficult year’.

The Crown took in $39.8 billion in tax in the nine months ended March 31, against a forecast in the Pre-election Economic and Fiscal Update estimate of $41.3 billion, according to the government’s financial statements. “

See:  Govt tax take down by $1.57 billion

Massive borrowings over the last three years has not staunched the bleeding of government revenue. Soon after the April 2009 taxcuts, government revenue had begun to drop,

The Crown accounts for the year to June, released yesterday, showed an all-up deficit of $10.5 billion, compared with a surplus of $2.4 billion the previous year.

The state’s core operations – such as health, education and defence – recorded a deficit of $4.5 billion as tax revenues fell while spending grew. “

See:  $250 million: What our Govt borrows a week

After the October 2010 tax cuts, that borrowing had risen, and by mid-2011 stood at around $380 million a week,

”  The Government is borrowing $380 million a week and next week’s budget will carry a record deficit of about $16 billion, Parliament was told today.

Finance Minister Bill English said the Government’s financial position had deteriorated “significantly” since late 2008.

“The pre-election update in 2008 forecast that the deficit for this year would be $2.4 billion,” he said.

“It’s much more likely to be around $15b or $16b.”

That level of deficit, as NZPA has previously reported, will be the highest in New Zealand’s history and Mr English confirmed that today.  “

See:  Govt borrowing $380m a week

See:  Government debt rises to $71.6 billion

History lesson over.

Test: what can we deduce from tax-cuts – especially made during a recession?

  1. Government revenue will fall.
  2. Government will have to borrow to make up the short-fall.
  3. Goverment will have to either increase taxes or cut services and/or increase User Pays charges for the public.
  4. All of the above.
  5. We don’t have to do anything, because National is a fabulous fiscal manager;  John Key waves his hands; and money magically falls from the sky.

If you, the reader picked anything except Option 4 – feel free to re-read the above and go do some further research on Basic Economics 101.

If you picked Option 5, then you are a  hopelessly committed National supporter.  Seek professional help – stat.

The fact of the matter is that none of the tax-cuts were ever affordable.

Common sense will tell even the most die-hard National groupie that if you reduce revenue, then one  has to cut expenditure and services; borrow to make up the shortfall; raise  user-charges; or all three. There ain’t no other way.

National has borrowed billions – that much is crystal clear from media reporting using  Treasury data.

What the New Zealand public also need to understand is that National will also be cutting expenditure and services and raising user-charges.

National has begun a programme of increasing user-pays charge for,

  • Prescription Charges

Prescription charges will increase from $3 an item to $5 an item in next week’s Budget, as the Government moves to offset the cost of extra health spending in the “zero Budget”.

The new charge will cover up to a maximum of 20 items from January 1 next year, raising $20m in the first year and $40m after that. “

See:  Prescription cost to rise to help pay for Budget

  • Raising the compulsory student loan repayment rate and cutting student allowances,

Up to 5000 students will be affected by the National-led Government’s cut to student allowances, Tertiary Education Minister Steven Joyce revealed this afternoon.  The Government announced a raft of changes to student loan and allowance schemes last week, including a stop to allowances after 200 weeks. “

See: Allowance cuts to affect up to 5000 students

”  The changes would see more than 500,000 people forced to pay back their student loans more quickly and people studying for more than four years would no longer be able to claim an allowance…

… The repayment rate for loans will be increased to 12 per cent from 10 per cent for any earnings over $19,084.

See:  Outrage at student loan changes

  • Government has cut back on the state sector, sacking 2,500 employees, including  60 frontline bio-security border staff.

The cost to our economy, should the Queensland fruit fly take hold, would be in the hundreds of millions. And if foot and mouth ever took hold, the cost to our economy could be in the order of  $10 billion over a two year period!  National is gambling with our economy, simply for the sake of a few million dollars.

Pests such as the Varroa mite and the Psa virus have already taken hold in our environment. The latter, the Psa virus, could impact on our $1.5 billion kiwifruit export industry.

See:  Kiwifruit disease Psa explained

See:  2500 jobs cut, but only $20m saved

See:  Risks involved in cutting MAF Biosecurity jobs

  • Teachers numbers “capped” and class numbers increased.

The ratio of teachers to students in New Zealand schools is set to be changed, Education Minister Hekia Parata announced today.

For year one the ration will remain at one teacher for every 15 pupils while the ratio for those preparing for NCEA exams in years 11-13 will be standardised to one teacher for every 17.3 pupils…

…  The Government is also putting a cap on the number of teachers by keeping it at the present level.

Parata says the Government is not reducing teacher numbers, but claims $43 million can be saved by not hiring any extra teachers. “

See:  Teachers ‘pushed out the door’ in Budget shake up – Greens

The implications of this cost-cutting exercise are mind boggling. Not only will be see class sizes increase, but there is the strong possibility that students with special needs will miss out. Larger class sizes will put extra pressure on teachers and students; make one-on-one teaching harder; and will possibly force many teaching staff to quit or move to Australia.

At a time when our society desperately needs more educated and trained young people, this is a counter-productive step that beggars belief.  Only a bean-counter (unmarried, no children of his/her own) could devise such a crazy proposal.

Ian Leckie, the New Zealand Educational Institute national president, said,

Essentially every child gets less attention, and if we’re ever going to be concerned about what happens for our children, we want them to get the best of service, put more children in the class, it makes it harder for the teacher, harder for children to succeed.”

New Zealand’s youth unemployment currently stands at 83,000 – up from  58,000 last year. How many believe that National’s plan will improve on that dire situation?

See previous blogpost:  Bennett confirms: there are not enough jobs!

How many believe that is not a desperate cost-cutting exercise?

And how many suspect that the “cap” will quickly become staffing cuts – as happened with state sector workers?

  • Government closes down Gateway Scheme – where those on low incomes were assisted to buy there own homes,

Prime Minister John Key says a scheme to provide up to 100 affordable homes at Auckland to people on low incomes is not needed because low interest rates mean there is greater capacity for people to buy their own homes.

Mr Key has been explaining the Government decision to scrap its Gateway scheme to help those on lower incomes buy homes in its flagship Hobsonville Point development, in Auckland.

It would have provided affordable homes in a flagship Auckland housing development but has been wound up with just 17 houses built. “

See:    Low interest cuts need for cheaper houses – Key

See:    Key backs cut-off for cheap homes plan

There will be other cuts to social services and/or rises in User Pays charges.

The net effect is that those who received tax cuts under $40,000 will find that the cuts have been swallowed up. Low and middle income earners may find that they are now not only no better off – but are having to put up with higher government charges and  less services.

Those on $100,000+ p.a.  have done very well.

Those earning $70-$80,000+ p.a. may escape  relatively unscathed.

Low income earners, on minimum wage ($13.50 p/h) or just above,  facing higher prescription charges,  will effectively  be paying for tax cuts for the high-income earners, wealthy, and asset-rich.

If the tax cuts were designed to reduce government expenditure; increase user-pays; and raise incomes for the top 10% – then National has achieved it’s goal.

National is continuing it’s 1990s agenda, albeit more slowly, and stealthily.

I wonder – is this what 1,058,638 New Zealanders voted for, when they cast their ballot for National. More user pays?

.

Information

Tax Cuts April 2009

.

Frank Macskasy Blog Frankly Speaking  tax cuts april 2009

.

Tax Cuts October 2010

.

Frank Macskasy Blog Frankly Speaking tax cuts 2010

.

By contrast,

Health Minister Tony Ryall said the $5 cost would be applied to the first 20 items of medicine per family each year, so no family would pay more than $100 a year for their prescription costs.

The current maximum for prescription costs was $60 a year. “

See:  Meds price hike: ‘Children will die’

The last word goes to Mana MP, Hone Harawira,

”  Doctors are saying right now that children’s health is being threatened by the price of medicine now. You have to assume that if Government raises that price then children will die as a result of that measure.

I don’t believe that any Government could be so callous.

Absolutely I think that these measures, although it is going to be difficult to prove, will lead to children dying, through the inability of their parents to afford the charges for medicine that are being proposed by this National/Maori Party Government.

Every price rise impacts poor people in a far greater way than it does people on the kinds of levels of income that him and his mates are on. So yes it is going to hurt every poor person in this country – Maori, Pacific and Pakeha”.

See: Ibid

.

*

.

Additional

Government delivers April 1 2009 tax cuts, SME changes

Budget 2010: What the tax cuts mean for you

Prescription cost to rise to help pay for Budget

.

.

= fs =

History Lesson – Toru – Jobs

20 March 2012 4 comments

|

Another look back into our recent history. Just to remind ourselves, that what is past, is prologue…

Firstly, too many of our simple-minded fellow New Zealanders still cling to the bigotted fantasy that those on welfare benefits are there “by choice”.  Currently, our unemployment stands at 150,000 – or 6.3% of the workforce.

But was it always so…?

|

6 June 2002

|

14 September 2002

|

New Zealand’s growth rate in the early to mid 2000s was between 4% and 6%, and the skilled labour shortage reflected an economy that was doing well,

|

|

Tony Alexander, the BNZ’s chief economist, was reported to have said that “businesses are also going to have to consider helping with basic education. They are going to have to take on less  skilled people and train them up in reading, writing, and arithmetic“,

|

24 October 2002

|

Unemployment dropped to a record low of  3.8%  by December 2007. Interestingly, as the recession impacted on our economy, unemployment soared. It is no secret that unemployment and recessionary periods are closely intertwined,

|

|

28 October 2002

|

Our GDP (per capita, adjusted by purchasing power parity) rose steadily in the 2000s, levelling of post-2008,  as the global banking crisis hit New Zealand, creating into a full-blown recession,

|

|

The result of leaving everything up to the free market – a skills shortage. It became readily apparent that businesses demanded well-educated, trained, experienced workers – but were not prepared to pay for that upskilling. That was the role of the State. So much for the State staying out of  the Market – when the Market could not/would not, invest in skills training as required,

|

20 November 2002

|

As the economy boomed, the government post surplus after surplus. (So much for the mischief-making  from certain National/ACT agitprops who scurrilously spread the lie that the previous Labour Government mis-managed the economy.) The actual data is  on record for all to see,

|

|

Which, in turn, allowed Labour’s finance minister, Michael Cullen to pay down our sovereign debt,

|

|

As always, the building industry was affected. Which is in marked contrast to builders who, in the last couple of years were finding work hard to come by. But in 2002, it was a completely different world,

|

25 November 2002

|

Even though the economy was growing and unemployment was dropping, it was evident that people’s skills (or lack of) did not match the demands of employers for their businesses. This failure of the Market to upskill workers, to meet the needs of business, is  yet more clear evidence that without State assistance and intervention, economic growth is stifled.

If the self-regulating “Invisible Hand” of the Marketplace acted as per theory, then unskilled unemployed should be upskilled by businesses as required.  This did not happen,

|

2 December 2002

|

The point of this history lesson is that a poorly performing economy will not maximise the use of available human labour. Or to put it more plainly, if the economy is in recession – expect high unemployment.

That is fairly simple to understand.

Those politicians, and their groupies, who talk about a “welfare lifestyle” or “welfare dependancy” are being deliberately disingenuous. These  politicians are well-educated, sophisticated men and women who have a clear understanding of economic forces and their consequences.

Politicians understand that very few people are on welfare as a “lifestyle”. And “dependancy” should actually mean being dependant on state assistance – or the alternative being to starve. Those who are unemployed are as “welfare dependent” as an astronaut in space is “spacesuit dependent”.

In truth, when the likes of John Key, Paula Bennett, et al, talk of  “welfare lifestyle” and/or “welfare dependancy” – they are using ‘code’ to paint welfare recipients as being the architects of their misfortune.

Because, dear fellow New Zealanders, as we all know, the unemployed here in New Zealand were sitting in the Boardrooms of  Goldman Sachs, AIG, Bank of Scotland, General Motors, Lehmann Bros, etc, etc, etc, and were responsible for the chaos and misery of the 2008 Recession.

When a politician attempts to paint a welfare beneficiary as “welfare lifestyle” and/or  “welfare dependancy” – they are shifting responsibility from themselves – the people with power – onto welfare reciepients – the most powerless in society- for the pitiful state of the economy here in New Zealand, and  throughout the world.

I wonder if welfare beneficiaries know that they crippled the revered demi-god of Western Capitalism, and brought Wall St and City of London, to it’s knees?

Damn crafty, these benes, eh?

|

|

= fs =

National – as fiscally prudent as a heroin addict?

John Key today announced that the proceeds from state asset sales could be used for roading…

Now hang on a mo’…

I thought National was intending to part-privatise Meridian Energy, Genesis Energy, Mighty River Power, coal miner Solid Energy, and Air New Zealand to pay off some of the $71 billion debt that National has racked up since it came to office in 2008?!

Now Key is suggesting that National may use the proceeds to pay for roading? Strangely enough, Key makes no mention of selling state assets to fund infra-structure here.

The questions that spring to my mind are;

1. Where is the income from Road User charges, gst on fuel, and other roading-related taxes that we are paying every time we fill up our vehicles at the pumps???

2. Wouldn’t it make more sense to use the profits from Meridian Energy, Genesis Energy, Mighty River Power, coal miner Solid Energy, and Air New Zealand, for infra-structure spending – rather han the actual generators of those profits???

3. If National has to rely on asset sales for infra-structure spending – what will they be relying on once all state assets are privatised and we’ve lost the entire income-stream???

This is like a heroin addict selling his car to pay for his next ‘fix’. What will he sell next? And what will he do once all his possessions are gone?

It’s not exactly a “good look” when a government behaves like a drug addict.

As for the good people of Kapiti – they got the government they voted for. It’s hard for me to feel any sympathy on this issue. My thoughts are with the 140 people who lost their jobs at MAF today. Or the thousands of others who’ve been made redundant these last three years.

My anger is directed at those individuals who blame welfare beneficiaries for the predicament they are in. The finger-pointers who blame the poorest and most vulnerable for daring to be poor and vulnerable.

To the people of Kapiti; you helped elect this government to office. You now have a wee taste of what it feels like to be steam-rolled and to be victimised.

Remember this on 26 November.