Motorists brace for higher fuel taxes while the govt paves the way for more cycling

Motorists  will be  bracing themselves   for another round of petrol price increases—not  only  because  the   government is  increasing petrol tax  by 3.5c a litre on  October  1,  but  also  because international crude prices are rising  and the  NZ  dollar  has depreciated around  13%  since March.

Prices  for  West Texas  and  Brent crude  have risen  between  35%  and  40%  since   this time  last year.  At the pump  the national fuel price last month  for  91 octane  was  $2.32 a  litre,  with  prices of up to  $2.50 in some regions.

Stations in Wellington and many parts of the South Island, and other areas which use the so-called “national price”, are now charging $2.409 a litre for regular petrol, the latest in a series of record highs seen in recent weeks.

Diesel prices, at $1.809, are at the highest level in just over a decade.

Continue reading “Motorists brace for higher fuel taxes while the govt paves the way for more cycling”

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Kavanaugh politicking shows what happens when judges are expected to become political players

WASHINGTON CORRESPONDENT:  Politics is about uniting people, according to an oft-used platitude.  But it’s also about dividing people, as shown by the latest developments in the battle to install Brett Kavanaugh, a federal judge, on the US Supreme Court.

Shortly before the end of public hearings before the relevant US Senate committee, an allegation has been made that Kavanaugh committed a sexual assault when he was at school 36 years ago.

Senate Democrats, who oppose his nomination, say a vote on his confirmation should be delayed while this is investigated.

Republicans, who support Kavanaugh, say Democrats knew about the allegation a while ago and are only now asking for an investigation to delay a vote until after elections in November. They plan to have both nominee and his accuser, Christine Ford, examined by the committee on Thursday. Continue reading “Kavanaugh politicking shows what happens when judges are expected to become political players”

Govt rejects MBIE costings of oil decision – so where are its own numbers?

The Ardern government’s ban  on new oil and gas  exploration could cost the country  from $1.2bn  to $23.5bn  in foregone revenue, according to official advice from the Ministry of Business, Innovation and  Employment.  The MBIE  modelling, quality-checked  by Treasury,  points to lost oil company profits falling within a range of $199m and $7.3bn, with a calculated mid-point of $2.1bn.

Energy and Resources  Minister Megan  Woods says the government disputes  the figures— but doesn’t  offer  its own estimate. She  has introduced  to  Parliament the Crown Minerals Amendment Bill, which will legislate  officially  to stop new offshore oil and gas exploration permits.

The Green Party, welcoming the  bill, says  it is

“ … a special day for the planet, and proof that this government are now meaningfully acting to address climate change”. Continue reading “Govt rejects MBIE costings of oil decision – so where are its own numbers?”

How an Aaa rating can be read as good news for the Ardern govt – or for the Key govt

Finance  Minister  Grant Robertson   was suitably   chuffed  by international  credit ratings agency Moody’s   Investors  Services’  reaffirming its Aaa rating on the  NZ  government’s  financial  position.  He  banged out a press statement to say this is another  sign that the  Labour-led coalition’s  decision  to  run  surpluses and  pay down debt  is the right  way   to go.

Robertson  brandishes the  Moody’s reaffirmation of NZ’s sovereign credit rating  to rebuff   critics who  insist the government  should  jettison  the  budget responsibility  rules   and borrow  more  to overcome the  country’s structural  infrastructure  and social  deficits.

Moody’s says the government’s fiscal management has created the space needed for investment in areas like infrastructure, affordable housing, education and policies to support families.

This is exactly what we planned for at Budget 2018 – while continuing to live within our means by running sustainable surpluses.  Moody’s says they expect NZ’s growth to be stronger in the next few years than other Aaa-rated countries. They also say our debt reduction track will see government debt fall significantly lower than other Aaa countries.

 “As Moody’s notes, this is important because NZ is more susceptible to the classic rainy day – natural disasters and changes in the international economy – than some of our peers.That’s exactly why we are staying within the Budget Responsibility Rules.”

Robertson points out  that those rules include running sustainable surpluses, getting net debt down to 20% of GDP within five years, and making sure government expenses remain under control and in line with what governments over the past 20 years managed.

The Finance Minister   couldn’t  resist  throwing  in  another  line or two to show how successful  his  economic management  is proving:

“The update from Moody’s comes on the heels of this week’s GDP figures showing the NZ economy had its best performance in two years over the latest quarter. The economy grew by 1% in the three months to June 30, with broad-based, inclusive growth across industries and regions.  It’s not just the one quarter that looks good – real GDP growth over the first half of 2018 was in line with the Treasury’s Budget forecast, and business investment is up 5.7% from a year ago”.

National’s  finance  spokesperson Amy  Adams has a  rather different  idea  of  what  Moody’s  was telling the world  about NZ’s  credit  rating.

She reckons  Moody’s  report praises the strength of an economy built up under nine years of a National government.

“In Moody’s own words: it notes how NZ’s fiscal metrics ‘improved swiftly in the aftermath of the 2008 recession and the 2011 Canterbury earthquake; they continued to improve through the downturn in commodity prices from 2014-2016 and the Kaikoura earthquake in late 2016.’  That NZ survived both economic and natural challenges and was still able to emerge stronger is testament to National’s stable hand in government. 

“Moody’s also praised National’s debt reduction, pointing out  ‘the central government’s gross debt fell to 26.5% of GDP in 2017 from a recent peak at 31.3% in 2012.’  Economists have already cut their forecasts for government surpluses in coming years because of the likelihood the Government will need more revenue than it expects to fund its wasteful and largely unquantified spending plans”.

Adams believes the strong economic foundations  built up  by National are now at risk of being torn down, undoing all the good work Moody’s has praised. The government’s employment policy will undermine the strength of NZ s labour force and make it less flexible at a time when great change is being demanded of employers in a global market.

She says it has already dampened enthusiasm for NZ as an export destination. Moreover the government decided to impose a fuel tax just as global crude prices were rising, hitting Kiwis at the petrol pump.  And its ban on oil and gas exploration ensures NZ will be a net importer of fossil fuels products, with all the cost that implies, for the foreseeable future.

It is far easier to spend wealth than create it. National wants all NZers to have the opportunity to accumulate wealth.  Low-quality spending such as we’ve seen from this government with its working groups, slush funds and massive but unsuccessful student bribe shows how quickly gains can be eroded.”

 Much  as   New Zealanders    might be  cheered  (or  downcast)  by these contrasting views  of  the Moody’s report,  there  is  little   sign  yet  of  any  political solution to  what  most economists  as  the  burning question facing the country:  how  do  we increase  productivity and  raise  incomes  to the levels enjoyed  by,  say,  Australians or  Scandinavians?

 

Jobs for the boys (and yes, jobs for the girls, too)

When Ethnic Communities Minister Jenny Salesa announced the Cabinet decision to have ethnicity data collected for candidates appointed to State sector boards and committees, she said the government every year makes appointments to 429 state sector boards and committees.

These appointments were made in the past week, according to Point of Order’s monitoring of Beehive press statements.    Continue reading “Jobs for the boys (and yes, jobs for the girls, too)”

EU may come to regret its mocking rejection of Britain’s Brexit compromise proposal

LONDON CORRESPONDENT:  In the latest step in the Brexit negotiations, on Thursday EU leaders rejected, with a little mockery, the UK’s laboriously-crafted compromise proposal.  If they mean what they say – there is already a little back-pedalling – this has greatly simplified the rest of the process. The EU in time may regret this.

The British Prime Minister, Theresa May, had staked her reputation on the Chequers plan – a free-trade area for goods and agricultural products under EU rules, designed to avoid imposing a border between the Republic of Ireland and Northern Ireland (a key EU demand).  By rejecting this, even as a basis for negotiation, the EU in effect has reverted to its initial offer: stay in an existing EU arrangement (like the European Economic Area) or leave with a free trade agreement but Northern Ireland remains in the EU Customs Union (and imposes a border with the rest of the UK). Continue reading “EU may come to regret its mocking rejection of Britain’s Brexit compromise proposal”

Watching the troughs: how did the politicians dish out our money this week?

Point of Order is keeping an eye on how taxpayers’ money is being spent – or given away – by the Ardern Government.

Ministers typically get a warm glow from announcing spending decisions, grants or the establishment of new troughs within the authority of their portfolios.

Last week we added up the figures they injected into their press statements over the previous seven days. Our tally was $290.6 million (much of this accounted for in one grand announcement for scientific research from Megan Woods).
Continue reading “Watching the troughs: how did the politicians dish out our money this week?”