Tribute has been paid to Titewhai Harawira but Beehive has missed govt response to the CPI and Crown Accounts

Buzz from the Beehive

Hurrah.  Today we found something fresh on the Beehive website, Beehive.govt.nz, which claims to be the best place to find Government initiatives, policies and Ministerial information.

It wasn’t from Finance Minister Grant Robertson, whose reaction to the latest inflation figures would have been appreciated.

So, too, would have been his reaction to  the latest Crown financial statements.

But no.

The only statement posted on the Beehive website since January 19 came from  Maori Development Minister Willie Jackson, who paid tribute to Titewhai Harawira –

Poroporoaki: Titewhai Te Huia Hinewhare Harawira

Titewhai Harawira came to signify the essence of the Māori renaissance period, an awakening of Māoridom to not only the wrongs of our collective past, but just as importantly in setting in place a framework for the collective progression of our country through honouring the commitments of our forebearers to Te Tiriti o Waitangi and the promises it holds for all.

The absence of a statement from Finance Minister Grant Robertson on the Beehive website does not mean he is oblivious to the latest inflation figures and Crown accounts.

He emailed two press statements to tell us:

1. Greater focus on supporting Kiwis as inflation unchanged

The Government will sharpen its focus on supporting New Zealanders dealing with cost of living pressures in a difficult global environment as annual inflation remained unchanged.

Robertson said the government knows it is hard for New Zealanders to make ends meet. This is comforting.

But –

“As the Prime Minister has said, the Government’s focus will narrow to support New Zealanders struggling to pay their grocery bills and mortgages,” Grant Robertson said.

“The Government is committed to addressing the bread and butter issues in front of New Zealanders and the cost of living is top of that list.

“The Government is also doing its bit by bringing spending down to more normal levels and reduce overall demand in the economy. The Treasury is forecasting real Government consumption will fall by 8.2 percent over the next couple of years, which they say indicates that fiscal policy is supporting monetary policy in dampening inflationary pressures.”

Stats NZ reported the Consumer Price Index was 1.4 per cent in the December quarter compared with 2.2 per cent in the previous quarter (“indicating that inflation has peaked”). The annual inflation rate was unchanged at 7.2 per cent, below the Reserve Bank’s forecast of 7.5 per cent.

Robertson wants us to believe forces beyond his or his government’s control are doing the mischief:

“Inflation is continuing to be heavily influenced by global factors, including higher international airfares and imported food and building materials prices. The prices for vegetables, fruit, milk, cheese and eggs are set globally, with tradeable inflation higher than the goods and services that don’t face international competition.

 “Domestically, bad weather is also unfortunately continuing to affect food prices, with adverse growing conditions contributing to a 20 percent rise in fruit and vegetable prices.

 “Many economies around the world are feeling the effects of a global environment that is putting pressure on prices, with New Zealand’s inflation rate of 7.2 percent below the OECD average of 10.3 percent. Economists are forecasting New Zealand’s inflation will remain elevated for an extended period compared with what has been experienced in recent times.

Furthermore, Robertson hopes to condition us to accept the cost of living can not be eased some time soon:

“There’s no overnight fix to the cost of living. We’re taking a range of actions to ease the pressure on families. We’ve extended fuel tax cuts and half price public transport. We’re also increasing support for seniors, students, beneficiaries and those on Working for Families from 1 April, along with making it cheaper for more families with our childcare package.

 “We’re also tackling the underlying causes of high prices. We’re taking action at the petrol pump and supermarket check out to improve competition and ensure Kiwis pay a fair price. We are also moving to reduce our reliance on volatile global energy markets through our climate change investments, including initiatives like the Clean Car Discount to decarbonise our transport fleet.”

But we can expect further initiatives to improve our lot:

“The Government will be making further decisions soon on its priorities and policies that will make a real difference in the long term to middle and low income New Zealanders and the small businesses who are doing it tough.”

And Robertson drew attention to better measures of what is happening in the economy:

 “Our strong economic and financial management has put New Zealand in a strong starting position to face what will be a difficult 2023. Unemployment is near record lows and incomes are rising, public debt is substantially below that of most other countries, exports are growing, tourists are returning and more people are arriving to live and work in New Zealand long term than leaving, helping ease worker shortages and rebuild the economy.

 “We have taken a balanced approach that has ensured the economy is in the best possible shape as we steer a pathway through a period a high inflation followed by projections of a shallow recession. Our economic plan is working,” Grant Robertson said.

Robertson persisted with self-praise in his second emailed press statement-

2. Govt books in good shape to meet economic challenges

The latest update on the government accounts shows New Zealand is in a solid position to meet global economic challenges and support New Zealanders facing cost of living pressures.

For the five months to the end of November, the Operating Balance before Gains and Losses (OBEGAL) recorded a deficit of $2.4 billion, $61 million lower than forecast at the Half Year Economic and Fiscal Update in December 2022 and $5.9 billion lower than for the same period a year ago. Tax revenue came in slightly above expectations.

“The Government knows that the cost of living is top of mind for New Zealanders every time they visit the supermarket or pay their mortgage. We have provided significant support to households and businesses through programmes such as the fuel excise duty cut and half price public transport. We are committed to continuing to support Kiwis through what will be a difficult year,” Grant Robertson said.

 “The Government is also playing its part by being fiscally responsible. Now that the emergency COVID response is behind us we are returning spending to more normal levels. The Treasury is forecasting real Government consumption will fall by 8.2 percent over the next couple of years, which they say indicates that fiscal policy is supporting monetary policy in dampening inflationary pressures.

Core Crown tax revenue was $78 million above forecast at $45.4 billion, due to higher-than-expected corporate tax offsetting lower GST returns.

Core Crown expenses were $742 million above forecast at $51.7 billion, due to higher interest costs and more health spending, including funding being provided to Health New Zealand/Te Whatu Ora earlier than anticipated.

Net debt was 19.2 percent of GDP, which was below the forecast of 20.3 percent of GDP due to better-than-expected market conditions affecting the New Zealand Super Fund’s financial portfolio.