Labour’s budget bestows bundles of benefits – but disgruntled poll respondents show a distinct lack of appreciation

Finance Minister Grant Robertson has acknowledged these are  tough times for New Zealanders.  So, did he deliver the kind of budget that will mitigate – if not alleviate –  the tough conditions?

Listening to Labour MPs as the budget debate in Parliament wound up this week, one might have believed Robertson had performed miracles.

Here, for example, is Palmerston North MP Tangi Utikere:

“This is a fantastic Budget that we should all be very proud of. I am proud of the largest investment in health ever—over $11 billion…. This particular investment from a Labour Government is aimed at providing better care at that primary and community level, helping and supporting our Māori and Pasifika community members, amongst others as well…

“I want to conclude my contribution this afternoon with two things. One is to say that I’m proud to be a member of the 11-strong Pasifika caucus within the Labour Party. Last week we took the opportunity to meet with communities in Auckland but also in the Ōtaki electorate as well, hearing about the difference that Tupu Aotearoa and STEAM academy funding will make for that community. Continue reading “Labour’s budget bestows bundles of benefits – but disgruntled poll respondents show a distinct lack of appreciation”

Robertson tackles the cost-of-living crisis which the PM did not recognise – now let’s see if he can steer clear of recession

Prime  Minister Jacinda  Ardern  early in March  insisted  there was  no  cost-of-living “crisis”  in New  Zealand. Now  her  right-hand  man, Grant Robertson,  has presented  a  budget which he  proudly  claims  deals  with that  very  same “crisis”, giving  away $1 billion in an emergency cost-of-living  package.

About 2.1 million New Zealanders will get a $350  payment spread  over  three months, while fuel tax  cuts  and half-price  public  transport continue  for  another two  months.

Will  that  be enough  to relieve those  suffering  in what Labour now  accepts   is a crisis?  And  will  it  halt  Labour’s  slide  in  the  polls.

On  that,  opinions  are mixed, with Labour’s  partner  in government  being the most  expressive  in  their  doubts.  Here’s what a Green Party press statement had  to  say  on the  subject: Continue reading “Robertson tackles the cost-of-living crisis which the PM did not recognise – now let’s see if he can steer clear of recession”

Buzz from the Beehive – it’s all about the Budget and billions being disbursed to buck us up in the wellbeing department

No, we haven’t fully analysed Budget 2022, but we did listen to Finance Minister Grant Robertson’s speech.

He took great pride in announcing his fifth Budget invests $5.9 billion a year in net new operating spending, while introducing multi-year funding packages that also draw from Budget 2023 and Budget 2024 operating allowances.

The government is investing $2.9 billion from the Climate Emergency Response Fund to meet its Emissions Reduction Plan and lay the foundations for the long-term transition to a low-emissions, high-wage economy.

And it is supporting New Zealanders “to meet the rising cost of living caused by global inflation pressures” through a targeted package of support focusing on low- and middle-income New Zealanders, including a short-term Cost of Living Payment for around 2.1 million people.

Interesting language.  He talks of problems caused by “global” inflation pressures.

Perhaps we missed the money he is providing to help us meet the rising cost of living caused by domestic inflation pressures. Continue reading “Buzz from the Beehive – it’s all about the Budget and billions being disbursed to buck us up in the wellbeing department”

Two key economic issues that should be tackled in Budget 2022 – but don’t hold your breath, folk

Two  of  New Zealand’s principal economic    issues   are  its  low  productivity and  high effective   corporate  tax  rates.

So will the  Ardern  government  tackle  these   issues   in  Budget  2022?

Finance  Minister  Grant  Robertson  could   write  himself   into   NZ’s  economic  history  if  he  did  so.

Sadly,  Point of  Order  suspects  he  might  go  for  what are  quick-fixes  (if he  does  anything at all)  that  do  little  to  raise  investment levels  and  lift  productivity  to stop NZ  falling   further  behind other  advanced  economies..

The  OECD in  its annual  review   of the  NZ  economy attributed  the low productivity rate  to muted product market competition, weak international linkages and innovation, and skills and qualifications mismatches.   Continue reading “Two key economic issues that should be tackled in Budget 2022 – but don’t hold your breath, folk”

Whoa there, Minister – a majority of Kiwis will be disappointed if govt spending is not curbed in this year’s Budget

Uh, oh – it’s probably too late to influence the government on the case for its spending to be curbed  ahead of the Budget Speech to be delivered on Thursday.  The speech and the raft of documents that will accompany it will be ready for the printer – if not already printed – by now.

But the New Zealand Taxpayers’ Union has ascertained that most New Zealanders oppose increasing Government spending.

A new scientific poll of 1,000 respondents was conducted by Curia Market Research and asked,

Given the current levels of inflation, do you think the Government should continue to increase overall spending in this year’s budget, or keep it about the same? Continue reading “Whoa there, Minister – a majority of Kiwis will be disappointed if govt spending is not curbed in this year’s Budget”

Caucus neophytes may be keeping the govt from knowing what Kiwis in their electorates are wanting

Labour  backbenchers, conscious   that  recent polling shows their  political futures  could be  cut  short,  will  be  looking to  this week’s  budget  to replenish their  party’s  popularity with  handouts  to  swing  votes.

They  could  be  disappointed, if the Budget’s programme does not tackle voters’ concerns.

BNZ  economists  last week  warned  that the  chances of  a  recession  are “increasing  by  the  day”.  Economist  Cameron  Bagrie  says  controlling  government  spending  to  tamp  down the  factors causing high inflation should be  a  priority for  the  government, but  a  big-spending  budget is  already  locked  in.

Meanwhile  investors  in the  local  sharemarket, taking  a gloomy  view  of  NZ’s  economic  prospects,  are  already  reeling  from the  downward  trend  in  the  local indices.  Similarly   the  NZ  dollar  has  dipped  sharply against both  the  greenback   and the  Australian  dollar, as  New Zealand’s  main   export  market in  China suffers  from a severe Covid  lockdown.

This  then  could  be  the  moment for   Finance  Minister   Grant Robertson  to  produce  the  proverbial  from  his  hat.

Certainly   his  opponents have  been  generous  with  their  advice,  urging him to offer  tax  relief  and  in particular  to  reverse the tax  bracket  creep   which  is  adding  to  the  bruising from  the  wage-price  spiral. Continue reading “Caucus neophytes may be keeping the govt from knowing what Kiwis in their electorates are wanting”

Buzz from the Beehive: taxpayers to stump up $20m to boost growth of the IT industry (which already outpaces other sectors)

David Farrar, at Kiwiblog, usefully kicked off our coverage of news from the Beehive this week with a post headed Good summary from Joyce.

He was sharing the opinions of Steven Joyce, a former minister of Transport and of Communications and Information Technology, who has written:

There were more datapoints this week suggesting the public of New Zealand and its Government are currently inhabiting different planets.

Going on the statements from the Beehive, ministers are clearly focused on growing the public service, doling out a big climate change slush fund, taking the long handle to the public’s preferred means of getting around, implementing co-governance of public assets, and pouring another massive dollop of borrowed cash into the hungry maw that is their giant new health bureaucracy.

The public, on the other hand, are dealing with a runaway cost of living, shrinking household budgets, rising mortgage rates, diminishing asset values, a surge in aggressive criminal activity, long queues at the local hospital, a declining education sector and the growing realisation that economic activity is being frustrated by an obstructionist political class.

And:

The Prime Minister and the Finance Minister have made it quite clear that it is for everyone else to tighten their belts — not the Government.

One of two new announcements on the Beehive website this morning – a pe-Budget announcement from Digital Economy and Communications Minister David Clark – brings news of more exuberance in the spending department.    

He said Budget 2022 provides “an additional $20 million over four years” towards two key initiatives in the Digital Technologies Industry Transformation Plan (which sounds suspiciously like a programme devised in Stalinist Russia).

The government will support the growth of the Software-as-a-Service (SaaS) Community and take ‘New Zealand’s Tech and Innovation Story’, a marketing initiative led by industry in partnership with government, to the world.

Clark said the government has been working with industry on this plan to help our tech companies fulfil their huge potential as generators of high-value jobs and export revenue.

But rather than describe a struggling industry, he said:

“In 2020, the digital technologies sector contributed $7.4 billion to the economy. Since 2015 it has, on average, grown about 77 percent faster than the general economy.”

Seriously – is  the private sector unwilling to invest in a sector recording that  level of growth?

The only other new Beehive announcement when we checked is that Trade and Export Growth Minister Phil Twyford has tested positive for COVID-19 and won’t travel to Timor-Leste today.

Twyford was to represent the Government at the 20th Anniversary of Timor-Leste’s independence and the inauguration of Dr Jose Ramos-Horta as Timor-Leste’s next President.  New Zealand’s ambassador to Timor-Leste, Philip Hewitt, will now represent the New Zealand Government at those events.

Let’s look on the bright side: perhaps this will result in some small savings to the taxpayer.

Latest from the Beehive

15 MAY 2022

Budget 2022 invests in tech sector growth

The Government is investing to support the growth of New Zealand’s digital technologies sector in Budget 2022, guiding the country towards a high-wage, low emissions economy.

14 MAY 2022

Phil Twyford tests positive for COVID-19

Minister of State for Trade and Export Growth, Hon Phil Twyford, has tested positive for COVID-19.

Buzz from the Beehive: Kelvin Davis does not mention the $5m cost of handouts (and we wonder what’s “trough” in te reo?)

The Point of Order Trough Monitor almost missed the handout of some $5 million to Māori tribes, the announcement of which was preceded by a press statement headline and 300 words of te reo.

Having found the English text a few paragraphs down in the statement, we were disappointed to find no monetary measure of the government’s generosity to the chosen tribes.   But who got how much can be found on the website of the Office for Māori Crown Relations,  an agency which – if ACT was to call the shots after the next election – would be abolished. 

That promise triggered Māori Development Minister Willie Jackson to demonstrate what he learned in Charm School by saying of ACT leader David Seymour: 

“It’s not about him being a useless Māori, it’s about him being a dangerous politician actually.”  

Kelvin Davis said the funding he was announcing was available for iwi Māori to develop resources and host events that focus on building greater awareness of te kāhui o Matariki. 

He might have started by explaining in the English-language bit of his press statement what “te kāhui o Matariki” means. He might also explain if funding is available for (a) non-iwi Māori and/or (b) Kiwis embraced by the “Crown” part of the Office for Māori Crown Relations,

The Matariki Ahunga Nui fund is the name  of this trough, by the way. It supports Māori-led kaupapa or initiatives celebrating mātauranga or knowledge about te kāhui o Matariki.

The Minister for Youth, Priyanca Radhakrishnan, was not so coy when it came to talking money.

She burst into life with her first press statement since March 25 to announce a $15 million boost over four years for youth development services, to be included in Budget 2022.

Transport Minister Michael Wood tossed a few million dollars into his press statement, too, when he welcomed the opening of the tender processes for Auckland Light Rail and the Additional Waitematā Harbour Connections project.

“We have seen just this week Auckland Airport announcing a $300 million-plus Transport Hub development, which will specifically cater for future mass rapid transit to the airport. By pushing ahead with this project, we are giving certainty to business to make important commercial decisions now, to plan around critical infrastructure.”

And:

“The Government’s investment in regional infrastructure is also continuing to deliver results with today’s opening of the Kawakawa roundabout, marking the official completion of $21.5 million in state highway improvements for Northland.”

Latest from the Beehive

14 MAY 2022

Prime Minister tests positive for COVID-19

Prime Minister Jacinda Ardern has tested positive for COVID-19. She has been in isolation since Sunday 8 May when her partner Clarke Gayford tested positive.

13 MAY 2022

Budget 2022: Supporting our young people to thrive

Young people in Aotearoa New Zealand will be better supported with increased investment from Budget 2022.

Minister Phil Twyford to travel to Timor-Leste

Minister of State for Trade and Export Growth, Hon Phil Twyford, will represent the New Zealand Government at the commemoration of the 20th Anniversary of Timor-Leste’s independence, and the inauguration of Dr Jose Ramos-Horta as Timor-Leste’s next President.

Kua pānuihia ngā kaupapa mō Matariki Ahunga Nui

Kua pānuihia ngā kaitono i angitu ā rātou tono pūtea hei tautoko i te iwi Māori ki te whakaora mai anō, ki te whakatinana anō i ngā mātauranga mō Matariki o te hau kāinga.

Key milestones reached on vital transport projects

Minister of Transport Michael Wood has welcomed the opening of the tender processes for Auckland Light Rail and the Additional Waitematā Harbour Connections project… 

 

 

“Considerable uncertainty” clouds the outlook as Robertson prepares to present 2022 Budget

Is  the  NZ  economy heading for  a  hard  landing?  As  the  country  awaits  the  presentation of Budget 2022, the omens  are not  good.

The ANZ Bank, in its  latest quarterly economic  forecast,  says  many  commentators   are talking  about the risks of  a  recession. It’s  a valid concern,  as  it is  clear  that  the  impact of  hikes in the  official cash rate (OCR)  has  already reverberated through the  housing  market  through  higher  mortgage  rates.  The  bank’s  economists  say this adds an extra layer of  concern  over  and  above fears  about the  cost  of  living  and  sustainability of  asset  prices  (via  KiwiSaver balances  and the  like).

“However  it is  imperative that  the  Reserve  Bank gets  on top of  inflation quickly. Going hard should, in theory, lessen   the  need to  hike by  more in total and that has been a  key RBNZ message.

“ Raising  rates  aggressively   while  consumer  confidence  is  around record  lows and  housing  retreating  might seem counter-intuitive,  but  the policy  choice  is  between some  pain now  or  probably  more  pain  later. Indeed  not  hiking aggressively now  would  itself be risky.

“If  bond  market  participants  sense  that  central banks are going soft on containing  inflation, long-term interest  rates  are  likely  to  rise  even more  sharply  over time  as investors  seek  inflation compensation. This  is what happened  in the  1980’s  and it is  crucial that  this  is  avoided this  time  around so  as to avoid a  deep  and prolonged  period  of  stagflation.” Continue reading ““Considerable uncertainty” clouds the outlook as Robertson prepares to present 2022 Budget”

Why several Labour MPs (whose futures are in electoral jeopardy) will be hoping for miracles in this year’s Budget

Finance Minister Grant Robertson managed  to  put  a  bold  face on  his  fiscal management  last week  when he  presented  the  latest set of Crown accounts, saying they   “are continuing to reflect the strong position New Zealand is in to manage the challenging global environment”.

Tax revenue in the  nine months  to March  was $2.7 bn above forecast at $78.6bn, due to better-than-expected corporate profits and a strong jobs market.  This was partly offset by lower GST returns.

Core Crown expenses were close to forecast at $92.6bn.

The operating balance before gains and losses (OBEGAL) deficit was $8.1bn, $4.1bn  below that forecast in December’s Half Year Economic and Fiscal Update.

Robertson commented approvingly:

“This result shows the strong position New Zealand finds itself in, despite the uncertainty and volatility of the Ukraine war, the pandemic and ongoing supply chain disruptions in critical trading hubs like China. It is further evidence that our strong health response has been the right one for the economy”.

Robertson concedes there are significant challenges for families and business right now. Continue reading “Why several Labour MPs (whose futures are in electoral jeopardy) will be hoping for miracles in this year’s Budget”