Transport plan (with an affordability proviso) is announced for the capital – but don’t look too hard for the details

The  Ardern  government  has  done  it  again, announcing a  grandiose plan to reform Wellington’s  transport system. The plan  includes a long-overdue  duplicate Mt Victoria tunnel, a rearrangement  of  the road around the  Basin Reserve and a  light  rail operation from the  city  centre to the  south coast, all in  the  Let’s Get Wellington Moving project  at  an original  cost of $6.4bn, now put  at $7.4bn.

Fanciful?  It  is,  if  you  are looking  for  a  business case on (for example) the  light rail project.

The announcement included  this  proviso:

“If the light rail option was too expensive it would explore using buses instead”

So  why announce  it?

Could  it be  a fanfare in   the  wake of the declaration  earlier in the week that Labour MP Paul Eagle has  thrown his  hat in the  ring   to be  Mayor of  Wellington? Continue reading “Transport plan (with an affordability proviso) is announced for the capital – but don’t look too hard for the details”

Oops – our well-being is likely to be bruised as NZ slips down international rankings and we slump on economic performance

For long  enough   New Zealanders  have liked  to  think  they  enjoyed  one of the highest living  standards in the  world. More recently those  familiar  with what  is  happening in those  countries  which are  leading the  world have  understood  NZ has  been  slipping  down  the  ladder.

Under  a  Labour-led  government,  the  slide  has  accelerated. Now   as  inflation  surges,  and  recession is looming on the  horizon, new  questions are   being  asked    about  the  economic  stewardship   of  the Ardern  government.

Has  too much  been  left  to  the  Finance  Minister  Grant  Robertson?  How   has  he  done   in  his   fiscal management?. Why  is  inflation  burning  so  fiercely? What  has  happened  with  his  concept  of  “well-being”?

One  of NZ’s  most experienced  economists, Bryce  Wilkinson, has  drawn attention to  the  latest  rankings of 63 of the world’s leading countries by the Swiss Institute for Management and Development (IMD).

Back in 2017, New Zealand ranked #16 – ahead of Australia at #21.

Five years later, New Zealand has fallen to #31, while Australia is ranked #19. Continue reading “Oops – our well-being is likely to be bruised as NZ slips down international rankings and we slump on economic performance”

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”

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”

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”

How the Nats are drawing blood by needling the govt on economic issues as living costs surge

Opposition parties appear to have thrust the government on to the defensive on inflation and the  cost-of-living crisis  and are widening the  attack to  find  chinks  in  the  Finance Minister’s armour on  his  handling  of  the  economy.

They have built  a  platform   for   the   forthcoming  budget  debate  which  will  ensure  it is  not  as  one-sided  as  in  earlier  years of the  Ardern  government.

Robertson even conceded in Parliament yesterday “we know that New Zealanders are doing it tough as global factors push up the cost of living”.

He quickly added that the  government is continuing to support low- and middle-income earners through reductions in their fuel bills and income increases.

For National’s  relatively  new  leadership  team, the  cost-of- living  crisis  has  been the  issue  that  has  allowed them  to  sharpen  the  parliamentary  skills  needed   to  spearhead  their  roles   in  exposing weakness  in  the  government policies. Continue reading “How the Nats are drawing blood by needling the govt on economic issues as living costs surge”

“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”

Overseas forces are to blame for the surge in our living costs? But non-tradables inflation (up 6 per cent) then must be explained…

In the wake of the latest inflation figures being published today, showing the consumers price index has risen at its fastest pace in some 30 years, the burning question is whether we  have  a  cost  of  living  crisis.

Opposition  parties  (inevitably) seized on the annual 6.9 per cent CPI increase to insist prices  are  out of  control.  National Party leader  Christopher  Luxon says prices   are  a  “silent  thief in  your  pocket”.

On  the other side  of  the political fence, the  Council of Trade Unions contends that inflation  is  being  driven by the price  of  property  and  the  price  of  fuel.

The man who is  running the economy accepts  no  responsibility.   Finance  Minister Grant  Robertson   says  the increases in consumer prices are a “reminder of the current global economic challenges” – but he  adds, almost as an afterthought, they  do  show the need for responsible fiscal policy in New Zealand.

Whatever the huffing and puffing politically, the  hard  fact  is that a  New  Zealander  who  took out  a  30-year  mortgage a  year  ago fixed  for  a  year and  who is  now  looking  to refix could  find  monthly  payments  go  up a formidable 33 per cent. Continue reading “Overseas forces are to blame for the surge in our living costs? But non-tradables inflation (up 6 per cent) then must be explained…”

Finance cheer-leader is looking after us – keeping Govt pressure on Russia to bring down oil prices is among his assurances

Deputy Prime Minister Grant Robertson is refusing  to relinquish his  role   as  the  country’s  number  one  cheer-leader,  even  as  economists  see  dark  clouds  gathering,  inflation  hits  levels  not  seen  for  30  years, and  consumer  confidence slumps.

As  Finance Minister, he  sees  his  role  as being  the  leader  of  the  band in  singing  the  praises  of  New Zealand’s “hard  workers”, thriving   businesses,  and  general  economic  well-being.  Not  for  him  the  dirges  of  some of  his  predecessors about  falling productivity,  the  need to  tighten our   belts, roll up  our  sleeves,  create  new  jobs and  raise living standards.

Here  he  was  yesterday  answering  another  patsy  from  who  else  but  Dr  Duncan Webb  (was  he  elected  expressly for  this  job?):

Hansard records the exchange: Continue reading “Finance cheer-leader is looking after us – keeping Govt pressure on Russia to bring down oil prices is among his assurances”

Budget 2022: the challenge of striking a balance between managing the debt and spreading good cheer

Deputy Prime Minister Grant Robertson is nothing if not   ambitious. In his role as Finance Minister he is planning a budget which , he says, will focus   on long-term issues like   investing   in the   health sector and  climate change initiatives at the  same time as he manages debt   down and   gets   the   books   back   to   surplus.

He   told   the   New Zealand Herald’s   Liam Dann he   feels   constant pressure “to make   sure   the spending we   do is the right money   in   the   right   place    at   the   right   time”.

ACT   leader   David  Seymour had  a  comment apropos of  that  observation:

“This  was a Government elected to make housing affordable, help those less well off, reduce child poverty, and give us a kinder, more united society. On every front, it could not have failed more profoundly.”

That   was   reinforced   this   week   as a   government   report   showed   that   despite the   government allocating   an extra $1.9bn   for   mental      health in 2019, there are ballooning specialists wait times for children and adolescents, and increased anti-depressant and antipsychotic medication dispensing for young people.

All mental health services for children and adolescents are short of at least a quarter of clinical roles.

Reports such as those reinforce what    Treasury   was   telling   its   minister   this   week.

Some   might   read   an   implicit   warning    in   the Treasury   document, called The Investment Statement.  This  describes and states the value of the government’s significant assets and liabilities, how these have changed from the past, and how they are  expected to change in the future. Continue reading “Budget 2022: the challenge of striking a balance between managing the debt and spreading good cheer”