Public service pay will get scant lift from Robertson – but let’s see if the Budget can keep govt’s poll support in the clouds

The  Ardern   government  is  cruising  along with  poll ratings  still far  above those of  its  opponents  and a  leader   enjoying  almost cult  status.

Her  deputy, Grant   Robertson,  wears  a  matching  suit  of  political  armour,  although one-time Labour  Minister (and then ACT  leader) Richard  Prebble contends  he is   the worst  finance minister  since  Rob Muldoon.

Until  now  the  government  has  been borne   along   on  a  cloud  originating  in  the successful  deflection  of  the  Covid  pandemic.  Its  policies  have  escaped   any   deep  scrutiny from  mainstream media,  partly  because of  preoccupation  with  the  pandemic,  and  partly because of  the  teflon  aura surrounding Ardern.

Even   when  there  is a  stumble,   as  happened this  week with her  speech  on NZ-China  relations  and  the  latest  chapter  in the  Mallard story, she  is  within hours  back  on  her  cloud. Continue reading “Public service pay will get scant lift from Robertson – but let’s see if the Budget can keep govt’s poll support in the clouds”

Well done, Minister – almost $1bn of spare Covid cash is found and Robertson lands a new job to keep an eye on his colleagues

Yes, Grant Robertson’s pre-Budget speech has now been posted on the Beehive website and we can officially confirm that not all funding allocated in the COVID Response and Recovery Fund has been spent. Our Finance Minister has almost $1 billion of unspent dosh to play with (and the Taxpayers Union is reminding him he is under not obligation to spend it).

He also confirmed he has a new job (but we imagine he won’t be relinquishing any of the others).  He will be leading the establishment of a team which will ride shotgun on the implementation of “critical” initiatives.

This means he will set up a new team to do the PM’s job of ensuring ministers actually do what she wants them do and what they are paid to do, in other words.

As part of the Budget preparation, Robertson told the Wellington Chamber of Commerce, he asked each Minister to look again at COVID spending for which they were responsible to see if it was  still needed or is still a priority, and whether underspends could be reprioritised.

And hey – this exercise has yielded around $926 million worth of savings. Continue reading “Well done, Minister – almost $1bn of spare Covid cash is found and Robertson lands a new job to keep an eye on his colleagues”

Polls show Labour on a high and the economy is in good nick as Robertson polishes Budget 2021

Labour  MPs  are a  happy bunch  of  campers. Party polling  is  solid, their  leader  has gained  recognition round the  world  that few other NZ prime  ministers have  enjoyed, and  their  opponents  are  in disarray.

The  government  has  steered  the  country   through  the Covid-19  pandemic  with  little  of  the  strife  that  has  ravaged  other  populations.

What’s  more   the  economy is  in good  shape, despite   the   damage  suffered  by  key sectors like  tourism, aviation  and   international  education.

The  Labour  camp   is  confident  Grant  Robertson  will  maintain  the  political  momentum  when he  delivers  the   budget next  month.  After  all,  he  did  not  hesitate to  spend  up  large to  sustain incomes  when the  economy looked  as  it  would nosedive   during lockdowns. Overall, the  economy  kept a  surprising  equilibrium   despite  the  pandemic’s  buffeting,  and slippage in GDP  in the final  quarter last year.

Not  that  satisfying  the  range  of  demands  for  higher  spending  will  be  easy.  Problems  like child  poverty, housing  shortages,  and inequality have  intensified  since  Labour   took office.

Failing   infrastructure  has  underlined  the  need  for all  those  “shovel-ready”  projects  promised in the run-up  to  last year’s election, but  yet  to  be launched. Fortunately  for  ministers,   they  have escaped  the  obloquy heaped  on  predecessors  when  they trot  out  the familiar banality beloved  of   Beehive staffers  (“work is  going on in that  space”,  Cabinet  is  seeking advice  on that”, “I have  called  for  a  report”). Continue reading “Polls show Labour on a high and the economy is in good nick as Robertson polishes Budget 2021”

Critiques of Govt’s contentious housing package raise questions about whose advice was sought

So  what happened  to  “go hard, go  early”?  Does  anyone  expect house  prices  (which have risen   more than $100,000  since  early 2020) to  start falling?

The  Ardern government’s   housing  package aroused  curiously mixed  reactions, hardly  any  of them  providing  a  glimmer of  light  to  would-be first-home buyers that house prices will  be  falling  any time  soon.

From one side, the warning came that rent controls could not be far behind. From the other,  “market forces” and the evils of neo-liberalism had  at  last been corralled.

Over  on the  Left, Chris Trotter  sees a housing crisis ripping apart the country’s weakest and most vulnerable communities.

“While the detail of the Labour government’s housing package has been sufficient to unleash the very worst impulses of NZ’s landlord class – whose screams of rage and wild threats of social vengeance have pretty much confirmed the rest of NZ society’s worst fears concerning‘property investors’ – it is the rank insubordination of the nation’s elected leaders which most rankles neo-liberalism’s true believers”. Continue reading “Critiques of Govt’s contentious housing package raise questions about whose advice was sought”

Financial Times chips in with some advice to our Finance Minister on the folly of adding housing to central bank’s deliberations

A Financial Times leader delivers advice that Finance Minister Grant Robertson should (but probably won’t) consider.

Essentially, the advice is to resist the temptation to  involve the central bank in the challenge of slowing the rise in house prices.

Changing regulation and reforming planning law is a smarter way to go.

The FT observes that – to many – it may seem obvious that the central bank quantitative easing programmes launched after the 2008 financial crisis have led to inflation, as money printing inevitably does.

But the inflation has shown up in booming stock markets, high prices for art and collectibles, and surging cryptocurrencies.  Rather than higher consumer prices, cheap money has led to asset price inflation.

In this reading, the FT says, central banks should reconsider their stimulus policies because they are only delaying and deepening the eventual bust.

Furthermore, according to the critics, stimulus is increasing wealth inequality and worsening housing crises.  Higher asset prices increase the net worth (as measured by market prices) of those who already have substantial wealth while leaving the position of those without assets unchanged.

Similarly, it pushes home ownership further out of the reach of those lacking in savings or inheritances — inflation that shows up in assets but not wages is particularly bad news for affordability.

The FT explains that this is why New Zealand’s government has instructed our  central bank to consider the effect of its policies on the housing market.

The centre-left administration of Jacinda Ardern has said that while the Reserve Bank will remain independent, it will have to take into account the government’s objective of “sustainable house prices”, which includes taming investor demand, when making policy decisions.

It is true that a fall in interest rates will increase asset prices, all other things being equal. Lowering the cost of borrowing should make it more attractive to buy long term assets, such as housing, that bring benefits that can last for decades.

Indeed, encouraging investment spending is part of a central bank’s motivation for cutting rates.

But to refer to a change in the price of assets relative to everything else as inflation — which means a change in the value of money — is a misnomer. A change in a particular set of prices is not the same as a change in all prices: houses have become relatively more expensive to all other goods and services in the economy, not just the Kiwi dollar.

Engineering deflation in consumer prices to address the particular, idiosyncratic, problems of the housing market would be a serious mistake. Using tighter monetary policy to reduce the price of real estate would also have the effect of reducing workers’ wages — a central bank-induced recession would ultimately do little for affordability.

Interest rates cannot be used to solve every problem and central banks have struggled enough to try to hit their existing inflation targets.

As the institution responsible for financial stability in New Zealand, the Reserve Bank should consider whether it has all the necessary “macroprudential” tools to address concerns about the housing market.

In November it already announced tighter restrictions on high loan-to-value mortgages. Requiring would-be homeowners to have bigger deposits will do little to address concerns about affordability, however.

Central banks, however, make a convenient scapegoat for politicians who are unwilling to take on the vested interests that can create an artificial scarcity of housing even in a land-rich country such as New Zealand.

Changing regulation and reforming planning law is a more sensible way to address the deficiencies of the housing market than running a monetary policy that would not be justified by the inflation and unemployment data.

In short, to solve New Zealand’s housing problems, “Ardern’s administration will need to look much closer to home”.

Robertson – of course – seems unlikely to be greatly bothered by the Financial Times, having  disregarded the advice of the governor of the Reserve Bank on this matter.

RNZ reported him as saying the government needs to use all the economic tools available to try to control escalating house prices.

Robertson is defending his decision to change the Reserve Bank’s remit to include house prices in its monetary policy considerations.

That is despite the bank’s governor, Adrian Orr, warning him last year that that was not a good idea.

Robertson said the government is not saying the Reserve Bank should be responsible for house prices – but the government needs to pull every lever within its power to tackle the housing issue.

The government was not suggesting the house-price crisis was entirely the responsibility of the Reserve Bank, Robertson said.

“What we are saying is that all parts of the apparatus need to be working towards these goals.”

Robertson said the government has been considering a wide range of options on both the supply and demand side of the housing market.

The Great Reset: Deputy PM pulls the plug on Magic Talk audience after reacting (badly) to questions about a conspiracy

None of our readers should be surprised to hear of a politician ducking questions.  But Deputy PM Grant Robertson’s handling of questions about “The Great Reset” and what he did subsequently bear closer examination.

The questions posed by host Peter Williams appeared designed to give Magic Talk Mornings listeners a better understanding of this Great Reset caper and whether New Zealand would be involved.

But Roberson dismissed the phrase as a conspiracy theory and – we are told – will no longer appear on the show.

As far as Point of Order can ascertain The Great Reset is an initiative of the World Economic Forum which has triggered conspiracy theories among reactionaries who fear it is part of a vile Marxist plot to over-tax them or otherwise do them a serious economic mischief.

But there are umpteen conspiracy theories around all sorts of things, including Covid-19 and the vaccines to deal with it.  Will Robertson no long be talking about them, either?

The WEF says on its website:

There is an urgent need for global stakeholders to cooperate in simultaneously managing the direct consequences of the COVID-19 crisis. To improve the state of the world, the World Economic Forum is starting The Great Reset initiative. Continue reading “The Great Reset: Deputy PM pulls the plug on Magic Talk audience after reacting (badly) to questions about a conspiracy”

The political payoff is plain but is it smart to borrow $219,512 per job (mostly temporary) to spruce up the Murihiku Marae?

The Point of Order Trough Monitor was triggered today by the announcement of a $9 million handout for Southlanders – sorry, some Southlanders.

The news came from the office of Grant Robertson who, as Minister of Finance, prefers to invest public money rather than give it away – especially when it is borrowed money which taxpayers eventually will be called on to repay.

Accordingly, wearing his “Infrastructure Minister” hat and in the company of Te Tai Tonga MP Rino Tirikatane, Robertson announced the Government is investing $9 million “to upgrade a significant community facility in Invercargill, creating economic stimulus and jobs”.

The only other news from the Beehive came from ACC Minister Carmel Sepuloni, who announced the appointments of three new members to join the Board of ACC on 1 February.

“All three bring diverse skills and experience to provide strong governance oversight to lead the direction of ACC” said Hon Carmel Sepuloni.

Of course they do. Continue reading “The political payoff is plain but is it smart to borrow $219,512 per job (mostly temporary) to spruce up the Murihiku Marae?”

What a good sport Robertson can be – if the demand for free handouts of money is too big, he will find some more

The ministerial slate has been cleared. There was nothing on The Beehive home page when we went looking for the latest news this morning.  

But the Point of Order Trough Monitor has been alerted by other sources of information to more bizarre examples of oinkers being fattened at the taxpayers’ expense.

The nature of the feeding frenzy has been recorded in a background document which itemises the final amounts awarded through the Community Resilience Fund – Phase Two (CRF 2).

The document was “proactively released” on Sport NZ’s website on October 14. 

This tells us it came into the ministerial domain not of Shane Jones (we wonder what he is up to today?) but of Sports and Recreation Minister Grant Robertson.

It further tells us Robertson was or is doling out around $15 million to more than 2,000 sporting organisations as part of phase 2 of the aforementioned fund. Continue reading “What a good sport Robertson can be – if the demand for free handouts of money is too big, he will find some more”

Ardern is skipper and Robertson is in charge of the engine room as the govt sets sail on a clear course with a new crew

PM  Jacinda  Ardern, conceding the next three years will be very challenging for NZ, has two overarching priorities  for  her  government: to drive the economic recovery from Covid-19, and to continue the health response to keep NZers safe from the virus.

In what will be a difficult environment it’s critical we have our most experienced ministers leading the ongoing Covid response to keep New Zealanders safe from the virus and to accelerate our plan for economic recovery.       

Sensibly, then,  she  has   recognised  the  skills  of   Grant Robertson  who  has  been  given   the  task  of  co-ordinating  the  drive to  regain  economic growth.  Besides  keeping the  Finance  portfolio    Robertson becomes  Minister  of  Infrastructure. And  his  seniority is  reinforced    with the  role, too, of  Deputy Prime Minister—a  role  which he had previously filled  in all but  name.

Labour’s recovery plan includes $42bn of infrastructure investment that will create jobs and ensure the economic recovery.   It    also  has  to   deliver much needed improvements to  roads and public transport, to schools, hospitals and housing, while also continuing to support the regions.

Ardern,  in  effect,  will be  the  captain  on   the  bridge  while  Robertson  is in  charge  of the  engine-room. Continue reading “Ardern is skipper and Robertson is in charge of the engine room as the govt sets sail on a clear course with a new crew”

$4bn hole in National’s fiscal programme raises questions about Treasury’s data-checking role and independent monitoring

Speaking as Labour’s Finance spokesperson, rather than Minister of Finance, Grant Robertson was quick to crow about the discovery of “a basic error” which left a $4 billion gap in National’s economic plan.

“If National can’t even do the basics required on their own policy costings, they cannot be trusted to run the country. Making mistakes like this have real world consequences that New Zealand does not need in this challenging time in our history.”

Robertson was harking back to an announcement a few days earlier, when (he gloated)

“ … National threw out a desperate economic policy that included $4.7 billion of tax cuts that would give Judith Collins $4,000 at a time when New Zealand needs to be investing in services like health and education for our future.” 

This is  a tad puzzling, prompting a question we sent to the people who despatched the press statement:  giving Judith Collins $4000 of what?  We await a response.  Continue reading “$4bn hole in National’s fiscal programme raises questions about Treasury’s data-checking role and independent monitoring”