Where has the surplus gone?
Despite the headlines, the latest set of crown accounts are not as bad as some are saying.
This is because the important figure is the one called OBEGAL, formerly OBERAC. This is the measure of the underlying structural surplus. Dr Cullen uses to refer to this one all the time until it got embarrassingly large and he then tried to revert to 1970s accounting standards by focusing on merely the cash surplus.
The OBEGAL to Jan 2008 was $3.1 billion against a forecast of $3.7 billion. Now that’s somewhat disturbing as normally actual comes in way above forecast, but some of the difference may just be timing issues.
The full year OBEGAL forecast was $6.6 billion. We’ll find out in May what that has been revised to – could possibly drop to the $5 to $6 billion range. This is still definitely high enough to afford tax cuts but ironically quite a bit less than previous years when Cullen said they were not affordable.
March 7th, 2008 at 8:48 am
This is Cullen’s secret wish as it takes the political pressure off him granting tax cuts or at least anything that is more than miserly. Never has there been a Government that has spent so much money, forceably taken from so many people, to achieve so little. I have just paid my provisional tax today as well as some fairly decent dollops of GST and I resent every dollar. Apart from the very rich and the very poor (on welfare) paying tax means a tangible sacrifice in one’s standard of living to pay for the Labour Government.
March 7th, 2008 at 8:49 am
So lets go back to Cullen’s four anti-tax cuts tests,
It looks like most if all are not going to be met – yet he still says he will give tax cuts. Given the desperation of this corrupt and dying government, he seems quite happy to be labelled a liar to have any hope of stopping the march of the National Party. His credibility is now non-existant.
He has blown his opportunities and middle NZ are hurting bad (with more pain to come). I wonder how on earth their support is being maintained at 30 odd percent. Surely there cannot be that many dumb-arses in NZ?
March 7th, 2008 at 8:50 am
The govt might actually be back to running deficits in a few years, but at least we are doing better than the UK and US which have run enormous deficits through some of the best economic times in history; and now face the prospect of raising taxes and slashing spending in the face of a downturn- a recipe for disaster.
At the very least, NZ’s tax cuts come at the beginning of the recession when spending and inflationary pressures should supposedly drop anyway; much better timing than if they had been in place a couple of years ago- the inflation rate and interest rates would be totally crippling instead of just bad.
March 7th, 2008 at 9:44 am
TIM BARCLAY:
“Never has there been a Government that has spent so much money, forcibly taken from so many people, to achieve so little. I have just paid my provisional tax today as well as some fairly decent dollops of GST and I resent every dollar. Apart from the very rich and the very poor (on welfare) paying tax means a tangible sacrifice in one’s standard of living to pay for the Labour Government.”
HEAR, HEAR !
MONTY:
“I wonder how on earth their support is being maintained at 30 odd percent. Surely there cannot be that many dumb-arses in NZ?”
HEAR, HEAR !
March 7th, 2008 at 9:46 am
Obegal is meaningless alphabet soup.
What on earth does Obegal stand for.
I am not entirely dumb on these matters . I do know that EBITDA stands for Earnings Before I Tricked Da Auditor.
But Obegal???
March 7th, 2008 at 9:50 am
Tim and Monty – amen to that!
March 7th, 2008 at 10:02 am
Operating Balance Excluding Gains and Losses I think.
March 7th, 2008 at 12:27 pm
Yep Ole Sullen was always going to not give any meaningful tax cuts and he knew the numbers when he set out his 4 requirements to do so .
This is one scheming lying son of a bitch No morals No ethics No principles.
just like the rest of the Socialist pond life
March 7th, 2008 at 4:11 pm
OBEGAL (in the NZ govt context)
Other buggers earnings gambled and lost !
March 7th, 2008 at 7:43 pm
UK-Kiwi “atleast we are doing better than the UK and the US” and so we should when most of our income is taken in direct and indirect taxes. Shit UK kiwis are as thick as pigshit in the hot summer sun, why do I say this. Well we believe we live in a benign democracy with a government that cares for it’s people. The government dresses itself up like a flash shop window but when you enter you realise the only thing on sale are used shit pumps.