He’s spent it all!
Dr Cullen’s ninth and probably final budget is a cunning political device but economically risky and most of all incredibly hypocritical.
The entire budget is designed for one and one purpose only – to try and stuff over National and make it impossible for them to offer larger tax cuts without spending cuts.
Imagine the outcry from Dr Cullen and the left if Bill English as Minister of Finance did the following:
- Run a cash deficit of $13.7 billion over four years to fund $10.6 billion of tax cuts
- Ran the OBEGAL operating surplus so low that it will not be large enough to fund the Cullen Fund contributions until 2016
- Reduced the contingency expenditure provision by $2.5 billion over four years (or $250 million a year)
You would have the left shouting from the treetops that Bill English is borrowing to fund tax cuts, that pensioners should start hoarding catfood because National is planning to starve the Cullen Fund of money, and that reducing contingency expenditure is slashing spending on health and education.
I got to ask Dr Cullen a question on how he would answer the challenge that he is borrowing to fund tax cuts, and he answered that he isn’t, that he is borrowing to fund capital investment.
The irony is that I didn’t agree with the premise of my question – I was in fact quoting what Labour have said for the past few years about borrowing and tax cuts, and the further irony is that Dr Cullen’s response was the argument I have made in the past that borrowing is okay if for capital, not operating expenditure.
As I said above, this budget exists for one reason only – to try and stuff over National. The logical inconsistency of saying we can’t afford tax cuts when the surplus is close to $10 billion, and then delivering tax cuts when the surplus has basically shrunk to zero is staggering.
OBEGAL, the operating balance or surplus after one off gains and losses is forecast to be just $1.0b next year, reducing to $200 million in 2011/12. That is well below a prudent level – I have generally maintained the OBEGAL should be enough to meet the Cullen Fund contribution around $2 billion) and around $1 billion on top of that. So this level of surplus is around $2 billion to $3 billion below that. Cullen has gone from hoarding all the money to spending it all.
Core crown expenditure is forecast to expand from $54 billion last year to a whopping $70 billion in 2012.
Core crown revenue was $58.4 billion last year. The tax cuts sees it stay at around $62 billion this year and next year but then increasing to $69 billion in 2012. So Cullen has core corwn expenditure greater than core crown income for the first time since the last Labour Government. This is a potential repeat of 1990 in terms of leaving the next Government with a deficit.
Net core Crown debt is forecast to go from $1.8 billion to $13.2 billion.
Dr Cullen could hardly contain his glee at having spent everything. Basically the fiscal margin for the next five to six years is close to zero. A further downturn and you have have significant problems. He has happily thrown away his previous fiscal discipline.
So this will make it tougher for National. they certainly will be able to deliver tax cuts larger than these ones, but not massively larger unless they get more rigorous with saying no to various spending proposals. There are not a lot of easy options thanks to Dr Cullen’s empyting or the larder. If by some chance Labour do get re-elected Dr Cullen’s successor will be equally as grumpy with him as Bill English might be – don’t expect any Government can deliver any significant new spending initiatives in the next few years.
I don’t think it is entirely a bad thing that National may have to say no to some more of Labour’s spending. Yes there is a political risk in doing so, but it is at times of economic hardship that people expect the Government to manage its spending more carefully – just as households do. And National certainly has some capital in terms of a lead in the polls that it can use up.
May 22nd, 2008 at 2:50 pm
David, after years and years and years of bagging Labour for not cutting taxes, you’re now bagging them for cutting taxes by too much. Why? Because they could outflank National’s one trick-pony leader John Key. Let’s hear what he says hey? “It’s far too little”. What, too little – you’d do more?
[DPF: I have not criticised for cutting taxes too much. I have criticised for spending too much]
May 22nd, 2008 at 2:56 pm
No problem, David. I hope National does “get more rigorous with saying no to various spending proposals”. Rolling back some of the wanton profligacy in the public service should be a central prerequisite to tax cuts. Nothing to be ashamed of.
May 22nd, 2008 at 2:56 pm
Cullen’s budjet looks to be sensible and pragmatic. Now it’s Key’s spending and tax cut programme that we really have to be worried about. As I said on a previous thread:
On the budget – I look forward to seeing reactions from New Zealand’s well-regarded economists on it.
The IMF has said that major increases in govt spending or major tax cuts will cause a blow-out in the value of the dollar and will cripple our export sector. Now Jon Key has said that National is due to cut taxes by $50 per week on average, or about $2,500 per year. There are about 3 million income earners. That’s pumping another 7.5 billion dollars into the economy, and without any major govt spending cuts. The results could be disastrous.
Now the export sector has been warning against tax cuts – and john Key looks set to ignore them, and crush them, all for his own personal political gain.
I hope the National Party is willing to deal with the backlash from NZ business if it wins the election. It’s going to be interesting.
May 22nd, 2008 at 2:57 pm
..As I said above, this budget exists for one reason only – to try and stuff over National..
Welcome to Politics at the post doctorate level
And no Key HASNT said he would cut taxes at $50pw level. That was merely a kite he flew to get some pre budget talking points.
May 22nd, 2008 at 2:59 pm
I’m reminded of that Tom Scott cartoon depicting Labour holed up in the Fuehrerbunker. How prescient… it seems the decision has been taken that it is better the economy be razed to the ground and the people decimated than that the glorious Reich fall into the hands of the enemy.
May 22nd, 2008 at 3:00 pm
So we have a Finance Minister purposely scuttling the economy and people like Paul W applaud him for it?
May 22nd, 2008 at 3:01 pm
Looks like Harvey Kietel will be the next National finance spokesman
You have said no to…
May 22nd, 2008 at 3:03 pm
Oh fuck off Nome this budget goes against everything the good doctor stands for. Walter Nash is turning in his grave right about now.
May 22nd, 2008 at 3:03 pm
DPF:
“Imagine the outcry from Dr Cullen and the left if Bill English as Minister of Finance did the following:
Run a cash deficit of $13.7 billion over four years to fund $10.6 billion of tax cuts
Ran the OBEGAL operating surplus so low that it will not be large enough to fund the Cullen Fund contributions until 2016
Reduced the contingency expenditure provision by $2.5 billion over four years (or $250 million a year)”
Hasn’t National been advocating running a deficit for the last 4 years or more?
In a way Cullen has been forced into a corner by National and the media on this one. National has made tax cuts its one and only campaign policy for the last 4 years, all the while promising no social spending cuts. Cullen had to deliver something, and fortunately it’s much more conservative and pragmatic than what National’s offering (huge tax-cuts with no major govt spending cuts).
National started the bidding war, and it looks now set to take us back to the 1980s with high interest rates, high inflation and an ailing economy (if it wins the election). The media needs to be responsible and bag National for offering such a risky and damaging fiscal programme, which will ruin our economy if enacted.
May 22nd, 2008 at 3:05 pm
Bevan, it’s good your using the talking points but that doesn’t make them true.
May 22nd, 2008 at 3:09 pm
Jasus, did he sit down because he had nothing left to say? What an utterly vacuous reply. So on this critical stage Key’s reply is that Cullen doesn’t believe the tax cuts but Key’ll double them…. oh and David, Key said nothing at all about spending (and less on policy…)
May 22nd, 2008 at 3:09 pm
could it be that Cullen has COPIED Key to become ‘national lite’ and thats the reason the far right feel they have been checkmated.
get all the new spending out before the budget where National wont raise a squeak..
and then line up Tax cuts for budget night to spend whats left to leave the nats speechless
May 22nd, 2008 at 3:15 pm
National did a good job of getting tax cuts onto the election agenda, and raising the expectations of what people should expect. Cullen has now effectively taken them off the agenda, which means National will have to show what their policies are when it comes to Government spending. They can’t offer more tax cuts without revealing what they won’t be spending the money on.
May 22nd, 2008 at 3:17 pm
could it be that Cullen has COPIED Key to become ‘national lite’ and thats the reason the far right feel they have been checkmated.
You really think THIS budget is going to claw back 20%? Your dreaming!
The reason we are pissed is that Labour are doing what they did the last time they were kicked from power – fucking the economy so the Nats have to spend the next two terms fixing it. Nice to know that Labour and its supporters think the economy is expendable for political reasons.
May 22nd, 2008 at 3:17 pm
The poll on the NZ Herald website asks “Will the budget save the Labour Govt”?
Currently 86% think it won’t.
Finally were any provisions made in the budget for Clark to buy some clothes that fit properly?
May 22nd, 2008 at 3:19 pm
Bevan, it’s good your using the talking points but that doesn’t make them true.
And the operating balance is………
May 22nd, 2008 at 3:19 pm
High interest rates are here now as a result of inflation caused in large part by Labour’s spending and more recently a spike in global commodities. To point the finger at National before they have even won the election is disingenous and to say poor Dr. Cullen was forced into a corner and has had to capitulate and sacrifice his dearly held principles for political expediency, well…
May 22nd, 2008 at 3:21 pm
“Hasn’t National been advocating running a deficit for the last 4 years or more?”
No they havent you blatantly dishonest fool. Everything out of your mouth nowadays is a lie, Nome. You do know you are being a pathetic wanker, right?
May 22nd, 2008 at 3:21 pm
Lindsay, try to spell properly when you’re insulting people you’ll appear less of a fool (you may still be one however, it’ll just be less obvious).
May 22nd, 2008 at 3:24 pm
Bevan, I don’t recall you mentioning OBEGAL? It was your ridiculous accusation regarding Cullen that I challenged. Good that you’ve gone to the detail pages however. Is your preference that spending on pensioners or kids is cut? I know you want the tax cuts, I’m just curious about who you think should be deprived to fund them?
May 22nd, 2008 at 3:25 pm
kisekiman – Cullen has been forced into a corner. If you don’t win you don’t get to introduce any of your policies. National has made the election about over-spending and the media has bought into it, because they lack the intelligence, and/or back bone to grill the leaders on the issues that matter the most. It’s very frustrating to watch.
May 22nd, 2008 at 3:25 pm
Cullen, the corrupt little Englishman he is, hates the “tories” more than he loves New Zealand/New Zealanders.
He is prepared to tank the NZ economy to spite the rich pricks (ie the National party) he loathes so much.
May 22nd, 2008 at 3:26 pm
Cullen has had a reputation of being a decent Finance Minister. He was going to leave a good legacy.
Good to see he just pissed it all away with a politically motivated, ‘poison pill’ budget.
The economic media should tear him apart over this.
May 22nd, 2008 at 3:29 pm
“Cullen has been forced into a corner. If you don’t win you don’t get to introduce any of your policies.”
So basically this is Cullens way of saying, “fuck you New Zealand you ungrateful bastards!”
“National has made the election about over-spending…”
Wait, I thought National has made the election about lowering taxes? Get your story straight, Nome.
May 22nd, 2008 at 3:30 pm
Paul W:
Sod off, I’m not interested in your pissy spelling comments.
Enjoy Cullen’s last budget, because there won’t be any more. Thank God for that.
May 22nd, 2008 at 3:31 pm
Nome said: In a way Cullen has been forced into a corner by National and the media on this one.
I might have agreed if you said Cullen was led into the corner by National’s policies and the media, but no one (aside from Helen & party) can force Cullen to abandon his principles just to retain power. I guess this shows what the overiding principles of the Labour Party are – power at any cost.
and nome – you are implying that this budget is bad!? (or that National/media have forced Cullen into the good corner?)
May 22nd, 2008 at 3:31 pm
““Hasn’t National been advocating running a deficit for the last 4 years or more?”
No they havent you blatantly dishonest fool.”
Yes they have. National promised massive tax cuts with no decrease in social spending. Now the surpluses have been getting smaller and smaller. National would have sent us in to deficit if it was elected in 2005. There’s no doubt about it. This is from renowned economist Brian Easton, on the 2005 election.
http://www.eastonbh.ac.nz/?p=760
May 22nd, 2008 at 3:35 pm
“Is your preference that spending on pensioners or kids is cut? I know you want the tax cuts, I’m just curious about who you think should be deprived to fund them?”
Right back at you PaulW.
Is your preference that taxation of solo parents or destitute orphans is increased? I know you want the extra spending, I’m just curious about who you think should be taxed in the coming years to fund it?
May 22nd, 2008 at 3:35 pm
Lindsay, try to comment on substantive matters and you’ll probably get treated with more respect. I usually ignore distractions, such as your earlier comment, but it was just so stupid it warranted comment.
May 22nd, 2008 at 3:35 pm
Tax Simplification has become the ultimate oxymoron under this budget.
May 22nd, 2008 at 3:38 pm
I wish you leftwing wanker apologists would stop huffing and puffing. Go and do it somewhere else. Cullen and Labour are fucked – this budget will not make a jot of difference to anything. This country has had enough of this government – end of story. I am looking forward to seeing Keys reply – last year it was a beauty.
May 22nd, 2008 at 3:39 pm
Actually Kimble, I’m quite supportive of moderate tax cuts that particularly benefit low income workers so in this instance, there’s no trade off.
The trade off is only required to support National’s alternative. Key clearly said he’d cut taxes more than Cullen but hasn’t given any indication on spending except for a review of all programs… Hence my original question, will he or won’t he cut spending and if so; where?
May 22nd, 2008 at 3:41 pm
Paul W,
If you don’t like what I post, don’t read what I write.
OK some comment on the budget, It’s a big spending irresponsible effort from a failed administration which doesn’t address overspending nor key problems. It will add more fuel to the fires of inflation.
May 22nd, 2008 at 3:43 pm
Casual said:
You missed it mate. He spent 5 of his twenty minutes saying nothing and then left the Chamber. Missed a great opportunity but only because he had nothing to say. It wasn’t quite the “beauty” you were hoping for. It was incredibly underwhelming.
May 22nd, 2008 at 3:43 pm
“National promised massive tax cuts with no decrease in social spending. Now the surpluses have been getting smaller and smaller.”
Why have the surpluses been getting smaller and smaller? We havent been taxed less and less surely. What has happened to spending?
May 22nd, 2008 at 3:44 pm
Peters is bashing DPF
May 22nd, 2008 at 3:44 pm
A budget designed to get Labour re-elected in 2011. National takes the political hit as it picks up the pieces. How unbelievably cynical of Labour.
May 22nd, 2008 at 3:45 pm
No Lindsay, when I find your commentary trivial and tiresome, I’d rather say so…
May 22nd, 2008 at 3:46 pm
Paul W, you simply assert that National will cut spending to reduce taxes. If National had won in 2005 the surpluses were sufficient that they didnt need to cut spending to afford the tax cuts they were recommending. You basic premise is incorrect.
Keys response in the next few days will be better than a speech few people will care about.
May 22nd, 2008 at 3:46 pm
Bit off topic here DPF but the little brown wrinkled gnome Winston has just described you in parliament as “The David Farrar Rumpelstiltskinites” You must be doing something right keep it up!
[DPF: Heh]
May 22nd, 2008 at 3:47 pm
Paul W said:
Bollocks.
May 22nd, 2008 at 3:50 pm
Roger,
Once again you show you are incapable of understanding basics. The facts are, that just like in Australia (and every other sensible country that has stopped stealing so much of peoples money) when you give tax cuts the economy grows and therefore government income. This was the primary thing National relied on. It works everywhere else, it would have worked here.
And since you raised the issue of Government spending, take a look at this link (courtesy of the excellent Whaleoil site) http://www.stuff.co.nz/stuff/thepress/4556051a6009.html the ANZ National bank is about to release a report flaying the government for their massive wastage of public money on unproductive areas. They have delayed it so as not to take attention off the budget.
Thank God this is Cullen’s last budget. The hypocrisy of a man who when we had the largest surpluses in the world could not afford tax cuts and now is throwing out money everywhere while bankrupting the country with totally wasteful expenditure.
I strongly suspect that history will not look kindly on this failed teacher.
May 22nd, 2008 at 3:51 pm
Paul W is talking shit as usual. I heard Keys speech and he told Helen that she lives in the past (Boks tour and Vietnam)and is yesterdays woman (as we all know) and when she got up to rant she confirmed it all by harking back to Muldoons budgets! Time she moved on.
May 22nd, 2008 at 3:52 pm
Kimble, I don’t assert anything at all. Key’s said he’ll review every line of expenditure and largely repeated this comment in his, unbelievably brief, reply today. He also clearly said the tax cuts weren’t large enough. I think my interpretation is perfectly reasonable.
Key’s response in the next few days will be what he’s fed. There’s a clear pattern emerging; Key is light on detail and has such limited experience he can’t manage parliament, so instead prefers safe audiences and scripted speeches. Pretty poor IMO for man who wishes to be PM.
May 22nd, 2008 at 3:52 pm
It’s a budget of a man whose party are 20%+ behind in the polls.
May 22nd, 2008 at 3:53 pm
Nome, I agree that the the media has lacked the intelligence, and/or back bone to grill the leaders on the issues that matter the most. The only gratifying thing is it’s a game of swings and roundabouts. If Cullen has been forced into a corner and to perform an about face it’s because the ideology he’s stuck to so doggedly is now politically untenable. His position is crumbling in the face of an electorate that is looking for change and tax cuts have been a lightning rod for their focus. However he is a realist and so has done what was necessary and sold out his principles. To imply he had no choice is bullshit, if his position had any traction politically he would have stuck by it.
May 22nd, 2008 at 3:55 pm
Johnboy, the point the PM made, a point Key might not even have been in the House to hear, was that unlike him, she has a view on significant world events and it’s a view she maintains. Unlike Key. Sure the tour and the Vietnam war are a while back, but Iraq isn’t and Key would-wouldn’t-would-wouldn’t and then claimed it was over … leadership is something that requires a little more certainty and fortitude.
May 22nd, 2008 at 3:57 pm
I am no great fan of John Key but I have now watched Clark, Key and Peters in the house and it is obvious which one has a vision and a direction for NZ.
Clark was her usual nasty, bitter and vicious self, light on detail and heavy on slander and muck raking, Peters as usual spent his time telling lies.
Key is the epitome of a leader in waiting, his speech was entertaining and hit on what is important to Kiwi’s, given the choice between Clark and Key the decision is easy and the people of NZ will make the right call come the next election.
May 22nd, 2008 at 3:58 pm
BB, what precisely did you think was good about Key’s 5 min speech? What detail most appealed?
May 22nd, 2008 at 3:58 pm
Restraint during periods of economic growth; stimulus during harder times — this is only inconsistent if you have no knowledge of basic macroeconomics.
May 22nd, 2008 at 4:01 pm
DPF, it would be good to know your opinion on the broadband offering. It seems quite a smart idea to build a high-capacity cable to Aussie given that they are building a massive one to the US (bypassing NZ unfotunately)
As for the tax cuts, well National well and truly raised the expectations with the $50 per week nonsense, Cullen was doomed no matter what he delivered… This seems a standard issue keynesian response to the looming downturn nonetheless…
May 22nd, 2008 at 4:01 pm
Paul W,
You might like to get your facts straight, the Key speech was much longer than 5 minutes.
May 22nd, 2008 at 4:01 pm
Paul W
All of it, what detail most appealed to you?
May 22nd, 2008 at 4:03 pm
DPF – badge of honour for you here!
That sad little git Winston, the last of the rare indigenous NZ Pygmy species, has just been bagging you in parliament.
You must be doing something right David!
May 22nd, 2008 at 4:07 pm
BB, I was pretty happy with the funding for additional skills training, funding for insulation for housing, more elective surgery … moderate tax cuts.
Lindsay, tell me how much longer than 5 minutes was it? Tell me how much of his allocation he used? Tell me when last an Opposition leader didn’t use all of their budget reply speech in an election year? Lindsay, I’ve worked in Parliament, I know what’s going on right now. Key and English are off working with their advisers and it’ll be English, not Key, who’ll give the substantive reply… English not Key who’ll be asked to rebut the government. English not Key who’ll attempt to explain the policy alternative. Key’s pearly whites will be kept for his TV interviews later where there’ll be a referee to help him out.
The facts are that Key’s a largely insubstantial but apparently pleasant leader.
May 22nd, 2008 at 4:09 pm
Bevan, I don’t recall you mentioning OBEGAL? It was your ridiculous accusation regarding Cullen that I challenged.
If Cullen running the operating balance of the country to near zero is not scuttling the economy, then I would hate to know what is in your eyes!
My assertion was not rediculous, your interpretation of it was.
May 22nd, 2008 at 4:10 pm
Bloody wonderful speech by Key definitely the leader with vision we need. How could even a poor deluded fool like you Paul
listen to that sad pathetic old battleaxe Helen trot out the same old same old “Wot about ealth and education” and interperate it as anything other than the last ravings of a doomed leader who has run out of ideas?
May 22nd, 2008 at 4:11 pm
“moderate tax cuts” can I get another block of cheese with a tax cut PaulW, and I thought it was going to be a liarbour lolly scramble, but no. Everybody will be cheesed off and Winston is a fungus.
May 22nd, 2008 at 4:11 pm
Paul W,
The time allocation to Key and Clark was 20 minutes. The source for this information is the official Order Paper which is available on the NZ Parliament website. There was a warning bell (a 5 minute one I think) which rang while Key was speaking. He did finish before the final bell rang so he spoke for at least 15 minutes.
May 22nd, 2008 at 4:13 pm
Does anyone have a link to Keys speech?
May 22nd, 2008 at 4:14 pm
The IMF has said that major increases in govt spending or major tax cuts will cause a blow-out in the value of the dollar and will cripple our export sector.
I don’t know where you get your facts, but you’re dead wrong. I don’t think you’ve even read the IMF report. Because in fact the report makes no mention of tax cuts being unsound, inflationary or undesirable” according to the NBR. And they continue to say:
Instead, it notes the government has used the extra tax revenue to reduce public debt and build a solid fiscal position. The flip side to this has been a widening current account deficit resulting from New Zealanders’ attempts to grow their non-taxable incomes through property speculation. This has shifted the country’s risk profile from the public to the private sector and resulted in a more vulnerable economy.
Hmm, nice work bro, but read things before you feel the need to comment on them. It makes you look ignorant, ill-informed and just stupid.
You missed it mate. He spent 5 of his twenty minutes saying nothing and then left the Chamber. Missed a great opportunity but only because he had nothing to say. It wasn’t quite the “beauty” you were hoping for. It was incredibly underwhelming.
While that may be true (and I don’t necessarily agree), it’s totally pointless. No swinger is going to look at Key and say, “Oh, what an appalling rebuttal to Cullen’s Budget, I can’t bring myself to vote for National…” If Key’s speech was bad, so be it. He only saw the speech for the first time when Cullen handed it to him. You could do better? Probably not. I bet you’d like to think you could, but then that’s why you’re sitting on your computer whinging and whining and dreaming of Cullen’s Budget and not gracing our nation as a politician.
This Budget will do nothing for Labour. I’m disappointed. I was hoping for a winner and all we got was suicide. Despicable.
May 22nd, 2008 at 4:16 pm
Does anyone have a link to Keys speech?
Keep checking National.org.nz and it will be up soon enough, and probably on their YouTube site. It may be hard to get a transcript because it was an off-the-cuff speech. Should be on Hansard too eventually.
May 22nd, 2008 at 4:17 pm
“Key’s response in the next few days will be what he’s fed.”
What rot. This is typical of Labour supporters, and people of the left in general. All left leaders are apparantly fantastic statesmen, but all the leaders on the right are puppets. Grow up.
You dont think his speech today was scripted?
May 22nd, 2008 at 4:24 pm
A great move by Key to leave the house before Clark had even begun her speech, it just proves that she is yesterdays man and that Key is the leader in waiting.
May 22nd, 2008 at 4:27 pm
Ok – cool. Kiwiblog’s National supporters want much higher inflation, much higher interest rates and a crippled export sector. Idiots. It’s people like you that are going to take this economy back to the stagnation of the 1980s. And all in the name of ideological dogma. Pathetic.
May 22nd, 2008 at 4:30 pm
Hoolian: Where is the report?
May 22nd, 2008 at 4:33 pm
OK-cool. Kiwiblog’s leftist trolls want higher inflation, celebrate the doubling of interest rates and a crippled export sector plus a mountain of hidden debt. Idiots It’s people like you who are going to take this economy back to 1990 when Labour last sabotaged an economy. And all in the name of ideological dogma. Pathetic.
May 22nd, 2008 at 4:34 pm
“Kiwiblog’s National supporters want much higher inflation, much higher interest rates and a crippled export sector.”
You dumb fuck. The TWI surged 0.7 in the minutes after the budget was released. What does that do for our export sector? Inflation is around 4% now, and thanks to a combination of purely politically motivated tax cuts and massive spending increases it is likely to be pushed much higher. That will makes cutting interest rates very difficult for the RBNZ. Nominal interest rates are going to increase.
We are facing an economic downturn and an increase in inflation thanks to the ideological dogma of your pathetic party.
Labour has fucked NZ with this budget.
You are making a clown out of yourself, Nome. Have some self respect and stop embarassing yourself.
May 22nd, 2008 at 4:39 pm
God there’s a lot of foolish commentary here but lets go through one at a time then I think I’ll wait for English to do the real reply!
First Bevan, Key will try to say Cullen’s irresponsible just like he said he was previously a scrooge. It makes sense to save surpluses when the economy’s growing and keep some pressure on inflation. Similarly, it makes sense to spend when things are tightening – I’ll agree it’s a change of approach, but it’s pragmatic not ideological. OBEGAL is forecast to shrink but growth is expected to recover… I don’t think it’s nearly as simple as David would like to think it is.
Secondly D4J, yes they are limited tax cuts but they’re targeted and there’s also careful spending increases which will also be helpful. Unlike Key, Cullen realises that there’s more tools available to politicians than simply the tax system.
Thirdly Johnboy, you’ve not made a point, you’ve just been typically insulting. I know it’s what usually passes for conversation around here but it’s actually juvenile. I know you don’t like talking about health and education and you know, issues, when you’d rather just froth and form about lairbour…
Fourthly Lindsay, Key might have spoken longer than 5 minutes… but you’re flogging a dead horse here. His speech contained almost no actually content. I’m listening to Rodney Hide right now… he’s saying much the same thing as I have; what on earth was Key doing given that he said next to nothing… it was easily the least impressive speech I’ve heard him give and he’s given a few that were in fact quite good – the last budget reply was but this one wasn’t.
Finally Kimble. No Kimble, it’s not typical of people on the left and not all left leaders are correct. Key is a poor statesman. He is a light-weight, he does rely on English to do the hard work… this was never more apparent than his appalling performance around Akl airport. You can pretend otherwise but you’re delusional. No I don’t think Key could plan much for today’s reply. I remember working in Opposition and trying to guess at the Treasurer’s plans and I can assure you that Clark and Cullen did much better in Opposition that Key is because they were smarter and more experienced and actually capable of engaging in a debate without a great deal of support…
May 22nd, 2008 at 4:44 pm
Did anybody hear Winston quote from Ian Wishearts Absolute power?
Winnie talked about the “elephant in the room”, I wonder how Helen felt when he said that?
May 22nd, 2008 at 4:48 pm
dimbulb:
“We are facing an economic downturn and an increase in inflation thanks to the ideological dogma of your pathetic party.”
1) I’ve never voted for Labour.
2) I want a balanced budget, with zero tax for the first $10,000 earned. National’s waste-watch website hasn’t identified any major areas which it could prune spending, so I agree with them that nearly all the government’s spending is wise, and invests in the long term productivity and well-being of our country.
3) Where I part company with National’s fiscal position is tax cuts. We can’t afford to start running massive fiscal deficits, stoking inflation and increasing interest rates. I disagree with Labour’s budget for the same reasons, but realise that it’s to a lesser degree than National’s program. Labour is by far the lesser of two evils at the moment.
May 22nd, 2008 at 4:50 pm
The Christchurch Press has posted an article about a report written by the ANZ which is very critical of Government spending.
This article hints at what will be a major challenge for the incoming Government, which is the quality of spending. A classic example is the Health budget which will need very careful management to get a better rate of return for the huge amounts of money invested.
May 22nd, 2008 at 4:51 pm
roger nome
No roger, we want a change from all of that – the polls also reflect that we want a change from all of that. Don’t vote for corrupt self serving govt.
May 22nd, 2008 at 4:58 pm
Woger
Who do you vote for then?, most here are happy to nail their colours to the mast yet you seem to be afraid of doing so.
Come on..tell us.
May 22nd, 2008 at 5:01 pm
Roger votes Green and/or Progressive. Anyone wish to hazard a guess at the chances of these economic illiterates ever balancing a budget!!!!
May 22nd, 2008 at 5:04 pm
“1) I’ve never voted for Labour.”
No, but thats only because you were too young to vote in the last election I am sure. In any case, there are only a few lunatic Labour policy you havent blindly supported. This is shown perfectly in your next statement, “nearly all the government’s spending is wise”.
“2) I want a balanced budget, with zero tax for the first $10,000 earned. National’s waste-watch website hasn’t identified any major areas which it could prune spending, so I agree with them that nearly all the government’s spending is wise, and invests in the long term productivity and well-being of our country.”
Speaking of that long term, lets talk about the Labours raping of the economy for pure populism and political spite. You dont want a balanced budget. If you did you would have been arguing for tax cuts for the last 5 years. A prudently balanced budget means running a surplus. For a country of our size a surplus of over $5b is nowhere near ‘balanced’.
“3) Where I part company with National’s fiscal position is tax cuts. We can’t afford to start running massive fiscal deficits, stoking inflation and increasing interest rates. I disagree with Labour’s budget for the same reasons, but realise that it’s to a lesser degree than National’s program. Labour is by far the lesser of two evils at the moment.”
All spending is better than tax cuts is just a variant on your Labour Good : National Bad rhetoric.
No New Zealand government needed to cut spending to reduce taxes until this irresponsible budget. That was Labours plan with this budget, not productivity or New Zealands well being. They have decided to piss away the surplus before National can get their hands on it. It is completely irresponsible and not befitting a government of a first world nation.
May 22nd, 2008 at 5:04 pm
Bollocks Paul all the comentators are saying the budget is visionless. Nothing about lifting us back up the OECD rankings ( funny how that is not mentioned anymore). “Thrown in the towel” I think was the phrase. Nothing about growing the economy. “Redistributing the shrinking pie” was the phrase used for that one. We all are concerned with raising the standard of healthcare and the level of education as that is the only way forward for this sad little country. Don’t confuse the rantings of a woman who has lost the plot with a vision for the future. When they run out of answers they tend to keep on repeating mantras from the past. That is what Helen is doing more and more I notice. When are you lefties going to roll her then? Come on you can tell us we won’t gloat about it or anything.
May 22nd, 2008 at 5:11 pm
“He’s spent it all!”
Well, I thought, that has a familiar ring. So, for those too young to remember I googled, and came up with some incisive comments from economist Brian Easton which seem remarkably apposite.
“A generalisation about every election year is, as Muldoon once said, ‘I’ve spent it all’. Ministers of Finance dont leave room for further fiscal injections – for unbalanced tax cuts. Why would one expect Michael Cullen to be any different? Do you really think he hasn’t spent every bleeding cent that prudence allows him? Not to do so would make him the stupidest Minister of Finance since George Forbes, and no one doubts Cullen’s intelligence. Like his predecessors he has spent it all. If there had been a further growth dividend he would have paid it.”
Funny thing is that this is extracted from an address in 2005.
May 22nd, 2008 at 5:19 pm
Johnboy, I guess I’ve got to say that I don’t give a toss what the media are saying. I don’t respect their analysis or insight. What matters in this debate is what you’ve said and I’ve said and so far you appear to be struggling. I think “lifting us to the top half of the OECD” was first put about by BusinessNZ and I agree it ought to be the goal but you don’t get there by just hoping. You get there various ways; government and business doing the right things at the right time. NZ’s GDP has been going well until recently, employment is good, productivity is improved also. Until I hear what precisely Key is actually going to do, and how it will differ from the current mob’s approach, then I’m disinclined to take his ravings seriously.
Honestly, it’s just partisan hackery to support a party that’s actually not said what it will do… and what a lost opportunity it was today when Key left the Chamber and didn’t even take his full allocation.
As to when “us lefties are going to roll her”… I’m not a member of the party, let alone the Caucus but after today’s performance – one that Key was unable to front up to – I think the answer is they’ll not and neither should they.
May 22nd, 2008 at 5:21 pm
jafapete, genius!
May 22nd, 2008 at 5:22 pm
jafapete- thanks; a very valuable contribution, and a lot of it is directly relevant to today.
May 22nd, 2008 at 5:28 pm
jafapete
I don’t have a lot of issue with what you just said except for this;
Was that a joke? I certainly doubt his intelligence. Let me see;
$8b surplus and no tax cuts – wot’s the cunnection…
Govt spending is not inflationary….
We won you lost eat that….
Working class scab….
Rich prick….
It’s just certain journalists that want a tax cut…
We don’t do tax cuts – we are socialists and proud of it…
No intelligent person would open themselves up to the sort of ridicule this dim-bulb has done so many times for so many years.
May 22nd, 2008 at 5:30 pm
I’ve spent it all too. And more.
May 22nd, 2008 at 5:30 pm
The argument that Cullen has loosened fiscal policy due to a weakening economy might hold more weight were he to have gradually loosened it; we have, after all, had projections of a slowing economy for some time. Moreover Cullen has repeatedly argued during debate that tax cuts do not improve the economic situation (his favourite example, as I recall, was to cite the US economy under Bush Jr. doing poorly in spite of tax cuts), so a sudden about face (or to quote the labour propaganda machine “FLIP FLOP”) on this position is highly dubious. Suddenly allocating the entire surplus in an election year (and especially with labour so far behind in the polls) should thus appear more like an act of desperation to win or perhaps even a scorched earth tactic to limit National to a single term.
May 22nd, 2008 at 5:34 pm
Was that all the media that you consider yourself far more intelligent than or just TV or Radio or Press there Paul?
I struggle just to understand why anyone of sound mind could possibly be a left winger so you are right on that comment.
I thought Helen said her government was going to lift NZ to the top half of the OECD but I bow to your superior intelligence it is obviously a plot by the evil Business Roundtable to discredit her government.
Employment is down and dropping rapidly and productivity is a basket case compared to most of our competitors.
If you are not a member of the party then I suggest you stop waving that large red flag with a picture of your leader on it.
May 22nd, 2008 at 5:44 pm
Excuse me, PaulW — back in the real world, when your income falls you should cut expenditure. Obviously, I’m not as smart as Doctor Cullen, but I’m sure not as stupid as he seems to think either. While I’m not fond of ‘visions’ from anyone other than saints or drunks, I sure find it incredible that Clark and Cullen are trying to paint themselves as the poster children for fiscal responsibility.
May 22nd, 2008 at 5:51 pm
Your budget coverage has been insightful as always, but I bet you wish you never this said David!!!!
May 22nd, 2008 at 5:56 pm
kimble:
“No, but thats only because you were too young to vote in the last election I am sure.”
heh – grow up boy.
“You dont want a balanced budget. If you did you would have been arguing for tax cuts for the last 5 years.”
Your lack of fundamental understanding shows through again. A budget should be balanced over the business cycle. A surplus when times are good to take the heat out of the economy, and a deficit when times are tough, to put stimulus back into the economy. An economy functions more efficiently when the spikes and the troughs throughout its business cycle are shallow. This is the benefit of fiscal conservatism.
Now I don’t think that NZ is in such a bad position that we need to be running huge deficits. We’ve yet to have even one quarter of economic contraction.
“All spending is better than tax cuts”
No, but at the moment wise spending. There is very little waste spending to cut, which is why National doesn’t promise spending cuts.
The rest of your post is just hollow rhetoric and not really worth responding to.
May 22nd, 2008 at 6:00 pm
“No, but at the moment wise spending. There is very little waste spending to cut, which is why National doesn’t promise spending cuts. ”
Sorry nome as usual you are wrong. You should have said “There is very little waste spending that we know of yet”
Check this out:
http://www.stuff.co.nz/stuff/thepress/4556051a6009.html
May 22nd, 2008 at 6:03 pm
Despite despising Cullenomics I don’t believe he is stupid politically and Clark even less so. This worries me. Why deliver a more of the same budget (except negligible tax cuts) when you are facing electoral oblivion?
Clark is so desperate for a fourth term she will sacrifice the economy for it. We are yet to see the big bribes, they will come out in October to turbo charge the Colby tax cuts.
That’s why the Nats are silent on detail. This is the phoney war.
Do not underestimate how low this crowd will go to continue to enjoy the aroma of new ministerial limos and subsidised business class travel. Remember, they won’t be the ones suffering if the economy tanks, particularly if they are still in government.
May 22nd, 2008 at 6:04 pm
It starts with—-”The country’s biggest bank is preparing to release a damning report on the poor quality of government spending.”
O shit o dear—– But never mind the quality mate —–feel the width!!
May 22nd, 2008 at 6:06 pm
Craig said:
Craig, in business terms, real-world, it may well make sense to spend more if you think it will assist you over the long-term and particularly if you’ve previously been very disciplined and built up some reserves. Equating the finance arrangements for a country to that of a household is not that helpful. For most of his term as Minister of Finance, Cullen’s been banking surpluses and has been decried as a scrooge – I think it makes some sense to be careful and cautious when the economy is hot and there’s strong external demand… but, when demand is reducing and the economy slowing, it’s not unreasonable to loosen the straps a little. The risk is inflation however which is why, I believe, the tax cuts are targeted towards the low- to middle-incomes and are not excessive.
May 22nd, 2008 at 6:07 pm
Nice bank that eh—wouldn’t want to spoil little Mickys going away party would they now.
May 22nd, 2008 at 6:08 pm
Johnboy, when Banks get their own houses in order, I’ll be interested in their commentary on government spending. Witness the collapse of financial institutions due to poor governance, illegal practice, low-doc loans etc… Lets not pretend the banks are not self-interested in this process.
And Johnboy, I didn’t say NZBR, I said BusinessNZ and I think it’s a valid goal.
As to your question about the quality of analysis in the media, I have to say I think most of the commentators are very very average.
May 22nd, 2008 at 6:11 pm
Detail aside, if Labour weren’t so low in the polls, there would be no tax cuts at all!
May 22nd, 2008 at 6:18 pm
“Johnboy, when Banks get their own houses in order, I’ll be interested in their commentary on government spending. ”
So you are not only more intelligent than the combined minions of the media Paul but the banks as well. Listen buddie just between you and I. The country needs a really bright leader cause we are totally in the shit. Why don’t you apply, lets face it Goff is not too bright and you have already told us that Key is a lightweight. Give it a go my son. Why dont you get a catchy new name, say “The Messiah” That should do it mate. You will be a shoo in!
May 22nd, 2008 at 6:22 pm
Bogusnews (175) Add karma Subtract karma +7 Says:
May 22nd, 2008 at 3:50 pm
“Roger; Once again you show you are incapable of understanding basics. The facts are, that just like in Australia (and every other sensible country that has stopped stealing so much of peoples money) when you give tax cuts the economy grows and therefore government income. This was the primary thing National relied on. It works everywhere else, it would have worked here.
And since you raised the issue of Government spending, take a look at this link (courtesy of the excellent Whaleoil site) http://www.stuff.co.nz/stuff/thepress/4556051a6009.html the ANZ National bank is about to release a report flaying the government for their massive wastage of public money on unproductive areas. They have delayed it so as not to take attention off the budget.”
That’s the crux of this issue as far as I am concerned. There is nothing I would like to see better than all the bureaucrats with useless university degrees getting paid well above real-life wage rates and doing work that adds NOTHING to the NZ economy, being made to join the real world along with the rest of us. In the 1980’s it was the Post Office, Min of Works, etc, that had 5 to ten times as many staff as they needed to actually do the work, and paying them all off actually put the governments finances, and the whole NZ economy, ahead.
Remember the health reforms, and the “money being wasted on consultants” that just about cost the Nats the 1999 election on its own? Well, where has the MSM BEEN when far greater wastage of money, to NO USEFUL END AT ALL, has been siphoned out of the pockets of the taxpayers into the pockets of hordes of young lefty ideologues with all the right P.C. Uni qualifications but no use to ordinary Mr and Mrs NZ – jobs for the boys, mate, and for the sisterhood, too. Remember all the ridiculous “Sir Humphrey” stuff about the way government-owned enterprises were run that Richard Prebble told us in his books? Wait for it – the padding that a responsible incoming government will be able to cut will be breathtaking, probably even worse than in “the Prebbo’s” heyday.
And don’t get me started on Welfare reform – like the stuff President Clinton signed into law in the US in the 1990’s – a Democratic President, not a Republican one – that Liarbour and the Left and the MSM in NZ have been in denial about the effectiveness of.
Am I looking forward to a rerun of the onetime new Lange government’s “opening of the books”, and the taking of some courageous decisions in the face of things having been much worse than the public had been sucked into thinking by a bullying PM.
The tragedy for John Key and the Nats is that they will inherit office just as an international economic downturn is really biting, on the heels of an administration that has shamelessly squandered the fruits of both the tough decisions made by previous administrations, and a favourable economic climate. We are going to need some real political maturity from NZ-ers in the years to come, like when “great communicator” Lange kept them on board over the reforms of Rogernomics. And THAT is not something I am optimistic about, given the aforesaid MSM’s rampant leftwing biases that have only deepened since those days. At that time of Reagan, Thatcher, and Roger Douglas, I thought, this is the death blow for socialism. But the socialists control of the culture and the institutions trumps truth and reality, sadly.
May 22nd, 2008 at 6:22 pm
big bruv says:
Like much of what Wishart comes up with, BB, “the elephant in the room” is hardly original, so I doubt he was channelling Wishart when he said it… though with Ian’s self-proclaimed connections to various dieties I guess we’ll never know
More importantly, what he was actually talking about was the Reserve Bank Act. This is the second time in a week I’ve had cause to voice agreement with something Winston said, which either means I’m losing what’s left of my mind, or that he has a point:
Of course he no sooner offers a legitimate debating point than he’s off into dreamland again:
NZF has been in existence for 15 years. So either he has been channelling Wishart for longer than BB thinks, or he’s started referring to himself by the “royal we”.
May 22nd, 2008 at 6:41 pm
To those who posted above asking for the link to Key’s speech in the budget debate it is here on YouTube. All 17 minutes of it.
May 22nd, 2008 at 6:42 pm
I listened to the Radio NZ Checkpoint programme immediately after the 5.00pm news. In their budget piece, they cut to interviewing a few random citizens in the Helensville and Mt Albert electorates. Not a single person in either electorate had anything positive to say about the budget. While these ‘vox pop’ interviews are statistically meaningless, it was striking that even National Radio couldn’t seem to find anyone who was impressed.
Also hard not to be struck by Labour’s luck in having the budget report sandwiched between the Kahui acquittal and petrol prices rising over $2 per litre. Neither are exactly feel-good stories. The stars in their courses really seem to have turned against them.
May 22nd, 2008 at 6:47 pm
Good god this is trite, back to DebSoc methinks.
If you have a opinion state it, but don’t deride others for having one. Best you challenge what I’ve said or keep quiet so that others can. The point is that banks are not impassive players and neither are they above criticism. They have a position that they’re actively looking to advance. That you don’t understand this doesn’t reflect on me.
Lindsay’s now conclusively proven that Key can speak for 17 minutes and say absolutely nothing… lets play “spot the policy alternative”?
May 22nd, 2008 at 6:49 pm
I ran it past my staff all of whom are eligible for the huge $11.89 or whatever. They all promised to invest it wisely. Thank you Doctor Cullen.
May 22nd, 2008 at 6:49 pm
Paul W:
I guess when it comes to saying nothing you’d have to rate as an expert who has had plenty of practice.
May 22nd, 2008 at 6:55 pm
Thats not very nice Paul perhaps your Mummy was right you are not the Messiah at all just a naughty little boy.
May 22nd, 2008 at 6:55 pm
“I ran it past my staff all of whom are eligible for the huge $11.89 or whatever. They all promised to invest it wisely. Thank you Doctor Cullen.”
Now all you have to do is top up their wages from the business tax cuts you received earlier. Oh you did? – because the minimum wage went up? Well you shouldn’t pay minimum wage if you don’t want to be affected by its rising. Simple as that really.
May 22nd, 2008 at 7:00 pm
Key summed it up in his budget speech – “Michael Cullen read the budget, but he doesn’t believe in it”
May 22nd, 2008 at 7:03 pm
What a brilliant little parrot you are then. I might double their wages so they can get $16.49 from nice Doc Cullen. God they will be ever so grateful. Tell me are you the parrot what writes Labour Party policy or are you the famous parrot that John Cleese took back to the pet shop?
May 22nd, 2008 at 7:14 pm
You prove the point that the only way to meaningfully deliver more money to working people is through higher wages. Sure tax cuts can help in a small way, but ultimately it is higher wages which deliver the best outcomes.
Your vote I assume, will be for a party who will and has thwarted growth in real wages for low income and lower skilled workers. So I challenge you to in fact deliver on your facetious promise, simply out of spite if necessary, that way some workers will get more money, and that’s why I’m involved in politics at all.
May 22nd, 2008 at 7:28 pm
“A budget should be balanced over the business cycle. A surplus when times are good to take the heat out of the economy, and a deficit when times are tough, to put stimulus back into the economy.”
So that is what Labour has set up eh? A massive surplus when the times were good, and now that times are looking troubled they are setting us up for a massive deficit?
“Now I don’t think that NZ is in such a bad position that we need to be running huge deficits.”
No? Then why did Labour just piss the surplus away at the very start of what can potentially be a long economic slow down? Wouldnt it make more sense to retain the surplus until we know which way the economy is going to go?
The truth is, Cullen had a massive surplus for quite a few years. The highest in the world, in fact. And this was despite a huge increase in spending. It wasnt prudence which led him to have it, it was ideological blindness; never reduce taxes, ever.
We now have another dubious world record; the highest interest rates. And the world differential is only going increase as the rest of the world continues lowering theirs to stimulate the economy.
Who would be Alan Bollard now, huh?
Just last week exporters were looking forward to an easier time of things in the near future. Oh well.
May 22nd, 2008 at 7:50 pm
Im still not sure which parrot you are Parrot. I suspect you are the dead one and that would make you eligible to be a policy advisor for Labour. So lets get your advice correct here. I should double the staffs wages immediately raising them from lower paid semiskilled workers status to what until todays budget would have qualified them as “Rich Pricks”. In approximately two months time when our little enterprise went bankrupt they would then become the underclass of “unemployed”. Is this official Labour party policy or just an interesting social experiment for left wing people to muse over when they pretend they know how to run a business or a country?
May 22nd, 2008 at 7:54 pm
Kimble , it’s called keynesian economics. You hold on to the money in the good times and let it out to stimulate the economy when things slow down. Tax cuts are a pretty stupid way of doing it. Investment in productive infrastructure that allows more capacity for gain in the next upturn is the best way of doing it. Cullen knows that but the retarded chimps of the right, such as yourself, have screamed so loudly for their precious tax-cuts he’s capitulated.
May 22nd, 2008 at 7:57 pm
Oh Dear
If Cullen was the Chief Financial officer of a listed company he would be praised because of the improvement of performance and the decrease in debt. Instead of this the forces of the right have castigated him to the stage where people think that tax cuts are more important than interest rates. And the really big gap in the debate is that if the country’s books are in good order then we individually benefit but this is never acknowledged. The surplus was not “pissed away”, the public debt level has improved dramatically during the time of this Government.
And Cullen gives significant tax cuts and still gets criticised.
His decision is classic Kensian economics, store the nuts when times are good and start releasing them when things turn sour.
And like it or not but Labour is not responsible for fuel price increases caused by peak oil or food price increases.
The really sad thing is that National is completely unable to deal with the crisis and if they were in power we would be in deep trouble…
May 22nd, 2008 at 8:03 pm
I am blown away by the logic of the right. For the last four years, the only cry from National has been “tax cuts”, “tax cuts” and yet “we will give humungous tax cuts”. No other policy worth talking about, but “tax cuts”, and the ability of each individual to spend “their own money” best.
What happens today on this blog site and on the news around the country?
It’s strange; “extravagant tax cuts”, “Cullen is being irresponsible”, “Cullen will send us to the wall!”, balanced by Key saying taxpayers will get more from National. Its not so much possums caught in the headlights, the Nats and the bloggers of the right are like chooks in a henhouse not sure which door to fly out: “Squawk, it’s too irresponsible and expensive! How dare he!” or “Squawk, we will match it and go better!”
Divide and rule…well done Michael Cullen. When the Nats find some new policy in the weeks before election, it will be despatched with the same eficiency.
20% lead Nats… I don’t think it is enough at this stage.
May 22nd, 2008 at 8:08 pm
Have I just awoken from a coma, and National have been running the country while I was out? Two days ago the lefties were claiming the EFA is all part of a right wing conspiracy to suppress freedom of expression, and today they are claiming National is responsible for Cullen’s latest budget.
What’s going on?
May 22nd, 2008 at 8:19 pm
Where’s the A-team tonight? Surely Johnboy and Lindsay shouldn’t be left without some supervision?
May 22nd, 2008 at 8:20 pm
No Lee, I just checked your blog and you are definitely still in a coma.
May 22nd, 2008 at 8:20 pm
PaulW:
But he didn’t, did he? Duh.
Ferdinand:
But he didn’t, did he? Duh.
Some lefty fools not having realised since 1980 the world has embraced Hayekian economics, seem to dwell in the past along with economically illiterate reef-fish and various assorted fools and morons with single-digit IQs.
Meanwhile, I thought Key’s speech quite uninspiring. Maybe I’m judging too harshly but IMO he had enough ammo to tear Cullen a new one but he didn’t. The relevant issue today was not tax cuts but the Liarbore history of self-interest spend and only 3/4 of the way thru did Key refer briefly to that. Key’s all we conservatives have got, but FFS, we’re not going to win more than one term unless he becomes a “great communicator,” (see PhilBest’s brilliant 6:22 comment – esp the last para).
The next PM has one of the biggest tasks since WWII: to
takelead NZ through the extraordinarily difficult upcoming economic reorientation foreshadowed by the current (at this point relatively minor) global economic upheavals which will become increasingly catastrophic economically, diplomatically and possibly militarily.We really need to elect the cleverest, most charismatic and able leader available in October, I don’t know that Key is it. I know of course that Clark isn’t.
May 22nd, 2008 at 8:23 pm
In short we need a Messiah.
May 22nd, 2008 at 8:28 pm
Let us pray.
May 22nd, 2008 at 8:28 pm
Some lefty fools not having realised since 1980 the world has embraced Hayekian economics
And some rightie fools fail to realise that Hayekian economics has been discredited (and always had a 19th C pedigree anyway) and that the Keynesian model is making a come back (in fact you you look at so-called “military-keynsianism” it never really left).
May 22nd, 2008 at 8:31 pm
19th century Ferdinand? Hayek was Keyne’s contemporary. Didn’t you know that?
May 22nd, 2008 at 8:32 pm
This was a cunning and calculated budget from Cullen.
Designed to bribe Labour voters with children but at the same time to leave nothing in the cupboard for National.
Oh and tax cuts in October – a couple of weeks before the election.???
And after 9 years of Labour why is it that all the middle class families are on benefits?
John Key is right to call it the block of cheese budget.
Let’s hope the average NZ is dairy intolerant.
May 22nd, 2008 at 8:35 pm
“John Key is right to call it the block of cheese budget.”
I agree democracy mum, but I would have called it The Ches and Dale budget, and who knows what a great communicator would have called it?
May 22nd, 2008 at 8:50 pm
If Cullen was the Chief Financial officer of a listed company he would be praised because of the improvement of performance and the decrease in debt.
No, he’d be ‘right-sized’ out of a job for wasting so much money on crap that simply isn’t profitable.
May 22nd, 2008 at 9:04 pm
The Hansard and video of John’s speech are at http://johnkey.co.nz/index.php?/archives/391-22-May.-John-Key-responds-to-Budget-2008.html
Bill’s video is at http://youtube.com/watch?v=NS3Ece734DM
May 22nd, 2008 at 9:07 pm
“…National certainly has some capital in terms of a lead in the polls that it can use up…”
Not according to the latest Roy Morgan, taken before the budget. It’s to close to call between LGPM and NUA. In fact, if you assume all the Maori seats go to the Maori Party, a slight bias (1-2%) in phone polling to National (for obvious reasons) and factor in Rodney losing in Epsom (highly likely), the LGPM is slightly in front in a 125 seat parliament.
http://www.roymorgan.com/news/polls/2008/4295/
http://www.elections.org.nz/calculator/
May 22nd, 2008 at 9:13 pm
mickey savage:
If National had been in power since 2000 and operated within the golden global conditions exigent 2000-2008, using the same policies they had continuously pursued in the years previously, then you would have found as at 22 May 08:
zero public debt
zero inflation
low taxes
high GDP
higher employment than achieved under Liarbore
12th in OECD ranking (estimate, but the only one in the list)
world-class infrastructure
health care efficiency at low cost and high return
education that worked (i.e. produced results instead of touchy-feely bollocks)
immigration that warmly welcomed migrants with vital skills and eschewed those who would become a drain in any way
The fact is, a chimp could have managed economic “good times” in NZ between 2000-2008, given the global conditions.
It is NZ’s biggest tragedy that this golden once-in-a-lifetime opportunity fell to a most self-interested, profligate, ideologically-driven bunch of low-skill parliamentary scum. The fact the scum were and are led by a power-obsessed selfish control-freak is just icing on the cake of tragedy.
May 22nd, 2008 at 9:13 pm
Well that is another fine mess the Cullen has got us into.
So it’s a definite lock now for National being the Government in waiting. Nothing can save Labour now. Hels is soon to join the ranks of the unemployed.
May 22nd, 2008 at 9:22 pm
Toms,
I don’t agree with your Epsom assumption but Morgan are running national at – 3 and labour at + 9 (with a sample of 912) compared to neilson at the same time. Do you think Neilson may have been more reflective of Auckland?
May 22nd, 2008 at 9:25 pm
Or22k -
Nah, Cullen’s got a job. Massey will need an economic history lecturer, and Maharey will love being in charge of him for a change…roll on Massey turning into a basket case…
May 22nd, 2008 at 9:27 pm
Bill’s video is also now up on his website (you can comment there): http://billenglish.co.nz/index.php?/archives/307-VIDEO-Response-to-Budget-2008.html
May 22nd, 2008 at 9:29 pm
bummer. trying to leave links for the JK video and hansard (on johnkey.co.nz) and the bill english video (on billenglish.co.nz) but they’re getting spam binned.
May 22nd, 2008 at 9:31 pm
I know what Keynesian economics is Ferdinand. There is no Keynesian excuse for running such an extraordinarily high surplus. And there certainly isnt a Keynesian excuse to overtax the populace to maintain a surplus so that you can still massively increase spending all while the economy is in good shape!
The leftie, elitist fools LOVE Keynesian economics because it is fits with their “redistribute everything” philosophy and it is supposed to work best in authoritarian states. It invariably leads to increased central planning, swells the influence of the state which is damned hard to ever reverse, it is useful in entrenching dependence upon the state, and it is so easy to sell to the electorate.
May 22nd, 2008 at 9:33 pm
Here is Bill English’s budget speech
May 22nd, 2008 at 9:35 pm
Meanwhile, back on Planet Earth the election isn’t this Saturday, and nobody abolished the Electoral Act and subcontracted it out to pollsters. Yet. You’re also making quite an assumption that Labour doesn’t revert to type, and run a toxic and panic stricken campaign of attrition against the “haters and wreckers” and the ‘luddite extremists”.
And PaulW, I don’t regard John Maynard Keynes or Milton Friedman as holy writ. I do think it’s quite useful to keep pointing out the bleeding obvious: No Minister of Finance has a magic money tree in the Beehive basement, and I’ll treat anyone who pretends you can increase spending, reduce income and not have something give somewhere as a snake oil merchant until I’m convinced otherwise.
May 22nd, 2008 at 9:36 pm
Democracymum asks “And after 9 years of Labour why is it that all the middle class families are on benefits?”
I’m not sure I’d say “all”, but I’d like to hear some answers.
May 22nd, 2008 at 9:44 pm
A minor thing I noted watching the Parliamentary speeches was that Liarbore once again demonstrated their propaganda skills by strategically placing their “New Zealand Liarbore” red boxes on the two desks behind Clark and in very few other places around the Liarbore benches. Because of course they calculated where the cameras would be facing during the key speeches.
OTOH, National had none of these subliminal props.
When will they ever learn? Hint to my friends: it’s called psychology.
May 22nd, 2008 at 9:51 pm
Reid …
What do you base your claims on?
eg higher employment than achieved under Liarbore (the best in the western world)
The economy has been performing out of its skin. Each year the treasury analysis has been shown to be too pessimistic and things are better than predicted. Perhaps Cullen knows how to hit the sweet spot?
If Key was in and given his promises I would expect debt to be up, overseas control of the local economy to be greater and interest rates to be higher.
The Clinton/Bush experience in the States is similar. Clinton the evil reckless democrat paid off debt and got the economy running. Bush the supposed economic miracle maker gave tax cuts to the rich, ran deficits and drove the US economy into the ground.
Don’t you love the right? They insist that they are better at running things but their arrogance and insistence that they know best prevents them from actually realising how things ought to be run.
May 22nd, 2008 at 10:07 pm
..What comes after ‘B ‘ for Budget??? ‘C’ for Cullen..’C’ for communist… ‘C’ for closures..’C’ for clearing out(I’m off To Australia).. ‘C’ for c#nt.
May 22nd, 2008 at 10:10 pm
“You would have the left shouting from the treetops that Bill English is borrowing to fund tax cuts, that pensioners should start hoarding catfood because National is planning to starve the Cullen Fund of money, and that reducing contingency expenditure is slashing spending on health and education.”
Oh come now Mr Farrar, you are dreaming up an imaginary response from “the lefties” of your imagination, and then knocking “them” for taking that “position”. You have been extremely critical in the past when commentators (such as myself) have done this from the other side! (e.g. arguments of the form “If the speaker’s tour had not been full of National MPs then Mr Farrar would have been damning the speaker’s tour…” Remember that?)
Cullen has spent the last 9 years retiring the debt that this country incurred the last time we had a National Government with dreams of a market-driven, privately-owned everything with fewer taxes.
Our hero Mr John Key admitted on Campbell that he was not adverse to borrowing to fund his party’s financial programme – i.e. the Tax Cut That Will Fix Everything.
So if Our Hero Mr John Key is going to run deficits and plunge us into big-time national debt anyway, in order to curry favour with the sort of voters who are only interested in a tax cut, then what difference does it make if Cullen spends all the cash now?
[DPF: You must be new around here. For several years the left has yelled borrowing to fund tax cuts on almost a daily basis. Cullen is running a cash deficit of $13 billion.
Also you are ignorant if you think most of the debt occured under National in the 1990s. Go check a history book. National was the first Govt ever to start repaying debt after it shot up to mammoth proportions before 1991]
May 22nd, 2008 at 10:12 pm
Paul M ; C for catastrophic cullen, I hope this soon too be unemployed sullen minister is employed as a carthorse in a flooded shingle pit ~!
May 22nd, 2008 at 10:16 pm
Bang goes a snap election.
There is no way Labour is going to ride to victory on this budget. The waiting goes on with only light relieve from Labour’s continued stuff ups to pass the time. It will be November before the stench of corruption is washed away and National takes over as the legitimate Government of New Zealand. The sun might once again shine on New Zealand.
May 22nd, 2008 at 10:16 pm
“No Lee, I just checked your blog and you are definitely still in a coma.”
Whay-Hay!
Thank you for making my day Ferdinand, at last I have one more name to add to my rather miniscule (ahem) ‘elite’ of readers. If you are the culprit, please stop posting as ‘anonymous’ it makes you look like a nutter.
May 22nd, 2008 at 10:19 pm
In tribute to Cullen
Cheese on toast
Ingredients
85g/3oz stilton
dash of Dijon mustard
dash of Tabasco sauce
dash of Worcestershire sauce
salt and freshly ground black pepper
1 slice of ciabatta, toasted
Method
1. Preheat the grill to high.
2. Place the stilton into a bowl and mash until smooth. Mix in the mustard, Tabasco and Worcestershire sauce and season to taste.
3. Spread the cheese mix onto the ciabatta slice and then grill for 1-2 minutes, or until melted and bubbling. Serve.
May 22nd, 2008 at 10:22 pm
mickeysavage, I don’t love the political right, since I view left-right divisions as illusory fabrications designed to fool the fools. So I don’t really listen to conservatives or liberals but rather try to determine the correct perspective in terms of what makes sense in the context of the times given the best possible application of the ideal humanitarian outcome. This is why for example I have said many times on this blog I think Bush is the worst US President in history and I have also said many times that Clinton is just as bad.
Happy to expand anytime offline but out of politeness sticking to the thread, I think that Liarbore has coasted over the last 8 years upon conditions not of its own making: i.e. it has taken advantage of others to its own benefit, by pandering to its own electoral interests to the extreme, whilst ignoring the fact that the revenue has largely come from its ideological enemies. Liarbore’s regime has produced little in terms of increased productivity that didn’t come from the global economic climate, yet it has given back very little to the productive sectors, and indeed in various ways it has discouraged them. At the same time, Liarbore has claimed credit for the largesse it has distributed to its own electoral base. That’s why I call them Liarbore, and that’s why IMO, they are scum. They don’t deserve to be in Parliament, let alone be in power.
May 22nd, 2008 at 10:39 pm
I must say – the guys at Scoop have done a good job in bringing together what everyone has said!
May 22nd, 2008 at 10:53 pm
Sorry Reid, “Liarbore” and “scum” are not very good ways to debate the merits.
Productivity has only gone up modestly, full employment does that. Full employment is probably the most important economic statistic there is for a community. If people have jobs then social ills go down. Despite the braying by some crime rates are decreasing for the first time in decades. And birth rates are a very strong indicator. When people feel more comfortable they breed. They have been breeding lately.
I disagree with the claims about coasting. Labour has poured huge amounts into infrastructure and paid off debt. Ideal things to do in preparation for when a country is facing a downturn.
And let’s be clear. The downturn is because of overseas events. Cullen has no responsibility for peak oil.
The ideal leadership will be one focussed on dealing with the environmental crises that we face. Clark and Fitzsimons are the only two who can do this.
May 22nd, 2008 at 11:03 pm
Well, I recon the label for this one is the “Hard Cheese” budget.
Sort of flows better that Key’s “Two blocks of cheese” and reflects Cullen’s ability to spend large amounts of money, yet still screw us all over.
May 22nd, 2008 at 11:14 pm
reid
“This is why for example I have said many times on this blog I think Bush is the worst US President in history and I have also said many times that Clinton is just as bad. ”
Ummm, anyone else see a logical error here?
mickysavage
From memory, Korea and the US also have very low unemployment rates, and Australia is not that far behind. Yet our productivity growth trails theirs by a huge margin. Care to explain?
Paul W (5.19) made the entirely unsupported claim that “productivity is improved also”, which flies in the face of all the published statistics I have seen. In fact, NZ productivity has declined since 2000, and is now back around the abysmal levels of the 70’s. This, rather than full employment, is what I would consider the most important economic statistic. Anyone can hide unemplyment by creating unproductive make-work jobs – look at the pre-1984 NZ Railways with its 22,000 staff doing approximately bugger-all. In the long term, productivity is the thing that gets a nation ahead, and this government seems not to even notice that ours is sliding.
May 22nd, 2008 at 11:33 pm
“Clinton the evil reckless democrat paid off debt and got the economy running. Bush the supposed economic miracle maker gave tax cuts to the rich, ran deficits and drove the US economy into the ground.”
Real Republicans endorsed Clintons welfare reforms and decried Bush’s absurd spending increases. I would be interested to hear what Clinton DID to get the economy running, and how Bush’s tax reform didn’t help the US bounce back after the tech crash (which came from Clinton’s era) and 911 (ditto).
“If people have jobs then social ills go down.”
Violent crime has been on the increase for years. Violent crime is worse than property crime.
“Labour has poured huge amounts into infrastructure and paid off debt.”
Name the infrastructure investment Labour has funded.
Labour continued to pay off debt because that is the least they could do. ANY government over that time would have done the same.
“And let’s be clear. The downturn is because of overseas events.”
Lets be clear, the previous economic prosperity has more to do with overseas than the current downturn. Labour presided over an economy that benefited from liberalisation in previous decades and a world economic boom. This doesnt take any special skill.
As for environmental issues, well Clark and Labour hav been a huge failure in that too. When they rush through their ETS in desperation just in time for the election, with zero regard for the long term problems caused by their inept law-making, they will cap an environmental career with fewer accomplishments than Judith Tizzard.
George W. Bush achieved more to help the environment than Helen Clark ever did.
Oh and productivity does not stall because of full employment, in fact, it is aided by it.
May 22nd, 2008 at 11:59 pm
Labour has presided over a huge and unsustainable increase in house prices that hurt exactly those that Labour is supposed to be helping.
Cullen preferred to impose high marginal tax rates on middle income earners for window dressing and not fix other holes in tax system that left many (probably including Labour Ministers) buying rental properties in attempt to lower their tax liability. Now the party is over, the hang over will last for years – and you can’t blame that one on international events.
I agree with Kimble – all this talk of investment in health, education, etc is rubbish. Spending large amounts of extra money to little effect is not investment! Investment by definition is capital expenditure that is expected to generate a future return.
May 23rd, 2008 at 12:04 am
“Labour has presided over a huge and unsustainable increase in house prices that hurt exactly those that Labour is supposed to be helping.”
Shady property developers? I THINK NOT!
May 23rd, 2008 at 1:39 am
Well, MickeySavage, it’s open to question whether the “evil Democrat” would have followed a course of fiscal conservatism, welfare reform and not hiking federal taxes if the Democrats hadn’t lost control of Congress in the ‘94 mid-terms, or the groundwork laid by George H. Bush which might have increased taxes but also controlled spending. Great argument for why it’s not necessarily healthy for one party to have a firm grip on both the executive and legislative branches of the federal government in the US; and I’m also all for giving Clinton credit where credit’s due. But, as Tom Stoppard once wrote everyone is entitled to their own opinions. Nobody is entitled to their own facts.
May 23rd, 2008 at 1:39 am
Michael Cullen is a silly……old…….man.
That is how he will be remembered by future generations of New Zealanders if the country still exists. Labour coasted on a successful economy not of their making. Now the hard times have hit and the economy is tanking. Labour has no answers and continues to waste others peoples money for no benefit to the New Zealand economy. The time for talk is over. Now is the time for action. Lets vote Labour out this November.
May 23rd, 2008 at 4:50 am
Mikhaels budget was all that it could be – a spoiler and a last ditch attempt to keep enough support to get a fair whack of the party vote and therefore list MP’s and not get reamed too much at the polls.
Will Hulun go to the polls early? If the focus groups and polsters show a surge of support after the budget you’ve got to say yes as there is no reason to hang on for grim death given the global economy is teetering one way and thats downwards into a commodity inflation lead recession. 3 buck 91 by xmas, Meeeerrry Christmas…yeah right.
Can John Inc. do much when they get elected to correct the global economic situation? No.
What they can do is correct the local command economy that Mikhael has weaseled onto us. T
he economy of no choice but MotherState.
MotherState taketh and giveth back less a handling fee.
MotherState spendeth unwisely and without measurable productivity in mind.
So if John Inc. can give the taxpayer their own cash back and focus on core infrastructure and services and prune the excessive non-productive spending of MotherState, New Zealand will be in a better place.
Its a shame Mikhael and Hulun have taken the opportunity to stick it to the country when the chips are down for all of us.
May 23rd, 2008 at 6:02 am
Well I’d call it the ‘Cheese on Toast Budget’ with the emphasis on ‘Toast’.
Of course, depending on which area of the political spectrum you inhabit, the final Cullen Budget was either a disaster or faintly adequate.
Those who assert it is a disaster suggest it is ‘too little, too late.’ and those who defend it are tending to suggest it should be defended because it delivers the precious tax-cuts that National have been calling for, so now they should all just shut up and be grateful.
In my opinion (and that is why I’m here, after all), It was in fact another fast-food, Mac-Budget from Cullen. It will do little to feed a family long-term, and was the economic equivalent of a burger, fast, convenient, facile and over-powered by its own marketing to disguise the fact that it will be toxic for the consumer and the environment, in turns.
If we are a Fast-Food Nation, then this budget will suffice to stave off the voters’ immediate appetite for change. But nowadays, people are hungry for a proper meal, and come lunchtime, and when it’s time to vote, they will once more be hungry. On the basis of this Budget –
Labour, and Mac-Cullen – Gone by Lunchtime.
Lee – MWT
May 23rd, 2008 at 6:38 am
Cheese on toast.
Heh heh, I’m loving it!
May 23rd, 2008 at 7:38 am
Craig Craig Craig – take the valium and calm down. The point of my post isn’t that polling companies run the country, just that you guys here in the kiwiblog sewer have to lower your expectations. Whilst you’ve all but popped the iced champagne, a sober analysis of the polls show the election is to close to call between the various coalition blocks. I don’t want the hospital system to be overcome with a rush of attempted suicides, anyurisms and heart seizures on election night when Helen puts together another left wing coalition. Heaven forbid what would happen to Davey’s traffic stats if the various permutations of Redbaiter were to fall dead in the shock of it all.
Paul: My view is most polls are commissioned with an eye on generating a headline rather than accuracy, with the current meme being on various doomsday headlines for Labour. Whilst I know they argue their methodologies make their polling accurate on thing stands out like dogs balls to me – 40% of households on Auckland North Shore don’t have landlines, and in South Auckland the figure is 60%, whilst the refusal rate is huge for polling. You’ve got ask how accurate they are given they’ve become so self-selecting even within the bounds of the polling comapnies attempts to be accurate.
[DPF: You really should not just invent figures. Some people call that lying. The 2006 Census shows North Shore City has landlines in 93.5% of households - not the 60% you claimed. And in Manukau City 85.4% of households have landlines - more than double the 40% you claim]
May 23rd, 2008 at 7:53 am
Sober analysis did show the blues ahead of the reds, by so much the coalition block part was almost meaningless (almost).
The mobile phone household probably is a red herring (ha ha ha) as that transient segment of the population are likley to be the least likely to turn out on election day.
Redbaiter does drag in a lot of feral Standard commenters though, thats good for traffic count.
Will Hulun and Mikhael go early to the polls? I reckon they will, and have done for some time, the suns going down and the rational strategy is to maximise party vote to keep a decent power block for labour, else that swinging voter will go right.
May 23rd, 2008 at 8:12 am
Tom Tom Tom — if you really can’t help being a tin-earned, patronising dork, can you? I know it’s old fashioned, but I’ve seen ample reason to take polls (and the clairvoyant certainties of blog commentators) with many many grains of salt.
May 23rd, 2008 at 8:43 am
[DPF: You must be new around here. For several years the left has yelled borrowing to fund tax cuts on almost a daily basis. Cullen is running a cash deficit of $13 billion.
Also you are ignorant if you think most of the debt occured under National in the 1990s. Go check a history book. National was the first Govt ever to start repaying debt after it shot up to mammoth proportions before 1991]
Let me rephrase in Internet l33t speak for you RRM:
wtf omg lmao you just got p0wned
May 23rd, 2008 at 11:15 am
gtfo
May 24th, 2008 at 6:27 am
So in terms of spending cuts who is looking forward to a bit of right sizing?
For a start Working for Families can be right sized to…….. oh NZ$0.00 government expenditure in perpetuity.