Do you want a Finance Minister who can’t do basic maths?

November 28th, 2012 at 1:56 pm by David Farrar

From Hansard yesterday:

Hon : I would ask whether the Minister checked his arithmetic coming to the House, because, by my reckoning, if there was going to be one house built every hour for every hour of the day, 7 days a week for 10 years, there would be a build of 613,000 houses, not the 100,000 houses that Labour says we are going to build.

Let’s make this easy for the Labour Shadow Finance spokesperson:

  1. An house an hour is 24 houses in a day
  2. That is 168 houses in a week
  3. That is 8,736 houses in a year
  4. That is 87,360 houses in ten years

It is clear that David Parker must also be responsible for the same calculations that they can build houses in Auckland for under $300,000 each. He was out by a factor of 7000%.

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28 Responses to “Do you want a Finance Minister who can’t do basic maths?”

  1. Colville (2,085 comments) says:

    DPF – wasnt he out by 700% not 7000% ?

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  2. RRM (9,478 comments) says:

    613,000 / 87,360 x 100/1 = 701.7%

    So he’s only 700% out, that’s not too bad…?

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  3. Graeme Edgeler (3,269 comments) says:

    DPF – wasnt he out by 700% not 7000% ?

    The real number was ~86% lower than he calculated.

    Which means DPF’s calculation of 7000% was more than 8200% too high :-)

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  4. Rich Prick (1,557 comments) says:

    This is what happens when you learn math from Cunliffe.

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  5. themono (132 comments) says:

    Embarrassing. He’s multiplied by 7 to get number in a week, then multiplied by 365 days to get number in a year, rather than by 52 weeks.

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  6. RRM (9,478 comments) says:

    Embarrassing. He’s multiplied by 7 to get number in a week, then multiplied by 365 days to get number in a year, rather than by 52 weeks.

    I think we now know why Labour believes there should be no problem at all in funding all of their state spending policies..

    All of us worker bees are paying income tax 7 x 365 = 2,555 days a year :-P

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  7. Ross Miller (1,670 comments) says:

    David Parker thinks 24x7x52x10=613,000.

    ‘Normal’ people might come up with 87,360.

    I hope that in his other life as a lawyer his clients checked their bills carefully.

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  8. barry (1,317 comments) says:

    I suspect that Parker actually a greens member in hiding – because his sort of maths is of type that the greens use. i think they call them magic numbers.

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  9. Alan Johnstone (1,064 comments) says:

    David Parker is a successful business man, prior to becoming an MP he ran a bio-tech start up that he took to IPO; it’s now happily trading on the NZ Stock market and earning very good export revenue for the country.

    It’s exactly the type of a high value business the country needs.

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  10. Auberon (871 comments) says:

    Dear God Alan Johnstone, successful???!! Perhaps you’d like to buy my shares off me. They’re not worth that much anymore, because I haven’t participated in its almost annual calls to shareholders for more capital.

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  11. Richard29 (377 comments) says:

    It’s funny how the media and blogs have very much bought into the “100,000 houses for less than $300,000″ line.

    Labour’s own release says that they will introduce the policy with the aim of delivering 10,000 houses by the last year of their first term and then reinvest the proceeds into building another 10,000 the next year and so on for 10 years.
    http://thestandard.org.nz/wp-content/uploads/2012/11/KiwiBuild_Factsheet.pdf

    If we assume a Labour led government gets voted in at the 2014 election and retains this policy through coalition negotiations (a reasonable bet). Then that means they deliver 10,000 houses in 2017 towards the end of their first term and maybe a further 30,000 over a possible second term. Given the difficulty of holding together a workable coalition for more than two terms and the likelihood of National rebounding – I would consider the chance of a third term in 2020 (making a total of 70,000 homes) to be low and chances of an historic fourth term in 2023 (bringing the total to 100,000 homes) being close to 0%. (Perhaps iPredict could run a bet on how many houses will actually get built)

    In terms of the cost the media seem to have assumed that ALL the houses will be under 300k – the policy doesn’t really say this, it says they will be a range of sizes and costs. I would think they will be going for an average cost of under 300k – this is very achievable outside the main centres – I suspect that a large number of the Auckland homes will be apartments to save on land costs, the policy seems to support this.

    The dollar value is open to hundreds of variables. The policy says it’s 300k for the build it also says they’ll be charging a profit margin of the government’s cost of borrowing plus 1% that’s around 3.5% on todays historically low rates but would be much higher in a high inflation high interest rate scenario (like if government were stoking inflation through money printing or massive public works projects). Also we are talking in 2012 dollars but we are 5 years from the first houses being built, so I assume they plan to adjust by inflation – is that the CPI or inflation in building costs (the latter likely to be much higher).

    So 100,000 houses for $300,000 is a great positioning statement for Labour. With the small disclaimer that the only thing we can really guarantee about the policy is that they won’t build 100,000 homes and they won’t cost $300,000

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  12. RightNow (6,679 comments) says:

    BLIS Technologies? Currently trading at 10c/share, not sure who’s happy about that.

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  13. Rightandleft (638 comments) says:

    I agree this Labour housing policy is nuts and I certainly wouldn’t want Parker as Finance Minister but ministers not knowing basic maths is a problem common to all parties. Earlier this year Hekia Parata declared we needed better quality teachers instead of quantity because there had be a “five-fold” increase in teacher numbers over the last decade but no corresponding rise in student achievement. In reality there was a 20% or one-fifth rise in teacher numbers, not the 500% she cited and student pass rates increase by much greater that 20% over that decade so in fact her entire statement was totally incorrect. I wouldn’t want Parker or Parata writing the budget.

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  14. queenstfarmer (748 comments) says:

    Parker must have been using Labour’s Greek calculator again.

    Which means DPF’s calculation of 7000% was more than 8200% too high

    Graeme, how do figure that?

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  15. Graeme Edgeler (3,269 comments) says:

    Graeme, how do figure that?

    In humour, obviously. My rationale is stated.

    Mostly, I was making a point about percentages being (almost inherently) misleading.

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  16. East Wellington Superhero (1,151 comments) says:

    BLIS is an excellent example of why Labour is so useless. Blis uses interesting technology but it’s commercially useless and has no big-buck markets. No consumer is going to pay an excess of money to buy a products whose benefit is so very marginal. It was hyped up by the Dunedin and NZ biotech community but it’s commercial underpinnings were shaky. Hype and no underpinnings – Labour to a tee.

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  17. Key is our man (790 comments) says:

    Bros – When they tax you to death in 2014, anything is possible.

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  18. Manolo (13,401 comments) says:

    Delusion, madness, stupidity, incompetence. Words fail me to describe the socialists.

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  19. Alan Johnstone (1,064 comments) says:

    Just read there annual report, appears they are tanking.

    Point remains though; he ran a export oriented high tech start up. He didn’t just sit on his arse and practice law (not that law is easy). He tried to do something positive. Baking the cake, rather than just arguing about how it was sliced

    For this alone, he stands out from the Labour party, his career isn’t in public sector, ngo or unions.

    I tend to give him a break for that.

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  20. iMP (2,248 comments) says:

    Parker is including the long drop outhouses out back o’ to the State Houses because the tenants can’t afford plumbing after water rights are signed away to various entitites.

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  21. Positan (383 comments) says:

    To me the oddest feature of this nonsense claim by Labour “functionaries” is the fact that nearly 80 years ago they brought in the 40 hour week – 8 hours work, 5 days a week.

    For the next 60-odd years that fact used to be dredged-up and spouted by Labour members, toadies, functionaries, etc. with all the solemnity of a catholic catechism, on every occasion possible – but now, and notwithstanding arrangements made under the Employment Contracts Act – here’s Labour’s most recent spokesman on finance making calculations which involve workers being engaged on house construction 7 DAYS A WEEK!!!

    Now it’s not really so long ago since FOL and Labour “conferences” wouldn’t have been complete without the likes of Skinner, Knox, Kelly (Senior) and dozens of similarly stunted mindsets all outraged about evil employers who wanted to extend the hours of their precious “workers.” Here we have the not-so-glowingly-competent Parker seeking to implement what his union forbears fought so hard for so long to avoid.

    The only conclusion possible: Labour is even more disastrously inept that any prior determination has yet registered.

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  22. Reid (15,981 comments) says:

    I tend to give him a break for that.

    He’s one the best they’ve got Dave. But that doesn’t say a whole heck of a lot for the rest of the team, does it.

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  23. pidge (53 comments) says:

    Parker was also not happy at the contractor at the MED who pointed out the calculations for carbon credits were a significant deficit, rather than a massive credit. And wasn’t Parker the one who field incorrect returns? I’m sensing a pattern here…

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  24. lcmortensen (38 comments) says:

    DPF – you’re working is out – the correct figure is 87660, not 87360. There are 365 days in a year, not 364.

    24 times 365 is 8760.
    24 times 365.25 times 10 is 87,660.

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  25. seanmaitland (455 comments) says:

    @Alan Johnstone – you are way off the mark on that one. I was part of a successful Investment Club for 10 years, and we has Blis shares for most of that time and they were absolute shockers and did nothing but lose us money.

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  26. Dirty Rat (383 comments) says:

    Both parker and farrar maths are out

    By my reckoning there would be a 29th of February at least twice in that 10 year period

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  27. coge (176 comments) says:

    Sounds more like a pyramid scheme than a housing policy.

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  28. Joseph Carpenter (210 comments) says:

    David Parker successful businessman – yeah, right. Quite apart from BLIS check out when he got involved in PROPERTY DEVELOPMENT – look up the bankruptcy and liquidation of Queens Parks Mews and Empire Deluxe, ask all the contractors and subcontractors and business partners how they feel about being fucked over by him. So now Labour want an innumerate failed “evil rich prick property developer” in charge of their low cost housing developments? What could possibly go wrong.

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