Labour still refusing to calculate impact of VSR

May 7th, 2014 at 12:00 pm by David Farrar

Stuff reports:

is still refusing to put a figure on the probable impact of its plan to let the Reserve Bank lift KiwiSaver contributions to fight inflation.

There’s only two possible explanations for this.

  1. They have no idea what the impact will be, and didn’t bother to calculate it in developing their policy.
  2. They do know what the impact will be, but don’t want anyone to know.

I’m not sure which explanation is worse.

Economic Development Minister Steven Joyce has put the figure at $400 million against a $2.5 billion impact from a rise of 1 per cent in the official cash rate, the central bank’s other inflation-fighting tool.

Labour finance spokesman David Parker said Joyce’s $400m figure was wrong, but he was “not going to play his narrow little game” by releasing what Labour thought the impact would be.

It’s not a game. It’s called credibility. If Labour wants people to think that a VSR will mean lower interest rates, then they need to say what they believe the impact will be.

He said the variable savings rate (VSR) was just one of the mix of policies Labour would introduce.

That’s irrelevant. One can debate the impact of the other policies also. But this is the policy that they have said will mean lower interest rates. Why are they unwilling to give us their calculation of what the impact would be?

Tags: ,

18 Responses to “Labour still refusing to calculate impact of VSR”

  1. alloytoo (546 comments) says:

    I personally think they don’t know.

    I think they tried to make an overly complicated policy in the hope everyone would just “Trust” them on that.

    After all, trusts don’t need disclosure if you’re Labour.

    As it seems, the man in the street has figured out he’ll be worse off and prominent economists have confirmed their suspicions

    Vote: Thumb up 16 Thumb down 0 You need to be logged in to vote
  2. Richard Hurst (859 comments) says:

    Labour cannot say it will mean lower interest rates, but they’d like to create this simplistic idea in middle class voters heads that it would. Calculating the impact ruins the appeal and exposes the lie.

    The only real way for govt to help fight inflation and interest rates is to control govt spending. This something Labour and the Greens (Gabour) cannot and will not do- therefore they want to control non-govt spending instead e.g: Yours and mine.

    Vote: Thumb up 19 Thumb down 0 You need to be logged in to vote
  3. tvb (4,430 comments) says:

    National should be able to turn this away from Labour. The post by Richard Hurst hits the nail. Labour cannot control their spending as it is spending that will hold the Labour-Greens Government together. So to off-set this they will force extra savings on some especially low-middle income wage earners.

    Vote: Thumb up 11 Thumb down 0 You need to be logged in to vote
  4. Viking2 (11,488 comments) says:

    Slightly off topic but more to the point.

    Wheeler said a continued strong exchange rate would likely be reflected in continued low or negative tradables inflation – which, together with other economic data – would be a factor in the central bank’s decision around how far and fast interest rates need to rise.

    “Further, if the currency remains high in the face of worsening fundamentals, such as a continued weakening in export prices, it would become more opportune for the Reserve Bank to intervene in the currency market to sell New Zealand dollars,” he said.

    http://www.stuff.co.nz/business/industries/10018244/RBNZ-may-intervene-in-currency-Wheeler

    In other words the RBNZ is fucked. He raises the interest rates and wonders why the world traders rape us. so to appease them he is going to print some money to pay the hooker.

    Idiots in high places.
    Idiots abound.
    Have the Nats. got an answer. Well so far the answer is a loud resounding no. at least Labour are attempting some ideas even if they are a not very good ones.

    P.S. Lots of businesses saying how quiet it has gone in the last 4 weeks. Backed up by Barfoots reporting last months number of sales in Auckland being down 27% on same month last year.

    Rock Star fairy dust around.

    Vote: Thumb up 1 Thumb down 3 You need to be logged in to vote
  5. Elaycee (4,393 comments) says:

    Why are they unwilling to give us their calculation of what the impact would be?

    1. Because they haven’t got a clue – and they didn’t think anyone would ask?
    2. Because they know the numbers will embarrass them?
    3. Because they didn’t worry about costing it out in the first place – (but they thought it sounded OK at the time)?
    4. All of the above?

    Vote: Thumb up 10 Thumb down 0 You need to be logged in to vote
  6. JC (958 comments) says:

    Well, as Warminista Prof Phil Jones told a skeptic “I’m not giving you my figures.. you’ll just criticise them!”.. so too with DP.

    But I think there’s another reason maybe more important.. this policy was dreamed up with support from Manufacturers Federation and various friendly exporters; the idea being to put out a half arsed plan and have the media trumpet undying support from exporters.

    Certainly it started out that way but for once the public clicked it was being asked/required to support a rich mans club and the thing fizzled.

    I think Labour has done that a lot in the last five years.. put up dogs for policy and expected its supporters to provide the political clout to get them across the line.. but its a different era now and with blogs available to all there’s much more informed opinion.

    JC

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  7. OneTrack (3,114 comments) says:

    Elaycee@12:24 – Definitely #4

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  8. OneTrack (3,114 comments) says:

    “He said the variable savings rate (VSR) was just one of the mix of policies Labour would introduce.”

    Did somebody ask him whether Finance Minister Norman considered it was just one of the mix of policies Green/Labour/IPMana/Winston would introduce?

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  9. thePeoplesFlag (247 comments) says:

    Personally, I would would much prefer to talk about Judith Collins, and so does the media. It is curious that this blog, normally a cornucopia of helpful posts sourced in the National party research unit, is struggling to find one single thing of note to say on the biggest corruption scandal facing our country in decades.

    Kiwiblog, fomenting zero mischief since Monday.

    Vote: Thumb up 0 Thumb down 9 You need to be logged in to vote
  10. trout (939 comments) says:

    Dream on Viking 2. The NZ economy is but a cork floating on an unpredictable global ocean. The Fed has more influence on the Kiwi dollar than the RBNZ has. All Wheeler can do is use the few levers he has to try and reduce the amplitude of fluctuation. All this nonsense about what politicians can and cannot do is just that; nonsense. We are a trading Country; we (because our products are mainly commodities) are price takers rather than price makers. If China says jump (ref baby formula issues), we say how high. If we want an open economy we have to accept that, because of our size, we are open to manipulation. Of course we can go the Greens/NZ First route and put up barriers and restrict foreign investment; the result will be a reduction is our standard of living; will that be acceptable? I think not. Ponder this: we basically rely on a peasant economy; growing things (mainly grass) as our main source of income; this gives us a second world economy but we aspire to the services and and standard of living of first world industrialized countries; to achieve this requires a fair amount of entreprenerial ability beyond simplistic solutions.

    Vote: Thumb up 3 Thumb down 0 You need to be logged in to vote
  11. Akld Commercial Lawyer (165 comments) says:

    The answer is much less prosaic. Not only do they have no idea – they haven’t asked a grown up who would have to point out that the idea is but an expensive fig leaf.

    There was a joke in Wellington during the Muldoon era – that went along the lines of “Why do they bury past-Presidents of the Manufacturers Association 3ft under?”. Answer, so they can still collect hand-outs. So no surprises that the EMA leapt out of the blocks saying this might be a good idea. I look forward to a retraction.

    Equally telling is that Labour’s Finance Spokesman and its current leader seem unable to get their story straight about how this latest fairy tale might work. Its a bumper sticker for the economically illiterate. I see it more in keeping with the sort of nonsense that might emanate from NZ First than someone with pretensions of actually being in Govt and expecting to have credibility with the business community – not to mention our trading partners. (And on that score – they are fast undoing the benefits of their thought leadership on the China FTA).

    The prospect of a tiny economy at the bottom of the world that pedals, largely, agricultural commodities and some niche manufacturing products – as well as tourism, making a dent in any of the factors that actually impact on the cross rate with the US dollar is juvenile. While the world waits for the US to stop running massive deficits and for the engine room that is the US economy to start firing – the best we can do is try to manage domestic inflation and improve productivity.

    And the great shame, for which a couple of individuals in the present Govt have much to answer for, is all this MSM noise about Williamson and Oravida is distracting attention from the issues that matter. As a starter for ten – Stuff is at least trying to get Parker to answer the right questions. The Herald hasn’t bothered. In the meantime, there are a host of domestic issues that are plain hard work – and then there is the risk of the Greens forcing Labour to take the economy back to subsistence level.

    We deserve better media. The answer for Robertson and others howling at the moon must be “is that it?” They have nothing to offer on the vital issue of taking the country forward – and can only continue with finding conspiracies where, in reality, there are only cock-ups.

    Vote: Thumb up 6 Thumb down 0 You need to be logged in to vote
  12. Viking2 (11,488 comments) says:

    trout (868 comments) says:
    May 7th, 2014 at 1:08 pm

    Dream on Viking 2. The NZ economy is but a cork floating on an unpredictable global ocean. The Fed has more influence on the Kiwi dollar than the RBNZ has.

    =======================
    Trout exactly my point if you had read my post.
    The RBNZ is farting against thunder if it thinks it can screw the currency traders. All that will happen is that Kiwi’s will get ripped off just like they did when Key had a go back in his trading days.

    Fulltime fucking idiots at loose.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  13. thedavincimode (6,800 comments) says:

    V2

    You have taken a whole month’s worth of stupid pills. There have been any number of rebuttals of your fairy land analysis on this issue over time and yet you blindly ignore them and continue to peddle this sad-arsed mantra that, as far as I recall from your own circumstances, is driven by the fact that your business is not globally competitive and you expect NZ taxpayers and consumers to subsidise it.

    You, along with all the other fairy land analysts refuse to grasp the plain truth which is that 1) our dollar is presently more a reflection of the weakness of other economies that are rooted, and 2) policy interventions cost either one way or the other (Muldoon almost bankrupting this country is a good example) 3) there is no perfect answer in which everyone wins a fluffy bunny and remains unaffected by what is happening in the rest of the world, but the least interventionist option at least does not create market distortions of the magnitude that Muldoon did or this fuckwitted liebour policy would.

    We have so many recent examples of interventionist bullshit going wrong and you offer this stunningly stupid affirmation: “at least Labour are attempting some ideas even if they are a not very good ones.” WTF – offering fuckwitted solutions that are born purely from a desire to assume government irrespective of the cost is somehow laudable? If you think those world class arseholes are onto to something then go ahead and vote for them.

    The Nats do have a solution. It is to allow the Reserve Bank Governor to do his job within a set of guidelines that have operated for 20 years or whatever; that endeavour to minimise interventions having regard to their negative consequences, and exclude direct political interference in our FX markets.

    So like I said, go and be a cheerleader for liebour, or even the melons given you thought printing money to save your business was a good idea even if it cost the rest of us. If you can’t handle that, try Winston First because he’s just as selfish as you are.

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  14. Viking2 (11,488 comments) says:

    thedavincimode (6,156 comments) says:
    May 7th, 2014 at 3:41 pm

    V2

    You have taken a whole month’s worth of stupid pills. There have been any number of rebuttals of your fairy land analysis on this issue over time
    =================================================================================

    Clearly you need to wipe the spittle of your glasses before you read or are they just fogged up with smoke haze?

    As I recall you lead the charge and in your mind that’s the world. Its simply not, so get over your self inflated ego.
    ==============

    policy interventions cost either one way or the other (Muldoon almost bankrupting this country is a good example)

    Yes he did. But allowing free reign is doing the same thing.
    =================
    For 40 years we have failed to earn a living despite all the brains trust trying things. We are having a few months in the sun and then when the milk price drops we will again but stuffed.

    What does it take to make fools like you understand that this is not a sensible thing to do?
    Or will you never because your view is so myopic that you just can not ever see the big picture.
    ======================
    but the least interventionist option at least does not create market distortions

    Well in IMHO fucking about with interest rates is just that. It is interfering in the market for money and its as interventionist as any other behavoir and it gives the opposite result to what we actually want to get. You may have noticed the dollar was up a cent this morning again, dipped for a few moments after his speech and then way it went up again.

    The money traders must just luv people like you. Are you one?
    =============
    The Nats do have a solution. It is to allow the Reserve Bank Governor to do his job within a set of guidelines that have operated for 20 years or whatever; that endeavour to minimise interventions having regard to their negative consequences, and exclude direct political interference in our FX markets.

    So that’s your prescription then is it.

    Its failed to work for 20 years and you are going to carry on banging your mindless head against the wall.
    Very intelligent.

    Doing the same thing over and over and expecting a different result from the same actions is bordering on lunacy.
    =================
    as far as I recall from your own circumstances, is driven by the fact that your business is not globally competitive and you expect NZ taxpayers and consumers to subsidise it.

    Quite incorrect and having grown up in an industry that was strangled by subsidies (probably before you had nappies,) I am no fan of subsidies. And if setting interest rates isn’t a subsidy for banks what else would you call it.

    You still haven’t answered my question from the other day.

    What happens to all the extra cash from raising the OCR. It money taken by false premise from interest payers and given to whom?
    Please tell us all so we can assess your sanity.

    I actually have no problem with being internationally competitive. NZ is in fact not because we have socialist governments like the Nats who are constantly adding to business burdens when our competitors don’t have those same burdens.
    Your favourite socialist party have continued to lump us with the RMA, WWF, about to add more paid parental leave, still retain student loans and so on and so on.
    Now I don’t see the Chinese, the Indians, the Bangladesh’s, the Vietnamese, or many others doing this but our manufacturers have to put up with it.
    You might actually see the picture if you think hard enough.

    Our Manufacturing exports (apart from milk product) have fallen a further 3% in this latest lot of figures and that is with CHCH rebuild adding to its capacity utilization.

    You dvm have a fixed mindset and a mindset that appears to be incapable of doing other than what you learnt 20 years ago. The world doesn’t stand still like your mind. Its changes constantly.

    Vote: Thumb up 0 Thumb down 1 You need to be logged in to vote
  15. thedavincimode (6,800 comments) says:

    V2

    How many scrabble sets did you put in the bag before you chucked it on the table and produced that ranting drivel?

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  16. Viking2 (11,488 comments) says:

    Still haven’t answered my question.
    Which leads me to the conclusion that you haven’t a fucking clue.
    A point redbaiter has made many a time.

    Go away and play with your toys.

    Vote: Thumb up 0 Thumb down 1 You need to be logged in to vote
  17. freemark (581 comments) says:

    Viking2 (10,827 comments) says:
    May 7th, 2014 at 12:19 pm

    “P.S. Lots of businesses saying how quiet it has gone in the last 4 weeks.”
    You are so full of shit. Which businesses..? The Gween job ones? Clairvoyants? Homoeopaths? Doomsday shelter suppliers?
    The PGF?
    There are some fuckwits on this blog..

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  18. Viking2 (11,488 comments) says:

    You reckon.
    perhaps you live in Auckland. Still you are welcome to that.
    Had probably eight or 10 in the last 10 days.
    We ain’t over it yet by any stretch.

    The CHCH city council have shown today that fairy dust and bullshit from Gerry doesn’t add up to much.
    Gerry threw his toys out the cot.

    Reports in the last few days of many businesses going under in the CHCH rebuild;ld owing their suppliers.

    Farmers hoarding cash. congratulated today by none other than the Gov. himself.

    You should get out more.

    Vote: Thumb up 0 Thumb down 2 You need to be logged in to vote