Christopher Luxon, New Zealand Prime Minister 2023

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#3242930 30-May-2024 20:25

https://thespinoff.co.nz/politics/30-05-2024/bernard-hickey-on-the-budget-theyve-talked-their-way-into-a-deeper-recession

Bernard Hickey has an interesting commentary on the Budget, particularly around the much-hyped tax cuts:

Since National made its tax pledge, the economy had soured. “The net effect of all of this economic slowdown since the election, is that the government’s still going to have to borrow an extra $12 billion,” said Hickey. “Now, their argument from the start was these are going to be tax cuts that will not be funded by borrowing.” But in Hickey’s view: “These are tax cuts funded by borrowing. And that’s because the economy’s worse than expected.”

tdgeek

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#3243015 31-May-2024 07:59

quickymart:

https://thespinoff.co.nz/politics/30-05-2024/bernard-hickey-on-the-budget-theyve-talked-their-way-into-a-deeper-recession

Bernard Hickey has an interesting commentary on the Budget, particularly around the much-hyped tax cuts:

Since National made its tax pledge, the economy had soured. “The net effect of all of this economic slowdown since the election, is that the government’s still going to have to borrow an extra $12 billion,” said Hickey. “Now, their argument from the start was these are going to be tax cuts that will not be funded by borrowing.” But in Hickey’s view: “These are tax cuts funded by borrowing. And that’s because the economy’s worse than expected.”

Yep. The fully funded but criticised as full of holes has transpired as such. I read those that get $250 are often down to $75, a good read will be the election Tax Cut Calculator and the now Tax Cut Calculator.

End of the day the promised tax cuts will be delivered but the promised funding isnt, at our cost as taxpayers.

I thought they were going to fix inflation that Labour caused? Ive not seen any action on that, but as we all know, its global and national inflation and like all other countries is easing back as expected. Perhaps the Coalition hoped the natural ease back would have happened quicker so they can claim that, as well as the economic benefits. A case of vote for us vs reality, and reality won.

ockel

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#3243018 31-May-2024 08:06

quickymart:

https://thespinoff.co.nz/politics/30-05-2024/bernard-hickey-on-the-budget-theyve-talked-their-way-into-a-deeper-recession

Bernard Hickey has an interesting commentary on the Budget, particularly around the much-hyped tax cuts:

Since National made its tax pledge, the economy had soured. “The net effect of all of this economic slowdown since the election, is that the government’s still going to have to borrow an extra $12 billion,” said Hickey. “Now, their argument from the start was these are going to be tax cuts that will not be funded by borrowing.” But in Hickey’s view: “These are tax cuts funded by borrowing. And that’s because the economy’s worse than expected.”

And I'm going to hazard a guess that, in true Bernard Hickey fashion, there was no analysis of the counterfactual? In the re-election of a Labour Govt that while there would not have been changes to the tax thresholds, there wouldnt have been any offsetting cost savings and that the net effect of all this economic slowdown the Government would still have to borrow an extra $12m. Thats assuming Robertson would not have increased the operational allowance (and its a BIG assumption given it increased each and every year he was Minister of Finance). It shouldnt be overlooked that theres a reduction in the operational allowance in this Budget.

A key reason theres a need to borrow extra money is the huge debt that this (and future) generation have been saddled with. In a high interest environment. With rising interest rates no economic unit should be increasing and increasing and increasing debt due to the cost of servicing it (banks know this with respect to HH but a failure to call out expansionary Budgets by the RBNZ, people like Hickey or the international economic monitoring agencies is truly an indictment on those "overseers").

If Robertson had been cutting the cloth according to the coat we'd have a very different looking situation.

[Mod edit (MF): edited name]

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sir1963

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#3243025 31-May-2024 08:44

tdgeek:

In that case cut the fat and the populous has the same services they have now. Lets see how that plays out

It will play out with loss of services, slowing down of services, more mistakes being made, and more actual waste being made.
The work these people did just does not miraculously disappear, the supposed "front line" staff who have been untouched will be expected to do more of it, leaving an effective loss of front line staff.

ockel

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#3243268 31-May-2024 13:41

sir1963:

It will play out with loss of services, slowing down of services, more mistakes being made, and more actual waste being made.
The work these people did just does not miraculously disappear, the supposed "front line" staff who have been untouched will be expected to do more of it, leaving an effective loss of front line staff.

I find the viewpoint that Governments are there to employ people as quite interesting. I see them as something there to support and enable the people (and businesses) they serve. They dont provide any goods or services that people pay to consume, they are in essence an unproductive entity from the economies point of view.

Perhaps I can explain my viewpoint better. A software developer needs to provide a product or service that someone/thing is willing to pay for. It needs sales people and developers to do this. A clear profit centre. The other people in the business are there to support this profit centre. No point in having a helpdesk or product support if there are no users. Similarly having a HR or finance team are only any good if they're there to support the entity/profit centre. So virtually all other areas are cost centres (a shared services function) and the growth of these are a function of the growth of the profit centre (and yes you can front load these services but eventually they have to be supported by future profit). Adding support staff for the Helpdesk/HR/Finance is just a further extension of the costs. Great that HR has executive assistants to make the HR teams life nice but essentially they dont add much to the top line for the organisation.

Bear with me.

I see councils and governments as giant shared services entities. The Government isnt a productive entity. Its role is to be a HR department (protecting citizens/workers, upskilling them, making sure they are healthy so they can be productive etc) and a giant support department for [both internally focused and externally focused] businesses (rules/regulations for them to grow, facilitate future growth etc). So the role of the Government and its workers are to enable and facilitate. To that end the front-line workers are those directly interfacing with the productive units of the economy and their goal should be to try to make it better for all of those units. Adding increased cost and complexity reduces the profit centre, failure to be an effective HR for its citizens reduces their economic capability (ceteris paribus). So having lots of nice additional staff in back office functions looking after the front line staff is just adding cost centres on top of cost centres. in the context of the above software developer example: asking the HR team to do its own paperwork, book its own flights or make its own coffee rather than employ an army of people to do it for them is a more efficient use of labour (HR might not like it but when they get out of bed in the morning are they asking what is their role in the organisation and what does it represent).

So if you think that the outcome is loss of services, slowing down of services and more actual waste then I'd ask the question: are those front line people the right people for the job? Do they actually consciously think - what is my job, what am I there for, what do I represent and am I the right person to be doing this. If you believe that your job is to make a difference to the external people you're dealing with then you wont end up with those outcomes you describe.

Esoteric for a Friday afternoon but robust for discussion.

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freitasm

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#3243271 31-May-2024 13:47

ockel:

sir1963:

It will play out with loss of services, slowing down of services, more mistakes being made, and more actual waste being made.
The work these people did just does not miraculously disappear, the supposed "front line" staff who have been untouched will be expected to do more of it, leaving an effective loss of front line staff.

Bear with me.

So if you think that the outcome is loss of services, slowing down of services and more actual waste then I'd ask the question: are those front line people the right people for the job? Do they actually consciously think - what is my job, what am I there for, what do I represent and am I the right person to be doing this. If you believe that your job is to make a difference to the external people you're dealing with then you wont end up with those outcomes you describe.

I am glad you didn't have to get a driver's licence, passport, go to an emergency room, call the helpline, call a suicide prevention line, have to call a police officer because your home was burgled, or be happy that border security stopped those vermin coming into the country, etc.

GV27

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#3243276 31-May-2024 13:54

Some of those things were pretty average even with the absolutely stonking increases in head-count across the public service.

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sir1963

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#3243301 31-May-2024 14:29

ockel:

sir1963:

It will play out with loss of services, slowing down of services, more mistakes being made, and more actual waste being made.
The work these people did just does not miraculously disappear, the supposed "front line" staff who have been untouched will be expected to do more of it, leaving an effective loss of front line staff.

I find the viewpoint that Governments are there to employ people as quite interesting. I see them as something there to support and enable the people (and businesses) they serve. They dont provide any goods or services that people pay to consume, they are in essence an unproductive entity from the economies point of view.

So you are saying privatise health, education, roading, fire, police, prisons , MAF, etc etc etc....?

Will this mean if you can not afford any of these services, you do not get them ?

ockel

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#3243302 31-May-2024 14:30

freitasm:

ockel:

Bear with me.

So if you think that the outcome is loss of services, slowing down of services and more actual waste then I'd ask the question: are those front line people the right people for the job? Do they actually consciously think - what is my job, what am I there for, what do I represent and am I the right person to be doing this. If you believe that your job is to make a difference to the external people you're dealing with then you wont end up with those outcomes you describe.

I am glad you didn't have to get a driver's licence, passport, go to an emergency room, call the helpline, call a suicide prevention line, have to call a police officer because your home was burgled, or be happy that border security stopped those vermin coming into the country, etc.

But each of those mentioned functions are actually the share services HR role that I'm talking about. Think about it for a moment. eg Drivers license - its a cost centre that should be fully funded by cost recovery in charging the amount that it costs to administer and create that service. It shouldnt actually be a burden on the taxpayers for the cost for the privilege to drive.

ER - thats the cost centre associated with keeping the population healthy and productive. Thats its role. How is that not obvious. And the ED staff are working pretty damned hard to get that outcome. The layers of bureaucracy above them in the health system need to be more effective and efficient as they're the deadweight loss (from an economics POV) associated with that cost centre.

I'm happy to explain the other situations that you mention but surely one can see the wood for the trees???

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ockel

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#3243308 31-May-2024 14:40

sir1963:

ockel:

I find the viewpoint that Governments are there to employ people as quite interesting. I see them as something there to support and enable the people (and businesses) they serve. They dont provide any goods or services that people pay to consume, they are in essence an unproductive entity from the economies point of view.

So you are saying privatise health, education, roading, fire, police, prisons , MAF, etc etc etc....?

Will this mean if you can not afford any of these services, you do not get them ?

Not at all!!!!

You dont privatise any of those things - they're collective public goods. But the operation of those things needs to be efficient and thought about in context of the desired outcome.

It really struck a chord on the feedback sought on firearm licensing. The Police have essentially subsidised the cost of licensing for years (I cant recall how long fees had remained static). Ideally the fees from licensing should cover the costs of running that function (freeing up funds to be used more efficently in general policing). That alone should be viewed as a cost centre for example. It doesnt or shouldnt privatise the function but it should be cost neutral.

Similarly something like parking infringement fees. Havent moved in years, relative to incomes its less of a deterrent to pay the fees. And the cost of monitoring and collecting has increased substantially. Again, a cost centre. The cost of staff, monitoring, implementation, recovery etc should be covered by the fines collected. And not massive amounts of revenue gathering either cos that turns parking into a profit centre, which is equally detrimental (and creates perverse behavioural incentives)

A corporate doesnt privatise (essentially outsource) its HR function if its operated efficiently and effectively internally, does it???

Sixth Labour Government - "Vision without Execution is just Hallucination"

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#3243310 31-May-2024 14:42

ockel:

Think about it for a moment. eg Drivers license - its a cost centre that should be fully funded by cost recovery in charging the amount that it costs to administer and create that service. It shouldnt actually be a burden on the taxpayers for the cost for the privilege to drive.

Are you suggesting the government makes a profit on driver's licenses?

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sir1963

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#3243311 31-May-2024 14:45

ockel:

A corporate doesnt privatise (essentially outsource) its HR function if its operated efficiently and effectively internally, does it???

Actually private companies out source a LOT of stuff, including a lot of HR stuff (employment lawyers , temping sources, recruitment , etc)

ockel

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#3243327 31-May-2024 15:15

sir1963:

ockel:

A corporate doesnt privatise (essentially outsource) its HR function if its operated efficiently and effectively internally, does it???

Actually private companies out source a LOT of stuff, including a lot of HR stuff (employment lawyers , temping sources, recruitment , etc)

But at some point it becomes more efficient to have it inhouse. And at some point it becomes too inefficient inhouse that you outsource it. And then it becomes..... well you get the idea.

Sixth Labour Government - "Vision without Execution is just Hallucination"

ockel

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#3243330 31-May-2024 15:17

SaltyNZ:

ockel:

Think about it for a moment. eg Drivers license - its a cost centre that should be fully funded by cost recovery in charging the amount that it costs to administer and create that service. It shouldnt actually be a burden on the taxpayers for the cost for the privilege to drive.

Are you suggesting the government makes a profit on driver's licenses?

Quite the opposite, I'd bet the Govt makes a loss on drivers licenses. That the fees charged dont cover the costs. Which means one of two things. That its not being run cost effectively or that the fees are not set at the right level to cover the cost of the (most) efficient operation.

Sixth Labour Government - "Vision without Execution is just Hallucination"

mudguard

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#3243332 31-May-2024 15:39

ockel:

Quite the opposite, I'd bet the Govt makes a loss on drivers licenses. That the fees charged dont cover the costs. Which means one of two things. That its not being run cost effectively or that the fees are not set at the right level to cover the cost of the (most) efficient operation.

I can see this going both ways. I work in finance, a few years back there was legislation (I think) that meant companies could only impose fines that reflected the cost. So if you were late on a bill you couldn't be charged a $100 late fee if it was in reality $15 work for someone.

Or the other side of that, something that is heavily subsidised that suddenly becomes user pays. Take motorbikes vs cars

Car Rego is $106 per year.

50cc Scooter is $400 per year. Because of the ACC component I assume. I guess you could argue it both ways. Both users are paying an ACC portion that reflects their risk profile.

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