Our new coalition government.

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473 posts

Ultimate Geek

#2332997 8-Oct-2019 20:09

tdgeek:

Mahon:

I realise that this thread is about our current government. National didnt spend socially and they regret that. But they spent huge on 2 catastrophic earthquakes. They built new roads eg Kaikoura to Picton, Transmission gully, 4 laning SH1, plus many more and we got through the GFC without obvious hurt to the people. This government cancelled most of the infrastructure spending and kept the money in the bank. Weird when credible economists have been telling them to spend more for the sake of the economy for the last year at least. The effect of keeping the money in the bank and just dishing it out on a whim is to slow the economy as we are seeing now.

Do they regret that? You mean when heath is underfunded and they boost health one year and wow, look at that.In fact health that year got not a lot more it all went on a one off aged care workers catch up. Note catch up.

Yes EQ was their funded by insurance and EQC. Yes there was more. Roads, not a big hit there apart from a year before election was that tunnel? And there roads of national importance? GFC yes affected but a LOT less than most a lot less. Borrowing 60B helped. as was posted there this year.

Money in the bank? There is a budget, almost all of that gets allocated, with a little surplus left over. Dont you read the Budget? Ive yet to see one that spending was down, and surplus was through the roof. There was no last budget to reduce spending so we get a 3.9B surplus. Dishing it out on a whim? I never got any whims. Will that slow the economy? Well, again, read the article, re the economy.

Is this result due to Labours financial stewardship? Nah, not really. NZ is doing well, they have added funds back into the economy, and work towards finanicial responsibility and debt reduction, they are doing that fine. Not throwing it away which is what they usually do, and which the other side tried to get votes on. Mistakes and stuff ups, but social spending and being careful with our money. Ok so far. Fair. Acceptable. With two years experience under their belt, they have one more, to box tick.

somewhat toxic

tdgeek

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#2333004 8-Oct-2019 20:21

Mahon:

tdgeek:

Mahon:

I realise that this thread is about our current government. National didnt spend socially and they regret that. But they spent huge on 2 catastrophic earthquakes. They built new roads eg Kaikoura to Picton, Transmission gully, 4 laning SH1, plus many more and we got through the GFC without obvious hurt to the people. This government cancelled most of the infrastructure spending and kept the money in the bank. Weird when credible economists have been telling them to spend more for the sake of the economy for the last year at least. The effect of keeping the money in the bank and just dishing it out on a whim is to slow the economy as we are seeing now.

Do they regret that? You mean when heath is underfunded and they boost health one year and wow, look at that.In fact health that year got not a lot more it all went on a one off aged care workers catch up. Note catch up.

Yes EQ was their funded by insurance and EQC. Yes there was more. Roads, not a big hit there apart from a year before election was that tunnel? And there roads of national importance? GFC yes affected but a LOT less than most a lot less. Borrowing 60B helped. as was posted there this year.

Money in the bank? There is a budget, almost all of that gets allocated, with a little surplus left over. Dont you read the Budget? Ive yet to see one that spending was down, and surplus was through the roof. There was no last budget to reduce spending so we get a 3.9B surplus. Dishing it out on a whim? I never got any whims. Will that slow the economy? Well, again, read the article, re the economy.

Is this result due to Labours financial stewardship? Nah, not really. NZ is doing well, they have added funds back into the economy, and work towards finanicial responsibility and debt reduction, they are doing that fine. Not throwing it away which is what they usually do, and which the other side tried to get votes on. Mistakes and stuff ups, but social spending and being careful with our money. Ok so far. Fair. Acceptable. With two years experience under their belt, they have one more, to box tick.

somewhat toxic

How so? Just responses to your claims, no more no less. Instead of a two word retort, why not discuss if you feel I am inaccurate. Your post seemed quite emotive. Regret, hurt to the people, keeping money in the bank, keeping money in the bank, dishing it out on a whim, slow economy as were seeing now.

The latter point, they just collected more GST (sales) and more Income Tax (wages paid), employment, already high, is now higher. How can that possibly be a slowing economy?

GV27

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#2333134 9-Oct-2019 06:49

tdgeek:

The latter point, they just collected more GST (sales) and more Income Tax (wages paid), employment, already high, is now higher. How can that possibly be a slowing economy?

Making more from GST and Income Tax is easy when you tax inflation. Doesn't work out so good for the taxpayer though.

tdgeek

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#2333139 9-Oct-2019 07:17

GV27:

tdgeek:

The latter point, they just collected more GST (sales) and more Income Tax (wages paid), employment, already high, is now higher. How can that possibly be a slowing economy?

Making more from GST and Income Tax is easy when you tax inflation. Doesn't work out so good for the taxpayer though.

How is higher sales inflation? If you are referring to threshold creep, I fully support annual tax table adjustments. No parties support that. They support calling them fake tax cuts every number of years. So they get free money for the in between years.

GV27

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#2333151 9-Oct-2019 07:46

tdgeek:

How is higher sales inflation? If you are referring to threshold creep, I fully support annual tax table adjustments. No parties support that. They support calling them fake tax cuts every number of years. So they get free money for the in between years.

Easy. If people have to spend more to maintain the same standard of living (if they are lucky) then GST from sales in an economy are going to go up.

I think this is real failing on the well-being approach tbh. It doesn't measure the point at which assistance is actually helping you get ahead in terms of quality of life - maybe 'less backwards' but not 'ahead'. It's better than the Nat approach of 'Well you aren't dying in the street so how bad can it be?' but the increase in transaction-driven taxes doesn't automatically mean anyone is actually any better off.

tdgeek

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#2333157 9-Oct-2019 08:01

GV27:

tdgeek:

How is higher sales inflation? If you are referring to threshold creep, I fully support annual tax table adjustments. No parties support that. They support calling them fake tax cuts every number of years. So they get free money for the in between years.

Easy. If people have to spend more to maintain the same standard of living (if they are lucky) then GST from sales in an economy are going to go up.

I think this is real failing on the well-being approach tbh. It doesn't measure the point at which assistance is actually helping you get ahead in terms of quality of life - maybe 'less backwards' but not 'ahead'. It's better than the Nat approach of 'Well you aren't dying in the street so how bad can it be?' but the increase in transaction-driven taxes doesn't automatically mean anyone is actually any better off.

This result showed more sales and wages. The population hasn't changed. You are assuming that extra is spending more to maintain the same standard of living. The extra wages are due to higher wages and more people working, both if which increases their standard of living

If there isnt a measure that well being is increasing quality of life, that doesnt mean it isnt. Well being isn't about wages, its about well being, being happier, not richer. Mental health afflicted people may remain on benefits but if they get more help they should be better off in their personal quality of life. The transaction driven taxes will mean that wage earners are better off as are businesses. Well being, being one of many parts of a budget isn't directly related, its another topic. Might be better to raise a new point, is well being helping? I can't see your point here as related to this latest result

GV27

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#2333195 9-Oct-2019 09:30

tdgeek:

This result showed more sales and wages. The population hasn't changed. You are assuming that extra is spending more to maintain the same standard of living. The extra wages are due to higher wages and more people working, both if which increases their standard of living

A long-standing issue with the way the Nats ran the economy was that productivity, if adjusted to allow for the huge amount of imported population, was pretty much stagnant. Yes, we had more money moving around the economy, and yes, people were getting paid slightly ahead of inflation, but that didn't mean that things like buying houses were getting any easier.

The population is still largely increasing at the same rate btw, if you trust Stats NZ figures (you probably shouldn't). But we are still importing tens of thousands of people a month over and above what governing parties campaigned on.

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Fred99

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#2333200 9-Oct-2019 09:37

tdgeek:

The latter point, they just collected more GST (sales) and more Income Tax (wages paid), employment, already high, is now higher. How can that possibly be a slowing economy?

Because that's retrospective so not necessarily indicating how a snapshot of now actually is, it's suggesting a slowing but still growing - not an already slowed down economy and forecasts acknowledge the possibility of global economic shocks that could result in recession. Recession by definition is also a retrospective measure, need two consecutive quarters of negative growth, so by the time recession is officially recognized, the country would have had negative growth for over 3 months.

The warning signs were strong enough for the RBNZ to drop interest rates by a large amount in one hit, to the lowest ever official cash rate.

That said, we're likely still not in recession, exporters are doing okay as the NZ dollar has slumped (as it's supposed to do) and the 7.5 billion surplus is making a further mockery of the 10 billion fiscal hole that the National Party campaigned on, and the increase in the minimum wage hasn't had negative impact on employment. On the other hand, Labour really hasn't delivered on election promises.

tdgeek

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#2333211 9-Oct-2019 09:49

Fred99:

tdgeek:

The latter point, they just collected more GST (sales) and more Income Tax (wages paid), employment, already high, is now higher. How can that possibly be a slowing economy?

Because that's retrospective so not necessarily indicating how a snapshot of now actually is, it's suggesting a slowing but still growing - not an already slowed down economy and forecasts acknowledge the possibility of global economic shocks that could result in recession. Recession by definition is also a retrospective measure, need two consecutive quarters of negative growth, so by the time recession is officially recognized, the country would have had negative growth for over 3 months.

The warning signs were strong enough for the RBNZ to drop interest rates by a large amount in one hit, to the lowest ever official cash rate.

That said, we're likely still not in recession, exporters are doing okay as the NZ dollar has slumped (as it's supposed to do) and the 7.5 billion surplus is making a further mockery of the 10 billion fiscal hole that the National Party campaigned on, and the increase in the minimum wage hasn't had negative impact on employment. On the other hand, Labour really hasn't delivered on election promises.

IMO. Anything positive given Trumps trade wars, is a good thing. As the last GFC showed, we are affected less than others which is a good thing. The 7.5, half of that is a paper change, but the real result of 3.9 is sound. How long would Labour take to delivers its polices? KB has failed so that's a clear fail. is any Govt expected to deliver on all policies at 2/3 term? Half of them?

tdgeek

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#2333217 9-Oct-2019 09:55

GV27:

tdgeek:

This result showed more sales and wages. The population hasn't changed. You are assuming that extra is spending more to maintain the same standard of living. The extra wages are due to higher wages and more people working, both if which increases their standard of living

A long-standing issue with the way the Nats ran the economy was that productivity, if adjusted to allow for the huge amount of imported population, was pretty much stagnant. Yes, we had more money moving around the economy, and yes, people were getting paid slightly ahead of inflation, but that didn't mean that things like buying houses were getting any easier.

The population is still largely increasing at the same rate btw, if you trust Stats NZ figures (you probably shouldn't). But we are still importing tens of thousands of people a month over and above what governing parties campaigned on.

NZF wanted immigration slashed, so moves were put in place. But, at full employment we also need people, and Id suggest most of those people went into the workforce as needed employees? We actually imported my wife's mother, so she is an immigrant, has PR, but not eligible for healthcare or a pension, which is fine we cover that. Im assuming that immigrants still need to be needed before they can come in. What was stopped was kids coming here studying some low tier qualification, getting a bung job, PR, and importing both parents. They now need to be a qualification we want

Fred99

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#2333333 9-Oct-2019 13:15

tdgeek:

As the last GFC showed, we are affected less than others which is a good thing.

We were less affected due to circumstances and opportunities that aren't available now.

tdgeek

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#2333337 9-Oct-2019 13:23

Fred99:

tdgeek:

As the last GFC showed, we are affected less than others which is a good thing.

We were less affected due to circumstances and opportunities that aren't available now.

What were those? IIRC the or a key one was that our banking system is not as joined to the hip to the big global bank operators as many other countries are

MikeB4

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#2333381 9-Oct-2019 14:17

The economy is the least worrying thing that I worry about these days. The world seems to be in a giant crap fest.

tdgeek

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#2333388 9-Oct-2019 14:27

MikeB4:

The economy is the least worrying thing that I worry about these days. The world seems to be in a giant crap fest.

Agree, Trump and Climate Change dwarf any economic inconvenience that may be coming

Fred99

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#2333448 9-Oct-2019 16:41

tdgeek:

Fred99:

tdgeek:

As the last GFC showed, we are affected less than others which is a good thing.

We were less affected due to circumstances and opportunities that aren't available now.

What were those? IIRC the or a key one was that our banking system is not as joined to the hip to the big global bank operators as many other countries are

What were they?

4 consecutive years of government surplus prior to the GFC, the books were in pretty good shape.
Banking system held together in the main, the disaster with banks overseas mainly confined to / caused by dodgy loans in the second-tier finance market.
An FTA with China which became our largest trading partner, and created a boom in another major trading partner - Aus - the other "rock star economy".
High export dairy prices.
Relatively high interest rates to keep inflation in check at the onset, which were able to be dropped from 8.25% in 2008 to 2.5% in 2009, providing massive stimulus. Much of that went into housing, thus not impacting on official inflation figures (but increasing living costs for many NZers).
Large increase in immigration, boosting GDP (but not necessarily GDP per capita) and increasing demand force inflation on housing.

The books are still okay, banks - I'm not sure, we've still got an FTA with China but the global trade situation is a bit glum and intertwined with geopolitics, dairy prices and other export prices holding up - but we've got a low dollar, with the OCR at 1% there's not much room to provide true stimulus any more, drop the rates further and that'll encourage people to exit cash deposits and risk investing in property and shares which might or might not be a bubble. Immigration has stayed high, increasing it further just puts more pressure on already stressed infrastructure (health, education, roading, electricity etc) as well as further inflationary pressure on housing.

Not saying disaster is going to happen, but if it does then the tank's relatively empty and the foot's already quite hard on the gas pedal.

If I was running the show, I'd be sitting on that surplus for a few months before deciding what to do with it. But if they do that, they'll be accused of (and probably be guilty of) using it for election year bribes - both parties, tax cuts or handouts.

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