Surely better than random Helicopter Money that some were pushing as an innovation?

ezbee:

 

Surely better than random Helicopter Money that some were pushing as an innovation?

 

Possibly. While I have financial qualifications, I dont have Minister of Finance qualifications. What I do know is that all or most first world OECD countries did the same, try to prop up the economy as best they could. You cannot have businesses going bankrupt second after second. You cannot have employees that are part of business production being laid off second after second. Helicopter payments suit the low income people, the rest of us update the Xbox. Cynical maybe but its needs to be targeted. Once all of this has played out, the World Bank should have a review as this will happen again and again. 

I'm prepared to give Chris (Hipkins - I'm going to have to watch that now!) the benefit of the doubt as to whatever he might propose.

Everyone has their own needs as to what's important to them - while I would like a little more money (who wouldn't?) I'm prepared to not have a tax cut if it helps someone further down the ladder from me, for example. As a parent I'm grateful that one of my boys school fees is fully paid for by the government - something I don't think National were even thinking of.

One thing I do find useful is the half price public transport fares. I'd love to see that continued, maybe permanently. I've been able travel anywhere on the Auckland public transport network and it costs very little, and my boys get to see all kinds of things they just normally wouldn't see from the back seat of a car.

networkn: Mr there is no Business confidence crisis?
Sorry Grant but just saying it over and over doesn't change a thing.

He has been wildly disappointing finance Minister considering what he had to play with. Don't think I can recall a single innovation he has been in charge of.

Easy enough to run a money printing business. Hard to recover a few years down the track. I am sure he will regret printing as much as he did, but he was everyone's best friend during that process.

Bluntj:

 

Easy enough to run a money printing business. Hard to recover a few years down the track. I am sure he will regret printing as much as he did, but he was everyone's best friend during that process.

 

You need to offer the correct alternative to Quantitatave Easing. That NZ and every other OECD country should have followed. 

networkn: NZ is a socialist little country

Wow , ok. Not much to reply to after that comment.

So you do support Quantitative Easing, but on a month to month basis? No issue with that, but its a minor factor. I believe there have been prosecutions. 

I find your assertion that we are a socialist country offending.

Given the cost of making the whole economy go cold turkey.
Printing money to keep people employed, and business on life support is probably one of the best uses.

Some businesses probably arranged their affairs to go for gold on this.

On the other side letting people go can be a process that takes time.
Maybe you need to see a longer lifeline or you start process immediately.
The way some independently minded owners who can arrange their 
books were talking none are giving Labour a vote ?  So hardly a vote buying scheme.

Winston Peters did put a stop to the business lease scheme though.

Yep, there is no easy answer. Given the everybody was locked down, there isnt a reasonable scenario to prepare documents in a rush. There will always be idiots, it happens with GST returns all the time.

I'm sure there could have been more post wage support validations, but the IRD has access to all that information. There has been repercussions, but how much red tape is appropriate when out of the blue we are locked down? The month to month option does make sense, but given that lockdown period was unknown and it wasn't going to be an out and in short term situation, a line had to be drawn.

But this is off topic

Yep, this is something Hipkins won't be inheriting - I daresay we won't be seeing lockdowns again anytime soon. IMO they've served their purpose, we have a vaccine now (which we didn't in 2020) and 96%(?) of us are double vaccinated, so not much to be gained from a lockdown, and I don't think he'll be doing any while he's PM anyway.

Speaking of stuff he will be looking at keeping and getting rid of:

https://www.nzherald.co.nz/nz/politics/thomas-coughlan-chris-hipkins-embarks-on-policy-bonfire-whats-safe-and-whats-not/IXYYKY5L4VE25IKR66RIYHL4WE/ (paywalled)

Stuff did a piece on it too: https://www.stuff.co.nz/national/politics/131035531/chris-hipkins-reorients-labour-towards-fighting-pandemic-of-inflation

ezbee:

 

Surely better than random Helicopter Money that some were pushing as an innovation?

 

It was functionally the same thing, but with an enormous business compliance cost that meant it sucked up a heap of time during which most financial eyes in a business should have been focused on other things. It basically took the processing burden away from the government and handed huge payroll complexity to businesses, and it's very easy to focus on how easy it was to get the payout but you basically had to be pushing the buttons on the payroll system itself to have an appreciation of how much extra work it created.

tdgeek:

 

Yep, there is no easy answer. Given the everybody was locked down, there isnt a reasonable scenario to prepare documents in a rush. There will always be idiots, it happens with GST returns all the time.

 

The flipside of the argument is that Robertson eventually did give out helicopter money anyway, in the form of the COL payment.

And despite all the resources the IRD and government departments had at their disposal, they still weren't sure if they could do it and there were some fairly glaring issues when they eventually did. So let's keep that in mind, and the enormous compliance burden handed to businesses at short notice with the wage subsidy, and the subsequent snafu with the COL payments when we talking about cutting the Government slack when it comes to 'doing things in a rush'. 

I think the COVID wage subsidy scheme (some businesses abused this) to keep staff employed in the lockdowns was courageous. It was needed and it was done. The alternative was unthinkable.

However after that the Reserve Bank and Finance Minister made a real mess of managing inflation. RB far too slow to raise the OCR leading now to a need to jack it up so high and so fast as to be intentionally engineering a recession. The government has been far too careless with inflationary money spending. All very easy to say this in hindsight but these people are required to carry the responsibility, and Treasury advise has been routinely ignored.

Stagflation now looms.

tdgeek:

 

You need to offer the correct alternative to Quantitatave Easing. That NZ and every other OECD country should have followed. 

 

LSAP? Fine. Low OCR? I mean... I guess, provided you pay attention to the data and are prepared to hike it just as quickly when a crisis is over. FLP? I mean... it might help free up credit when you do emergency hikes in the future. So far, so good.

But the removal of LVRs was totally unnecessary. It is the single biggest failure in the RBNZ Covid response. There was no need to do this, let alone for investors. Closely followed by not increasing the OCR from lows even when it was patently obvious that house prices were exploding and inflation was taking off worldwide. And finally, the FLP programme that was still giving banks cheap money to lend late last year - at the same time as we were drastically and belatedly hiking the OCR. 

The reappointment of Orr was simply the cherry on top. The issue wasn't easing, it was that we made a dog's breakfast of it in almost every possible way.  For some people that means contract extensions on $800K plus p.a, for the rest of us it just means we are dangerously exposed in terms of mortgage debt and no guarantee of pay increases to help inflate the debt away.