|
|
GV27:
evilengineer:
Where as at the same time National keep trying to tell us that tax cuts aren't inflationary.
Which is nonsense on stilts as well.
Are they more inflationary then helicopter payments made because you're starting to lose the political narrative?
If not then Hipkins should probably mind his step.
You dont even need to go back to the helicopter payments to talk about the Labour Governments inflationary spending. Claiming that this years budget wasnt expansionary was a joke. And yet some people think that the Finance Minister is doing a good job. Its hard to spot when the Covid spending was (and ended) in the financials. And next years spending will increase by another $11bn (only $2bn of this is increased finance costs) - even after the Finance Ministers $1bn savings. Unbridled spending.
Sixth Labour Government - "Vision without Execution is just Hallucination"
Lifetime subscriber
evilengineer:
And yet our debt to GDP ratios are still low by international comparisons, PREFU came back not as bad as feared and we've literally just got favourable reports back from the big credit rating agencies.
The sky isn't about to collapse on our heads, we've just dealt with a pandemic, there's a cyclone recovery to pay for as well as a decades long infrastructure deficit, if we want doctors/nurses/teachers etc we need to pay for them, etc., etc., etc.
Inflation has been a world wide problem
Austerity doesn't work and scare mongering to justify tax cuts is dishonest.
And I'll say it again. PREFU is laughable. Its as optimistic as the budget was. The ability for Treasury to see 3 months ahead is poor let alone 12 months ahead. In May this year they were $3bn short of forecasting compared to the actual financial result. Thats a $3bn miss. If you were a CFO, fincon or even a junior management accountant and you were 50% wrong in your bottom line from your 10mth forecasts (just 2 months short of fiscal reporting) would you still have a job?
At the Budget in May Treasury was forecasting a $7bn deficit for 2024. Its already out to $11bn deficit despite the $1bn in cost savings announced by the finance minister. But its not that bad? Really? You dont think a 50% increase in our deficit for this year is not that bad? The first thing analysts do wrt financial reporting is analyse the current result and then look at the prospective forecasts. Very few reporters have actually tweaked to the fact that the last year was so much worse than promised. But everyone is looking to the fairytale of the future.
If we print a $11bn deficit (thats more than 3% of GDP) then the ratings agencies (who did a good job with the GFC (sic)) will have to downgrade.
Dont forget that this is all OPERATIONAL spending. The spend on cyclone recovery and infrastructure deficit is CAPITAL spending. A whole different bucket. Usually funded out of FCF and borrowings. But if your FCF is negative then how do you pay for it?????? You guessed it.......
Sixth Labour Government - "Vision without Execution is just Hallucination"
ID Verified
GV27:
For PREFU to be even remotely ball-park (and it won't be) it would require Labour to show the kind of restraint they haven't been able to muster at any point in the last six years. You'd give them a pass on the Covid years, but spending simply hasn't dropped back to anywhere near where it was.
There is so, so much more scrutiny of National's proposed tax plans than the madness of Treasury or RBNZ forecasts being constantly wrong, even in the short term and in some cases, shortly after already being revised. It's maddening, but there never seems to be any fall-out or conversations about how much of our fiscal and monetary policy is being based off data that is just nowhere close to actual reality.
Access to social services like health, education and law and order are the key parts of our social contract that give the government license to collect taxation. Those are getting worse and taxes are increasing each year through a lack of indexing at a time of high inflation. Actually fixing these is borderline impossible if you can't even get the basics of forecasting correctly.
We are rapidly approaching failed-but-functioning state status. Not too dissimilar to the US and their mounting debt problem. We just aren't as far down the road as they are.
The madness is that between May and September there has been little change in view on revenue generated. But expenses have increased in every year including FY24 despite the Budget being a budget for the 2024 year. The numbers on the left are from the Budget (BEFU23) and the right from PREFU. We know the Finance Minister has lopped $1bn pa off the spending for the next 4 years but spending for this year alone has leapt $2.5bn from when departmental budgets were approved at BEFU.
I dont rate Hooton's column in the NZH given he's an ACT mouthpiece but he draws some scary parallels to 1984 and 1990. One does feel that if Willis becomes Finance Minister then we could be in for a repeat of the Mother of All Budgets. Quite frightening for the country.
Sixth Labour Government - "Vision without Execution is just Hallucination"
Lifetime subscriber
Lifetime subscriber
Trusted Lifetime subscriber
Trusted Lifetime subscriber
|
|
|
