Jacinda Ardern - our new PM

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Ultimate Geek
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#1923549 22-Dec-2017 09:28

Fred99:
rjt123:

One needs only read the prefu for the 2008 election to see that labour's surpluses (which look good on paper) had failed to deliver the economic prosperity or fiscal strength that the country needed for the coming years.

OK - so let's slam Labour for not predicting the GFC, then also slam Labour for daring to suggest that the current "Trump Bump" to global markets might not be sustainable, even over the course of the current term.

I wasn't suggesting they should have predicted it, but anybody with even a slight knowledge of economics knows the principle of economic cycles: expansion, peak, contraction, trough. If Cullen was qualified for job of finance minister surely he would have known a contraction was going to come some time and could have planned a little better for it. The trouble was they were living inside Clark's "strategically benign Utopia" that didn't exist except in their minds.

I just don't agree with narrow minded perspectives.

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#1923552 22-Dec-2017 09:29

Fred99:

rjt123:

One needs only read the prefu for the 2008 election to see that labour's surpluses (which look good on paper) had failed to deliver the economic prosperity or fiscal strength that the country needed for the coming years.

OK - so let's slam Labour for not predicting the GFC, then also slam Labour for daring to suggest that the current "Trump Bump" to global markets might not be sustainable, even over the course of the current term.

Exactly. The effects of the GFC and EQ's are not what is often stated. Some things we can manage, some we cannot, but those we can is the real issue. Underfunding is an issue, but gives free surpluses. Thats not great IMHO. Now we have to overfund these sectors in coming years.

I can cease funding maintenance of my vehicles and home, then tell everyone my bank accounts are in great shape. But I cannot make the required spending that I have put off, go away.

MaxLV

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#1923557 22-Dec-2017 09:36

rjt123:

MaxLV:

-----------------

The full costs (including the government costs) aren't available yet, but it wont be anything like the costs of the Christchurch earthquakes.

The cost to the government are nowhere near the 92 billion the National government borrowed in the 9 years they ran up the Government debt.
IOW this weak excuse For the previous governments huge debt just doesn't add up.

As for the GFC that happened in 2008, and New Zealand wasn't that badly affected by it, certainly not enough to justify running up such a huge government debt anyway. They didn't have to pay out billions to banks, or any other 'too big to let fail' corporate mates did they.

So where has all the money gone that they have borrowed? And why did they borrow money to fund their promised electioneering tax cuts?

So if 92 billion debt is bad then borrowing a further billions to contribute to the super fund would be even worse, yes?

So where had all the money gone. The reason you can't see where it has gone is because you are taking a very narrow view of the government's affairs and expenditure to portray it in a negative light. If you look at the bigger picture then suddenly it all makes sense and doesn't look so bad.

Take the government's payout for the collapse of South Canterbury Finance for example. A billion dollars of wasted money because the previous government had failed in their oversight of the industry. As well as all the economic stimulus measures required because the previous labour government had run the economy into the ground. One needs only read the prefu for the 2008 election to see that labour's surpluses (which look good on paper) had failed to deliver the economic prosperity or fiscal strength that the country needed for the coming years.

You have no idea of the 'total view' I'm taking of the previous governments mismanagement of New Zealand.
The 'bigger picture' is that the country now has a 92 billion debt that has to be paid back. A debt we didn't have to have, and shouldn't have been borrowed in the first place.

The South Canterbury Finance payout was simply bailing out one of their 'mates' and because of the huge investor support by national party supporters. They should have let it fail.
Even so, the 1.6 billion cost to the government for that bail out, plus the costs of the Christchurch and Kaikoura earthquakes, and the GFC effects dont total anywhere like the current debt of 92 billion that they ran up, even with them cutting (underfunding) a lot of government expenditure for the nine years they were in power. ANd they were going to give tax cuts, further reducing the governments income.

The Clark Labour government managed the economy far better that the National government did, without the need to borrow and put the country in debt for decades to come. The Labour government debt was 5.5% of GDP in 2008, The National governments debt was 34% of GDP in 2017.

That is the reality and difference between how Labour governments and National governments have run New Zealand for the past 19 years.

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#1923559 22-Dec-2017 09:38

rjt123:
Fred99:

rjt123:

One needs only read the prefu for the 2008 election to see that labour's surpluses (which look good on paper) had failed to deliver the economic prosperity or fiscal strength that the country needed for the coming years.

OK - so let's slam Labour for not predicting the GFC, then also slam Labour for daring to suggest that the current "Trump Bump" to global markets might not be sustainable, even over the course of the current term.

I wasn't suggesting they should have predicted it, but anybody with even a slight knowledge of economics knows the principle of economic cycles: expansion, peak, contraction, trough. If Cullen was qualified for job of finance minister surely he would have known a contraction was going to come some time and could have planned a little better for it. The trouble was they were living inside Clark's "strategically benign Utopia" that didn't exist except in their minds.

I just don't agree with narrow minded perspectives.

What should we do now? Raise taxes, stop spending and wait for GFC 2.0, WW3, EQ? Unlike many people, we can borrow if we have to. If we dont have to, we dont need to borrow, we can invest in todays NZ and its near future, at least keeping it as up to date and current as we can. If we dont have to catch up under funding, we could be reducing debt, but we cant do that right now, unless we just continue underfunding and give tax cuts

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#1923561 22-Dec-2017 09:42

All this commentary sounds like Red vs Blue, National vs Labour, side A vs side B, but the reality is its about what all of us do every day, manage our income and expenses. We cannot avoid costs out of our control, but we can manage what have control over, and the issue here is that hasnt happened very well. We cannot afford tax cuts. We have held back spending. Banked surpluses that arent surpluses, or at leats the size we were told.

rjt123

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#1923566 22-Dec-2017 09:50

MaxLV:

You have no idea of the 'total view' I'm taking of the previous governments mismanagement of New Zealand.
The 'bigger picture' is that the country now has a 92 billion debt that has to be paid back. A debt we didn't have to have, and shouldn't have been borrowed in the first place.

The South Canterbury Finance payout was simply bailing out one of their 'mates' and because of the huge investor support by national party supporters. They should have let it fail.
Even so, the 1.6 billion cost to the government for that bail out, plus the costs of the Christchurch and Kaikoura earthquakes, and the GFC effects dont total anywhere like the current debt of 92 billion that they ran up, even with them cutting (underfunding) a lot of government expenditure for the nine years they were in power. ANd they were going to give tax cuts, further reducing the governments income.

The Clark Labour government managed the economy far better that the National government did, without the need to borrow and put the country in debt for decades to come. The Labour government debt was 5.5% of GDP in 2008, The National governments debt was 34% of GDP in 2017.

That is the reality and difference between how Labour governments and National governments have run New Zealand for the past 19 years.

The south Canterbury Finance thing was a legal obligation because of legislation rushed through by the labour government guaranteeing investors funds. Don't think it was anything to do with mates... Sorry.

And the prefu for 2008 election which should have been a glowing report about labour's prudent fiscal management, espousing the virtues of their low debt and the golden years ahead, despite the gfc etc. actually was quite the opposite, the rhetoric was more doom and gloom. Probably because things weren't quite as good as they seem when we select two random statistics as a indication of the economy.

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wsnz

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#1923573 22-Dec-2017 10:09

tdgeek:

All this commentary sounds like Red vs Blue, National vs Labour, side A vs side B, but the reality is its about what all of us do every day, manage our income and expenses. We cannot avoid costs out of our control, but we can manage what have control over, and the issue here is that hasnt happened very well. We cannot afford tax cuts. We have held back spending. Banked surpluses that arent surpluses, or at leats the size we were told.

That's because it is very much is National v Labour, side A v side B situation. We have two completely differing opinions on policies that are beneficial for the country, with only a very small amount of common ground. Toss into the mix subjective opinions such as not having managed what we have control over very well, and it's a recipe for disagreement.

We need objective decision making that is backed by evidence.

wsnz

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#1923574 22-Dec-2017 10:12

rjt123:
And the prefu for 2008 election which should have been a glowing report about labour's prudent fiscal management, espousing the virtues of their low debt and the golden years ahead, despite the gfc etc. actually was quite the opposite, the rhetoric was more doom and gloom. Probably because things weren't quite as good as they seem when we select two random statistics as a indication of the economy.

If Labour want to lay claim to their supposed superior fiscal management during their previous term, then logically they should also lay claim to the GFC, but that's always conveniently ignored as being an "external factor". Shades of Trump.

tdgeek

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#1923579 22-Dec-2017 10:22

wsnz:

tdgeek:

All this commentary sounds like Red vs Blue, National vs Labour, side A vs side B, but the reality is its about what all of us do every day, manage our income and expenses. We cannot avoid costs out of our control, but we can manage what have control over, and the issue here is that hasnt happened very well. We cannot afford tax cuts. We have held back spending. Banked surpluses that arent surpluses, or at leats the size we were told.

That's because it is very much is National v Labour, side A v side B situation. We have two completely differing opinions on policies that are beneficial for the country, with only a very small amount of common ground. Toss into the mix subjective opinions such as not having managed what we have control over very well, and it's a recipe for disagreement.

We need objective decision making that is backed by evidence.

If you looked at the total annual expenditure, I would doubt the differences are massive. Underfunding is my pet gripe, that is commonly mentioned by many commentators. You cannot run away from that, it has to bite. While I have no issue with conservative spending when required or appropriate, I have to draw the line when its a policy to underfund and create fake surpluses. At the expense of health, education and so on. The balance is just not right. Now we are forced to live with that, catch up, and should there be a crisis of some sort, here or global, we are in a poor position to deal with that and catch up vastly underfunded sectors. It becomes one income vs two needs. That doesnt work for individuals and it doesnt work for a country

6FIEND

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#1923584 22-Dec-2017 10:28

MaxLV:

You're still sticking with the tired old sad excuses of natural disasters and the GFC?

No - you're right. Let's just pretend that they never happened.

MaxLV:

Where has all that borrowed 92 billion gone? Why did they have to borrow it in the first place?

The current government has to borrow to cover the obligations the previous government's mismanagement has lumbered us all with.

Can you really not see that you've answered your own question?

Clark's government left National with an economy in recession, a projected "decade of deficits", yet National still retained (and expanded on) all of Labour's social policies. Including interest-free student loans, Working for Families, and raising the minimum wage (and benefits) at a greater rate than Labour did in their 9yrs of Global Economic prosperity.

National had to borrow to cover the obligations the previous government's mismanagement had lumbered us all with.

The difference now is that instead of the accounts being in deficit and the fruit of the previous 9 yrs being entirely squandered, Labour have inherited an economy in surplus and on a growth track.

(In fact, this is such an illustrative example of how National turned NZ's economy from recession into a thing of global envy, it's worth quoting the figures here)

08/09 -1.0%
09/10 -0.3%
10/11 +1.6%
11/12 +2.3%
12/13 +2.3%
13/14 +2.6%
14/15 +3.7%
15/16 +3.6%
15/17 +3.7%

That some can criticise National's borrowing and turn a blind-eye to Labour's increasing that borrowing is cognitive dissonance on a massive scale.

wsnz

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Ultimate Geek
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#1923589 22-Dec-2017 10:35

tdgeek:

If you looked at the total annual expenditure, I would doubt the differences are massive. Underfunding is my pet gripe, that is commonly mentioned by many commentators. You cannot run away from that, it has to bite. While I have no issue with conservative spending when required or appropriate, I have to draw the line when its a policy to underfund and create fake surpluses. At the expense of health, education and so on. The balance is just not right. Now we are forced to live with that, catch up, and should there be a crisis of some sort, here or global, we are in a poor position to deal with that and catch up vastly underfunded sectors. It becomes one income vs two needs. That doesnt work for individuals and it doesnt work for a country

What are the criteria used to define "under funding" and how is it objectively measured? What level of funding would make education (for example) fully funded?

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rjt123

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#1923599 22-Dec-2017 10:54

wsnz:

tdgeek:

If you looked at the total annual expenditure, I would doubt the differences are massive. Underfunding is my pet gripe, that is commonly mentioned by many commentators. You cannot run away from that, it has to bite. While I have no issue with conservative spending when required or appropriate, I have to draw the line when its a policy to underfund and create fake surpluses. At the expense of health, education and so on. The balance is just not right. Now we are forced to live with that, catch up, and should there be a crisis of some sort, here or global, we are in a poor position to deal with that and catch up vastly underfunded sectors. It becomes one income vs two needs. That doesnt work for individuals and it doesnt work for a country

What are the criteria used to define "under funding" and how is it objectively measured? What level of funding would make education (for example) fully funded?

I think you have hit the nail on the head. Appropriate funding is subjective to personal opinion on what is a priority, based on your own circumstances, morals, beliefs, views etc. I think a lot of it comes down to mis-management and inefficiencies (e.g. in health especially. But I don't have any data to back up that up.)

Likewise, our priorities in our own perspective might be to create surpluses, or more wealth redistribution, or less taxes, or higher taxes with more state funding etc. There's no right or wrong, but there are benefits and drawbacks for each.

tdgeek

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#1923601 22-Dec-2017 10:57

wsnz:

tdgeek:

If you looked at the total annual expenditure, I would doubt the differences are massive. Underfunding is my pet gripe, that is commonly mentioned by many commentators. You cannot run away from that, it has to bite. While I have no issue with conservative spending when required or appropriate, I have to draw the line when its a policy to underfund and create fake surpluses. At the expense of health, education and so on. The balance is just not right. Now we are forced to live with that, catch up, and should there be a crisis of some sort, here or global, we are in a poor position to deal with that and catch up vastly underfunded sectors. It becomes one income vs two needs. That doesnt work for individuals and it doesnt work for a country

What are the criteria used to define "under funding" and how is it objectively measured? What level of funding would make education (for example) fully funded?

Why do commentators in NZ frequently refer to under funding? Have you looked at health funding? year after year its underfunded, the medical people have complained for years. Last budget it was a good increase as Bill correctly said, but it wasnt, as he omitted to tel, you that most of that went to the one off catch up of aged care workers pay. Roading. Apart from the election based project. Housing, sold off, crisis, oh no there is no crisis. But if you fee; that not paying the bills is how to save money, that's fine. It actually doesnt work.

Explain to me why deferred spending is so often mentioned in NZ?

tdgeek

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#1923605 22-Dec-2017 11:05

rjt123:

wsnz:

tdgeek:

If you looked at the total annual expenditure, I would doubt the differences are massive. Underfunding is my pet gripe, that is commonly mentioned by many commentators. You cannot run away from that, it has to bite. While I have no issue with conservative spending when required or appropriate, I have to draw the line when its a policy to underfund and create fake surpluses. At the expense of health, education and so on. The balance is just not right. Now we are forced to live with that, catch up, and should there be a crisis of some sort, here or global, we are in a poor position to deal with that and catch up vastly underfunded sectors. It becomes one income vs two needs. That doesnt work for individuals and it doesnt work for a country

What are the criteria used to define "under funding" and how is it objectively measured? What level of funding would make education (for example) fully funded?

I think you have hit the nail on the head. Appropriate funding is subjective to personal opinion on what is a priority, based on your own circumstances, morals, beliefs, views etc. I think a lot of it comes down to mis-management and inefficiencies (e.g. in health especially. But I don't have any data to back up that up.)

Likewise, our priorities in our own perspective might be to create surpluses, or more wealth redistribution, or less taxes, or higher taxes with more state funding etc. There's no right or wrong, but there are benefits and drawbacks for each.

I can agree with that. NZ is a poor country, I think we can all agree on that. We all want good services, good health, good education, good transport infratstructure, good housing, and so on, I think we can all agree on that. We can also all agree that we cannot have everything right now.

So we are all agreed! :-)

What the issue is , is how do we manage all this poorness? We cannot budget for everything in any given year, but we also cannot defer spending every year and create surpluses and say all's well, then decide to give away 7B in tax cuts to everyone. I cannot see the balance or appropriateness there. I guess its fine if we are all very comfortable, so we can turn a blind eye to health, and so on, but is that really how we all want to be? I dont want to throw money at the poor to shut them up, but in many sectors we are under resourced year in and year out. Maybe we tell media to not report all this, dont report road congestion every day and so on. Head in the sand stuff

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#1923614 22-Dec-2017 11:17

tdgeek:

Why do commentators in NZ frequently refer to under funding? Have you looked at health funding? year after year its underfunded, the medical people have complained for years.

Why do you keep referring to health funding? It is demonstrably true that its funding increased under the National government. (from 11.9bn in 2008 to 16.7bn in 2017) This represents more than a 10% increase per capita in real terms.

Yes - medical people have complained for years... There is significant dysfunction in the DHB's (Example) (And you can argue that the Health Minister ought to have done a much better job of whipping them into line) but it is really not an example of governmental underfunding. Particularly when contrasted with the Labour party's funding history in this portfolio.

It's just not a good example to use if you're trying to make a point that National deferred spending to achieve a "fake" surplus.

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