Entry 1394, on 2012-05-25 at 21:14:05 (Rating 5, Politics)
Yesterday the National government of New Zealand delivered it's budget. It was called the "zero budget" because there was supposed to be a zero total change in spending. But it could just have easily been called a zero budget because it has zero new ideas, or zero integrity, or zero fairness, or zero credibility!
Many people have been critical of the budget and even those who support it generally say something fairly insipid like "it was the responsible thing to do in difficult financial times". But is nothing the correct response in these situations? Some would recommend an austerity approach while others would suggest the opposite. But the zero budget was neither.
Of course doing nothing is better than doing something stupid, like pursuing the types of policies the right are recommending in Europe, so I suppose we should be happy with what we got. In fact with a terrible government like we have doing nothing is about the best we can expect.
And yes, In know it's not all bad. There are one or two things in the budget which are OK. And I know it's not easy, especially in the difficult fiscal circumstances we find ourselves in.
But the real problem is a result of the government's tax cuts for the rich. If they hadn't given that $2 billion hand out to the rich a few years back the country would be far better off. Not only would the tax take be greater but there would be the perception of greater fairness.
Handing out all that extra cash to the rich pigs feeding from their trough of excess while removing tax credits for people who make next to nothing (like kids delivering papers) is evil. Sorry, but there's no other word for it. Surely the New Zealand public are starting to see what a bunch of bumbling buffoons, immoral scumbags, and sleazy con artists these people actually are.
Not that Labour is much better. The more I watch the two traditional parties the more likely it is that I will be to be voting Green next election. I think Russel Norman's performance has been very impressive. He sounds intelligent, reasonable and above all - and unlike all the rest - fair and compassionate.
So I think I'm ready to assign marks out of 10 for this budget now: zero. And that's being generous!
OJB is quick to criticise responsible budgets like this one but has no answers himself. Does he think Labour would do better? Surely he cannot be that naive. We got the best budget possible given the circumstances.
Comment 2 by OJB on 2012-06-10 at 10:55:52:
Actually I do have answers if you bother to read what I have been writing. First, improve the government's position by reversing the tax cuts. Then, don't sell our assets (this would mean we won't get the quick boost of income but we will win long-term). Then, don't be scared to borrow for worthwhile projects (interest rates are low, let's make use of that). It's not rocket science, people!
While Labour do have some significant deficiencies I do think they would so much better than National who are almost entirely driven by their discredited free market ideology.
This was in no way the best budget possible. It was (mostly) one which will make things worse and definitely cause long-term damage. The global financial downturn should not be used as an excuse for this sort of mismanagement.
Comment 3 by SBFL on 2012-06-14 at 11:28:21:
Maybe it is deemed a 'zero' budget because it is entirely consistent with the one before...both made in a time of international turmoil and in a time where the govt intends to return the country to surplus in 2015 (or was it 2014). Consistency, reliability and credibility is what the NZ public are crying out for. As am I. We now need a finance minister to play it safe in these times, he has delivered and that his why his party maintains high public ratings. A nation needs to trust in its government in times of uncertainty and this is what is happening.
Only idiots spend money which they do not have.
Comment 4 by OJB on 2012-06-15 at 00:00:52:
Maybe. I still think my explanation makes more sense. Returning the country to surplus is stupid. Anyone could do that if they ignore everything else. If we can get to surplus fine, but we shouldn't do it by selling off everything we have and introducing policies which cause a significant number of our people to move to Australia!
Consistency, reliability, and credibility eh? You think that's what these clowns have? Well they're consistently bad, reliably lacking in ideas, and I'm sure their rich friends think they are very credible. I would prefer intelligence, morality and fairness myself.
National's ratings are beginning to slip. I think they have little chance at the next election. Because they have no obvious partners maybe they won't be back for a long time. We can only hope. The problem is they will do as much damage as possible before they go. They always do.
Actually many intelligent people borrow money. It's a fairly standard way to set up a new business or to assist through a temporary crisis, for example. Especially when interest rates are so low it's the smartest thing to do. Of course the money needs to be used intelligently. That's the hard bit!
Comment 5 by SBFL on 2012-06-16 at 08:13:40:
Yes, it's clear you promote a policy of borrowing. Seems you haven't been following Europe. Need we go that far? I never heard of a family that borrowed when they were already in the red and did well.
You said "Returning the country to surplus is stupid."
You've put the nail in your own coffin here.
You said "we shouldn't do it by selling off everything we have"
Since when is 49% of selected SOEs "everything we have" ?
You said "which cause a significant number of our people to move to Australia!"
- granted nothing has much improved since the figures under the last government, but maybe that has something to do with the reluctance to assigning govt land to mining. Since we're comparing to Australia and all....
Comment 6 by OJB on 2012-06-16 at 11:36:23:
The European countries currently in crisis did not get that way simply because ether borrowed too much. A major factor was allowing multinationals in to strip the economy without taxing them. That should be a lesson to everyone.
Returning the country to surplus is not a good idea if so many other potential benefits are sacrificed for that one aim which is largely meaningless since most of our debt is private anyway.
Yes, OK, I engaged in a bit of rhetorical hyperbole there. Selling any part of an important and well performing asset is stupid. Most people understand this, except those motivated by the failed ideology of the past.
Emigration to Australia is worse now than it was under Labour. Let's not forget that. And mining is never going to be the path to instant wealth here like it is in Australia. Even if it was, what happens when the resource is gone?
Comment 7 by SBFL on 2012-06-30 at 06:22:38:
Ohhh, the "evil multinationals"...was only a matter of time before you reverted to this.
Now you digress to private debt. Stay on topic.
Re partial selling of SOEs - maybe you should do the financial analysis and math. Cost of borrowing, cash flow, ROI and all that.
And emigration to Australia under Labour was worse than under the previous National administration. Lets focus on real drivers. But you just assume mining will not have an impact. Flaky stuff, really.
Comment 8 by OJB on 2012-06-30 at 11:43:59:
You are trivialising and distorting my point regarding the multinationals. I have heard several economic commentators make the point that large corporations are attracted to low-tax economies, but the benefits aren't really what was promised, plus the corporation moves on as soon s they get an even better offer. It's not really evil, just greedy and short sighted. That's what pure capitalism is all about.
The financial analysis has been done and in the long term the average person will lose just like they have in the past with these deals.
I believe the emigration to Australia is currently the highest it has ever been. At the very least National haven't made things sufficiently better to stop it. Another total failure!
Comment 9 by SBFL on 2012-07-03 at 10:22:13:
but the benefits aren't really what was promised. Tell that to the community who got jobs and income out of it. plus the corporation moves on as soon as they get an even better offer...probably can only practically and logistically apply to tech companies like Apple. As for the rest, its not so simple to do so.
The average person doesn't lose when they gain a job.
Maybe then you agree that National should have followed through on their plan to mine resourceful land. Oh wait, you didn't....
Comment 10 by OJB on 2012-07-03 at 15:28:46:
The jobs didn't last though, did they? The multi-nationals just moved on when it suited them. Have a look at the "modern economic miracle" in Ireland. Another fail!
In general a person who has no job who then gets one doesn't lose, I agree. But the jobs don't last and many jobs set up in a low cost economy correspond to one lost somewhere else. Why do you think HP laid off 37,000 workers in the US but has hired more in India?
National criticised the Labour government for the number of people moving to Australia at the time. Now it's worse. Where's their credibility?
Comment 11 by SBFL on 2012-07-06 at 10:22:25:
As I already said "emigration to Australia under Labour was worse than under the previous National administration"
As for today, well we can't grow jobs when the Left opposes job-growth via their opposition to growing new resources in the mining sector.
Comment 12 by OJB on 2012-07-06 at 11:16:10:
Yes, emigration to Australia is getting worse: it was worse under the previous Labour administration than the Nats before that, and now it is worse again under the current National government. When they criticised Labour they were so sure they could do better: apparently they were wrong.
So you blame the let for the inept performance of the current government. That is so typical of the right: if things go badly while the left is in power it's the left's fault. If they go badly when the right are in power it's also the left's fault.
You've got to get real and admit that National are not doing a good job. You can't excuse their inadequacies by blindly blaming the opposition.
Comment 13 by SBFL on 2012-07-10 at 09:32:55:
Mining was a real generator for growth and the left killed it. I think the blame is warranted on this occasion.
Comment 14 by OJB on 2012-07-10 at 11:13:20:
You can't just rely on unsustainable activities such as mining to stimulate the economy. For one thing mining is temporary: the resource eventually runs out. Then there are the environmental problems. I'm not saying we shouldn't have any mining, just that it isn't a magic answer to all of our problems.
Comment 15 by SBFL on 2012-07-10 at 11:24:01:
Of course a single mine doesn't produce resource forever but many mines on low-value environmental land can produce much growth. No-one said it was a "magic answer", but it is definitely a way to grow our economy and to keep pace with the Australians and their growth. Even Labour's Shane Jones is admitting many Maori are leaving for Aussie for mining jobs. Speaking of the Australians, try and tell them it such a bad thing. Haha, good luck, they didn't even want the Labor govt to special tax the mining industry (let alone prevent it).
Comment 16 by OJB on 2012-07-10 at 11:38:52:
I'm not sure what this "low value" land is but it sounds ominous. I guess it is land which hasn't been exploited by (mainly foreign) mining companies yet. Mining is temporary and is a major environmental problem, especially for coal. We should look carefully at all new mines.
And the mining resources in Australia are totally different from what we have here. No matter what we do we will never compete with that. We need to find more creative and forward thinking ways to advance our economy.
Labour in Australia probably made a big mistake with the carbon tax. It is the right thing to do but unless other countries do the same it is pointless. Plus Australians (and probably everyone else) don't care enough about long term issues to surrender short term gains.
Comment 17 by SBFL on 2012-07-10 at 11:56:02:
Well it was category 4 land, the lowest value, so yes, "low value".
Totally different? How so? Because they are bigger than zero?
It wasn't a carbon tax. But if you think it was right to abandon a carbon tax, then I won't disagree with you.
Comment 18 by OJB on 2012-07-10 at 12:04:56:
What was category 4 land? Are we talking about a specific example now? (the recent extension announced on the West Coast maybe) I thought we were talking more in generalities.
Australia is about as geologically different from New Zealand as two countries can be. They have uranium and other high value minerals. We have small amounts of gold and not much else apart from low value stuff like iron and coal.
Yes, the carbon tax was the big news but the mining tax was a separate but related issue, right? The same argument applies to both. Ideally every country in the world would have these taxes and the funds go to research on alternative energy, cleaning up carbon, etc.
Unfortunately the opponents of these taxes (and emission trading schemes and other environmental schemes) are quite right when they say having them in Australia and not China and the US is a waste of time.
Comment 19 by SBFL on 2012-07-10 at 12:19:39:
Sorry "schedule 4" land not "category 4".
Australia may be bigger and different than NZ, but a mine of useful resources is a mine of useful resources. You're really stretching a long bow now.
As I said the Aussie public rejected the mining tax. By that rationale, you must agree with them.
Lets's put it this way, even Labour leader David Shearer supports mining: Shearer on mining
Comment 20 by OJB on 2012-07-10 at 12:31:47:
Mining in Australia will always be far more worthwhile and valuable than here in New Zealand. You cannot copy a strategy used in one country and expect it to work somewhere completely different.
I do agree with rejecting the carbon tax, but not because it is an inherently bad idea, but because to tackle global issues you must have global strategies. To be honest I am not aware of the rationale behind the mining tax. Can you clarify?
A agree with this: "I guess it’s only right to look at that as an option". But in many cases the option should be rejected. Not sure about that particular case.
Comment 21 by SBFL on 2012-07-10 at 12:45:43:
Maybe it even is more valuable in Australia, but does that mean it doesn't add value in NZ? Jobs etc?
As I said the Aussie public rejected the mining tax. According to your rationale on public feeling, they must be right.
So now you downgrade your opposition to "not sure". Good to see you're opening your eyes at least.
Comment 22 by OJB on 2012-07-10 at 12:58:56:
Mining has some positive value and some negative value. We should look at each case on its merits and decide from there. We should not be afraid to reject mining which has insufficient positive effect.
The government must always make the final decision because that's what they have been elected to do, but if a large majority of the public are against a policy the government should look at it carefully because public opinion, while often wrong, is worth considering.
Again you assume I have an extreme opinion against all mining. I do not and have never said this. You seem to be trying to use the old "straw man" fallacy against me: change what I'm saying to make it easier to refute.
Comment 23 by SBFL on 2012-07-10 at 13:05:10:
Then you now support the government to do it on schedule 4 land?
Nice non-answer.
Not at all. Nothing extreme about now saying "not sure" (about outright rejection of mining).
Comment 24 by OJB on 2012-07-10 at 13:40:51:
I don't know all of the facts, potential advantages and disadvantages of the case you are referring to. I would never offer total support for all mining on schedule 4 land or anything else.
It may be a non-answer but it's the best I can do at this point. The public are often wrong - who knows, maybe they (and I) are wrong about asset sales. But to say that asset sales are OK because the public supports them is definitely wrong and that's what Key is doing.
Comment 25 by SBFL on 2012-07-10 at 13:50:19:
Worth looking at rather than just straight protesting.
It's not "asset sales" but in fact "partial asset sales". An important distintion the left are keen to overlook as they grope for public support.
Comment 26 by OJB on 2012-07-10 at 14:00:57:
Yes sure, everything is worth looking at, and nothing should be either automatically accepted or rejected. And we need to balance all factors: economic, social, political, environmental.
Do you get my point about public support now? Key quotes the alleged support shown at the election as justification for the sale, but rejects the lack of support shown now. He can't have it both ways. But, of course, he'll try.
Comment 27 by SBFL on 2012-07-10 at 14:17:46:
Indeed. Economic - tick!, Social - tick!, Political - maybe...blah, Environmental...only schedule 4...then tick!
So you agree it's only "partial" asset sales? Why is it so bad for Key/National to have upfront "partial" asset sales an yet it's okay for Labour to have secret full asset sales?
Comment 28 by OJB on 2012-07-10 at 15:32:15:
Indeed. Economic: maybe, social: maybe, political: yeah I agree, blah, environmental: no. In fact I haven't looked at this issue very closely so I have no idea whether what I said above is true, but it would be some people's interpretation of the situation, wouldn't it.
In no way was it OK for Labour to sell our assets. That was a betrayal of trust and an unmitigated disaster. They will never be forgiven for that!
You can leave comments about this using this form.
Enter name, email (optional), enter number, comment, click Add. You can leave the name blank if you want to remain anonymous. Enter your email address to receive notifications of replies. Comment should appear immediately (authorisation is inactive).
BLOG PAGE