The $23b supposedly spent on transport in 2009 doesn't seem quite right.
Reading Cunliffe's opinion piece today suggests to me that Labour have perhaps finally listened to what has been said in this thread.
There's still something of a credibility issue that Labour will need to resolve though. They are proposing to kick start the economy to a bigger extent than National, make a bigger and bolder effort to reduce borrowing - yet so far the only policies would seem to involve more spending.
I think the Greens alternative budget proposes some good ideas at fairly raising revenue. It makes one wonder whether Labour will reassess their support of a capital gains tax, what they might do about the Emissions Trading Scheme and (of most interesting to me personally) that they might finally say something about transport.
Wasn't there an big earthquake in there somewhere? The problem with such comparisons is that there are all sorts of effects embedded in the income tax and GST take.
Yes you're definitely correct there, as in fact there were two big earthquakes in there. Perhaps Canterbury could be excluded from the figures?
What it really requires is Labour doing some hard yard through written questions in getting all the numbers, plus a mass of OIA requests to Treasury so they can learn absolutely everything about the effect of the tax changes and really show what has been going on.
Not long ago we were borrowing $250 million a week, now that's $380 million all of a sudden. Earthquake aside, what happened?
Heh. That's brilliant.
I agree Craig, I just wonder whether Labour’s so terrified of National using the criticisms of how they’ve been handling the economy to justify further spending cuts. It’s pretty easy for National to simply say “yeah we know the deficit is massive, that’s why we need to cut x, y and z”.
Don Brash’s latest letter to John Key helps justify any bad news in the budget quite nicely (Key’s reply to the letter probably should be a big thank you).
I guess I'm not saying that Labour's approach is what they should be doing. But I can kind of see why they seem to be hesitant.
Cutting research and education funding like this government have done for the last couple of years is just nuts, especially when other nations have invested more during the downturn so they come out of the blocks faster.
Yeah good point. I always thought the best way to catch up with Australia might actually be as simple as seeing what they've done and copying it (at least to as great an extent possible, we can't really dig up our country and export it to China - much to Gerry Brownlee's annoyance).
What I’d mainly like to hear is a way out of the mess. A better future. Hope.
Yeah that would be good. Tough to see a way out though as many of the things that would normally come rescue us (high export prices, growing demand for exports etc.) don't seem to be making much of a difference.
The argument from National seems to be that we're not recovering in the short-term because we're saving the extra cash rather than spending it - which will help in the longer term. While that might be true, if it takes a few more years for things to turn around then how are things going to be when we come out the other side?
How they should play it, I think, is by pointing out that the huge deficit has arisen from the tax cuts given. Basically that National through these tax cuts have created a structural deficit and that cutting spending isn’t the answer but reversing the tax cuts is. They should campaign on something like a 39% marginal rate on income over 90k and a 45% marginal rate on income over 150k.
Somehow National still manage to get away with saying that the tax "switch" was cost neutral. Surely some straightforward questions in parliament would fix that problem:
1) What was the revenue raised from income tax in the six months after October 2010 and how does that compare to the same six months after October 2009?
2) What was the revenue raised from GST in the six months after October 2010 and how does that compare with the same six months after October 2009?
Surely if the loss in revenue from 1 is bigger than the boost in 2, then the tax switch didn't pay for itself.
To be fair to Labour, they're in a bloody difficult situation with their economic arguments at the moment. The more they slam the state of the economy, the more National will use that to justify spending cuts. The good old "strategic deficit" approach seems to have worked a charm in National's case - to the point where it seems they're now almost trumpeting how utterly massive the budget deficit is. Usually you'd be ashamed of it.
Labour really need to decide whether they're going to criticise National's mishandling of the economy by highlighting areas of stupid spending (please start with their pork-barrel, I mean transport, policy) or highlighting how Labour's going to painlessly raise revenue.
After all, there's only two ways to reduce the deficit: increase revenue or decrease spending and Labour don't seem too keen on the latter.
Good post Russell.
It's interesting to think that at the last election I really wanted to vote for both Labour and the Greens as I felt both parties were worthy of my vote. I suspect this time my decision will come down to which party is being less useless. The Greens are probably winning on that front at the moment - though I wish they would learn that they lose far more votes than they gain from many of their "hard left" policies.
One wonders whether Labour's uselessness right now is because they have stuffed up with the timing of settling on their policies. There may be a growing unease about the government but at the moment there is no alternative vision, Cunliffe's good work is being ignored because Labour are too busy focusing on stupid stuff, and they generally seem disorganised.
I know some good policymaking is going on behind the scenes, they just need to start talking about it - quickly.
I thought Goff's "The many not the few" speech a while back was great. How come we haven't heard that line in months?