OnPoint by Keith Ng

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OnPoint: Spending "Cap" is Fiscal Anorexia

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  • jb,

    An exceptionally fine analysis.
    I live on the outskirts of a city in Western Europe with a 200,000 population, total debt of close to €1bn, annual deficit around €120m.
    To its credit, the newly elected council is struggling to cut the annual deficit by increasing taxes/rates and cutting expenditure against a chorus of wailing and gnashing of teeth by the affected parties i.e everyone.
    (Dog owners protest marches, anyone...?)
    I proposed to the Finance Senator that he outline the core services that the city could afford to provide by staying within its budget (only cuts, no increase in revenue) and – in a next step – to outline the core services affordable with a budget that actually started paying off debt.
    And then ask people to pick the ones that they want to pay for on top.
    Political suicide, of course, which is why he’s not going to do it, but maybe someone would like to demonstrate the impact of the National-ACT cap on core services in New Zealand.
    Hospitals? Only open 9-5 M-F
    Roads? No new ones, no repairs either.
    Slips blocked a road? Stays blocked.
    ACC? An excess of $1000 per incident.
    Welfare? You’d be joking.
    An artist’s impression of Auckland/Wellington after 10 years of the proposed region would be an eyeopener..

    a.small.town.in.germany • Since Jan 2007 • 77 posts Report Reply

  • Craig Ranapia,

    asset impairments

    I could think of something really really tasteless, but won't lower the tone of proceedings quite so early. :)

    Under this limit expenditure will grow no faster than the annual increase in the rate of population growth multiplied by the rate of inflation.

    But I will be bitchy enough to point this out - isn't it funny how the one area of public expenditure that can't be linked to inflation is MPs annual pay increases -- even while, of course, civil servants are told by successive governments to show "wage restraint" for Team Kiwi.

    North Shore, Auckland • Since Nov 2006 • 11902 posts Report Reply

  • bulbul,

    "....we probably signed some stupid UN conventions against the latter.." with respect to "...or if we got rid of a lot of old people... somehow.."

    A throwaway comment or the real attitude of PA participants to the older generation that surfaces periodically ? How are you different from John Key and his statement about NZF constituents during the tea party. And you wonder why NZF gets back into power?

    I made a post sometime back to highlight an underlying attitude that I sense among many PA members -- that the silent generation and baby boomers having had it good all the way are somehow the cause for all their current and future problems, are horrible people, and dispensible.

    I hope the debate continues. There were some good comments last time countering the predominant feeling.

    BTW I think I may be the typical PA age demographic or slightly older and have older family members I do not mind looking after. They did the best they could with whatever they got and they deserve some respect.

    Since Nov 2011 • 6 posts Report Reply

  • Deborah,

    I read those comments as sarcasm and/or irony, and the very opposite of Keith’s actual attitudes.

    ETA: I think you have totally misread Keith's rhetorical intent.

    Manawatu City • Since Nov 2006 • 1303 posts Report Reply

  • bulbul,

    I am sorry I do not agree.

    While the point is not specifically about Keith--I have been a regular for a long time on this site to sense the tone.

    Since Nov 2011 • 6 posts Report Reply

  • Ian Dalziel,

    Don Johns & Fiscal Dragoons...

    National’s coalition agreement with ACT

    I trust this "Satan sandwich" was signed in blood!
    I dont see a dedicated 'No surprises' clause though...

    Banks as Regulatory Reform Minister?
    - Master of taps and spigots, enlarger of hoops
    and fine print, exalted Less-Bettererer of Rules...
    the mind boggles.
    I foresee Small Businesses becoming smaller
    under his wing as well...

    I love this bit:

    For the avoidance of doubt ACT will, in particular, seek reassurance that the $400 million investment by the Crown Water Investment is in the national interest and does not embody significant non-transparent wealth transfer

    Doesn't that just say that significant transparent wealth transfers are ok? Look for a Bechtel-type PPP arrangement soon...

    Christchurch • Since Dec 2006 • 4822 posts Report Reply

  • jb,

    @ bulbul
    Keith should perhaps have used the SarcMark, but that said, I haven't noticed an significant ageism undertow on this site.
    If you REALLY want to read some serious beat-ups of baby boomers, head on over to interest.co.nz - the last time I looked, Bernard was proposing asset confiscation and concentration camps... [SarcMark]

    a.small.town.in.germany • Since Jan 2007 • 77 posts Report Reply

  • Tom Semmens,

    A touch of ageism towards baby boomers you say? A hint of resentment towards the most selfish, greedy and egocentric generation ever born in any civilization anywhere you opine?

    Who would have thought!

    Auckland • Since Nov 2006 • 1793 posts Report Reply

  • Craig Ranapia,

    A throwaway comment or the real attitude of PA participants to the older generation that surfaces periodically ?

    @Bulbul: Keith was obviously, and sarcastically, noting that you can't just wish away the bleeding obvious spike in superannuation costs coming down the pike without 1) dramatically raising eligibility very quickly or 2) dramatically reducing the pool of claimants. I find it hard to see how you drew the conclusion Keith was disappointed that he can't tuck into a big plate of Soylent Green...

    North Shore, Auckland • Since Nov 2006 • 11902 posts Report Reply

  • Greg Dawson,

    I think we can call that a successful troll, as the the thread is well derailed.

    Wellington • Since Nov 2006 • 221 posts Report Reply

  • HenryB,

    Keith, your analysis of the `Tea Party' bill is spot on and I am really surprised at the MSM silence on it. Morning report didn't even raise it with Key in its interview with him about the deal with ACT yet, in many ways, it is as portentous as the Charter Schools matter. Given that it is not so long ago that Obama had so much trouble with the Tea Party republicans over breaking the limits on a legistatively imposed limit on government budgetary matters, you would think it would be fresh in their memories of journalists and point of reference for serious questioning of what is being proposed here. Yes, I know the US limits are different from the ones being suggested here, but the problems they created are the ones that Banks wants to introduce here as well.

    @bulbul: On the matter of PA members attitudes I am really surprised that you can't see Keith's remarks as the sarcasm they were meant to be and it gives one pause to accept your judgements about the `underlying attitudes' of some PA contributors. I am not sure what the typical PA age demographic is and whether I fit I but I like you have many friends and family who are "older". I have not sensed here anything that could be seen as an attitude that

    the silent generation and baby boomers having had it good all the way are somehow the cause for all their current and future problems, are horrible people, and dispensible

    Palmerston North • Since Sep 2008 • 106 posts Report Reply

  • Tom Semmens, in reply to Greg Dawson,

    Danyl over the dimpost is of the view the whole TABOR thing is a joke, since it can be ignored by the right and will be repealed by the left. Nothing but a sop to the Monster Raving Looney party and it's leader John "Barking Mad" Banks.

    the real knife in the guts is the onward march of third world crony capitalism designed to enrich the National party's mates by privatising the attractive bits of the education system (Charter Schools) and ACC and leaving the shit and the dross to be dealt with by a public sector being happily drowned in the bath by the double dipper of Dipton - a man who doesn't need the excuse of a TABOR to enjoy his knife work.

    Auckland • Since Nov 2006 • 1793 posts Report Reply

  • Greg Dawson, in reply to Tom Semmens,

    by privatising the attractive bits of the education system (Charter Schools)

    My thought on reading about the charter schools clause was that it was a means to fund the hyper-religious evolution-is-a-theory sort, rather than the attractive bits.

    Wellington • Since Nov 2006 • 221 posts Report Reply

  • bulbul,

    @Greg Dawson 8:45

    Not intended.

    Since Nov 2011 • 6 posts Report Reply

  • DeepRed,

    Bulbul:

    A throwaway comment or the real attitude of PA participants to the older generation that surfaces periodically ? How are you different from John Key and his statement about NZF constituents during the tea party. And you wonder why NZF gets back into power?

    People also mistook a certain Jonathan Swift book for a manifesto.

    Tom S:

    My thought on reading about the charter schools clause was that it was a means to fund the hyper-religious evolution-is-a-theory sort, rather than the attractive bits.

    My thoughts exactly. The Texas Board of Education is a cautionary tale of what could possibly happen. Or, we'd otherwise get Golden Arches Junior High.

    The southernmost capital … • Since Nov 2006 • 4227 posts Report Reply

  • Ian Dalziel, in reply to Tom Semmens,

    Fey, Rich, Rights...

    ...to enrich the National party's mates by
    privatising the attractive bits

    I see they also:

    ...further agree to implement measures to improve the effectiveness of employment placement services for beneficiaries through contracting out such services to private sector and community organisations...

    and gee didn't National wage war on our teachers and also get rid of the community night classes that focused on helping people get ahead - now they say:

    Underachievement in education often compounds the disadvantages already faced by children in vulnerable, at-risk communities, and can contribute to intergenerational disadvantage, poor health, poverty, joblessness, welfare dependence, criminal offending and social dysfunction. It is one of the reasons for New Zealand’s very high rate of youth unemployment

    The fact that high class numbers contribute to underachievement and lack of actual jobs to go to, isn't mentioned either...

    Show us the jobs, John!
    Show us the jobs!

    Christchurch • Since Dec 2006 • 4822 posts Report Reply

  • Tom Semmens, in reply to Greg Dawson,

    But doesn't it come back to an analysis of motives? This is a secretive government that has marked paranoid suspicion of the public service that I can only put down to watching far to much Fox News during their long confinement in opposition. There is real bias towards solutions that allow the government to privatise the delivery of public services. That is why I don't think the primary driver here for charter schools is as culture war driven as in the USA.

    I think there are two primary drivers behind this governments push for Charter Schools (and things like Whanau Ora). Firstly, Private organisations are not subject to the OIA (and they don't leak) so they help salve the paranoid imagination of the likes of Steven Joyce. And secondly, the government knows the public will not accept the wholesale transfer of our remaining state assets into the the hands of the economic vandals of our right wing business elite, but they also know that this failed business elite is growing impatient in its wait for the promised monopoly rents. In the meantime, privatised schools and ACC accounts provide a fine mechanism for buying off this incompetent and risk averse crony business class with fat taxpayer contracts.

    Auckland • Since Nov 2006 • 1793 posts Report Reply

  • BenWilson, in reply to bulbul,

    Was this one from Tom the kind of thing you mean?

    A touch of ageism towards baby boomers you say? A hint of resentment towards the most selfish, greedy and egocentric generation ever born in any civilization anywhere you opine?

    I'd agree, there's some of that. The predominant demographic here is middle-aged, sitting in the spot that missed out on quite a lot of the things that made the baby boomers wealthy, and continues to do so. Tax free profit on asset growth, for instance. I think your warning not to hate on them outright is sensible - it won't help anything.

    Auckland • Since Nov 2006 • 8439 posts Report Reply

  • Graeme Edgeler,

    So, part of National's coalition agreement with ACT is to put in a "spending cap"...

    Also part of their last confidence and supply agreement as well.

    With the legislation currently sitting before a select committee (I submitted, who else did?).

    But that's just the formula under normal circumstances. Through omission or ignorance, N-ACT's plan is much worse.

    Except it's also better because it doesn't actually have teeth, whereas the Colorado experiment was an amendment to the Colorado constitution that actually forbade the legislature and governor form breaching its terms. And when it presented problems, the legislature and governor couldn't come together to fix it.

    Wellington, New Zealand • Since Nov 2006 • 2999 posts Report Reply

  • Ben Austin,

    I have to say I am surprised at the Charter Schools initiative. Seems like a solution in search of a problem. Or perhaps, more likely, something that appeals to a very select group of supporters of ACT. Is this something people have been talking about seriously in NZ?

    TABOR, well, ACT has been talking about that for years, not that this is much of a consolation.

    London • Since Nov 2006 • 884 posts Report Reply

  • Raymond A Francis, in reply to bulbul,

    In the 50s lots of jokes revolved around people of colour, hor'si half gallon jar
    And then in the 60s it was common to tell jokes about women, feminists etc

    No sense of humour if you complained, its sarcasm, it is the truth, that's how they are
    See a pattern
    Just saying

    45' South • Since Nov 2006 • 536 posts Report Reply

  • Greg Dawson, in reply to bulbul,

    @Greg Dawson 8:45

    Not intended.

    In which case I apologise for the aspersions.

    I agree that a knee jerk "blame the old" is not helpful; I might suggest it seems like a by-product of the disinclination to grow up that has otherwise defined our modern society. "You're not my real dad I don't have to pay your taxes I hate you I'm going to run away".

    However, I do think that we need to still accept that there are some serious imbalances in the world (and opportunities) presented to different generations.

    As someone who expects to never quite reach "retirement age" as it constantly moves back, I don't think it's unreasonable to expect some sacrifice on the part of the people who might still get there.

    Wellington • Since Nov 2006 • 221 posts Report Reply

  • Lyndon Hood,

    As Mr Edgeler says, what they're talking about isn't binding. The finance minister would just have to explain why they're spending over the rate and, apparently, how they plan to get back. Sort of like the Bill of Rights, but for money.

    "Because it's silly" and "not at all" may or may not be deemed appropriate answers.

    Wellington • Since Nov 2006 • 1095 posts Report Reply

  • Idiot Savant, in reply to Tom Semmens,

    Firstly, Private organisations are not subject to the OIA (and they don't leak) so they help salve the paranoid imagination of the likes of Steven Joyce.

    But the moment they become "Boards of Trustees constituted under Part 9 of the Education Act 1989" they are.

    Palmerston North • Since Nov 2006 • 1639 posts Report Reply

  • Angus Robertson,

    This is a state with the same GDP per capita as Sweden, but which could not afford to vaccinate its children. That is perverted.

    Perverted?

    California cut a lot of immunisation programs this year for a saving of USD18 million. Yet California decided to build 54 miles of high speed rail track in the middle of nowhere for USD10 billion. This certainly isn't a spending cap, but the results are similar.

    Auckland • Since May 2007 • 984 posts Report Reply

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