OnPoint: Budget 2011: Now with 70% less wordiness!
45 Responses
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Sacha, in reply to
I'm not expecting socialism any time soon
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giovanni tiso, in reply to
I'm not expecting socialism any time soon
There are about a thousand discrete steps between "yes, the Tories are right that we need to cut spending, but here are some tax credits for R&D" and "socialism".
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Kumara Republic, in reply to
But my question is this: isn't it private debt that NZ ought to be worried about? as I understand it private offshore debt has been the concern of the ratings agencies, and our government debt is not very alarming in an international context.
Indeed it is. But it's been deliberately misrepresented as public debt - hence the 'strategic deficit'. Hardly any bullshit has been called on the issue, and I suspect it's the case because the banks (mostly run from Oz) have too much to lose.
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Interesting article in the guardian on the results of slashing public spending in a recession (recently, as opposed to the all the earlier evidence).
Currently I'm petrified of a repeat of the early 90s, but I can't see how we're going to dodge that bullet given the performance on both sides of the house.
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Ian MacKay, in reply to
Indeed it is. But it’s been deliberately misrepresented as public debt – hence the ‘strategic deficit’. Hardly any bullshit has been called on the issue, and I suspect it’s the case because the banks (mostly run from Oz) have too much to lose.
Andrew R supplied me these figures. Not quite what the Government points out.
At the end of last year debt was like this (from Reserve Bank figures):Household $183 billion 94% of nominal GDP
Business $72 billion 37% of nominal GDP
Agriculture $48 billion 25% of nominal GDP
Government $56 billion 29% of nominal GDP
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Sacha, in reply to
There are about a thousand discrete steps
Thank goodness for MMP
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Bart Janssen, in reply to
Yup, dogma says, in a recession government spending should increase, decreasing spending causes an even bigger drop in taxes which leaves everone in the poo.
Dublin's policy of ferocious cuts to public services, pay and welfare were the model to be emulated
What I find sad is that in NZ we never seem willing to believe that what is found to be true in other countries - we have to learn it for ourselves :(.
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James Butler, in reply to
What I find sad is that in NZ we never seem willing to believe that what is found to be true in other countries – we have to learn it for ourselves :(.
We don't even seem to learn that way.
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81stcolumn, in reply to
I'm not expecting socialism any time soon
I believe it is still used for bailing out broken banks and financiers.
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Greg Dawson, in reply to
We don’t even seem to learn that way.
Well exactly. We've done this before, but it seems to be mostly forgotten what happened. The intervening boom has removed all memory of a time when things were not-so-great.
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Matthew Poole, in reply to
yes, the Tories are right that we need to cut spending
Depends where one cuts the spending. Cutting spending on Roads of Dubious Significance in order to spend money on social policies is objectionable to you? You'd rather than the RODS and the social policies were funded?
National have fucked the economy in a craptacular fashion. Economic incompetence on a grand scale. Even Craig doesn't dispute that English qualifies for an "F" for "Fucking useless" when it comes to how he's handled the economy - though the precise phrasing of the crimes is open for debate.
Given that, Goff doesn't have a hell of a lot of wiggle room. National have been pre-loading debt, for one thing, so a lot of the borrowing has already occurred and must now be serviced. The best we can really hope for is a shuffling of spending priorities to try and minimise the damage and hopefully get the recovery going properly. -
Islander, in reply to
National have fucked the economy in a craptacular fashion. Economic incompetence on a grand scale.
Totally agree, and also with your last paragraph.
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bmk, in reply to
So long as the other major party in Parliament fails to come up with coherent and recognisably different policies from National’s, it makes perfect sense for people to choose the leader who projects a more competent image
Yes. That's why when they say this I just keep quiet.
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Sacha, in reply to
I believe it is still used for bailing out broken banks and financiers.
touche
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Bart Janssen, in reply to
pre-loading debt
Worth noting debt in itself isn't bad. It's just that the use National made of that debt was ... well .. useless. Instead of using the debt to stimulate the economy they ... heck I'm not certain wtf they did with the money but it's gone.
The Spanish example suggests that the only way out of this mess is to increase govt spending particularly in welfare areas but also in infrastructure projects. That may mean more debt, but may also mean some more taxes - but more taxation tends to depress economies. It won't be easy finding a balanced path.
Note the Spanish got called all kinds of dipshits for their approach ... until it worked.
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Matthew Poole, in reply to
heck I’m not certain wtf they did with the money but it’s gone.
Some of it hasn't been spent. It's just sitting there, accumulating servicing costs. English said as much a couple of weeks ago, when he said that some of the borrowing recently has been far in excess of need in order to take advantage of the interest rates available.
more taxation tends to depress economies
It can't depress our economy much further than the slash'n'burn approach taken by National has already achieved, and if it's spent wisely on transfer payments to the lowest-income families and on training people for the Christchurch reconstruction then the growth effect should be fairly significant.
One of the most infuriating aspects of how National have buggered things up royally is the absolute refusal to impose a levy for Christchurch. It would be accepted by most people, particularly if it had an entrenched expiry clause, and would deal with a reasonable chunk of the projected borrowing.
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Bart Janssen, in reply to
absolute refusal to impose a levy
Yeah I've seen various discussions of why it's a bad idea mostly centred around the cost in administration of such a one time levy.
But to me the value of it is that it emphasizes the direct nature of how we give our money to the government. Most folks just pay tax blindly and then ask the government for money equally blindly never really connecting the two activities. But the levy would be crystal clear ... money comes from my salary and goes to CHCH.
Hey what if all my taxes were so obvious?
<conspiracy theory> The cynical side of me suspects that's the real reason the government don't like such a levy because it only leads to more direct levies/taxes which ultimately take control away from the powerbrokers </conspiracy theory>
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James Butler, in reply to
<conspiracy theory> The cynical side of me suspects that’s the real reason the government don’t like such a levy because it only leads to more direct levies/taxes which ultimately take control away from the powerbrokers </conspiracy theory>
Well exactly, it's one bit of revenue which they couldn't get away with turning into a top-end tax cut. I hope.
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Matthew Poole, in reply to
Well exactly, it’s one bit of revenue which they couldn’t get away with turning into a top-end tax cut. I hope.
I suspect their objection is more grounded in the fact that the Greens dared to suggest that such a levy could be rated progressively. And I have to say, a lot of people on Your Views got very bitchy about the whole "we're in this together" only being applied to people earning at least the median wage instead of being applied at the same rate to everyone who has any income whatsoever.
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Matthew Poole, in reply to
it’s a bad idea mostly centred around the cost in administration of such a one time levy
Yeah, nah, not buying that one. Yes it'll cost to administer, but it'll still raise a hell of a lot more money than it costs.
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