General New Zealand Election 2020

Who will you vote for in the 2020 election

  • National

    Votes: 18 22.8%
  • Labour

    Votes: 40 50.6%
  • Greens

    Votes: 9 11.4%
  • NZ First

    Votes: 0 0.0%
  • Act

    Votes: 4 5.1%
  • New Conservative Party

    Votes: 2 2.5%
  • Other

    Votes: 6 7.6%

  • Total voters
    79

Inruin

Warriors 1st Grader
Contributor
May 19, 2012
9,215
Auckland
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Rick O'Shay

Warriors 1st Grader
May 1, 2013
4,005
New Plymouth

Inruin

Warriors 1st Grader
Contributor
May 19, 2012
9,215
Auckland
Interesting that National is sideing with the guy accused of sexual offending, with a police investigation still on going.
But then it shouldn't surprise that they promoted a guy who in my opinion was grooming 12 year olds on snapchat.
no, they are simply saying that the speaker is out of order doing what he is doing and it has already cost millions for the tax payer.
 

Juju

1st Grade Fringe
Nov 9, 2012
1,668

wizards rage

1st Grade Fringe
Apr 18, 2016
3,392
Tauranga
Inflation ramping up... rents ramping up... but pay freeze for teachers, police, nurses, public sector for the next 3 years. Owww... Essentially pay cuts!

THIS is the result of our massive debt. I hope some party political people reflect that this is the the same tough choices that National had to make after 2008.

I hope those same people bitch about the government running government services down now. But non politically it’s the price you pay for economic shocks. I didn’t blame National then and I don’t blame Labour now. Debt projections are dire and we have to prepare for any potential future shocks.
 

Miket12

Warriors 1st Grader
Apr 20, 2012
9,295
Inflation ramping up... rents ramping up... but pay freeze for teachers, police, nurses, public sector for the next 3 years. Owww... Essentially pay cuts!

THIS is the result of our massive debt. I hope some party political people reflect that this is the the same tough choices that National had to make after 2008.

I hope those same people bitch about the government running government services down now. But non politically it’s the price you pay for economic shocks. I didn’t blame National then and I don’t blame Labour now. Debt projections are dire and we have to prepare for any potential future shocks.
Huge borrowing, rents increases have been restricted, pay increases frozen, interfering with the independence of the Reserve Bank, looking at reintroducing stamp duty, rising inflation, low productivity. I wonder whose book on economic theory Grant Robinson has been reading?

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Rizzah

Stop Being Shit
Contributor
Apr 18, 2012
4,280
Dunedin, NZ

Dawn chorus: The brilliant and perverse absurdity of Labour's austerity Budget of 2021​

The Govt freezes most state sector wages, cuts $926m of Covid spending plans and strangles transport projects to start reducing debt; Tight Budget stance keeps interest rates low and house prices high.
- Bernard Hickey

TLDR: Labour is pivoting to Budget austerity and public debt reduction too soon after a crisis, making the same mistakes National did from 2011 to 2015, when it prioritised low interest rates and high house prices in the short term over a long-term improvement in wellbeing. It’s great for homeowners, awful for renters and means the Government can’t achieve its housing, child poverty and climate change ambitions.

The Labour Government is painting Budget 2021 as a “fiscally responsible” plan for Covid recovery that allows public debt reduction from the mid-2020s. It set the scene this week by cancelling $926m of Covid spending plans, freezing most state sector wages and shelving big transport projects to start reducing debt within two to three years.

But Finance Minister Grant Robertson is falling into the same austerity trap triggered in 2011 by Bill English when he launched his ‘zero’ Budgets of 2011, 2012 and 2013 too soon after the Global Financial Crisis and Christchurch earthquakes. The return to austerity and ‘keeping a lid on debt’ successfully reversed the trajectory of public debt and squeezed the size of Government down from 35% of GDP to 30%. But this premature tightening forced the Reserve Bank to run lower interest rates for ever longer over the last decade. That, in turn, increased house prices and forced the Reserve Bank to tighten lending restrictions.

Exactly the same thing is happening again, despite the change of party in power and Labour’s rhetoric about improving wellbeing in the long run. It is choosing debt reduction over a much more concerted effort to reduce child poverty, improve housing affordability and invest in climate emissions-reducing infrastructure.



A median voter strategy​

What is the political strategy behind this toxic fiscal and monetary combination? High house prices and low mortgage rates are much more comforting to median home-owning voters than big chunks of ‘their’ taxpayers’ money being spent on the undeserving poor and on railways and buses they believe they’ll never use.

This week Robertson made a rash of announcements the confirmed the Government’s pivot to austerity, and the Reserve Bank, in response, reiterated it is preparing, in response, to further tighten bank lending rules to prevent lower-for-longer interest rates pumping more yet more credit air into the housing market. The perversity is Robertson is directing the Reserve Bank to try to improve the housing market’s sustainability (by an as yet unspecified concept), but the Government itself is contributing to this by running fiscal policy too tight and not firing up the inflation needed to normalise interest rates.

That was evident in Robertson’s pre-Budget speech on Tuesday to the Wellington Chamber of Commerce, in which he trumpeted $926m of Covid recovery spending ‘reprioritisation’ and repeated his core message about ‘keeping a lid on debt.’

“Our fiscal objective as outlined in the Budget Policy Statement remains to stabilise debt by the mid-2020s, and then reduce it as conditions permit,” Robertson said, although in saying this he also emphasised just how much headroom the Government had to use its balance sheet if it wanted.

“Even at their elevated levels our debt position is significantly better than almost every country we compare ourselves too,” he said, pointing out debt servicing costs at less than 1% of GDP was no more than pre-Covid levels.

“On an internationally comparable basis of General Government net debt that is produced by the IMF, New Zealand’s current levels of net debt are slightly below 22 percent of GDP. This is less than half of Australia’s level of close to 49 percent, and some way away from the United Kingdom at 97 percent and the United States at 109 percent.”

So why not use it to achieve the wellbeing goals?​

But Robertson pivoted repeatedly in his speech and in yesterday’s announcement of a pay freeze for most public servants to the need to ‘restock the savings account just in case there is a rainy day.’

“As a small economy subject to external shocks, it is sensible that we look to reduce our public debt as the economy returns to full health,” he said in the pre-Budget speech.

“As the recovery gets underway, we are keeping a close watch on the debt taken on during COVID-19 to support the economy,” he said in announcing public servants earning over $100,000/year would not be paid extra for another three years and any increases for those earning $60,000 to $100,000 would be exceptional. Only those earning less than $60,000, which is just 25% of public sector workers, would receive pay increases.

“Just as businesses are making decisions as they plan for the recovery, our responsible economic approach means the Government is faced with choices about where new spending is targeted,” he said.

This language of austerity is awfully familiar​

Bill English made similar noises in 2011 when he announced the first of three ‘zero Budgets’ with no increases in new operational spending allowances.

“This Budget is about investing in our future,” English said with his second ‘zero Budget’ speech of 2012, which reaffirmed his aim to be reducing debt within three years.

“It shows the Government is responsibly managing its finances. We are on track to post an operating surplus in 2014/15, when we will start bringing debt down to prudent levels,” English said then.

“These surpluses will allow the Government to rebuild New Zealand’s resilience to further shocks, help lift national savings, keep interest rates lower for longer, take pressure off the exchange rate, and reduce future finance costs,” English said then.

Then what happened?​

The-then National Government also announced and delivered public sector pay restraint at the same time, arguing it needed to keep inflation down as the economy got closer to full capacity. It also wound back or refused new big spending on infrastructure, including holding back on funding the City Rail Link and squeezing capital spending on hospital and schools.

This helped the Reserve Bank reduce its Official Cash Rate to 2.5% in 2011, which surprisingly at the time (but not in retrospect) fired up the housing market again. The Reserve Bank was then forced in 2013 to introduce Loan to Value Ratio restrictions, which it progressively tightened until 2017 as interest rates were cut progressively ever-lower to 1.75%.

It’s happening again​

This tight fiscal policy of 2011 to 2015 and the lack of investment in new infrastructure to underpin new housing supply meant the Reserve Bank had to keep interest rates lower than it otherwise would have, and then tighten lending restrictions to stop the housing market soaring even further away.

Last year’s rate cuts to 0.25% and the brief removal of LVRs unleashed the pressure underneath the market, triggering an almost immediate 20% jump in prices.

So here we are again​

The Government is tightening fiscal policy, forcing the Reserve Bank to tighten lending rules because interest rates are remaining lower for longer.

The Reserve Bank said yesterday it was looking at further tightening its LVR rules and potentially introducing a Debt to Income Multiple limit. It downplayed a limit on interest-only lending, but is still looking at that too.

What is actually needed is a burst of inflation that allows interest rates to normalise and take the pressure of the housing market. Instead, the Government wants to have its low-interest-rate-and-high-house-price-cake and eat it too, keeping median voters happy and waving at the Reserve Bank to ‘do something’ to stop asset values rising too fast.

This perversity was emphasised yesterday in job and wage figures showing annual wage inflation of just 1.6% in the March quarter. Yesterday’s wages freeze for public servants will further drag down on wage inflation, extending the period of low interest rates.

Debt lid squashes infrastructure spending​

Meanwhile, the Government is looking at delaying or shelving public transport projects because of higher construction costs, and refuses to deliver anything like the $5b a year in extra benefits to reduce child poverty recommended by the Welfare Experts Advisory Group. The extra infrastructure and benefit spending should not be a problem, given the ample debt headroom, but the Government’s preference for debt reduction over investment ensures the delays.
It’s a great time to be a home owner. It’s not a great time to be a renter or a beneficiary. It may explain the improvement in business confidence last week to mid-2017 levels.

Ignoring the overseas trends​

This rinse and repeat of the austerity strategy is also in stark contrast to what is being seen overseas, where event conservative Governments are choosing to invest in benefit and infrastructure spending over debt reduction.
Australia’s Liberal-National coalition decided this week to abandon its debt-reduction strategy and focus on reducing unemployment by running deficits for longer.
America is firmly focused on reducing child poverty dramatically with big cash payments and by spending 10% of GDP on infrastructure upgrades.
Yet a Labour Government here is worried firstly about debt reduction, where our debt is about half Australia’s and America’s is four times larger. A perverse and brilliant outcome if you are a property investor.

 

Miket12

Warriors 1st Grader
Apr 20, 2012
9,295
Where is Grant getting his advice from?
Debt reduction, at this time, seems foolish.
What I find interesting is some of the similarities between what National did after the GFC and what Labour are currently doing such as targeted expense reduction. And then other parts are polar opposites designed to appeal to their voter base. While National reduced government spending they also (foolishly in my opinion) gave tax cuts to top earners. In my opinion, they should have kept the top tax rates the same (but increased the thresholds where it changes from one bracket to the next) and reduced the lower tax rates.

Labour are appealing to their base (and keeping with the WellBeing Budget philosophy) by giving out benefit increases.

The problem with both of these approaches is that neither help the lowest wage earners or those who want to work. Think of it this way, a tax cut to the lowest tax bracket would say give everyone an extra $50 per week that doesn't make a lot of difference to someone earning over $150 K but means more food on the table for a struggling family.
 

Rizzah

Stop Being Shit
Contributor
Apr 18, 2012
4,280
Dunedin, NZ
He’s drawing in his arts degree to think deeply about all his decisions...
Don't knock arts degrees. Plenty of smart folk have them.
I like Grant, clearly a smart dude. He won't be making these decisions by himself.
There seems to be parallels with bad ideas from the past, which makes me think there is entrenched thinking somewhere within the system (treasury etc).
 
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bruce

Warriors 1st Grader
Contributor
Sep 1, 2015
16,252
I like Grant, clearly a smart dude.
He is one of the sharpest tools in a very blunt box...just saying like. I do feel sorry for him in this. Bill English did the same and because he did we were well placed to handle the pandemic.

Conversely Joe Biden is borrowing like there is no tomorrow.

I cannot honestly say who is doing the right thing, but the wage freeze is going to send more brains across the Tasman.
 
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Miket12

Warriors 1st Grader
Apr 20, 2012
9,295
He is one of the sharpest tools in a very blunt box...just saying like. I do feel sorry for him in this. Bill English did the same and because he did we were well placed to handle the pandemic.

Conversely Joe Biden is borrowing like there is no tomorrow.

I cannot honestly say who is doing the right thing, but the wage freeze is going to send more brains across the Tasman.
The wage freeze will also make filled positions harder. Who would want to work for the government knowing there was no chance of a salary increase for three years.

Worse than that is a number of civil servants didn’t get an increase last year because of COVID. How many of us would like to go four years without an increase in pay? Will the PM instruct the Remuneration Authority not to give Ministers and MP’s a pay increase for the next three years?
 
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bruce

Warriors 1st Grader
Contributor
Sep 1, 2015
16,252
The wage freeze will also make filled positions harder. Who would want to work for the government knowing there was no chance of a salary increase for three years.

Worse than that is a number of civil servants didn’t get an increase last year because of COVID. How many of us would like to go four years without an increase in pay? Will the PM instruct the Remuneration Authority not to give Ministers and MP’s a pay increase for the next three years?
Mike, I see you subscribe to Bernard Hickey.

What I like about the guy is the sensible way he can describe things, and is so often correct.

He has long been a proponent of the helicopter system, giving a cash handout to everybody to get it moving in the economy.

Back in the old days when rural towns were usually based around a freezing works and or dairy company, often staffed by rural Maori, who often spent their pay by next payday. Things just ticked over nicely. Everybody had some cash.

Sure they couldn't buy new cars, or expensive booze, because of import licensing, but that didn't bother the rural Maori, DB Brown and a 20 year old V8 was all they needed.

Social welfare? The rural Maori had their whanau system, which worked just fine.

I took a walk around Westhaven for the first time in decades last week. I was staggered. That is nothing like I knew it as a kid. There are billions of dollars, yes billions, tied up at jetties and from what I can see by going over the bridge everyday they don't seem to leave the marina very often.

So they are obviously tax dodges from very wealthy individuals. I am no economist, but I know Bernard Hickey would argue that tax money would be better spent on infrastructure or something to get the economy moving.

That seems to be Biden's attitude based on very sound advice from his Treasury.
 
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wizards rage

1st Grade Fringe
Apr 18, 2016
3,392
Tauranga
Don't knock arts degrees. Plenty of smart folk have them.
I like Grant, clearly a smart dude. He won't be making these decisions by himself.
There seems to be parallels with bad ideas from the past, which makes me think there is entrenched thinking somewhere within the system (treasury etc).
It’s not so much a knock on an arts degree it’s just that economics is a complex, specialist area and he’s literally running the country.

If it was a job interview as head of the economics in a company the size of NZ, EVERY applicant would need a masters degree in economics and vast experience. Grant is nowhere near that.

In governance, you typically make decisions based on departments recommendations. In this he needs to lead the response rather than ok others work. The current economic crisis requires deeply impactful change which will affect the whole country for years to come and those decisions need to be underpinned by knowledge. I have a deep understanding of this area but would not like to have to make his calls.

Grants a smart guy and I have liked him previously but since the election his decisions have been poor. To the point where I think your right. Someone else is telling him what to do and he doesn’t have the economic brain power himself.

I think there are external factors like overseas lenders, threatening to pull funding to NZ if we don’t rein in the spend up which is forcing some unpalatable decisions.
 
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