“Labour is the party of economic competence”

Anthony Robins makes a case at The Standard that Labour is the party of economic competence.

The old myth that National are good managers of the economy should now be well dead and buried. By any realistic assessment of the records of the last two governments, Labour is the party of economic competence.

Labour: 9 surplus budgets, paid down net government debt to zero, established the Cullen fund, KiwiSaver, KiwiBank and emissions trading scheme, low unemployment, negotiated a successful free trade agreement with China, and so on.

National: 7 deficit budgets (so far), ran up record government debt, sold productive assets, made significant losses by cutting Cullen fund contributions, gutted the emissions scheme, got taken for a ride by Hollywood, Sky City and Rio Tinto, higher unemployment, is negotiating a disastrous TPP, and more.

There’s some valid points there, but also some questionable ones. And some significant omissions, for example Kiwirail, and the fact that the New Zealand economy was heading into difficult times while Labour was still in Government, having committed the country and the incoming National Government to significant increased spending.

There’s certainly things National can be criticised for, but “made significant losses by cutting Cullen fund contributions” is nonsense, and the Hollywood deal can be credited in part for improving tourism which is one of the countriy’s biggest earners now.

Labour needs to highlight the issue of economic competence next election (with any luck the media will do their job too and fairly present the facts). It is supposed to be a core National strength, but any clothes that emperor ever had are long gone now. National is vulnerable.

Robins looks back to the Labour Government led by Helen Clark and Michael Cullen. They were voted out in 2008, seven years ago.

National aren’t judged on the Bolger Government, or the Muidoon Government.

Of course National is vulnerable, especially if the economic situation worsens or doesn’t improve much.

But Bill English is widely seen as a very sound Minister of Finance who has managed the economy through very difficult times. If he remains then National may still look economically reliable. If not it National will have to look like they have got a comparable replacement.

Sure “Labour needs to highlight the issue of economic competence” – but Andrew Little and Grant Robertson have to do quite a lot of convincing yet about perceptions of their economic competence. If they are still leader and Finance Spokesperson at the election.

And absent any poll recovery miracle Labour still have to grapple with how economically competent Labour+Greens looks, or Labour+Greens+NZFirst looks.

They’ve got plenty of time. It’s two years until we head into the next election campaign.

But they’ve had plenty of time. It’s nearly seven years and four leader/finance spokesperson combinations since Labour lost power.

Before Labour is seen as ‘the party of economic competence’ they need to be seen as a party that can competently manage itself.

Flag Referendums Bill passed

The New Zealand Flag Referendums Bill passed it’s third reading in Parliament yesterday. Radio NZ reports:

Parliament passes law to change flag

Legislation clearing the way for referenda on changing the nation’s flag has passed its third and final reading in Parliament.

The bill was passed by 63 votes to 59 with the support of National, United Future, ACT and the Maori Party.

The first part of the referendum is expected to be held later this year, when voters will pick their favourite of four proposed flag designs.

As we know the process to seek and select alternate flag designs is well under way, with the top forty designs now chosen.

I find it odd that the legislation enabling this has only just passed. There has already been considerable effort and expenditure.

It was interesting to watch the twelve speeches in Parliament on this Bill.

Government speakers promoted the process, but more notably Opposition speakers spoke against the flag change process but didn’t look convinced by their own arguments, especially Trevor Mallard, Grant Robertson and Russel Norman.

Bill English (National):

This Bill will give New Zealanders the opportunity for the first time ever to vote on the flag that represents them and their country.

Trevor Mallard (Labour):

I’m an old fashioned Parliamentarian and I think the role of the Prime Minister is to stand up in this Parliament and to state his views.I waited through the first reading of this legislation. I waited through the second reading of this legislation. I waited through the committee stages for John Key to get on his feet and to give his views.

He went on to complain about the lack of Key’s contribution to the debate – but kept calling it Key’s ‘vanity project’. There’s not only a contradiction on that, there’s also a huge contradiction in Mallard’s and Labour’s pro-change but anti this change stance.

And Andrew Little did not appear to speak on Labour’s contradictory stance.

Alfred Ngaro (National):

It’s disappointing to see that a member…to see that he’s come to a point where he knows and he’s agreed, in fact at select committee he agrees with the changing of the flag. He told us that. It’s in Hansard.

He said that changing the flag is the right thing to do, yet today in this house, to the open public of New Zealand he’s only opposing it out of spite.

Grant Robertson (Labour):

I’m one of the members of the Labour party who thinks that there is a place for a new flag for New Zealand.

But I’m equally a member of the New Zealand public who’s angry with John Key for turning a process…I, along with a lot of other New Zealanders am angry with John Key that a discussion about this, a discussion about out national identity, has become a vanity project for him, and there’s absolutely no doubt that that’s what’s happened.

Ironically as Mr Mallard says, the vanity doesn’t extend to coming to parliament to actually talk about the flag change.

They are trying to argue two opposites at the same time, Unconvincingly.

Labour are intent on trying to depict it as a John key vanity project – but Robertson did not look or sound angry. His argument sounded contrived and insincere.

Russel Norman:

This Bill is of course a classic form over substance Bill. So the form of course is actual pattern on the flag…so it’s really about some people saying they want to change the pattern.

But a flag, the reason why the pattern matters is that it actually refers to a deeper substance, and the deeper substance that it refers to is the constitutional arrangements of the country, ah that’s the thing that really matters.

Norman gave a subdued fairly passionless speech. He wanted to change much more than the flag – he wants to change the constitution along with it.

However the Greens have also campaigned against the flag change as not the right time to put any resources into changing anything while there are ‘more pressing matters’. To be consistent they would not want constitutional changes to be addressed until there are zero hungry children and zero damp houses in New Zealand. That’s never.

Marama Fox (Maori Party):

I think this is an important discussion, and it’s important because I absolutely agree with a lot of the objections about why we’re doing this, but actually I absolutely agree that I’d like to see a change in the flag, and I’d like to see a change in the flag because I’d like to see something that does symbolise our duality of nationhood.

Should we be spending this amount of money on doing it? I’d like to think not.

Should we have put a constitutional change first before we put a flag change in? Absolutely agree with that.

Constitutional change would be much more complex, would take much longer and would be much more expensive than the flag change process.

The Maori Party voted for the Bill.

Links to the all the speeches:

New Zealand Flag Referendums Bill – Third reading – Part 1 Bill English
New Zealand Flag Referendums Bill – Third reading – Part 2 Trevor Mallard
New Zealand Flag Referendums Bill – Third reading – Part 3 Alfred Ngaro
New Zealand Flag Referendums Bill – Third reading – Part 4 Grant Robertson
New Zealand Flag Referendums Bill – Third reading – Part 5 Jacqui Dean
New Zealand Flag Referendums Bill – Third reading – Part 6 Kennedy Graham
New Zealand Flag Referendums Bill – Third reading – Part 8 Jono Naylor
New Zealand Flag Referendums Bill – Third reading – Part 9 Russel Norman
New Zealand Flag Referendums Bill – Third reading – Part 10 Marama Fox
New Zealand Flag Referendums Bill – Third reading – Part 11 Chris Bishop
New Zealand Flag Referendums Bill – Third reading – Part 12 Jenny Salesa
New Zealand Flag Referendums Bill – Third reading – Part 13 Nanaia Mahuta
New Zealand Flag Referendums Bill – Third reading – Part 14 Joanne Hayes, Lindsay Tisch, Tim Macindoe

Mood of the Boardroom 2015

NZ Herald has published a summary of their annual ‘Mood of the Boardroom’: Dairy and infrastructure top worry lists which shows that business confidence has slipped.

Confidence (out of 5) in:

  • Local economy 2.3
  • International economy 2.54
  • Own business situation 2.99

 The country’s senior business leaders are becoming increasingly concerned about the slowing economy, the Government’s strategy and our reliance on China and dairy exports.

The 2015 Mood of the Boardroom, published today, surveys 110 top corporate chief executives and company directors as well as heads of our leading business organisations.

The results show 75 per cent want to see the Government formulate a Plan B in case the dairy slump continues. Eighty per cent want diversification of the economy accelerated.

Sixty-four per cent of respondents agreed that indicators pointed to an economic slowdown from their own business perspective.

On political performance:

  • Bill English 4.6 (down from 4.75)
  • John Key 4.28 (down from 4.49)

Drops for both is not surprising given the worsening economic conditions and increasing number of embarrassing issues. If this downward movement continues through to the election it will pose re-election difficulties for National.

Jacinda Ardern was rated the most impressive Labour MP for the second year running.

This makes National’s re-election chances less difficult unless Andrew Little and Grant Robertson can gain some credibility in the business world.

Slater versus English and family

Cameron Slater has posted an attack on Bill English ate Whale Oil: SCUM LIST MP SAYS HE WILL VOTE FOR PAIN AND SUFFERING

Bill English has declared he will vote against any euthanasia bill put before the parliament. no debate, no reading the legislation, he is just going to let his Catholic dogma dictate how he will vote.

This is a typical Slater-type attack – Slater has been very critical of English in the past so this is not out of the ordinary. So far.

And now we see one of the problems with MMP and scum list MPs. They don’t have an electorate to listen to or canvas.

They are representative of no one but themselves and the party.Electorate MPs like Nick Smith always survey their electorate and debate the issues with voters.

Much and all as I dislike Nick Smith’s politics, in person he is a top bloke, he keeps getting elected with massive majorities because he listens to his constituents.

Slater also campaigned against MMP so it’s no surprise to see him slamming list MPs.

Until English retired from his Clutha-Southland electorate and went onto the list only last year he kept getting elected with massive majorities. In 2011 with a majority of 16,168 he got 21,375 votes,  over twice as many as all other candidates combined.

Bill English has to listen to no one but his stroppy missus.

This is a low blow from Slater, Bringing English’s wife into is a low blow. Again this isn’t out of the ordinary for Slater, he was particularly nasty during National’s Northland candidate selection slinging dirt involving the family of one candidate.

Some comments supported Slater but there more supporting English and criticising Slater managed to survive the censor’s filter and getting significant support. For example:

That’s a bit harsh. Bill is entitled to his opinion as you are of your opinion.

24 upticks

Yes he is but I don’t want his personal religious beliefs to dictate what I wish to happen if the occasion arises. I would like to make my own decision and have it written down for when I am too ill to fight for that right.

1 uptick


Right, you’ve now lost me. When you call Bill English a”scum list MP”, that shows you to be in the same loony class as those you keep referring to as the Green Taliban and I have laughed with you at their silly antics. I happen to think, also that the Greens are loony. But I also think that there are some areas where people are entitled to exercise their consciences, and the sanctity of life is one such area.

26 upticks


Would you prefer him to say one thing and do another (as so many people do)? At least we know where he stands. While I might not agree with his views, I respect his right to have them.

34 upticks

Compared to:

Catholic or not, this is the sort of arrogance we saw from Cullen. Please remind me who got National down to the miraculous 20% threshold?

English’s expertise lies within financial management. I for one am happy he is no where near social policy. He doesn’t have a clue and doesn’t gauge with the public very well.

2 upticks

I disagree with English on euthanasia but respect his right to have his own stance on what would be a conscience issue if this was voted on in Parliament. This is the report Slater was criticising:

His deputy, Mr English, a Catholic, said today he would vote against any law change.

“The law says that if the doctor helps them die that would be breaking the law and that’s what the judgment said pretty clearly,” Mr English said on TVNZ‘s Q&A programme.

Mr English, whose wife is a GP, said he personally did not believe the law needed to change.

“My personal view is that the law is where it should be,” he said.

3 News

While polls show a sizeable majority of people support euthanasia there are still many who oppose it, and they have as much right to be represented in Parliament as anyone.

This was also raised on Kiwiblog, and Slater is criticised by several including someone who has been a fairly loyal supporter of Slater:


Mr Slater seems intent on re-creating himself as a man of unlovely disposition. I used to enjoy some of his more outrageous observations but, really, he has descended to a level of almost perpetual ad hominism ( if that is a word). The site very rarely contains anything of any interest other than his own insatiable desire to be heard.

16 upticks, 2 down

Keeping Stock

@ Nookin – WO makes his distaste of English pretty obvious. But to attack English’s wife, who to the best of my knowledge has never tried to impose her personal views on the electorate is poor form indeed.

Slater is entitled to his own view, and calling MPs ‘scum’ is typical of his critical approach, but using family members in political criticism crosses a line for most people.

There’s no reason why commerce and compassion can’t co-exist

It’s common to see carping about how compassionless the Government and John key and National MPs are. How they purportedly don’t care about poor people – some go as far as accusing ‘right wing’ politicians and rich people of deliberately keeping the masses poor so they can accumulate wealth.

Which is absurd, as anyone who knows how commerce works knows that the more affluent people are the more prosperous business can be. You can’t make much money out of destitution.

Thursday’s budget has created confusion and consternation on the left. How could an allegedly hard right government be the first to raise core benefit levels for 44 years? Something three eras of Labour led government had failed to do.

Amongst the confusion absurd claims have been made. In Thoughts on budget 2015 Danyl at Dim-Post:

National believes in massive intervention in the economy, mostly in favor of their political donors but also in response to signals from their polling and market research…

rickrowling asked “What are the examples of this?” None have yet been given. This statement is typical from the left of National do anything hinting at compassion – there must be an ulterior motive driven by the greed of the 1%.

One way of trying to explain is by claiming that National’s efforts are weak and the left would have done it better. Like ‘truthseekernz’:

The response from virtually all opponents was lamentable. I would have preferred something like:

“It’s great to see this government adopt a weak tea, might-work-a-little version of the policies we’ve been promoting for years. So we’ve won the policy argument. National has done it because that had to, not because they wanted to. If voters want the real thing, they should be sure to vote for us (whoever ‘we ‘ are – Labour or Greens) next election.”

National can’t have done it because they wanted to what they thought was a good thing to do, they ‘had to do it’. That’s crap of confusion.


John Key’s hallmark of power is pragmatism and if that means that he has to give a little to the masses, he will, and did. But that does not change his wider agenda that has all the markings of seeking neoliberal outcomes.

Again Key “has to give a little to the masses” but has a “wider agenda”. That’s ideological crap.

Neilm has a different take on it:

And Key’s opponents have developed a rather insular, self-reinforcing narrative about how Key hates the children etc which isn’t quite what National is. I’m not suggesting that National is the perfect social justice party but constantly making strategy on the basis that they’re corrupt liars out to destroy democrat and the planet has distracted from forming a strategy that deals with reality.

Tinakori also challenges the left leaning laments.

Wow, Danyl, there are so many straw men in that post. The major two are the propositions that this government was a group of hairy chested economic fundamentalists and that effective social policy is entirely the preserve of the left.

The first was flawed from the very beginning and was probably prompted by the bizarre and false idea that they had embraced austerity as a fiscal policy when their approach was classic Keynesian. This is just another case of the left and the commentariat looking to overseas political slogans for guidance rather than looking at what a government actually does.

As for the big things – fiscal, monetary and general regulatory policy – there is no major change that I can see and the spending changes are pretty small in the context of both government spending and the economy.

richdrich swings the other way:

The “middle class welfare” concept is an artefact of neo-liberalism.

It divides society into “hard working keewees” and “beneficiary scum” (Labour and National both love the former term, but Labour might be a bit softer on the latter. “Communities with needs”, maybe?)

Benefits (apart from disguised ones like tax free capital gains) are denied the former and grudgingly meted out to the latter, accompanied by an appropriate degree of paternalism, like making them spend all day in a Winz office with no toilet – at least they can’t take drugs while they’re in there.

I haven’t seen any sign that National (and ACT and the Maori Party and Peter Dunne) have “grudgingly meted out” the benefit increases. Confused leftists like richdrich can’t bring themselves to even grudgingly meting out praise when it’s due.

How could this tory scum out left the left on social policy? Tinokori suggests:

On social policy you underestimate the personal impact on government policy of growing up in a state house (Key) and the Catholic social conscience (English).

There may be something in that, but there’s far more to it. I’m not Catholic and didn’t grow up in a state house. I did grow up in a very poor household – where I learnt the value of hard work and self responsibility.

Many people in New Zealand who have built their own businesses and careers and wealth have seen and experienced hardship somewhere along the way.

We now seem to have a left who can’t see past their arrogance.

I see more compassion in Key and English and many in business and on the centre right than amongst the carping on the impotent left.

This budget appears to have turned politics upside down in New Zealand. I don’t think it has. It just demonstrates what has been evident for a long time, that the left/right divide was long ago bridged. It doesn’t exist in New Zealand how it once did.

Key and his National government get it. They got it a long time ago, that’s why they are still in government.

There’s no reason why commerce and compassion can’t co-exist. Except in the closed carping minds of the old left. They are left crapping in their own nest.

Budget headlines

I’ve only seen headlines and summaries on the budget. Two stand out to me from those that the Herald has highlighted in Budget 2015: 10 things you need to know.

  • Budget deficit of $684 million this financial year.

That was signalled so is no surprise, and was expected to be a major criticism of Bill English, John Key and National,

  • A $790 million child hardship package, includes an increase in $25 of core benefit for beneficiaries with children.

In contrast that’s a major surprise.

And it isn’t hard to see that if the increase in benefits wasn’t included the deficit could have been avoided.

This is a very significant choice and signal from National, putting welfare of some of the poorest ahead of a long standing target.

Iain Lees-Galloway unhappy in Parliament

Labour MP Iain Lees-Galloway wasn’t happy with the Speaker David Carter nor a number of Government MPs  yesterday in Question Time.


Disgusting display of arrogance from Bill English in the house. And from elsewhere in the house (that I may not name) too.

He retweeted

The Speaker’s reasoning only makes sense if…nope. It’s just plain ridiculous


Carter now shut Cunliffe out. Peters tries to help. Carter says public will judge… We have. You’re a useless, useless puppet

Then tweeted:

Parliament has become a complete farce. Most of you already think that but it’s been confirmed for us too today.


Carter again demonstrating how a biased Speaker contributes to disorder in the house

Blaming the Speaker for ‘disorder in the house’ ignores the responsibility (or lack of) of those who are being disorderly, the MPs.


I was wrong… child Poverty IS a laughing matter (going by National MPs’ giggles anyway).

Then another target:

Tim Groser and other Nat MPs very excited that he’s made a dick of himself on the international stage. Must be a National MP KPI.

Back to the Speaker – retweet of

When Carter says “no doubt in my mind the question has been addressed”, has he considered that the problem might be his mind?

Then yet another target:

More patronising arrogance from a National Party Minister. Take a bow, Simon Bridges.

Most of the criticism of the Speaker seems to have come from this exchange between Grant Robertson trying to dig into aspects of Bill English’s budget – it is hardly surprising that English wouldn’t reveal what could be addressed in the budget.

Draft transcript:

5. Finance, Minister—Statements on Return to Surplus

[Sitting date: 20 May 2015. Volume:705;Page:6. Text is subject to correction.]

5. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance : Does his Budget 2015 speech include the statement, “there will be a small surplus this year and increasing surpluses forecast over time”?

Hon BILL ENGLISH (Minister of Finance): The member will just have to wait one more sleep to find out.

Grant Robertson : Why should New Zealanders believe his making a promise for a surplus for next year and forecast surpluses for the following years tomorrow, given that he made that exact promise last year and will break it tomorrow?

Hon BILL ENGLISH : Well, I am quite confident that New Zealanders will make up their own minds about that, regardless of what that member says. In fact, if that member criticises the Budget and our economic management, most of them will conclude that we are probably doing the right thing.

Grant Robertson : Is it correct that Treasury advised him that the surplus he will promise tomorrow for next year is possible only if there is a significant rebound in global dairy prices?

Hon BILL ENGLISH : The member will just have to wait until tomorrow, but I hope tomorrow he uses the term “fiscal crisis”, because—

Grant Robertson : I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER : Order! I am going to invite the member to ask that question again.

Grant Robertson : Is it correct that Treasury advised him that the surplus he will promise tomorrow for next year is possible only if there is a significant rebound in global dairy prices?

Hon BILL ENGLISH : The member will have to wait until tomorrow, but I hope he uses the term “fiscal crisis” tomorrow.

Grant Robertson : I raise a point of order, Mr Speaker.

Mr SPEAKER : Order! If the member is saying that question has not been addressed, on this occasion, it has. He talked about the surplus that will be promised tomorrow in his question. It has been addressed.

Grant Robertson : Is it correct that Treasury advised him that a surplus for 2015-16 is possible only with a significant rebound in global dairy prices?

Hon BILL ENGLISH : The member will have to wait until tomorrow.

Hon Members : No, no.

Hon BILL ENGLISH : Well, he will have to wait until tomorrow.

Grant Robertson : I raise a point of order, Mr Speaker. That is the third time I have asked a straight question to the Minister—

Mr SPEAKER : Order! [Interruption] Order! The member will resume his seat. That is not the same question he has asked three times. On the second occasion he repeated the question he had asked the first time, and on that occasion I ruled that, because of the way it was framed, that question had definitely been answered. Does the member have a further supplementary question? [Interruption] Order! I am on my feet, and I am going to warn that member that if he interjects like that again while I am on my feet, I will be asking him to leave the Chamber.

Grant Robertson : I raise a point of order, Mr Speaker. Are you telling me that the Minister addressed the question I just asked?

Mr SPEAKER : No, I am not. I am saying that when you rose and took a point of order and said you had asked the same question three times, you are—[Interruption] I have a very good mind to do it. The point I was making was that the member was wrong with his first point of order, when he said he had asked the same question three times. He had not. We are moving forward, if the member wishes to ask—[Interruption] I am not entertaining further questions on my—[Interruption] Order! I am not entertaining any further adjudication on that matter. If the member has further supplementary questions, I will hear them.

Ron Mark : I raise a point of order, Mr Speaker. I am trying to be helpful, as an independent observer.

Mr SPEAKER : Order! The member will simply raise his point of order.

Ron Mark : The point of order, Mr Speaker, to assist you, is that he—[Interruption]

Mr SPEAKER : Order! This is a point of order, I hope, but it will be heard in silence. It will be heard in silence.

Ron Mark : I am not challenging you at all, but—

Mr SPEAKER : Order! Would the member simply raise his point of order.

Ron Mark : I am trying to. The point I want to raise with you is that he did not actually say those words. His words were “This is the third straight question I have asked.”, not “I have asked the same question”—

Mr SPEAKER : Order! The member may not have heard me, but I said that as far as I was concerned I had adjudicated on the matter and that was the end of the matter. The member may not have heard that.

Grant Robertson : Is it correct that Treasury advised him that a surplus for 2015-16 is possible only if there is a significant rebound in global dairy prices?

Hon BILL ENGLISH : The member will have to wait until tomorrow.

Grant Robertson : I raise a point of order, Mr Speaker. How is that an answer addressing that question? It is about advice he has received. He cannot tell me to wait until tomorrow. Amazingly enough, Treasury do give him advice. He ignores it—

Mr SPEAKER : Order! We have had a similar line of questions now on four occasions. It is not the way I would have hoped the Minister would have answered the question, but—[Interruption] Order! Grant Robertson will leave the House. I warned the member that—[Interruption] Order! The member will leave the Chamber.

  • Grant Robertson withdrew from the Chamber.

Chris Hipkins : I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER : Order! We have a point of order that I will hear from Chris Hipkins.

Chris Hipkins : Repeatedly during question time today, when there have been points of order from either side of the House, you have admonished members on this side of the House for their interjections during points of order or when you were on your feet. I would like to know whether the same ruling is going to apply to Mr Brownlee, Ms Parata, and a variety—

Mr SPEAKER : Order! I have heard enough from that member. There were occasions when there were interjections from this side of the House when I called for order, particularly when Mr Mark was attempting to raise a point of order. I could not identify the particular person who made those interjections. Frankly, they were coming from a large number of people. On this occasion I specifically warned Mr Robertson that if he was to interject again when I was on my feet, I would have no choice but to ask him to leave. He did not heed that warning. He gave me no choice but to deal with him severely. I say to all members that when I am on my feet and I call for silence and then a member specifically, after being warned not to interject, does so, he leaves me no choice but to be severe.

Hon David Cunliffe : I raise a point of order, Mr Speaker. The colleague Mr Robertson in front of me used four supplementary questions to ask the same question, as you have previously advised members to do when Ministers are not giving a straight answer. You have ejected a member who had absolutely understandable frustration. My point of order is to ask you what sanction will apply equally to Ministers who are deliberately thwarting the intent, if not the letter, of the Standing Orders and denying the people of New Zealand the opportunity to have a proper question answered in a proper manner.

Mr SPEAKER : I will hear from the Hon Gerry Brownlee.

Hon Gerry Brownlee : I think that question might be reasonable if it were about a range of topics that any Minister should be able to answer about their portfolio. But 24 hours before a Budget is delivered being asked to give a commentary on what will be in a Budget text is completely unreasonable. [Interruption]

Mr SPEAKER : Order! I can understand the sense of frustration on this side. I have agreed with that. But that was not the reason Mr Robertson was ejected from the Chamber. I hope I do not have to point it out again to members. The reason was that he was given a very specific warning. He ignored that warning.

Hon David Cunliffe : I raise a point of order, Mr Speaker.

Mr SPEAKER : Is it a fresh point of order?

Hon David Cunliffe : It is, because I did not question your ruling that you ejected a member for questioning your judgment. My point of order was, given the circumstances and the understandable frustration on this side of the House and the thwarting deliberately of the intent of the Standing Orders, at what point would any sanction be applied to any Minister who continued to make those types of tactics plain? That was nothing to do with the ejection of Mr Robertson.

Mr SPEAKER : I accept that point. Ministers are responsible for their own answers and those answers are then judged not only by this House but by the public. On one occasion when I did not think that the Minister had answered the question correctly I asked Grant Robertson to repeat the question. That is a tactic I frequently use. [Interruption] The member now interjects and says that it was on four occasions. As I have pointed out to the House, those questions were different. In one he quite specifically talked about a matter that would be addressed in tomorrow’s speech, and that gave the Minister a perfect out to say he would have to wait for the Budget. As to the last question about Treasury advice, it would have been a more satisfactory answer if it had been answered directly by the Minister, but at the end of the day I am not responsible for the answers that are given by any Minister in this House. Ministers themselves are responsible for—[Interruption] Order! Ministers themselves are responsible. They will be judged both by this House and by the public.

Hon David Cunliffe : Point of order.

Mr SPEAKER : No, I have dealt with that matter from the Hon David Cunliffe.

Rt Hon Winston Peters : Point of order.

Mr SPEAKER : Order! Just a minute. I just want to be clear to Mr Cunliffe that I have dealt with that matter. I have made a ruling. I do not intend to relitigate it here today, but if it is a fresh point of order—

Hon David Cunliffe : It is, Mr Speaker.

Mr SPEAKER : A fresh point of order—the Hon David Cunliffe.

Hon David Cunliffe : I raise a point of order, Mr Speaker. What is the definition of “addressing the question”?

Mr SPEAKER : Now the member is attempting to relitigate the matter. I judge that on every occasion depending on the context and content of the question, the context and the content of the answer. I am the one who makes that judgment.

Rt Hon Winston Peters : Point of order.

Mr SPEAKER : I am sorry—is this a fresh point of order?

Rt Hon Winston Peters : Yes, it is.

Mr SPEAKER : The Rt Hon Winston Peters.

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. If one of the four questions with additional words gave the Minister of Finance an out, what was the redeeming feature for the first three answers that did not give him a way out?

Mr SPEAKER : Order! The member is now relitigating a matter that we have already ruled on in the House today. He is not raising a fresh point of order.

Tracey Martin : I raise a point of order, Mr Speaker.

Mr SPEAKER : Again, I want to give the same warning to Tracey Martin, to be fair to her. If she is raising an absolutely fresh point of order, I am happy to hear it, but if it in any way relitigates the discussion we have now had for the last 10 minutes, then I will be asking that member to leave the Chamber.

Tracey Martin : Thank you, Mr Speaker. I appreciate your warning and I hope that I do not transgress, but I seek your clarification on the last question asked by Mr Robertson—

Mr SPEAKER : Order! The member now—

Tracey Martin : —not the content of the question, not the content of the question, but I am asking whether you could give a ruling later on about when it is appropriate, if we ask a direct question about a report, for a Minister to say we have to wait until tomorrow—

Mr SPEAKER : Order! The member is now very dangerously—should be about to leave the Chamber. She is relitigating the decision I have made. I have explained to Mr Cunliffe that I have got to judge every answer given, as to whether it addresses the question. Mr Cunliffe sought more definition on that. I said it depends on the context of the question, the content of the question, the content of the answer, and the context. There is no specific ruling I can give as to whether any question in the future will be addressed or not. I make a judgment to all; that is my responsibility in this House.

Broken promise budget promises little

It’s been well signalled that the soon to be announced budget will break one of National’s long standing ‘promises’ – that they will balance the books by now after years of deficits.

National have to cop some flak for that because it’s been a major campaign plank. But attention will soon turn to what they are actually offering this year. A bugger all change budget could be as damaging to their re-election chances as an old broken promise.

A Dominion Post editorial is scathing – Budgets and broken promises.

Nothing can disguise the fact that this Budget also brings a big broken promise. It won’t supply the Budget surplus that National has promised for so long.

Prime Minister John Key and Finance Minister Bill English have been busy downgrading the pledge that they boasted about for so long; now it’s an “artificial target” and apparently doesn’t mean much at all. Yes, it was an artificial target. But it was National’s artificial target.

And they are also pessimistic.

Right now the fiscal cupboard is bare and it might stay that way for some time. The danger then is that more National promises, both large and small, will have to be broken. And that might end up really damaging the John Key brand.

The pre-budget announcements have been, inevitably, embarrassingly thin.

Are they under-promising while planning to over-deliver?

That’s an old political PR tactic, but if the delivery is still paltry then ‘steady as she goes’ might become ‘steadfastly going nowhere’.

Is there nothing available to deliver?

As English says, the big problem is that low inflation is putting a huge brake on the Government’s tax revenues. The effective cut is billions of dollars and it is forecast to last for years.

This and the collapse of dairy prices mean the Budget surplus might not even arrive next year.

National may be fenced in by their prudence – something voters have rewarded them for so far but there’s a risk they will swing away from it, especially if targets aren’t met.

Presumably, the Budget measures on child poverty will be small and disappointing. This might not damage Key much by itself. After all, his supporters are probably not personally much affected by the problem.

But, if more and more promises are broken and there is a slowdown in growth, the Key formula will begin to fray.

The Key formula is already fraying around the edges, something that’s inevitable by the third term.

But if a broken promise budget promises little for the future then the National Government may start to unravel.

English signals missed surplus target

Bill English has clearly signalled he will announce another deficit budget this month.It’s likely to be a small deficit relative to the size of the budget, but red ink is red ink.

On The Nation yesterday:

Well, okay, it would be nice if the number got there this year; it’ll just take a bit longer.

We’ll soon be in a position to start paying off debt. Our expenditure’s under control; the revenue’s a bit harder.

We think that it’s really important we get to surplus…it’s going to take a bit longer.

In the whole scheme of financial management over seven budgets this won’t be a big deal.

Except that English and National have promoted and campaigned on reaching surplus by now so conceding this target is a bit of an embarrassment to them. English will take this on the chin, outwardly at least, but he will be frustrated. At least he should be.

The financial crisis followed by the Christchurch earthquake made it a very challenging two terms for National and despite clocking up some huge loans they have managed things fairly well, and compared to many other countries (notably Australia) it’s been well managed.

Minister, you used the analogy of weight loss, but let me use another one, the All Blacks. They set a goal to win the World Cup; they don’t. That’s a failure, and they call it that. You set a target for a surplus, and you haven’t met it. That’s a failure, isn’t it?
Well, for a lot of people, the surplus is less important than the World Cup. But the thing about the World Cup is—
But it’s your target, Minister. Minister, you set the target. It’s your target, and you didn’t get there. Isn’t that a failure?
With the World Cup, there is a final, and you’re absolutely judged on the final. With a surplus, it can take a bit longer and you still get there. You don’t get another go at the World Cup.

It is a failure to achieve what English has promoted and what National campaigned on last year. It’s not a broken promise. It’s pragmatic. But it’s a failure to achieve a target.

You’ve set yourself a time limit, and we were supposed to be in surplus and you’re not going to get there. Can you not concede that that is a failure?
No, I don’t call it a failure. It is what it is, and that is for the 14/15 year, we budgeted $370 million surplus. It looks like it will be a $500 or $600 million deficit, and the surplus will be the next year. So we’re on track.

But if English and National can’t get to surplus by next year’s budget the pressure will pile on them. They could be judged at the 2017 election by extended failure to achieve a surplus.

Improving tax compliance on capital gains

In the past Labour MPs have repeatedly claimed and implied that property speculators don’t have to pay tax on capital gains. A year ago then leader David Cunliffe and finance spokesperson David Parker both pushed this fallacy. From Cunliffe and Parker repeat claims on property speculation:

David Cunliffe in a speech to Young Labour:

We have too many children who are getting sick because they live in cold, damp, cramped houses with black mould growing up the walls. Sometimes owned by speculators who just push the rent up while getting rich on tax-free capital gains.

David Parker on The Nation:

“You need to tax the speculators….capital gains tax”
“Loan to valuation ratios would not be needed if they were taxing speculators and building affordable homes.”
“National Party, despite the fact that we had 40 percent house inflation, they’re not doing anything about it. Not taxing speculators…”

Presuming they must have known that IRD does pursue compliance on taxing the capital gains of speculators this looked dishonest.

It’s good to see that Andrew Little seems to be either more informed or more honest. He recently suggesting that the Reserve Bank target speculators as reported in Focus on spec buyers: Little

 Mr Little said the Government must take action on property speculators who were damaging the housing market.

Mr Little is known to not favour the introduction of a capital gains tax, something Labour had campaigned on in the last two elections and lost.

Mr Little said there were several options the Government could take to prevent property speculators building up large housing portfolios and pushing up house prices.

First home buyers, or those who wanted a rental property for retirement, were being shut out of the market by lending restrictions that should be targeted at property speculators who sometimes owned 10 to 20 houses and sat on them, he said.

”The solution needs to focus on Auckland. There is no point in a family trying to buy a house in Wanganui, where prices are dropping, being subject to lending restrictions designed to lower house price inflation.”

Another solution could be those buying multiple properties needing a higher level of equity for subsequent purchases, he said.

But the most important action was to build more houses to increase supply.

He’s on the same page as National in seeing the need to increase the supply of houses. And I’d expect him to agree with Bill English in his approach in IRD to clamp down on speculators.

Finance Minister Bill English yesterday rejected calls by the Reserve Bank to remove tax incentives for investment housing, which the bank has blamed for rising house prices in Auckland. But he said there was an ongoing discussion about whether the Inland Revenue Department could be doing more to enforce existing rules on property trading.

Mr English said there was already a tax in place for people who bought property with the aim of reselling it.

And with real estate agents and buyers reporting high levels of trading activity in Auckland, “there is a question of whether that should give rise to further enforcement activity”.

Speculators are already taxed, when the IRD can determine that they have been speculating.

At present, speculators have to declare that they are buying a house with the intention of reselling it. They are then taxed on the sale.

The IRD scrutinises property transaction records to make sure people are complying with this rule. In particular, it looks at how quickly a house is sold and the number of houses a person is selling.

Figures released by the IRD showed that $52.4 million was collected in 2013/2014 from speculators or traders – either from one-off speculative transactions or patterns of dealing. This figure is expected to increase in 2014/15. The IRD has already collected $63.2 million.

So IRD are addressing speculation and their tax take is increasing.

Any potential changes to the IRD’s resources would be announced as part of the Budget on May 15.

That suggests that the rules are seen as sufficient but that more resources may be provided to improve compliance with tax on capital gains when speculating.


Get every new post delivered to your Inbox.

Join 4,101 other followers