All posts tagged budget

Government spoon-fed, or the spoon business?

Bill English spoke via Skype to an Otago Chamber of Commerce post-budget lunch yesterday.

Most of what he said was fairly routine and unsurprising, describing the financial situation and National’s approach to dealing with it.

The Global Financial Crisis was inflicted on New Zealand (although we were headed towards financial problems of our own in 2008 when that hit). We are still at the mercy of a international events. But ultimately we need to make our own good fortunes.

Zero budget or Stimulus?

Much has been said about the budget being a zero. English pointed out that the Christchurch earthquake was a major stimulus for the South Island (and the whole country which will supply many goods, services and people).

It is a significant cost to Government (us), but these costs were committed to before this budget.

It also involves a large injection of capital from overseas as insurance payouts.

Due to continued quakes the Christchurch recovery has been slow to get going, but it does offer many business opportunities.

Business needs to drive recovery

The emphasis on National’s approach is to create a sound economic framework to enable business to thrive. Government can reduce red tape and cost of business impediments, and it can offer some incentives by structuring tax and encouraging research and development.

But that’s only footwear. The recovery will only get legs when businesses recover confidence and invest in more jobs and more production.

Business generates business. Government can help a bit, but they will never be a fix-all solution. It’s up to us.

New Zealand  business will grow and thrive when New Zealand businesses decide that’s what they want to do. That’s us, out here in the cities and provinces.

We shouldn’t sit back expecting to be spoon-fed by government. It’s up to us to design spoons, manufacture spoons, sell spoons, and use spoons in our businesses as tools to generate more business.

by Pete George on June 1, 2012  •  Permalink
Posted in Politics
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Posted by Pete George on June 1, 2012

http://yournz.org/2012/06/01/government-spoon-fed-or-the-spoon-business/

Hide: How high is the budget?

Rodney Hide  makes the point in  in the NZ Herald that it’s very difficult to visualise how much money is involved, for example in the budget. It’s just a bunch of billions with eye glazing lines of zeroes.

One billion dollars is impossible to get your head around. It’s a number of dollars that we never concern ourselves with day-to-day.

I worked out back then that only stories involving hundreds or thousands of dollars were reported. They were the stories that we could easily grasp. The stories involving millions or billions of dollars didn’t rate a mention. They don’t fire the public imagination.

He worked out a system for trying to explain how much a bunch of billions is.

“Imagine a $100 bill,” I began. “Now imagine a wad of them from the bank wrapped up tight. There’s a hundred of them. That’s $10,000.

“A hundred wads and you have a metre. That’s a million dollars.

“So how high is a billion dollars? It’s a kilometre!”

And now to the current budget:

Government spending this year is $100 bills stacked 95km high. That’s a lot of money.

The deficit is a stack of $100 bills packed tight and stacked 10km high.

Welfare spending is 22km.

Still hard to visualise? This might help.

Next time you’re flying in a jet imagine the current budget deficit is a stack of $100 notes stacked up to cruising height, the spend on Super is just under that, and the spend on welfare is overhead.

by Pete George on May 27, 2012  •  Permalink
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Posted by Pete George on May 27, 2012

http://yournz.org/2012/05/27/hide-how-high-is-the-budget/

Budget: verdict

This was probably the budget for National to do the most with, the first budget in their second term, but they were severely constrained by trying to balance the need to be “austere” in a very difficult economic environment, but being careful not to further stifle anaemic growth.

If they were going to take risks this was the time to do it. They would hope that the negatives would be bypasssed by subsequent bidgets and largely forgotten by the next election.

There has been a lot of noise, but about fairly minor things, and nothing of major consequence.

So it hasn’t been a bad budget – I think the best reasonable description is it was a budget for it’s time.

National will be hoping the economy will have improved enough to allow them some measured increases in important funding areas in their next two budgets. And to hope that continued restraint in public service spending and employment will have been overshadowed by an improving public sector.

There’s huge risks in the world econom so National chose to play safe. I think that was appropriate.

Now most attention will be on the asset sales (Mixed Ownership Model). Much will depend on the market conditions for the sahre floats.

by Pete George on May 26, 2012  •  Permalink
Posted in Politics
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Posted by Pete George on May 26, 2012

http://yournz.org/2012/05/26/budget-verdict/

Stuff the poll – wrong questions

Online polls are notoriously bad – stupid questions, and no control over manipulation and who votes. At best they are an indicator of opinion.

Today Stuff have a budget poll that asks a typically dopey question.

It’s easy to see limitations with the way the possible responses. For example, if the budget is good for the economy won’t we all be better off?

But the main question is the main problem. Should we  be better off with this or any budget? As already said, we’d hope that we would all be better off than if it was a terrible budget.

But they ask “you”, on a personal level.

Should we be looking at budgets like lotto, where it might deliver us a jackpot that will solve all our problems (except money management skills may be unchanged)?

Should any of us be better off? or should it be a continuation of a fair balance of give and take, and of provision of reasonable public services and facilities?

Or have we become that self centred that everything must be viewed with an eye for personal advantage?

Are Government budgets supposed to be for the good of the country as a whole?

I don’t care if I don’t get a handout, I don’t think budgets should be seen as opportunities for personal gain.

by Pete George on May 25, 2012  •  Permalink
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Posted by Pete George on May 25, 2012

http://yournz.org/2012/05/25/stuff-the-poll-wrong-questions/

Budget: well, what did you expect?

In the days preceding the budget, media talked up a tight, bland, holding steady budget.
Now, the media talk down a tight, bland, holding steady budget.

In the days preceding the budget, opposition parties talked up a zero plan zero hope budget.
Now, the opposition talk down a zero plan zero hope budget.

Well, what did you expect?

We pretty much got what we expected. Sure, there are a few minor surprises, but there’s not much to write home about. But the media have to write and talk, that’s their job, so they have to make something of it.

I found the budget very entertaining – no, Bill English isn’t entertaining! – but the coverage was funny. Full of predictable careful spending, and full of predictable coverage.

Events like the budget show some competitiveness – media personalities competeing for the descriptive phrase that sticks. “Paper boy budget” seems to be the leading contender, but that is the media hooked on Labour’s line and stinker.

Overall media haven’t got anything big to talk about that’s in the budget, so they talk instead about the big things that should have been in ther budget, or so they say. If dramatic big things were in the budget then they would have dramatic big things to talk about.

Then they wouldn’t have had to resort to piddly issues like paper boys.

This is what the editorial teams have said.

And other media comment:

Seemsa to be a fair bit of austerity in the comments departments. If all that gloom gets you down don’t go to the princes of pessimism at The Standard:

But they’ve been saying much the same all week.

The only ones trying to gloom more are the Labour team. David Shearer seems to be trying to encourage everyone to leave for Australia. Or does he think only National voters leave the country? You noticed the same promotion at The Standard? That’s just “Eddie”, he’s the Labour team anyway.

Waiting for David Farrar’s budget appraisal at Kiwiblog, so far just a bland 2012 Budget highlights – ah, that’s right, it’s a bland budget.

A budget that restrains itself from overspending too much is a bugger, isn’t it. Nothing exciting to write about.

by Pete George on May 25, 2012  •  Permalink
Posted in Politics
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Posted by Pete George on May 25, 2012

http://yournz.org/2012/05/25/budget-well-what-did-you-expect/

Budget: the paper boy pinch

It’s not pinching from kids, some politicians while pinch themselves when they realise they’ve gone off half cocked on this.

Much has been made of taking a tax credit away from children, like paper boys and paper girls. The critics have been a bit premature jumping in on this, including a lineup from Labour (I’ve heard David Shearer, Grant Robertson, David Parker, David Cunliffe and David Clark), and Winston Peters. Either that or they are deliberately trying to mislead.

From Peter Dunne’s speech in the house today:

These transitional rules will provide employers with time to update their payroll systems.

I have described these tax credits as out-dated, Mr Speaker.  Allow me to illustrate.

When the tax credit for income under $9,880 for example, was first introduced, it was aimed at people on a fulltime annual salary of less than $10,000.

Times and salaries have moved on significantly since that time, and the tax credit no longer applies to the group it was originally established to support.

Similarly, the child tax credit was a transitional measure introduced by Sir Robert Muldoon in 1978 – in an era when most employers did not deduct tax at source.

Now they do, so the credit has become similarly outdated.

So they tax credit changes are tidying up old obsolete tax law.

And the “paper boys” argument is a myth. Those who deliver suburban papers most likely earn under the $2,340 exemption.

 

by Pete George on May 24, 2012  •  Permalink
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Posted by Pete George on May 24, 2012

http://yournz.org/2012/05/24/budget-the-paper-boy-pinch/

Budget – wait until Friday

So it’s budget day.

We’ve already seen a string of early announcements from the Government. As is normal.

The journos are guessing and analysing those guesses. And they’ve been talking up “public interest” stories about people and families who might hope for a lottery win type policy dream.

DPF at Kiwiblog is talking about how he will scan the numbers as soon as he can fit it in and explains his Budget coverage.

As does Keeping Stock: Budget Day – 24 May 2012

At the Standard they are franticallytrying to talk things up and talk things down, making condemnations in advance in scathing reviews and previews. Yawn.

This drip feed of anticipation will continue for the morning and early afternoon.

And then the creeping tweets will begin, followed by the breaking news headlines telling us what we already knew,  with a few new tidbits. There may even be a relatively big surprise or two.Sort of.

This will continue through the day. And it wull be uberanalysed through the evening.

And I’ll keep a bit of an eye on it but won’t get too excited. Bill English doesn’t spend it all in one day.

Tomorrow morning I’ll get up and have a look around, and I should start to find the useful analysis done after the excitement has calmed down, the more considered opinions beyond the headlines.

Bill English will sound boringly sensible, John Key will be relaxed, David Shearer will try to sound like he knows something, and Russel Norman will claim chicken to National’s egg.

David Farrar at Kiwiblog will have some considered comments by then. And Eddie at The Standard will be saying he’d told us so already, National are naff, Key has to resign, English should return to Dipton, and he/she probably won’t say anything about David Shearer but may mention another David who ight comment on financial matters.

The Government will keep borrowing and the Opposition will keep criticising, the blogs will keep buzzing and bellowing and belching brickbats. And I’ll chug away on just another day.

A useful number to remember is 1/366.

by Pete George on May 24, 2012  •  Permalink
Posted in Politics
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Posted by Pete George on May 24, 2012

http://yournz.org/2012/05/24/budget-wait-until-friday/

Labour’s alternative economy

Labour are on the right track with this comprehensive plan to get the economy back on track.

This morning David Parker gave a speech where he clearly set out how a Labour government would be different.

  • We will create jobs by supporting our exporters to expand and earn more.
  • We will help Kiwis to get the education and skills they need to seize the job opportunities of a 21st century economy.
  • We will grow incomes by investing in science and innovation to create more high-wage businesses.
  • We will make it easier for Kiwis to save for their first home and to build a retirement nest egg.

It’s good to see such an innovative plan, I’m sure no other parties will have thought of anything like that.

That should sort out our debt problems. With some help from Russel Norman as Finance Minister to keep spending under control – his green policies grow on trees.

Alternate title: Labour’s same old platitudes in an alternate universe

by Pete George on May 23, 2012  •  Permalink
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Posted by Pete George on May 23, 2012

http://yournz.org/2012/05/23/labours-alternative-economy/

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