Carrots versus cost of carrots

As Labour release more policies they are differentiating themselves more from National.

Finance spokesperson David Parker recently released Labour’s alternate budget. This was seen as well thought through and prudent, although there was some criticism from the left for it being too miserly.

Over the last week Labour have switched to education. This has the appearance of loosening the purse strings as carrots to entice voters have been prominent. These include:

  • Reduce class sizes by 2018,  in primary schools from 29 students to 26, in secondary schools from 26 students to 23
  • 2000 new teachers
  • Computers for all students age nine and up
  • Affordable payment plan for parents to pay for new technology
  • Modernise school buildings
  • End voluntary donations by providing annual $100 grant per student.

All of those policies will cost more. Labour say they will re-allocate National’s funds to better utilise (and better pay) the best teachers, but that may not cover all these policies.

Details aren’t available yet online, they only have very brief summaries and a link to a factsheet doesn’t work. Labour will need to cost their carrots or they will get hammered by National.

Labour are differentiating themselves from National on education policies along the lines of more versus better.

Additional teachers will cost more but on top of the cost of salaries is the cost of training and administrative overheads and extra classrooms will be required.

An updated alternate budget may be required.

But Labour are clearly differentiating themselves from National.Labour will be promoting the extras they are offering, while National will be questioning the cost of handouts.

The election could be fought on carrots versus cost of carrots.

Budget winners and whiners

There’s no way of knowing if the budget is an election winner for National (it won’t harm their chances and will probably enhance them) but as a smart, sensible, pragmatic budget that appears to care for families it has to be a winner for National for the moment.

Peter Dunne is claiming it’s a good budget for UnitedFuture with some justification. It nudges Paid Parental Leave in their policy direction and with Dunne having an involvement in health and families the extension of free doctors visits and prescriptions for children have to be a personal win.

There is little specifically for the Maori Party but it won’t do them any harm.

The budget was never going to slash public spending so ACT don’t win anything from it.

The opposition parties made it look like they were losers with very negative attacks, but this may clash with general public perceptions.

In reality Labour mustn’t be disappointed with aspects of this budget at least. David Parker has acknowledged this. If this was a Labour budget they would be applauded, and it won’t cause them any difficulties if they take over Government and economic management later this year.

But David Cunliffe has chosen a very negative reaction, which portrays it as a loss despite claiming National have stolen some of their policies. And National have cunningly sold it as both prudent and caring, and Labour are left claiming they would do more – which means spend more, so their claims that the surplus is fudged looks sticky.

Russel Norman tried to portray it as a ‘cabinet club’ budget, benefiting a select few rich people at the expense of the poor. It don’t think he’ll get much credit for this approach, it’s hardly a way to build support.

Winston Peters grumped about it as if the country has lost something but it’s his mojo that’s hard to find.

Hone Harawira complained there was nothing in it for Maori and “we didn’t even get crumbs for kids” but both those groups will benefit from more free health care and an improving financial position for the country. What Harawira means is he didn’t win handouts for his constituency.

The handout mentality didn’t win anything from the election. Many will applaud that.

National have crafted a crafty budget and are the big winners, with Dunne picking up some of the glory.

It won’t win the election but it will make it harder for Labour and Greens to win. They were practising losing speeches yesterday.

They can still win the election, but they have to start looking like potential winners.

Yesterday John Key and Bill English looked like they were on the podium already. People like voting for winners, not whiners.

Cunliffe Q&A on Facebook

David Cunliffe had Q&A on his Facebook page tonight. It worked much better than his last one (at The Standard) – a mix of policy and personable chitchat.

Cunliffe and Parker

Josh Lucas Evening lads. Q: What would an alternative Labour Budget have looked like?

David Cunliffe We’d deal to big housing crisis – 100,000 new homes. Taxing speculators and banning foreign buyers of existing homes. On jobs we’d get unemployment down to 4% in our first term with our Economic Upgrade. And our Best Start package would give every kid the best start in life, including the most vulnerable. See https://labour.org.nz/budget2014

Simon Gotlieb I’m curious David. We’re pretty certain about where Mr Key wants NZ to be in 20 years. How about you? When my children have children themselves what kind of society would you like to leave them?

David Cunliffe Hey Simon. We’re a bit worried about where NZ will be in 20 years unless we change course. It’s not clear Mr Key has a long term vision. He tends to make shorter term decisions. Our vision is for a NZ where everybody’s potential is recognised, everybody gets an opportunity to do and best they can be. I’m worried we’ve got a generation locked out of the housing market – and child poverty is a ticking time bomb.

Sophie Roil Why should we vote labour

David Cunliffe Because it’s about you, not us – and a fairer society. Take today. The Nats paid parental leave and parental tax credit policy is only half as good as Labour’s Best Start. Worse still, with 285,000 children below the poverty line, their package does not give 1c to the most vulnerable children. Not this year, not next year, not ever. https://labour.org.nz/beststart

Tayna King If you win the election will you remove the laws passed by national to violate the privacy of Kiwis eg: GCSB

David Cunliffe Our policy to immediately set up a full review of the NZ security services. We believe NZers have a right to be free from blanket surveillance, and that nobody should be spied on by NZ security services without a judge’s warrant.

David Kelly John Key’s budget speech — empty posturing, how do you stay sane listening to that drivel?

David Cunliffe You’re right, he seemed more interested in petty political point scoring than in addressing the issues that affect New Zealanders in their everyday lives.

Ian Vaudrey Do you think Labour will ever have a leader that can connect with the working man?

David Cunliffe You’ve got one.

Franquis Vegas ACC is a disgusting mess, leaving vulnerable people more vulnerable in order to make cash. Is there anything Labour will do once in government to fix ACC? Thanks 

David Cunliffe Franquis Vegas, I’ve had people in tears in my electorate office – who can barely walk, and ACC has told them they don’t have a problem. We will change the culture of ACC, so that it returns to the ideals for which it was set up – to help NZers who are the unfortunate victims of accidents, not to re-victimise them.

Naani Abercrombie How are you planning on helping to curb the high price of housing, especially in auckland? If a capital gains tax is part of your plan, what are the details of how it would work?

David Cunliffe We have to stop the crazy price increases which are locking young families out of a home of their own. We need to build more affordable houses – and we’re going to build 100,000 over 10 years. We need to remove the tax bias via CGT excluding the family home (currently renters subsidise landlords’ taxes). We also believe it’s a birthright for Kiwis to buy our homes, not foreign speculators.

Trudi Manning Do you believe in God? How about Aliens?

David Cunliffe One all at this end re God. (We’ll leave the aliens to Colin Craig).

Matthew Bowes What do you consider to be the 3 biggest issues facing New Zealands future? and what would you do to solve them?

David Cunliffe Work, homes, families.

Mawera Karetai We are a family with three kids and no plans to have more. We have a business that makes enough for us to survive and grow a little. We would get $200 per child per week under the new WFF tax credits and free health for all three kids – that will make a HUGE difference for us. What are you offering us? PS – we don’t have a trailer.

BY the way, I am a member of Labour and at the moment I am not sure if I can give Labour my Party vote, since I just can’t see where you give a damn about my family.

David Cunliffe Mawera, remember Labour brought in WFF. Our Best Start package is more generous than National’s immitation. Our economic policies will be better for everyone, including you. Our small business package will be something to look forward to.

Byron Donaldson David Cunliffe come to Westport to meet me I’m a great supporter of the NZ Labour Party please come and visit I’m still at high school and I’m the only student at my school who is a member of the Labour Party.

David Cunliffe I’m sure I’ll be there during the campaign. Well done for flying the flag.

Mihaela Soar By the way the so called surplus : selling strategic assets for 4 billions !

David Cunliffe Yes. And they made a loss compared with their promise, and now only 2% of NZers own those shares. (They’ve privatised our rivers too.).

Roger Tarry what do they mean surplus? we still have an overseas debt dont we?

David Cunliffe You’re right Roger. The vast majority of NZ’s debt is private debt, not Government debt – that’s debt held by Kiwi families and businesses, for things like mortgages. National are only talking about the Government surplus – not New Zealand’s external deficit, which they project will blow out to over 6% of GDP.

Curtis Omelvena Hey David. What could future generations lose if we do not raise the retirement age to 67? What are the alternatives to raising the age? Why do you think the best solution is to raise the retirement age? And could you modify the policy so some hard labour jobs retire earlier.

David Cunliffe Today’s Budget shows spending on super this coming financial year exceeding total Government spending on pre-school, primary, intermediate, secondary and tertiary education.Our aim is to ensure NZ super remains a sustainable, universal, publicly funded retirement policy. In order to do that we have to make the numbers add up in a predictable and fair way. We’re being honest with New Zealand. John Key isn’t. Under our policy, the hard labour jobs you talk about will be able to still retire at 65, because they will receive a transitional payment if they need it – no less than the super.

Simon Morris Why did you vote to keep rivers dirty with national

David Cunliffe We didn’t.

Kawhia Chambers do you truly want to represent the people of NZL or the big corporate banks feeding us an exploding crown dept

David Cunliffe I’m in politics to put people first.

Chris Mckissack if you promise to make the mighty waikato river blue again, ill vote for you 

Simon Gotlieb You’d need to get rid of all the cowshit first Chris. Good luck with that one, what with all the dairy farms

David Cunliffe We’ve said we’ll replace National’s weak NPS on “water quality” with a real one.
Clean rivers will not be allowed to get dirtier. Dirty rivers will be cleaned up. Increases in livestock/fertiliser/effluent will be controlled, not permitted.

Caitlin Blacktopp Aah ive written mine out like 5 times now

David Cunliffe I must vote Labour.
I must vote Labour.
I must vote Labour.
I must vote Labour.
I must vote Labour.

Alastair Ross Do you agree with economists saying there is little difference between National and Labours economic policies?

David Cunliffe Absolutely not – CGT, monetary policy reform, Best Start for kids, higher wages, cheaper power, fair employment laws. That’s just a start.

Byron Donaldson There was nothing in the Budget about child poverty I think that’s disgusting.

David Cunliffe So do we.

Jgl Lennon What concrete steps will you take to help the unemployed?

David Cunliffe We’ve set an agressive target to reduce unemployment to 4% by the end of our first term. There’s a whole package of policies that will work together.

SPEECH: New Zealand’s economic upgrade | New Zealand Labour

Ethel Leota Whittaker-Masiutama What kind of jobs would you create for “the people” of NZ

David Cunliffe Jobs with higher wages, all around our regions. In 14 out of 18 regions median wages went backwards since the start of this National Government.
Our manufacturing and forestry upgrade policies provide two examples of how we would get more and better jobs in specific sectors – with higher wages.

Stephen Kennedy Hey DC
As you know, we can’t solve problems by using the same kind of thinking we used when we created them. What innovative thinking is driving Labour 2014+ ?
Yours in red, – Stephen Kennedy [teacher, married, 3 kids, mortgage, Kiwi]

David Cunliffe We need to tax capital gains, boost innovation, increase savings, reform monetary policy, provide decent work, and help NZ’s industry on the journey from volume to value.

Mo Mosameh We want to know if are you going to change loan policy for postgraduate students or not ? Because it is not fair international students get free education plus 498$ a week as a scholerdhip from our family tax and kiwis students borrow money from studylink to eat.

David Cunliffe Mo, we’re going to scrap the 5 year ceiling on the student allowance. The Nats in this Budget froze the income threshold for student loan payments for another 3 years, because apparently you’re rich if you’re earning $20k..

[Name removed as requested] Change we can believe in hey. Why do you think National ripped off half your policies?

David Cunliffe Because have no vision of their own. They are a pale version, and they haven’t addressed the underlying economic issues.

David Cunliffe Hi all, wrapping up soon. Thanks so much for your questions, and wish we had time for more of them.

Penny Clark I see you didn’t answer my question, was it too hard for you?

Bennett Morgan Penny – there are over 200 questions. A lot to answer in what was originally going to be a 20 minute Q+A. Currently there are 295 questions or comments. Some weren’t getting the response they wanted (in the time available that would have been impossible).

Bobbi Pagani Would you please answer this question I posted on your page (copied at the bottom of this thread).

Bobbi Pagani Ok David let me make this very clear, I have tried and tried to get Labour to answer my question. I was glad you’re heading the Labour Party. But I cannot get my question answered. You just about had my vote in the bag. If Labour will not answer me I’m not voting for you, ok Only one vote, but my property is prominent and last election your Bill board was on my fence. You won’t be getting that either! I’ve tried for months through many avenues. Please reply, I’m attempting till the last minute.

Dawn Elizabeth Pollard I hope you let us know what your full education policy is sooner rather than later…There are a lot of teachers in NZ and a lot of them are not happy with the direction National is heading. Teachers don’t always vote Labour, you need to show them what you will be doing in education!

Bobbi Pagani Yeah, you did not answer my question Yet again. What is it with that question, posted well before closing time?

Nick Lawson To be honest David Cunliffe I don’t feel your answers held much insight. You seemed to answer the really obvious question and have ignored any questions i would have deemed important, or answered them extremely vaguely. This doesn’t fill me with confidence and has actually turned me off labour completely. Just another national waiting in the wings.
Liam O’Connor Tell me why when, given Parker’s own words that paying down debt is the most important thing, you’d force compulsory savings on me for a retirement I won’t have/reach? Surely it’s better to put that money towards paying off my student loan — a debt I’m sure that many Gen Y felt they had no choice but to take to get ahead — than saving for a hypothetical rainy day. It’s bad economics. Needless to say that when I’m already struggling to live in Wellington because that’s where the jobs are (unless I wanna suffer more and move to Auckland) — and we don’t live extravagantly; I haven’t even been on a paid ticket to the cinema for years — the idea of locking away money with a private company until I’m 65+ (if I make it) on top of tax and student loan repayments seems ridiculous. Especially when you insinuate that this policy will help fund your mates in the forestry industry. Seems like cronyism to me, just in shades of red rather than blue.
Bobbi Pagani If you will not answer my question- to your electorate office, on your page several times, and now here well before closing, even though I thought you were great, no, no and no. I’m still giving you a chance to answer and up until the election, if you don’t I’m not going to tick the box for you.
Now I’m going to ask the question of other parties. 
I have not even received from you why you do not answer.
Bobbi Pagani What a waste of time that session was, and I really believed I would get a reply, posting as I did well before closing.
Ok David Thank you for this opportunity!  I want to address the Rates Rebate. (I have previously asked this question both at the Electoral Office and on Labour’s page and got nowhere, no response on the page.)
So, the rates rebate, as I’m sure you know is a rebate available on application to those on a low income. The maximum rebate amounts to about $600, not insubstantial.
There is a narrow timeframe in which to apply for the rebate. There is information required for the application which is usually not even available by the cut off date for the application, you are expected to guesstimate.
If you miss the cut off Auckland Council will deny the rebate entirely. They will require the full rates to be paid and slap on penalties as well.
This did not used to be so. As I recall some twelve or so years ago if there was a cut off date they did not apply it. Now they do, strictly. 
This may be in accord with the letter of the law but is entirely against the spirit of it. The rebate is there by definition for people who are not managing that well, the low income earners would include the sick, disabled, invalids, elderly. It is there to help, I suppose, (or maybe there’s another reason for it?) Yet Auckland Council requires of the very people who are not managing that they get their application in on time, or rather, really, ahead of time considering the required information isn’t even available. It rigorously enforces the cut off date and denies any extension. I think this is unfair so I have stopped paying rates. If the back rebates were allowed my rates would be well towards being paid.
I would like Labour to look at this law and amend it so that Councils do have to allow eligible applications for rebates and back rebates, regardless of date of application and also not be allowed to apply penalties on the rebates they should have allowed. If the rebate application is late they have had the use of money after all. I think this is fair, and in the spirit of the intention of the Act. Do you? Will Labour do this? I look forward to your reply. Regards, Bobbi.

Too long to deal with in a quick fire Q&A but he is getting frustrated.

From Parliament: Budget Debate – 15th May, 2014 – Part 1

Balancing gender versus balancing the budget

Do voters (including women voters) care much abour gender balance?

Quite possibly perceived competence of parties, leaders and candidates are more important to many voters.

Here’s some percentages.

  • National got 47% party vote and have 27% female MPs.
  • Labour got 28% party vote and have 40% female MPs.
  • Greens got 11% party vote and have 50% female MPs.

The voter turnout at the last election was 74.21% – at least 25% of those voters (and probably around 50%) were women.

The voter gender balance will vary across parties but presumably there’s a lot of female voters who choose to vote for parties with proportionally less women candidates.

Perhaps voters, including female voters, put more priority on balancing the budget than balancing the genders.

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.

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.

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.

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.

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.

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.

 

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