The two hands of Robertson’s surplus response

Today’s Herald editorial – Use surplus for benefit of everyone – highlights a contradiction in the opposition response to the National Government finally, after seven years, achieving an actual surplus.

Across the aisle, opposition parties waved their wish-lists with new confidence, calling for the surplus to be spent on child poverty, more hospital operations, more pre-school education … you name it.

At the same time, they predicted the slender surplus would disappear as suddenly as it arrived.

Labour have long criticised National for following their surplus years under Helen Clark and Michael Cullen with a sequence of deficits.

Even now they lambast National because they say the surplus will be short lived due to tightening economic conditions and low inflation.

But Labour have opposed many measures aimed at keeping a tight rein on spending.

They have pushed for more spending.

As soon as the surplus was announced Labour MPs suggested how it could be spent many times over.

On one hand Labour’s finance spokesperson Grant Robertson was highly critical of the meagre surplus:

First surplus a blip on radar screen of debt

by  on October 14, 2015

Bill English’s first surplus is just one black drop in a sea of red, with New Zealanders still paying over $10m a day in interest payments, Labour’s Finance spokesperson Grant Robertson says.

“The Finance Minister has finally found a surplus needle in his haystack of debt. Despite promising a ‘significant’ surplus, it’s just $414m. That’s less than 0.2 per cent of GDP – a rounding error, not a surplus.

“But the surplus show is over before it has begun. With the economy running out of steam, National’s promises of a string of surpluses are extremely unlikely to become reality. That’s poor financial management.

“National’s financial management will go down in history as one small surplus – at the peak of the economic cycle – out of nine Budget deficits.

And on the other hand, on the same day, he issued this complaint about the lack of spending required to achieve the surplus:

Nats sacrifice Kiwis’ health and education for surplus

by  on October 14, 2015

National’s drive for surplus has meant less investment in critical areas like health, education, housing and transport – yet John Key told Parliament today he wants the money for cycleways, Labour’s Finance spokesperson Grant Robertson says.

“The Government’s belated surplus has been partly achieved by dropping spending by $235m in education, $97m on housing and community development, $52m in health and over $300m on transport and communications.

“These are critical areas. Too many students are failing NCEA, dilapidated state houses are making people sick, patients are waiting far too long in hospital emergency departments and regional roads and internet services are in desperate need of upgrades.

“It also appears that $444m has been taken out of the EQC claims budget. No one in Canterbury waiting for repairs or needing their repairs redone would think that money isn’t needed.

“The next time Kiwis find themselves waiting for an operation, getting sick in their home, worrying about their children’s performance at school, or nearly crashing on a dodgy road they can thank their lucky stars Bill English has a surplus and John Key has his cycleways,” Grant Robertson says.

This is Opposition opposing gone mad – criticising National for finally, only just achieving a surplus but hammering them for not spending more. For not spending a lot more.

On one hand he criticises years of deficits, but he wants to hand out heaps more money with his other.

The Herald wrote:

If the surplus in the final account for the year that ended on June 30 can be sustained in the current year and projected to continue, the best use of it would be to reduce debt more quickly. The next best use would be to resume the contributions to the NZ Super Fund that the Government suspended six years ago.

The level of debt and stopping contributions to the Super Fund have also been criticised by Labour.

If Robertson ever becomes Minister of Finance it will be interesting to see how he goes about balancing the books.

Leave a comment

14 Comments

  1. David

     /  17th October 2015

    Robertson will never be finance minister, I think his tenure has exposed him as nothing more than a political operative who,s life experience of student politics and working as a parliamentary staffer has left him ill equiped for any serious ministerial role….I think the same applies to Ardern. Trouble is Labours talent pool is pretty shallow.

    Reply
  2. rayinnz

     /  17th October 2015

    ” It will be interesting how he will go about balancing the books”
    Probably the same way his dad did and that didn’t end well

    Reply
    • Mike C

       /  17th October 2015

      @rayinnz

      I just Googled the key words “Grant Robertson MP Father” to see what you meant above.

      It was quite a revelation.

      Reply
    • It’s unfair bringing his father into it.

      I knew his father, he was a nice bloke outside his workplace indiscretions.

      Reply
  3. nice piece Pete – Labours hypocrisy knows no limits…

    NZ is exposed currently given the debt English has run up so he didn’t need to implement austerity measures and cope with the impacts of the Christchurch earthquake… we need strong surpluses and a debt pay down pretty much now, or the next external shock is going to find the Government with very little wriggle room in terms of borrowing to respond..

    Imagine the outcry if Social Welfare had been slashed and Government workers laid off – a la Europe after the GFC…… yip Labour would have howled its outage. So National run an almost Keynesian borrow and maintain strategy, and Labour howls look at the debt Cullen ran surpluses…

    This country would have been in real state if not for Englishs’ approach and China prime the pump building infrastructure spending up, which kept Australia growing when the rest of the world was slowing or going backwards…..

    Hopefully Grant Robertson will never be PM or Finance Minister – he shows himself to be incompetent with his utterings…

    Reply
  4. “Labour have long criticised National for following their surplus years”
    Can we please stop this lie Pete. The financial estimates from the Labour Government in 1999 showed significant and increasing deficits – and that was before the GFC.

    Reply
    • 1999? I’m aware that deficits way into the future were estimated towards the end of Clark and Cullen’s nine years.

      Reply
    • This was in 2008:

      After 14 years of surpluses, we now face nine years of deficits.

      After a sustained reduction in public debt – under Governments of both stripes – it is now set to rise relentlessly over the next 10 years, well before the worst of the fiscal pressure from retiring baby-boomers hits.

      http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10536181

      That was before the effects of the Global Financial Crisin were known and well before the Christchurch Earthquake.

      Reply
      • Mike C

         /  17th October 2015

        @George and Goldie

        So the National Government were rooted right from the start of their tenure in 2008.

        And the Christchurch Earthquakes and the Global Financial Crash came along to add salt to the wound.

        Reply
        • Cutting the top tax rate from 38 per cent was full retard though……. we could very much have been in the black if they had done that, and perhaps kept our assets, or……. the list goes on and on, our top tax rate is very low by international standards

          Reply
          • Alan Wilkinson

             /  17th October 2015

            No, it was a stupid tax which just created work for accountants dodging it for everyone except the suckers on PAYE salaries. It was accurately called an envy tax and notably failed to affect the rich, merely those who had got to the top of their profession near the end of their careers. Idiotic.

            Reply
            • So the solution was cut it? how about bumping up other rates (trusts etc) to match? that was their justification to lower it, its a 2 way street. what is the top tax rate in Australia?? If we matched theirs we could afford quite a bit…………..

            • Alan Wilkinson

               /  17th October 2015

              Who could afford what? You seem to believe tax creates money out of thin air? The more tax the Government has to spend the less we have to spend and invest. Mostly the Government spends on unproductive people and investments so the country winds up poorer.

            • @Alan
              So Norway, with a top tax rate of over 47% should be poorer you think? Or Australia with 49% (they even added a temporary 2% levy for the deficits) The UK is also at 45%. It doesn’t create money out of thin air, and doesn’t have to, any pinch in growth is countered by either improved spending and services from govt or a reduction in our debt. (we are at 100 Billion now). You complain that this deducts money from investments? Realistically thats only the top 10% of NZ, and the investment gangbang that is property in NZ could do with more money being taken out of it…..

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