Nation: Grant Robertson on the state of the economy

I think he easily met this target.

The Finance Minister says he shares some of the business community’s concerns, such as global trade tensions and their impact on our economy.

…strikes are the result of “nine years of frustration with previous government”

…says “we want our government agencies to have best practice procurement… we have put the word out to our Ministries that they should be abiding.

 

Half a billion dollars spent on movie making subsidies

Over half a billion dollars has been handed out to movie makers to encourage them to come to New Zealand.

Is this money well spent? Or is it subsidising the already rich?

Matt Nippert (Herald) – Inside Wellywood: How NZ taxpayers forked out $575 million for Hollywood to film here

Act leader David Seymour isn’t willing to dance around this issue of whether subsidising Hollywood’s costs – including for their celebrity starlets – is worthwhile: “I think New Zealanders can decide for themselves whether they feel good about likely having given Scarlett Johansson $3m.”

“Every dollar spent on subsidies is a dollar that can’t be spent elsewhere. Who amongst us believe politicians are the wisest at investing our dollars?”

An otherwise boosterish recent government evaluation of the latest iteration of the subsidy scheme, released yesterday, found $177.1m in grants paid out over the past three years resulted in a significant economic boost for the country but only generated $126.9m in additional tax revenue, costing the government $50m.

It isn’t stated how widely additional tax revenue was considered in that equation. It would be difficult, for example, to quantify the financial and tax benefits that tourism gets out of movies made here.

While Seymour put a firm foot forward in opposing the decades-old scheme, Grant Robertson, the Minister of Finance but perhaps more saliently member for Wellington Central – the location for two-thirds of the country’s subsidised film production – was keen to stay light on his feet.

Robertson wasn’t willing to weigh in on whether ScarJo was worth it, but said criteria letting productions qualify for the maximum subsidy had “been tightened in recent years”.

“I think it’s an area we want to be in. There are obviously always limits to how much you put in – what the scale of any subsidy scheme might be – but from my perspective, New Zealand has done well, produced good people, and this is part of being in that particular industry,” he says.

Sounds a bit like Labour’s immigration rhetoric while in opposition turning around to a more pragmatic approach in Government.

There’s a lot more about it in the Nipper article, and Rod Emmerson has his take on it too:

Q+A today – business and trade

On Q+A this morning:

Why is business feeling so gloomy? Surveys show business confidence has been persistently low since the Labour led Government took office. Corin Dann talks to Finance Minister Grant Robertson.

Plus, what could an NZ-EU Free Trade Agreement mean for you? And will European farmers give up some of the subsidies that make trade harder for our food producers? European Trade Commissioner Cecilia Malmstrom joins us.

Labour fundraising in private clubs

Labour tried to make a big deal about some National fundraising, but they seem to be doing the same sort of thing, and are looking like they have been caught with their hands in the biscuit jar.

Stuff in 2014: Does Cabinet Club buy influence?

Party funding is back under the spotlight after two ministers ran into trouble over their links with wealthy donors amid revelations National operates a ‘Cabinet Club’ offering access to top ministers in exchange for cash.

Last week National’s $1000-plus Cabinet Club dinners were in the gun, though there were counter-accusations, laced with claims of hypocrisy, that Labour offered chinwags with MPs for $1250 a pop.

The Greens have had a couple of stabs at greater transparency. The first, through Sue Kedgley’s Lobbyists Register Bill, has lapsed. Now the Greens are pressing for a ministerial disclosure regime. Co-leader Dr Russel Norman estimates John Key had raised more than $1 million from his “club” appearances.

“John Key claims the Cabinet Club is part of the normal political donations process. Cash for access to the inner circle of the Government is not normal,” Norman said. “It is democracy for sale.”

National MP Tau Henare says the Left is trying to curb National’s fundraising ability because it is jealous National can raise more. And National president Peter Goodfellow insists there is no quid pro quo for donations.

Newshub in April 2017: Labour launches exclusive ‘President’s Club’

The Labour Party has launched an exclusive secret society called The President’s Club for those who donate big bucks to the party.

It opened for business two weeks ago, with the primary role of luring in big cheques from wealthy Labour supporters.

It’s Labour’s version of National’s Cabinet Club, which sees exorbitantly-priced tickets sold for exclusive dinners attended by Cabinet ministers of the Crown.

Labour president Nigel Haworth says The President’s Club differs from Cabinet Club because Labour MPs aren’t involved, and aren’t used to lure in donations in exchange for access.

But Labour are charging big bucks, and using Ministers as an attraction. Stuff yesterday: Labour hosts business and lobbyists at $600-a-head dinners in exclusive private clubs

Finance Minister Grant Robertson gave a post-Budget speech at a $600-a-head Labour fundraiser at the exclusive Wellington Club, drawing comparisons to the previous National Government’s “Cabinet club” scandal.

According to several attendees, about 40 people, including party supporters, business figures and corporate lobbyists, attended the dinner hosted by Labour president Nigel Haworth on Wednesday, at which Robertson was the key

The Cabinet manual states: “holding ministerial office is regarded as a full-time occupation and is remunerated as such. Accordingly … accepting additional payment for doing anything that could be regarded as a ministerial function is not permissible”.

This means that if Robertson was attending in his ministerial capacity, rather than as an MP, Labour would be unable to use the event as a fundraiser.

Labour dance on the head of an MP pin…

…but get pinged for it.

Labour’s fiscal plan was never realistic

Labour campaigned with a fiscal plan last year, and it was the centre of a controversial claim by Steven Joyce that demonstrated an $11b fiscal ‘hole’.

The reality is that the fiscal plan was not a plan as it could never have been implemented – there was virtually no chance of Labour governing alone. And this is Labour’s excuse for budgeting $12b more than specified in their plan, the cost of governing arrangements with other parties.

This is an obvious reality of single party campaign policies in an MMP environment where single parties have never governed alone, so it may be more a problem of how parties (and media) portray campaign policies.

NZH: Labour’s first Budget vs its campaign plan: Does it match up?

A comparison of Labour’s campaign fiscal plan with its first Budget shows things are not tracking quite as Labour planned during the campaign, something it put down to its coalition agreements and higher costs than expected.

Analysis by NZ Herald data journalist Keith Ng shows total Crown spending is forecast to be almost $12.5 billion higher over the five years to 2021/22 than Labour forecast in the “fiscal plan” it campaigned on in the last election.

That takes it to $24 billion more than National had planned over that period.

Labour campaigned on its fiscal plan against criticism from National that it had not allowed enough to cover the costs of its policies as well as increases in Government spending such as wage increases.

The higher spending also indicates the cost of securing the support of NZ First and the Green Party was higher than Labour allowed for in its fiscal plan and some policies were costing more than expected.

Finance Minister Grant Robertson said the Budget should not be compared to Labour’s fiscal plan because it was based on Labour Party policy while the Budget reflected the Government arrangement with NZ First and the Greens.

In one way that’s a fair claim by Robertson. Labour was never likely to govern alone.

But did Robertson make it clear that his fiscal plan was not a plan?

He could not know which parties Labour may combine with to form a Government. But he must have known his fiscal plan would never remain intact in an MMP government, and should have expressed it with that clear proviso.

Will this happen next election? It’s likely to be glossed over again, or at least Labour may try that, but having been in Government with two other parties it should be much harder to get away with.

Unless Labour campaigns with the expectation that NZ First and Greens will miss the cut and won’t impact on Labour’s fiscal plan.

 

 

 

Q&A – Robertson and Adams on the budget

Both the Minister of Finance Grant Robertson and the Opposition spokesperson in finance, Amy Adams, will be interviewed on Q&A this morning.

Robertson was competent on the Nation yesterday but could be pushed more by Corin Dann.

National seemed all over the place in their criticisms of a budget that was widely viewed as not much different to what a National budget might have been. It will be interesting to see Adams’ approach now.

Are you ditching neoliberalism? “…looking to transform the basis of our economy”.

The government isn’t going to get bigger. It’s going to get smarter.

Fiscal discipline emphasised by Robertson. Transforming in a deliberate and planned way, in contrast to the rapid reform in the 1980s.

What about dealing with the so called crises? Cites health rebuilding, but nothing out of the ordinary.

Child poverty? Robertson thinks they will make a big difference, citing $75 per week from the families package, due to kick in on 1 July.

Working poor? He only mentions help for families, not workers with no dependant children. No holding to account on this.

Budget “a ringing endorsement of the Defence Force from the Coalition Government”

It is notable that this refers to ‘Coalition Government’ – Greens are not a part of the coalition. While NZ First and Grant Robertson have tried to talk up the Defence budget it has been described as “money for a frigate upgrade cost overrun, some joint training and another 800 LSV trainees”.

Minister of Defence Ron Mark talked up the budget allocation for the Defence Force.

Enhancing Defence Force capability

New Zealand’s Defence Force can continue making meaningful contributions to global security and peacekeeping efforts, and respond effectively to events like natural disasters, as a result of Budget 2018 funding, says Defence Minister Ron Mark.

Budget 2018 provides a $367.7 million operating funding boost to the Defence and Veterans portfolios over the next four years, underpinned by an extra $324.1 million for the New Zealand Defence Forces’ operating budget. In addition, Budget 2018 provides $42.3 million in new capital funding for modernisation.

“The extra funding is going to go a long way towards helping the Defence Force meet increasing demand across a range of tasks,” Ron Mark says.

“The funding announced today is also a huge win for conservation, the environment and fisheries protection.

Alongside the increase of $324.1 million in the Defence Force operating budget, Budget 2018 also sees:

  • $41.3 million additional capital investment for the first tranche of investment under the Defence Estate Regeneration Programme Plan
  • an additional $22.6 million operating funding over the next four years and $1.0 million capital funding for the Defence Force to deliver the enhanced Limited Service Volunteer programme (supported by a related investment of $4.2 million over the next four years for the Ministry of Social Development to administer the programme)
  • as announced earlier, $1.1 million in grants to the Royal New Zealand Returned & Services Association (RSA) and No Duff Charitable Trust over the next four years to support the services they provide to veterans – $250,000 for the RSA and $25,000 for No Duff Charitable Trust annually (This initiative was announced before Budget Day.)
  • $6.3 million in 2018/19 for the repatriation of the remains of service personnel and their dependents for those buried overseas since 1955
  • $13.6 million over the next four years set aside for new capabilities.

“This is a ringing endorsement of the Defence Force from the Coalition Government. It recognises the value it provides New Zealand and its meaningful contributions to peace and security around the world,” says Ron Mark.

Defence got a few mentions in the budget speeches in parliament on Thursday.

Grant Robertson:

New Zealand’s Defence Force will be able to make more meaningful contributions to global security and peacekeeping, and better respond to natural disasters, with a $345 million operating funding boost to the Defence and Veterans portfolios over the next four years, including, in partnership with the Ministry of Social Development, funding to expand the Limited Service Volunteer programme for young people under 25.

It didn’t rate a mention from Simon Bridges

Winston Peters:

Can I just say it was clear as daylight that the National Party had been hiding the costing—$20 billion, for example, when it comes to the Defence Force, was a fiscal risk. It wasn’t even budgeted for. Then he had a frigate that was overrun by, and costing, $148 million, and they kept it quiet from the public from July last year all the way to election day.

We’ve got, for example, the things that also matter in defence. That’s a substantial boost in a critical area, which means that our defence capacity in the Pacific—so desperately needed by so many Pacific Islands and by the Pacific itself—can now show up responsibly.

That’s it.

However on his ‘National Security’ blog Simon Ewing Jarvie is quite scathing.

Politics, Defence & Budget 2018

The political fate of New Zealand’s Defence rests in two simple questions. The first is how important defence is in the scheme of the current government’s political priorities and the second is how much influence the current Defence Minister has.

Take a look at past behaviour of Government parties as an indicator of the future. Labour’s choices have often seen a reduction in combat capability – think air combat force for example. NZ First talks tough but, when in coalition with National, vetoed the acquisition of the second two ANZAC frigates. At least the Greens are up front in their disarmament desires.

It is clear that Defence is not a high priority for this Government. That’s concerning because there are some important decisions to be made about platform replacement. Good ministers can get money for their portfolios. Putting aside this year’s abysmal budget result, how is Ron Mark placed in the machinery of Government?

First, the general view is that Ron, Jacinda Ardern and Grant Robertson aren’t exactly drinking buddies so there’s not likely to be any favours done for Defence in that department. The relationship between NZ First and Greens is toxic at the best of times and Defence is right in the middle of that.

I can’t see Ron Mark and Golriz Ghahraman (Green’s Defence Spokesperson) nutting out an accord over a herbal tea anytime soon.

So that brings it back to how Ron is able to leverage NZ First’s support for the Government. Unfortunately, Ron Mark’s star, within his own party, appears to be waning. Were it not, Peters wouldn’t have stood back and let Fletcher Tabuteau roll Mark as Deputy Leader. NZ First got heaps of concessions out of Labour in Budget 2018 but they weren’t going to die in a ditch for Ron Mark or Defence. It’s unlikely that anything is going to change there.

For all the bold election campaign statements by NZ First, Ron Mark got money for a frigate upgrade cost overrun, some joint training and another 800 LSV trainees.

He highlights a lowlight:

$148 million over four years is listed as a new initiative. It is actually the value of the cost overrun for the ANZAC frigate upgrade so it’s not generating any capability that wasn’t already signed up to.

Not only is this not new spending, it’s actually caused a degradation in other Defence capability development. That’s because as part of their ‘kiss and make up’ exercise, the MOD agreed to reduce the specs on the new littoral operations vessel from a purpose-built military specification to a commercially available hydrographic and dive support vessel to ‘save’ a similar amount of money. In December, Mark attacked the previous Government over the frigates saying “it means the lives of men and women were now being compromised”. How can he possibly reconcile that with sending sailors into threat zones in a vessel not designed for self-defence and survivability? You can’t paint it grey and call it a warship.

Grey lipstick on a war pig.

The bulk of the money allocated for acquisition to MOD is for the construction of the new maritime sustainment vessel, HMNZS Aotearoa. Apart from a few legacy projects, there is nothing for the big ticket items listed in the 2016 Defence White Paper.

Finally, but very important, is personnel costs. These are currently about $1b of the cost of running defence. Is there, in effect, a pay freeze? Or, will the operating funds have to be used to retain ‘he tangata’. NZ First campaigned on this and has delivered nothing.

Don’t forget, also, about the ‘drag’ that capital charge and depreciation is having on NZDF’s funds.

 

 

 

 

 

The Nation – Grant Robertson a financial asset

The Nation digs into the budget with an interview of Finance Minister Grant Robertson, plus ‘a closer look at the numbers’ with CTU Economist Bill Rosenberg.

(The nation is now officially called ‘Newshub Nation’, I’m not a fan of this because it’s supposed to be about the nation, not a media company) .

There seems to have been more criticism of the budget from the left than from the right, if you ignore Nationals fairly lame scatter gun attempts to sound like they oppose a budget that is barely any different to their past budgets.

Discussing all these stories and more will be our panel: Newshub’s Political Editor , Newsroom Pro Managing Editor , Sandra Grey from the Tertiary Education Union and former National Party General Manager Chris Simpson.

Tertiary education got little out of the budget, hence I presume the inclusion of Grey.


A good interview for Robertson I think he shows a lot of promise. He almost looks and sounds like a younger version of Steven Joyce.

He has had long enough in Parliament, first as a staffer and now nearly ten years as an MP, to build a lot of experience as a politician.

He has also had the benefit of being able to focus on the Finance portfolio since 2014. He showed in the interview an in depth knowledge of his portfolio and the decisions he and the Government have made.

He has started fairly cautiously and conservatively, with promises of transformation down the track. It all looks very sensible.

Prime Minister Ardern has attracted most of the media attention, but the critical work of the Government to date looks like having been done by Robertson. To me he comes across much better and more credibly than Ardern, but I tend to dislike celebrity/personality fluff.

I’m sure the interview will be dissected and Newshub will come up with a headline for the;r ‘news’ tonight, but my overall impression of Robertson is very good, he looks like he could be a very capable Minister of Finance for at least the next two years, and if Labour learns from and leans on his example they could easily stretch out for another term or two as well.

It’s still early days for Labour in power, but Robertson could turn out to be one of their biggest assets – and potentially, the country’s.

Newshub: Interview

Transcript: The Nation: Finance Minister Grant Robertson

 

A reasonable first budget for Labour

As Minister of Finance Grant Robertson was fortunate to inherit a healthy economy and a growing surplus to play with.

From what I’ve seen (I was busy yesterday and only caught bits of the budget details) it was a generally prudent and predictable budget. Big dollops of dosh had already been committed in last year’s ‘mini budget’, so this was more of an incremental addition.

Health and education  got reasonable increases, but nothing dramatic – National claim some increases are no more than they increased in their last budget. That isn’t a bad thing.

The budget has been described as ‘the first step in a plan for transformation’ – it is really only a beginning in most respects. Much will depend how the economy goes over the next couple of years and how the results of the many working groups and advisory committees pan out. There seems nothing revolutionary about the Government at this stage.

I’d like to see a bold reform of the whole tax and benefit system, and with healthy books it is a good time to do something, but it is probably too seen for the Government to get to grips with major changes – and the IRD computer system in particular couldn’t cope anyway until it is replaced.

Labour have been criticised for reneging on some of their promises – fair comments but no big deal.

While money has been spread around there is still a big miss – middle New Zealand, ordinary working people who don’t have dependant children. They have had their tax cuts whipped away from them and as far as I have seen will get little direct benefit.

Overall it seems to be an ok first budget. The degree of transformation won’t become apparent until next year’s budget, and the election year budget after that.

Media and some politicians try to make dramatics out of budgets but in the main they should be predictable and boring, so this one has been a success.

Budget highlights – foundation for the future

The budget is more of a preparatory budget rather than the claimed transformative budget – but Minister of Finance Grant Robertson acknowledges that. Here is his summary of the 2018 budget.


Foundations for the future

Health, education, housing and other critical public services receive overdue investments today, says Finance Minister Grant Robertson.

“Our public services have been underfunded for too long and there has been a failure to appropriately plan for the future. That changes today,” says Grant Robertson.

“Budget 2018 begins the economic and social transformation that must happen if New Zealanders are to have better lives in the decades to come.

“The Coalition Government is rebuilding the critical services Kiwis expect their government to provide – modern hospitals, classrooms kids can learn in, public housing for those who need it, efficient transport systems and safe communities.

“Budget 2018 makes responsible investments for the future, while delivering a surplus of more than $3 billion and taking a responsible approach to debt reduction.

“We are committed to living within our means and having a buffer to deal with the risks and shocks that a small country like New Zealand inevitably faces.

“The Government’s plan is fully funded within the operating and capital allowances we have set for this and future Budgets. We have been able to increase the allowances slightly because economic growth is forecast to be stronger than was expected before the election, by cracking down on tax avoidance, by reprioritising spending to reflect the Coalition Government’s priorities and with our more balanced debt track.

“We are committed to being responsible – not just fiscally but socially and environmentally. This Government is preparing our country for the future by making sure its foundations are strong and sustainable,” says Grant Robertson.

Highlights of Budget 2018:

  • Health receives a huge boost with $3.2 billion more in operating funding over the next four years and $850 million new capital – including $750 million to tackle some of hospitals’ most urgent building problems, the biggest capital injection in health in at least the last decade.
  • This Budget commits to free doctors’ visits for everyone under the age of 14 – an extra 56,000 of our young people from the current policy. We are extending very low-cost general practitioner (GP) visits to all Community Services Card holders and extending the Card to all Housing New Zealand tenants and New Zealanders who receive an accommodation supplement or income-related rent subsidy. This will make going to the GP cheaper by up to $30 for the 540,000 people eligible for the Card.
  • Elective surgery, maternity services, air ambulances and the National Bowel Screening Programme are among the health services receiving extra funding.
  • New capital funding will build schools and hundreds of new classrooms. Operating funding for education over the next four years increases by $1.6 billion to address rising demand, fund 1,500 more teachers and raise teacher-aide funding. Early childhood education gets a $590.2 million operating boost over four years, benefiting over 200,000 children. A total of $284 million goes to Learning Support to allow every child with special education needs and learning difficulties to better participate in school life.
  • Housing is boosted by more than $634 million in operating funds. We will increase public housing by over 6,000 homes over the next four years, provide more transitional housing and help for the homeless and offer grants for insulation and heating.

“This Government is placing the wellbeing of people at the centre of all its work,” says Grant Robertson.

“We are also building strong foundations for a more productive and sustainable economy. Budget 2018 allocates $1 billion over four years to encourage business innovation through a research and development incentive. We are supporting and growing our regions through the $1 billion-per-year Provincial Growth Fund and investing $100 million into a Green Investment Fund to help our economy’s transition.

“We are promoting a progressive and inclusive trade agenda. Our tax system will be fairer and more balanced to encourage investment in the productive economy.

“This Government is looking ahead to the next 30 years. We are managing our economy responsibly and providing the critical public services we need to build foundations for our future,” says Grant Robertson.