National – incompetent economic policy, no ideology

National have justifiably been hammered over the mistakes made in their economic policy. This pretty much destroyed any remote hope they had of coming close to competing with Labour this election.

With their claimed economic management reputation in tatters what have they got? Not much.

What does National actually stand for, apart from trying to get power? They seem to have become an ideological vacuum.

Andrea Vance: Why Paul Goldsmith can’t read numbers or the public mood

Paul Goldsmith, you had one job.

When you are using numbers as a sales pitch, it pays to get them right.

$4 billion-dollar hole in an alternative Budget totalling tens of billions of dollars might appear insignificant.

But the mistake will dearly cost National.

In other circumstances, leader Judith Collins should demote her finance spokesman. The fiasco dominated the launch of her campaign.

She can’t sack him. Felling your number two in an election campaign would be unthinkable and an admission that the oversight was more than the ‘irritating’ slip that the party attempted to downplay.

But his blunders are unforgivable, and not just because it’s careless and demonstrates a lack of competencies.

Goldsmith has fatally wounded not just Collins’ campaign, but the last semblances of the narrative that National are the superior economic managers.

Image

With Judith Collins unable to come close to competing with Jacinda Ardern on popularity, what have National got? Does anyone know?

Damien Grant: The National Party’s problem is a lack of ideology

National Party leader Judith Collins has waited two decades for this moment. You’d think she’d be better prepared.

If National wanted to understand how to tackle a popular yet ineffective leader, they only needed to have looked to the seat of Epsom and the determined and ideologically-driven David Seymour.

The ACT Party is surging in the polls partly as a result of the dysfunction in National but more importantly because Seymour has spent nearly a decade articulating policies. When you are selling your own ideas, it does not really matter what the other candidate is doing.

Voters will either like what you have to offer or they will not. Because the opposition doesn’t appear to believe in anything, they are reduced to railing against the real or imagined failings of the incumbents. It isn’t working.

In fact, the milquetoast offerings of National are a window into their soul – and it is disappointing viewing.

The problem is ideology. Collins and Goldsmith either do not understand, do not believe in, or lack the courage to fight for the supply-side neo-liberalism that was at the heart of the Reagan-Thatcher-Douglas economic revolution. Instead, they have by ignorance, intention, or cowardice, fallen into the progressive Keynesian dogma that the only way to stimulate an economy is by boosting demand.

After reading Goldsmith’s excellent book on the history of tax in New Zealand, We Won, You Lost, Eat That!, I expected better. I’ve heard he’s been muzzled and is chafing at the constraints, but maybe the whiff of leather from a Crown limo has him distracted.

And to give him credit, he has also outlined an accelerated depreciation tax strategy. Firms will be able to expense capital expenditure up to $150,000 and there will be faster depreciation rates for certain larger investments. This will have a very real and dramatic effect on our economy and some economists credit a similar change with helping Australia avoid a recession after the global financial crisis.

Beyond this audacious but unpromoted policy and the extending of the 90-day law to all employers, National has little to offer.

Collins’ tragedy is she has waited two decades to lead her party, but has spent none of that time thinking or reading about what she would do once she had the crown.

Had she done so, she could have used her excellent communication skills to articulate to the electorate a real alternative to the status quo, not merely the unappealing promise of maintaining the ancient regime with a new titular ruler at the helm.

That may sound harsh to some, but it’s hard to argue with it.

National are in real trouble for this election, but their problems won’t stop if the come a distant second to Labour. They’re a hodge podge of politicians who seem to think they deserve power because, ah, because what?

More mistakes in National’s economic plan could be inconsequential

There are claimed to be more problems with Nationals numbers in their economic plan.

Last week: National Party admits $4 billion hole in their promised spending

The National Party officially launched its election campaign today, but it was hindered by a $4 billion hole in its flagship economic policy.

The party’s finance spokesperson Paul Goldsmith was forced to concede his numbers did not add up after Labour revealed the significant gap in its costings.

“This is an irritating mistake. We missed it, and our external checker missed it as well, and that’s a mistake that we made,” he says.

Now the party will instead borrow the missing billions, which Goldsmith argues is still far less than what Labour is borrowing.

National Party leader Judith Collins told media after the launch it was inconsequential in the scheme of things.

Two days ago National’s fiscal hole appears to double to $8 billion as Paul Goldsmith denies double count mistake

The hole in National’s alternative budget may have blown out by another $3.9b after the party appears to have double-counted part of its transport programme.

The error has come about after National twice counted $3.9 billion left over from the New Zealand Upgrade package, an infrastructure plan announced by the Government in late January.

In fact, the left over money was put into Treasury’s multi-year capital allowance back in May. In National’s costings, the party had counted the two sums of money separately, when, in fact, the NZ Upgrade programme money now only exists in the capital allowances.

Today the story continues – National says fiscal plan stacks up after Labour insists there’s another mistake

National’s finance spokesperson Paul Goldsmith remains defiant the party’s economic plan stacks up – but has had to make another correction after using out of date figures.

Goldsmith says National’s “estimate is that would lead to about half of the people who are getting in the first year getting it in the second year”. The party is looking at a threshold of about $90,000 for an annual household income, he says, but that would be “clarified at the appropriate time”.

A second $88 million error, by using Budget figures for the 10-year ‘Existing Capital Allowance’ instead of the pre-election update, has now been corrected in National’s online plan.

Labour says there is a second $4bn error as National has double counted transport funding.

“Paul Goldsmith is floundering”, Labour’s Grant Robertson says.

“He’s trying to change his plan quietly in the background so he doesn’t have to own up to his leader for another mistake.”

Labour says National has allocated $3.9bn of transport funding under the NZ Upgrade Programme, but that money no longer exists in that programme as it was transferred by the government at the start of this year into a more general capital fund.

It says National has also counted and allocated that money in its general capital fund – so has double counted.

Goldsmith says he doesn’t “accept that at all”.

Whether Goldsmith is right or not this time is of little importance compared to the ongoing exposure of National’s less than competence economic plan.

Collins is probably right. In the scheme of things it is likely to be inconsequential as National look almost certain to not get a chance to implement their economic plan, especially if mistakes keep being highlighted.

National’s bad year continues. They have done a bad job of rebuilding the party after losing power in 2017. Covid hasn’t helped, but multiple leadership changes, disunity, an exodus of experience and an inability to put together a competent economic plan makes most of their problems self inflicted.

National embarrassed by $4 billion mistake

I’m sure National will have checked their fiscal policy numbers carefully, but not carefully enough. Grant Robertson pointed out they made a mistake – apparently National didn’t notice that the Government had changed a Super repayment amount,

This was very embarrassing for National, and for finance spokesperson Paul Goldsmith, pretty much stuffing up the the day of their official campaign launch. And it stuffs National’s attempts to portray themselves as better managers of the books.

Richard Harman at Politik: Surging into National’s space

National’s campaign launch yesterday was overshadowed by its Finance spokesperson Paul Goldsmith having to admit before the broadcast that the figures on which he had based the affordability of his $4 billion tax cut were wrong.

The error yesterday centred on what is supposed to be the heart of its campaign; $4 billion in tax cuts to boost the post-Covod recovery.

National’s tax cuts were to be financed by stopping contributions to NZ Super Fund, but the party had used figures from the May Budget to support their affordability and failed to recognise that Robertson had reduced the estimated contributions to the fund in the PREFU published last Wednesday.

The error might have been avoided had National taken up the long-standing Opposition “perk” of having a Treasury official embedded in the Leader’s office. But the former Leader, Simon Bridges, refused to accept a Treasury official being part of his team.

Ultimately it was an error which while massively embarrassing is unlikely to impact National in any structural sense. The party has never looked like winning the election, so all that it may do is knock a few more points off its ultimate share of the vote.

We will never know what effect it ends up having on the election result, but it makes a difficult campaign harder for Judith Collins and National.

Harman went on to evaluate the fight for votes on the right, claiming the new Conservatives were “on a roll” (the lack of polls makes this hard to confirm), but it’s well known how hard this election already was for National.

The worry now for National must be that if NZ First fails to make it back to Parliament; if the Billy Te Kiha – Jami-Lee Ross Advance Party gets some support and if the New Conservatives continue their surge, then the foundations are there for a populist right-wing party.

What seems possible is that the centre-right space in New Zealand politics, which only a year ago National was beginning to believe it could have to itself is now becoming more contested by ACT and by the populists.

That is one of the potential implications of a lacklustre showing by National at the polls on October 17. And after the events yesterday, that lacklustre showing looks even more possible.

It’s quite possible ‘lacklustre’ may end up being a National disaster.

This sort of coverage doesn’t help: National’s disastrous day:

But there is one optimist:

No post on it at Kiwiblog yet.

National’s tax cut policy

Just when it looked like Labour were comfortably PR managing their way to a comfortable election victory, playing ultra-safe with a minimal policy approach, and National looked to be going through the motions heading for a big defeat, the campaign has been shaken up a bit with a promise of tax cuts for everyone.

National were obviously waiting for the PREFU release (Pre-election Economic and Fiscal Update – economy “better than predicted”) on Thursday, announcing their Economic & Fiscal Plan yesterday, with most attention given to short term tax cuts aimed at stimulating the economy.

This seemed to rattle Labour, with both Jacinda Ardern and Grant Robertson reacting.

Ardern said tax cuts were “irresponsible”:

“What they have announced today is unaffordable and is raiding from a fund that has to be available to make sure that we as a nation can keep responding to the challenges of Covid, not deliver unaffordable tax cuts.

This is a bit rich. Labour have already spent something like $50 billion propping up the economy, and have a $14b fund set aside to dish out as they see fit.

“Now is just not the time for tax cuts and I genuinely believe New Zealanders will look at the environment right now and agree with that.

“What we need now is really careful economic management, we need certainty and we need a plan and that’s what we’ll deliver.”

There’s nothing certain about our short and medium term economic future.

Minister of Finance Grant Robertson:

“It beggars belief that in the middle of a pandemic the National Party is planning to gut the money set aside to protect New Zealanders in case of another major outbreak of Covid-19,” he said in a statement after the announcement.

“We carefully put aside $14 billion to look after New Zealanders’ health and wellbeing and now National wants to put that at risk. This policy reeks of desperation as National races to borrow money to pay for a $4000 temporary tax cut for Judith Collins.”

The responses from Ardern and Robertson reek of rattledness.

National’s announcement.


National will cut taxes for middle New Zealand

National’s massive tax stimulus package will put more than $3000 extra into the pockets of hard-working Kiwis on middle incomes, National Party Leader Judith Collins says.

You can read a copy of National’s Economic & Fiscal Plan here.

Ms Collins has announced the next National Government will let Kiwis keep more of what they earn by lifting the bottom tax threshold from $14,000 to $20,000, the middle threshold from $48,000 to $64,000 and the top threshold from $70,000 to $90,000.

These changes will be in place from December 1, 2020 until March 31, 2022. The total cost of this over the 16-month period is estimated to be $4.7 billion.

“Today we are facing the biggest economic downturn the world has seen since in living memory. But with the right leadership and economic plan we can grow our economy and keep Kiwis in jobs,” Ms Collins says.

“To keep our economy ticking, New Zealanders need money to spend. National will deliver temporary tax relief that puts more than $3000 – or nearly $50 a week – into the back pockets of average earners over the next 16 months.

“This will give Kiwis the confidence to go out and spend, which will be crucial for our retail, tourism and hospitality businesses to survive this economic crisis.

“New Zealand is facing a much longer and more painful economic shock than earlier forecast. We need a serious plan for economic growth to get us back on track.”

National’s Finance spokesperson Paul Goldsmith pointed to higher taxes as Labour’s only plan to get New Zealand out of this economic hole.

“No country has ever taxed its way out of a recession – and this is a big one we’re in now.”

As well as tax relief for households, National will double the depreciation rate for businesses that invest in new Plant, Equipment and Machinery over the next twelve months. This will bring forward the amount a business can claim in depreciation for new investments, which will stimulate investment by increasing the return on capital.

Doubling the depreciation rate is expected to cost $430 million a year for five years, while increasing tax revenues in out years.

“Our stimulus package has been fully-funded and costed, and is included in our independently reviewed Economic and Fiscal Plan released today,” Mr Goldsmith says.

“National’s plan carefully balances the need to drive economic stimulus, increase investment in core public services and restore government debt back to prudent levels.

“Labour, on the other hand, has announced it will increase taxes during a recession. The contrasting approaches to the economy at this election could not be clearer.

“Judith Collins and her strong National team will bring the leadership, experience and vision needed to get our country back on track.”

You can read a copy of National’s Economic & Fiscal Plan here.

You can view a copy of National’s Personal Tax Relief Policy here.

You can view a copy of National’s Double Depreciation Rate Policy here.


See RNZ: National promises $4.7bn in tax cuts in economic and tax policy

Obviously this policy would benefit me, by a few thousand dollars. I’m not sure it’s the best approach over the next year or two, but at least it’s reasonably even, it means all tax payers would pay less tax for 16 months (that makes for a messy part taxyear), and every one of us could decide what to do with the extra take home pay.

It does seems a better approach to Labour ‘picking winners’ and ‘corporate welfare’ of dishing out millions of dollars to selected businesses, which puts competing businesses at a disadvantage. I guess they plan to continue to do that with their $14 fund they don’t want given to workers.

Funny to see Labour favouring some corporates while National taking less from workers, that shows how muddled politics is these days.

This announcement is unlikely to swing the election (I’m still very undecided), but going by Labour’s responses it has them a bit worried. At least it livens up a lacklustre campaign.

Labour’s underwhelming tax policy

Grant Robertson announced Labour’s tax policy yesterday, not Jacinda Ardern. There’s not much to it, and it was criticised from the left and the right.

So what are the changes? Is Labour putting up taxes?

Our balanced plan protects vital services like education and health and keeps a lid on debt. 

Our three tax policies are:

– A new top income tax rate of 39% – only affecting income over $180,000 

– A freeze on fuel tax increases and no new taxes for the entire term

 – Closing tax loopholes to make multinational corporations pay their fair share 

Just the 2% highest earners will pay more tax – this means MPs (excluding party leaders and ministers) will avoid the higher tax.

The pledge not to increase any other tax in their next term actually means that with bracket creep middle income earners will continue to be taxed at a slightly higher overall tax rate with every increase in their income. This has been happening since the last lower bracket adjustment about ten years ago.

Governments have been promising to ‘close loopholes’ used by multinational corporations for many years, with little changing.

The projected increase in tax take will be only about half a billion dollars a year, which won’t come close to paying back the many billions of dollars borrowed to address the Covid Pandemic.

There appears to be nothing new to try to address property assets – Labour’s announcement mentioned only what they have already done, which seems to have done nothing to reduce property inflation.

They continue to promote ‘fairness’ – “We’re improving the fairness of our tax system to make sure everyone is paying their fair share”. Fairness is in the eye of the payer – most people think it’s fair for others to pay more tax, not them.

National and ACT and others tending right criticised the higher tax bracket.

Goldsmith, Seymour slam higher tax rates

Labour’s opponents say more tax is not the answer to the economic challenges facing New Zealand.

“No country’s ever taxed its way out of recession,” National’s Paul Goldsmith says.

“And this is classic Labour Party policy, spend more, tax more.”

“And there’s a very big question as to how much actual revenue will be gained because this will be great for tax planners and accountants to work their way around.”

Goldsmith also warned this is “just the beginning”.

ACT leader David Seymour said the new rate announced by Labour would raise little revenue and describes it as “divisive populism”.

“Jacinda Ardern likes to say we’re all in this together, but Labour is picking on a small group of New Zealanders to fund the Covid-19 recovery.

“Labour is telling young New Zealanders ‘if you study hard, get good grades, get a good job, save money, and invest wisely, we’ll tax you harder’ – that’s the wrong message,” Seymour says.

One valid criticism was that the Trust tax rate was not being increased so would be 11% lower than the highest bracket. This is likely to increase the use of trusts to try to avoid tax.

The top bracket will also increase to significantly more than the business tax rate, which will also encourage ‘management’ of income and assets to try to reduce tax.

Greens were amongst the strongest critics – see Green reaction to Labour’s tax policy.

But on current polling Greens and NZ First look like struggling to make the threshold and may not be in the next Government.

The latest UMR poll (25 Aug – 2 Sep 2020):

  • Labour 53%
  • National 29%
  • ACT 6.2%
  • NZ First 3.9%
  • Greens 3.2%

It’s looking like Labour may be able to govern alone, or at least with a majority. And they are acting like they believe that will happen.

Robertson is promising no other increases or new taxes, but was asked whether that would stand if Labour needed to negotiate post election for support, with a party like the Greens, that has a more aggressive tax policy.

“This is the policy that Labour is campaigning on and we will only implement the changes that are in this policy,” he said.

That could be seen as confidence or arrogance.

Judith Collins rules out NZ First, rules in ACT

National leader Judith Collins has already confirmed that National will not consider doing a governing deal with NZ First after the election, but has now strongly endorsed the ACT party and specifically David Seymour in the Epsom electorate.

ODT (NZH): Collins rules out working with NZ First

National leader Judith Collins appears to have ruled out working with NZ First after the election – and says Winston Peters and his party are probably on the way out anyway.

…Collins has slammed the door shut on the chances of reversing the decision not to work with NZ First.

“We have made that very plain as a caucus and as a party, and I know a lot of our party supporters and voters certainly wanted us to do that,” she said today.

“I’m pretty clear – the caucus has decided it. That’s the caucus view.”

“It’s really important to understand the caucus has said that they don’t want to do a deal with Winston Peters. There is no reason that I know that we are going to change that.”

Yesterday from Stuff: Judith Collins calls for Epsom voters to back ACT’s David Seymour

Judith Collins has explicitly asked voters in Epsom to back the ACT party’s David Seymour, sidelining her own finance spokesperson as part of a longstanding arrangement with the libertarian party.

Collins, the National leader, on Monday said she was asking voters in the Auckland electorate should to vote for Seymour for their electorate MP, saying she would “welcome him being part of a National-ACT Government”.

“I don’t need to have little cups of tea or anything, because everybody knows that David Seymour and I work very well together”

“I’m asking the people of Epsom”.

“I think it’s always important to be respectful of people and their votes, and I’m very, explicitly saying that I believe that a National-led Government is going to be best served with ACT as our partner.”

“I’m very happy to say that we want the party vote, please, in Epsom, please, and in this particular electorate you can give the first tick, for the electorate, to David Seymour.”

This was fairly obvious but at least this is explicit and open National support for Seymour in Epsom and for the ACT Party as a governing partner, far better than the charades and signalling of past elections.

National’s passive Epsom candidate since 2011 Paul Goldsmith said:

“It’s the party vote that counts. That’s my focus”.

He has always had to avoid campaigning for the electorate vote while seeking the party vote.

There has been reports that electorate polls show Seymour looks comfortable and should retain the seat.

Seymour, leader of the ACT party, said the media could focus on such endorsements, but he was “listening to the voters”.

“What they’re telling me is that the world has changed and we need a plan for a faster recovery with lower taxes and less debt,” he said in a statement provided by a spokesman.

Asked if Collins’ endorsement guaranteed ACT would work with National, Seymour said: “National is the only party ACT could work with right now.”

That’s stating the obvious. None of Labour, Greens or NZ First would consider doing a governing deal with ACT.

“We can’t work with a Labour Party that has the most disastrous public policy record in living memory.”

Seymour has feuded with Winston Peters through the term, who a couple of weeks ago challenged him to a fist fight – it was lame and never going to happen but Seymour has kept getting under Winston’s skin. It won’t help that ACT is getting double the support of NZ First in polls.

So as expected one option for the next Government is a two party National + ACT coalition. ACT are currently doing well in polls and should get several MPs in Parliament this time, but National are struggling, polling 20-30% behind Labour.

I think that is likely to close up a bit but the gap looks far to big to close for National unless there is some significant development, like Ardern resigning and Phil Twyford taking over the Labour leadership.

The Government drip feed of spending announcements

National spokesperson for finance Paul Goldsmith is nudging Minister of Finance Grant Robertson on the drip feeding of spending announcements.

Usually most spending is signalled in budgets – this year’s budget was published in mid-May, but unusually, due to the Covid pandemic, a there was a lot of additional spending plus $20 billion not allocated to anything specific.

Obviously spending on measures related to Covid would have to be announced and that would happen gradually as needed. But like $1 billion a year Provincial Growth Fund it leaves open perceptions and allegations of election campaign assistance.

Every Government times announcements they think will be favourable to their chances of re-election, it is a major benefit of incumbency. But most spending is signalled in the election year budget.

In Parliament’s Question Time yesterday:

Hon Paul Goldsmith: Does he stand by his response to my question on Tuesday, which asked how much additional spending he had so far planned to announce before the general election in September, “As the member knows, the Government has been very flexible all the way through our response to ensure we meet need as it arises, but I don’t have any specific plans in that regard.”?

Hon GRANT ROBERTSON: I stand by all of the statements I made in that answer, and I think the member’s impression wasn’t too bad just then.

Hon Paul Goldsmith: How did he not have any specific plans for new spending on Tuesday and then have his Government announce $400 million of new spending on Wednesday?

Hon GRANT ROBERTSON: The basis of that spending was in the Budget and the COVID-19 Response and Recovery Fund announcements we made.

Hon PAUL GOLDSMITH: Does he think he can just dismiss questions about his intentions for billions of dollars of spending?

Hon GRANT ROBERTSON: No, and I haven’t.

Hon Paul Goldsmith: Can he assure New Zealanders that he’ll keep a substantial part of the $20 billion spare from the COVID fund as a contingency in the case of a later outbreak?

Hon GRANT ROBERTSON: I, in fact, talked exactly about that when I announced it on Budget day.

Hon Paul Goldsmith: How long is he planning to keep up his average of announcing $200 million of new spending a day since the Budget, and how does he think New Zealand will pay for it?

Hon GRANT ROBERTSON: I would have to go back and look at the figures that the member has just put forward there. What we have done throughout the last 2½ months or so is what New Zealanders wanted us to do, which is cushioned the blow of this virus on both our economy and our society, and we will keep doing that.

On Wednesday:

Govt boosts innovation, R&D for economic rebuild

New Zealand’s entrepreneurs, innovators and crown researchers will benefit from a $401.3 million funding boost through Budget 2020 and the COVID Response and Recovery Fund to help deliver jobs and a stronger economy in a post-COVID world, Research, Science and Innovation Minister Dr Megan Woods said.

Free period products in schools to combat poverty

During term 3, the Ministry of Education will begin providing free period products to schools following the Government’s $2.6 million investment. The roll-out will begin at 15 Waikato schools and be expanded to all state and state-integrated schools on an opt-in basis in 2021.

“Our plan to halve child poverty in 10 years is making a difference but there is more to do and with families hit hard by the COVID-19 global pandemic, it’s important to increase that support in the areas it can make an immediate difference.

Free period products to schools seems like a worthwhile initiative but it has been campaigned for by the Greens for some time and it seems very loosely connected to Covid.

Thursday:

An iconic New Zealand tourism attraction and the country’s 31 Regional Tourism Organisations are the first recipients of support from the $400 million Tourism Sector Recovery Plan, to help position the sector for recovery from COVID-19, Tourism Minister Kelvin Davis announced today.

Sport and Recreation Minister Grant Robertson has welcomed the first release of funds from the $265 million Sport Recovery Package announced as part of Budget 2020.

It will be difficult for Goldsmith and the Opposition to pin specific spending more on electioneering than being necessary, but the COVID Response and Recovery Fund decisions should be scrutinised.

Questions on “safe economic activity” at lowered Covid-19 alert levels

Questions were asked at today’s Epidemic Response Committee about what different alert levels will mean to businesses wanting to restart. There seems to be a focus on “what constitutes safe economic activity”.

From Stuff Live:

Simon Bridges probing the “levels” in relation to the economy. Treasury’s modeling shows the lower the level, the better the economy. He said businesses are telling him they want to go to level 2. “Level 3 is a bit of a no man’s land”.

Grant Robertson is saying the detail of the lockdown coming this week will give business some clear guidance of what’s permitted. He’s saying it will show us “what constitutes safe economic activity”.

“I don’t share your view around level 3,” Robertson says level 3 will allow us to increase economic activity.

He says he’s been working with the construction sector to work out what safe economic activity looks like.

Robertson is saying the enthusiasm for coming out of lockdown early can actually mean yo-yo-ing between levels, which isn’t good for economic activity either.

Paul Goldsmith asking about “what sort of pragmatism” will be brought to the health regulations that will determine how businesses work under levels 2 and 3.

Robertson said work is underway on those issues, so there would be real clarity.

Contact tracing will be important too. “Knowing who is in your workplace, knowing where they are and what they’re doing”. This will help us manage flare ups as they come.

Responding to Marama Davidson, “the best economic response is a strong public health response”.

Sounds like a patsy.

University of Otago epidemiologist, Professor David Skegg, said countries that had not succeeded in controlling this disease, their economies were not going to flourish.

“I’m not an economist, but I would be very surprised if we’re going to do worse economically because of the measures we’re taking in the medium term.”

He stressed that the country should get to level 2.

“We need some careful planning this week on what level 3 or level 3.5 would look like.

“It’s not just a health issue and it’s not just an economic issue,” Skegg said.

From RNZ Live:

Simon Bridges said level 3 was akin to no man’s land with the downsides of level 4.

Finance Minister Grant Robertson said when deciding on moving to level 2 and 3, his focus was on “what constitutes safe economic activity?”

“Level 4 is doing exactly what we wanted it to do for New Zealand and New Zealanders. The last thing we want is to come out level 4 and create a situation where we have to yo-yo between levels.”

Meanwhile, Paul Goldsmith said businesses needed clarity on returning to work and how social distancing would look like in the working environment.

“There’s a shared desire among industry workers, government to get people back to work as soon as possible. Health and safety is a very important part of the workplace,” Robertson said.

“The best economic response is a strong public health response and that has to be underpinned by an investment in our health system.”

Stuff:

Michael Woodhouse asking whether the “principles approach” is sector based or risk based.

The question is really whether or not the businesses that open will be determined by the kind of business they are (for example cafes) or the kind of measures that are put in place by any business, so cafes that follow those guidelines could reopen, whereas the one’s that don’t implement the guidelines don’t reopen.

Robertson said it will be mainly the latter (so not sector-based) BUT you can’t completely detach sectors from the guidelines.

Bridges asking whether level 3 is therefore significantly more permissive than level 4.

No response given.

Robertson saying that in the case of the media, “the patient had pre-existing conditions”.

Media just about had comorbidity.

 

 

 

The job of Opposition Leader and “the difference between responsible and political”

The job of Opposition in a democracy such as ours is important, it is a way of holding the Government to account (along with the media who generally do this).

To do Opposition well a good balance needs to be found between criticising the Government and highlighting failings, but not being seen as petty politics or a constant whine of negativity.

The current Leader of the Opposition, Simon Bridges, has had two problems. He has been seen by many to be too negative too often, and his method of delivery either annoys people or turns them off, making his overdoing of negative attacks sound worse. He has been widely criticised, including by what looks like a majority of commenters on the right tending National linked Kiwiblog.

In times of crisis there is some expectation that opposition parties and MPs will put the good of the country before their own re-election ambitions, so the balance should shift towards more cooperation and less nagging and niggling.

Bridges’ speech in response to the Government economic package announcement on Tuesday was widely criticised as negative, petty, tone deaf and inappropriate in the circumstances (although some National supporters praised it). His speech:

A speech by National’s spokesperson on finance, Paul Goldsmith, was praised for a better tone (he said many of the same things), and for praising good aspects of the package while including reasonable criticisms. His speech:

The argument between Opposition negativity versus cooperation flared up in Parliament yesterday between Jacinda Ardern and Bridges.

Question No. 1—Prime Minister

1. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government’s statements and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Yes, especially the package that was announced yesterday by this Government in response to the global pandemic of COVID-19, including the $12.1 billion package that is split between business certainty and continuity—making sure that consumers have enough money in their back pocket to keep the economy going but also that we look after older citizens; and, obviously, the half-billion – dollar investment directly into health to support the response to COVID-19.

Hon Simon Bridges: Does she still stand by her statement in the House yesterday that nobody displaying symptoms has been denied a COVID-19 test when Director-General of Health, Ashley Bloomfield, stated in the media yesterday that “There needs to be a reason why people are tested for COVID-19. This means along with symptoms of COVID-19 they should have either a history of travel or close contact with a possible case.”?

Rt Hon JACINDA ARDERN: Both the Director-General of Health and myself stand by the case definition for testing of COVID-19, which is exactly both as the director-general described and also as I described yesterday, which adds the ability for a clinician to make that decision. I want to say this again very seriously to the member on the other side of the House: this is a time where New Zealanders need to know that this House—

Hon Simon Bridges: Don’t give me a lecture. I’m doing my job in the interests of New Zealand.

Rt Hon JACINDA ARDERN: —is united. We are politicians, and it is not for us to determine—

Hon Grant Robertson: They don’t think you’re doing your job.

SPEAKER: Order! Order!

Rt Hon JACINDA ARDERN: —when people are tested. It is for doctors to.

SPEAKER: Order! I apologise for interrupting the Prime Minister, but the Minister of Finance should not engage, and I understand that the Leader of the Opposition and a couple of the members were also interjecting. But in his engagement, his volume was coming through the Prime Minister’s mike, and, frankly, it is a matter better not discussed in this House during this serious time.

Hon Simon Bridges: Does she accept that GPs have received the clear message from Ashley Bloomfield to stick to the case definition for testing symptoms with a history of travel or close contact with a case, given the letter he sent to all GPs on Sunday, which stated, “I ask you to continue to apply the case definition when considering who you should test, and to use testing supplies and personal protective equipment with prudence.”?

Rt Hon JACINDA ARDERN: I don’t think anyone would disagree with giving advice that applies some criteria to who is tested, because at a time like this, there will be people who have, for instance, cold symptoms that are unrelated to COVID-19 who simply won’t need a test. It is of course prudent that we allow clinicians—not politicians, not members of the public—to make that decision. My final point is that the best thing we can do is not create an environment where everyone who has a symptom that may be a cold or may be a flu believes they need to be tested for COVID-19. That is not responsible either. Yesterday, 620 tests were undertaken—620 tests. We are testing and, as you’ll see from those tests, those cases continue to be linked to overseas travel.

Hon Simon Bridges: In light of that answer, will she simply accept, then, that if it is simply symptoms and no other criteria as set out in the definition for testing, there will not be, automatically, testing in this country today?

Rt Hon JACINDA ARDERN: There has never been a situation where every single people who asks for a test would receive one, and nor would that be a responsible response. That is not what countries anywhere in the world are doing. That is not the way the World Health Organization is asking countries to respond, and nor should it be the way we are. I am listening to experts, clinicians, and doctors. I ask the member to do the same.

Hon Simon Bridges: Isn’t it quite clear from both her answers and Ashley Bloomfield’s that we have a rationing of testing in New Zealand?

Rt Hon JACINDA ARDERN: No.

Rt Hon Winston Peters: Can I ask the Prime Minister: has there been universal support from the professional medical fraternity with respect to Ashley Bloomfield and the Prime Minister’s criterion on this matter?

Rt Hon JACINDA ARDERN: I’ve read some of the writing on this by experts in the field, and there is absolute agreement with the approach that is being taken. I again want—

Hon Members: It’s the Prime Minister’s criteria.

Rt Hon JACINDA ARDERN: That is an outrageous suggestion. I again want to make clear to the other side of the House: this is a national issue. There is no politics in testing; there should only be expert clinician advice. I ask the member again: if you would like to receive a briefing on this, I am happy to provide it, but the member is becoming borderline irresponsible.

Hon Simon Bridges: In light of that last answer, what does she say to the half a dozen doctors who have contacted me by email and other means in the last 24 hours to express their frustration, given the difference between what she’s saying in this House and what Ashley Bloomfield and the Ministry of Health are quite clearly directing?

Rt Hon JACINDA ARDERN: Again, I ask the member to read for himself the case definition I advised in this House yesterday. Whilst, yes, it does set out specific circumstances, it then makes a note: given the changing global environment, if the clinician believes that they should be testing, then they are able to. But what we do not want to do for doctors is create a pressure environment where every person demands a test, regardless of whether or not there’s any likelihood of their symptoms even being COVID-19, when there isn’t a need for one.

Hon Simon Bridges: Are media reports correct that until Monday, there had been an average of just 11 COVID-19 tests conducted a day?

Rt Hon JACINDA ARDERN: I’ll do the same that I did with the journalist who asked that question: that was, I believe, an inaccurate way to display what’s happening with our testing. As you would expect, when New Zealand had no cases, there weren’t many tests. Over time, they have increased. We had 620 tests processed in one day yesterday.

Hon Simon Bridges: Isn’t the reality that it’s not that there weren’t any cases; it’s simply that there wasn’t much, if any, testing?

Rt Hon JACINDA ARDERN: I think the member will find that when there are no cases, it’s hard to spread, and therefore there is no rational reason to be testing everybody. Again, I ask the member not to listen to me if he does not choose to but listen to the experts.

Hon Simon Bridges: What does she say to the 76-year-old Wellingtonian woman who got off a cruise ship and had symptoms but wasn’t tested this week because the GP said, “We’ve been told not to test unless we absolutely have to.”?

Rt Hon JACINDA ARDERN: She would’ve fallen within the criteria. Obviously, the doctor believed that there weren’t symptoms there that meant that they should. I am not going to second-guess a doctor, because that person would have fit within the case profile. Again, my final plea is to the member: think about the audience he is speaking to right now. This doesn’t have to be political.

Hon Simon Bridges: Does she accept that it is my constitutional duty to ask her questions and try and get answers on the most significant issue this country has faced in many, many years?

Rt Hon JACINDA ARDERN: I have been in that seat and I know the difference between responsible and political. [Interruption]

SPEAKER: Order! Order! It ill behoves the Leader of the Opposition to react. As I’ve warned the Minister of Finance earlier, sometimes people have to take a deep breath when people are winding them up.

Government and National may cooperate on Covid-19 economic response

Much of what makes the news from Parliament is combative, controversial or the worst of MP behaviour. Here’s an example of how speeches (by Grant Robertson and Paul Goldsmith) can be reasoned and reasonable, with offers of cooperation between the Government and the National opposition.

It’s good to see and important that they actually follow through with their cooperation on dealing with Covid-19.

MINISTERIAL STATEMENTS

COVID-19—Government’s Response to Economic Effects

Hon GRANT ROBERTSON (Minister of Finance):

I wish to make a ministerial statement on the Government’s response to the economic effects of COVID-19. While there is much uncertainty about the COVID-19 outbreak, it is clear that it is going to impact the world economy, and therefore New Zealand’s economy, for much of 2020. As we know from events like the global financial crisis, New Zealand is not immune to economic shocks that occur offshore and that are beyond our control, but what we can do, alongside our public health response, is to support confidence with a plan to address domestic economic impacts.

Our first responsibility as a Government is the health and wellbeing of our citizens; that is why our response continues to be led by our public health response. This strong public health response will also ultimately be critical to ensuring our economy and our people come through this outbreak in good shape. We have committed to providing the necessary resources to support our health system to protect New Zealanders’ health and wellbeing.

From an economic perspective, the Government has already made a number of immediate interventions, including support for the tourism and seafood industries, funding to increase regional business support programmes, and directing Government departments to pay businesses faster to support cash flow. Inland Revenue and the Ministry of Social Development (MSD) are supporting businesses and workers on issues like provisional tax readjustments, late payment and filing fees, wage instalment plans, and income support.

MSD’s rapid response teams are in place in regions like Tai Rāwhiti, and we have removed the stand-down period. I met yesterday with the chief executives of New Zealand’s major banks, who told me that they are well-prepared, both in terms of their own operations and in their ability to work with their customers, to get through this. The options they highlighted for customers are reducing or suspending principal payments on loans and temporarily moving to interest-only repayments, helping with restructuring business loans, consolidating loans to help make repayments more manageable, providing access to short-term funding, and referring individual customers to budgeting services. I strongly encourage businesses and banks to talk now and make a plan to get through this challenging situation.

Yesterday, the Government signalled its further steps as the impacts spread across the economy. Decisions on these measures need to balance the risks of poorly targeted spending and moving in time to support affected firms and individuals when they need it. Our business continuity package includes a targeted wage subsidy scheme for workers in the most adversely affected sectors, training and redeployment options for affected employees, and working with banks on the potential for future working capital support for companies that face temporary credit constraints. We will not be able to provide a wage subsidy for all affected firms during the duration of COVID-19. It will have to be temporary. It will also have to be tailor-made. We want to target the subsidies to those who are most affected and least able to adjust. Further details of this package will be announced next week.

These initiatives do not stop us from providing other forms of assistance to people and firms, but they are a sensible place to begin. We have also directed officials to develop longer-term macroeconomic measures that may be required to support the economy, businesses, and workers if there is a major, sustained global downturn. I reiterate that while we are planning for that situation, we are not predicting it, but planning for it is the responsible thing to do.

I want to be clear that this situation is very different to other challenges the New Zealand economy has faced in the past decade. The Canterbury and Kaikōura earthquakes were events that impacted defined areas, where it was clear which businesses were affected, why, and how. With COVID-19, which is an evolving, global health crisis, we are seeing different businesses in the same industries and in the same regions impacted differently. That is why a tailor-made response is required.

The global financial crisis was caused by the concerns about what financial institutions like banks were experiencing, but that’s not what is happening here. We have a very sound and stable banking system and a sound underlying economy. We have been running surpluses. Our net debt position, at 19.5 percent of GDP, is well below what we inherited and well below other countries. We are already ahead of the curve with the $12 billion New Zealand Upgrade Programme, which is supporting the economy.

This is a global problem that New Zealand is well positioned to deal with, and because this Government has the interests of all New Zealanders at heart, if we all work together—Government, businesses, and workers—we will get through this.

Hon PAUL GOLDSMITH (National):

Video “available shortly”

Thank you, Mr Speaker. The National Party shares the Government’s concern about the economic consequences of the COVID-19 outbreak. Already, these have been significant for the businesses affected. People have lost their jobs, they’ve had their hours reduced, they’ve lost income, and they’ve closed their restaurants without knowing when they’ll open again. Some struggling businesses will fall over, and there’s no longer a sense that the impact will be short and sharp, but only a question of how damaging it will be, and we have seen today that the latest business confidence figures are at their lowest levels since 2009.

We support the initiatives announced so far. We support the tourism and seafood industries, and faster payments from Government departments. We support the efforts of IRD and the Ministry of Social Development to help with provisional tax adjustments and late payments, we agree that businesses in distress should be talking with their banks, and we acknowledge that the Government is putting together its business continuity package, including a targeted wage subsidy scheme for workers in the most adversely affected areas and industries. We were disappointed that the details weren’t available yesterday. This has been going on for several weeks now, and it’s our belief more urgency is required. Yes, it’s complicated, and, yes, the boundaries have to be clearly defined, but we worry that the window to save jobs may be beginning to close.

We also ask the Government to reconsider its plan to lift the minimum wage again on 1 April. The Government announced several very substantial increases to the minimum wage back in 2017, when the economy was growing strongly—a 27 percent increase over three years. The situation has changed dramatically since then in the past few months. The April change will mean the minimum wage has lifted 20 percent in two years.

It doesn’t make sense to be proposing relief to businesses at the same time as significantly adding to their costs. Saving jobs should be the focus. The economic challenge before us is serious. The Government needs to shift its mind-set from adding costs to business to taking pressure off small and medium sized enterprises so that they can survive and continue to employ New Zealanders. So I urge the Minister to reconsider and postpone the 1 April rise for six months while we assess the situation. Nobody knows how widespread and deep the international slow-down will be. We need to hope for the best but prepare for the worst.

Thanks to the discipline of successive Governments, the country has relatively low debt and the ability to provide stimulus if required. The ability to borrow, however, should not stop the Minister from taking a hard look at wasteful spending, such as with elements of the Provincial Growth Fund. Some of the money would be far better used in a business continuity package than it is being used now.

We also need to recognise the longer-term economic challenges haven’t gone away. The Minister is wrong when he says that New Zealand entered this crisis with strong momentum. That’s not correct. The latest estimate from the Reserve Bank is that New Zealand grew at 1.6 percent in 2019. So a clear, coherent growth plan is outlined. We believe it should include tax relief, a substantial infrastructure plan that is delivered, relief for small businesses, regulatory reduction such as we outlined yesterday, and policies focused on putting more money in the hands of New Zealand families.

Finally, we thank the Minister for his offer of briefings from Treasury, and we undertake to work constructively to suggest ways forward as we confront this economic challenge together.

Hon GRANT ROBERTSON (Minister of Finance):

I thank the member the Hon Paul Goldsmith for that contribution—in particular his offer to work together. I’m sure he’ll appreciate the briefing that he’s getting—I think this afternoon—from Treasury.

Three quick points in response. The first of those is that this package and the work we have been doing has all been undertaken in consultation with the business community and, indeed, with the union movement. It is important that we continue to work with them. They are the people who are telling us that this package needs to be targeted and needs to ensure that it reaches the people who need it.

I also note in that regard, with reference to the member’s comment about the minimum wage, that is precisely the across-the-board, sweeping, knee-jerk reaction that is not useful at this point. What is useful at this point is ensuring that support gets to businesses who need it via a targeted approach while also ensuring that our lowest income New Zealanders get a fair go. We know that those on the minimum wage tend to spend the increases that they get because that is the nature of being on a low income, and we continue to support those New Zealanders to be able to move forward in that way.

Thirdly, I just want to make reference to the member’s comment about the timeliness of this package. All countries around the world are grappling with an evolving situation. He will not be able to find countries other than those directly in the eye of the storm who have taken actions beyond what this Government has done. In fact, this Government is well ahead of the curve, in part because of a fully funded infrastructure package that we announced at the end of January. The New Zealand Government has ensured that we are in a good position to deal with what is a serious situation, and we will continue to take a measured and active approach.