Pointless points of order

The Opposition risks losing credibility and effectiveness in Question Time by raising far too many pointless Points of Order. Not just barking at every car, but also barking at cars that don’t exists, are making a mess of the best opportunity for the Opposition to hold the Government to account in Parliament.

In Thursday’s Question Time Michael Woodhouse was first in Q1. Then in Q3:

Hon Paula Bennett: I raise a point of order, Mr Speaker. Just on behalf of the Opposition, we just understand that they’ve had a bad week and they need to encourage themselves today with a bit of a handclap.

Mr SPEAKER: And Paula Bennett, that was not a point of order, and seeing we’re in question time, the National Party will lose two supplementary questions.

It didn’t end there:

Hon Steven Joyce: I raise a point of order, Mr Speaker. In the answer to the previous supplementary question, the Minister himself raised these matters and—

Mr SPEAKER: Yes, and the fact that one member breaches the Standing Orders and I didn’t intervene is not a reason for someone else.

Hon Steven Joyce: I raise a point of order, Mr Speaker.

Mr SPEAKER: The member’s not going to—especially after the ruling that I’ve just given—dispute what I’m going to say.

Hon Steven Joyce: I just want to clarify if I could—

Mr SPEAKER: No, no.

Hon Steven Joyce: —in a general sense, if I could, Mr Speaker.

Mr SPEAKER: No, the member can’t. I want to make absolutely clear that there is no such thing and no ability in our Standing Orders to have a point of clarification, or to do the sort of interrogation that I believe the member was going to start, as to what the Standing Orders are. When I have ruled, that is the end of the matter.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Are you now ruling that if a Minister introduces some new material into an answer, that cannot be used in a subsequent supplementary?

Mr SPEAKER: I want to apologise to the House for not stopping the Minister earlier and ruling it out. I should’ve; I didn’t, and I am ruling that irrelevant material introduced in either a supplementary question or in an answer does not give licence for further extension of things that are outside the relevance question for that question.

Rt Hon Winston Peters: Is it his view and position that the coalition Government came to the view that an expanded, visionary, forward-looking economic programme was far more likely to deliver justice to the people of this country, rather than voting for something because there’s nothing else on offer?

Hon GRANT ROBERTSON: Yes, I do. I mean—

Hon Steven Joyce: I raise a point of order, Mr Speaker. Mr Peters has just raised the election campaign and voting again, which is the very thing you ruled out in my supplementary question.

Mr SPEAKER: No, no, he actually referred to the, the substance of his question was around the policy of the coalition Government.

This all detracted from a question originally aimed at making an important point about the scrapping of tax cuts.

Q5 – point of order from Judith Collins.

Q6 – two from Simon Bridges, one from Nathan Guy. Plus:

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. We’ve only got a limited time for questions in this House. [Interruption] Sir, can I be heard in silence. It’s a point of order.

Mr SPEAKER: Absolutely, because all points of order are to be heard in silence.

Rt Hon Winston Peters: Thank you very much, Mr Speaker. We’ve only got a limited time for questions in this House, and affording someone in this time to think up what he wants to ask next is not part of the procedure of this House.

Mr SPEAKER: My view is that there are a number of members who take a little time either preparing in their minds or getting the questions out. Frankly, I’d rather have thought-out questions than many of them that we get.

Q8 Points of Order:

  • Carmel Sepuloni – 1
  • Simon Bridges – 3
  • Gerry Brownlee – 3
  • Winston Peters – 1

Q9 Points of Order:

  • Brett Hudson – 2
  • Gerry Brownlee – 2
  • Nikki Kaye – 1
  • Chris Hipkins – 1

Q11 Points of Order:

  • Nick Smith – 4
  • Simon Bridges – 1
  • Gerry Brownlee – 1

Hon Simon Bridges: I raise a point of order, Mr Speaker. I just want to raise the point of order—it’s highly unusual. The member’s calling for it, so we haven’t moved on. I’m just—I’m clearly seeking to understand what’s gone on here.

Mr SPEAKER: Yes, and to make it absolutely clear, the number of supplementary questions are entirely at my discretion. I have decided, because of the interjection from Dr Smith, I will not allow any further Government or Opposition supplementaries on this question. I’m not taking away—if the members want to use them on the next question, they can, but not on this one, because of Dr Smith’s behaviour.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I think there are some very important questions that should be asked in this. I’m sorry that you’ve taken this. One of the new pieces of information that the Minister managed to give the House was the new collaborative way that the Government wants to work with all sectors, to see if they can meet the target, and I think it would have been appropriate if there had been an opportunity to ask him if he’ll put out a list of suitable species for home gardeners to put on their list of tree plantings to help the Government with their target.

Mr SPEAKER: Sorry; as a result of that frivolous point of order, another one of the supplementary questions for the National Party has been lost.

Hon Dr Nick Smith: I raise a point of order, Mr Speaker. It’s a very reasonable request. When the Government’s most important flagship programme is around these billion trees—

Mr SPEAKER: No, Dr Nick Smith will resume his seat. He will resume his seat now. I have ruled that we are moving on to question 12 because of an inappropriate interjection by Dr Nick Smith when he had been called for a supplementary. If Dr Nick Smith intervenes again, on that question, it will result in further loss of supplementary questions to the National Party.

Hon Dr Nick Smith: I raise a point of order, Mr Speaker. What was the comment that I made, that, as a consequence, has—

Mr SPEAKER: The member will resume his seat.

Q12 Points of Order:

  • Steven Joyce – 3
  • Simon Bridges – 6
  • Parmjeet Parmar – 1

Some of the Points of Order were reasonable, but many were frivolous or seemed pointless – in other words, a waste of time and an unnecessary and counter productive diversion.

Question Time concluded with:

Hon Steven Joyce: I raise a point of order, Mr Speaker. Again, I was listening very carefully to that answer—before the gratuitous bit—and I’m sorry, but in a previous supplementary the Minister has been asked, “What proportion will be the Government—

Mr SPEAKER: The member will resume his seat. I’ve ruled that it’s been addressed. In fact, I’ve stopped her for over-addressing it.

Hon Member: Supplementary question?

Mr SPEAKER: No, the National Party has run out of supplementary questions.

Trevor Mallard is making a real effort to allow an effective Question Time. The Opposition are running a real risk of blowing it.

Politics 101 – pick your battles wisely, and make sure they are battles you have a good chance of winning.

Now a $20bn hole accusation

Steven Joyce’s accusation of a $11 billion ‘fiscal hole’ livened up campaign debate. he was widely criticised but didn’t back down.

Now the Government is reversing the hole blame.

RNZ: Govt accuses National of leaving $20bn hole

The government has accused National of leaving it with a $20 billion bill which has not specifically been included in future budgets.

Finance Minister Grant Robertson told Parliament this afternoon that National failed to put aside the money for its promised big ticket Defence Force upgrade.

“As one commentator has said, the National Government never accurately costed it and made no provision in any of its long-term forecasts to pay for it.

“This is far from providing certainty.”

Government officials are now reviewing the programme to look for better value for money, he said.

“This is the responsible thing to do given the mess left by the previous government,” Mr Robertson said.

Robertson seems to be preparing the ground for either a cut back to spending on the Defence Force upgrade, or justifying larger than promised spending and deficits. Or both.

But his predecessor Steven Joyce denied National had left behind a fiscal hole.

He said the $20 billion of promised spending stretched over 15 years and could be paid for out of nearly $110 billion of unallocated capital funding over that same time period.

“There’s plenty of room in the long term forecasts.”

Mr Joyce said it was a desperate ploy to divert attention from Mr Robertson’s plan to ramp up debt.

“I think the Labour Party might be tilting at windmills to suggest this somehow leaves a fiscal hole.”

Expect this fiscal punching and counter punching to continue, but the crunch will come when Robertson presents his first budget next year. Then we should see the actual fiscal situation as affected by new Government policies and spending, for the short term at least

Did Steven Joyce fail economic papers?

I’ve often seen it claimed that Steven Joyce failed economic papers. This came up again on Twitter on Monday:

This circulated on Facebook:

A version of the meme which claims to show Steven Joyce's university transcript from the 1980s. Image/Facebook

The claims seem to have become somewhat embellished. He got a fail mark in one, and did not complete or withdrew from seven economic papers.

Joyce in a 2014 n interview with Victoria University’s student magazine Salient:

“I went to Massey University, from 1981 to 1985 in Palmerston North. I did a vet intermediate and didn’t quite make the cut for vet school so I did a zoology degree for two years,” he told the magazine.

“In the first three years I passed all my papers, I was very excited. And then I started in student radio. In my fourth year I was doing economics papers. I sat six and passed three.

“In my fifth year I enrolled for three and passed none. By that time I was fully into radio.”

That doesn’t quite match the student record – which is incomplete, it doesn’t show results from 1981 to 1983.

It was also was checked out by NZ Herald in September: Finance Minister Steven Joyce confirms he dropped out of uni economics papers

The Herald put written questions to Joyce, including whether the grades affected his ability to be finance minister.

His press secretary replied only that “Minister Joyce started but then withdrew from those papers because he was starting his radio company”.

Joyce and several friends, including More FM’s Jeremy Corbett, started New Plymouth radio station Energy FM in 1987.

He went on to develop a commercial radio empire and made $6 million when it was sold to CanWest.

Further details from Wikipedia:

After leaving university Joyce and a group of friends (including radio presenter Jeremy Corbett) started their own radio station, Energy FM, in New Plymouth.[4][5] With business partners, he built up RadioWorks over the next seventeen years, both organically and by acquisition, to a network of 22 radio stations and 650 staff. He retired as Managing Director of RadioWorks in April 2001, when CanWest purchased it, Joyce receiving $6 million for the sale.[5]

After RadioWorks he joined the New Zealand National Party, working as their campaign manager in both the 2005 and the 2008 general elections. He also served as CEO of Jasons Travel Media for two years until 2008.

That kind of suggests a lack of economic papers did not prevent Joyce from substantial commercial success. He became a list MP in 2008 when John Key led National into Government.

How important are economic qualifications for Minister of Finance?

Grant Robertson (current Minister of Finance, became an MP in 2008):

Studied politics at Otago, graduating with a Bachelor of Arts with Honours in 1995. His involvement in the campaign against user-pays education led him to become President of the Otago University Students Association, and later Vice President and then Co-President of the New Zealand University Students Association.

After leaving university, Grant joined the Ministry of Foreign Affairs and Trade, and was also posted to the United Nations in New York. On his return to New Zealand he became an advisor to then-Minister of Environment Marian Hobbs, then to Prime Minister Helen Clark.

https://en.wikipedia.org/wiki/Grant_Robertson

Bill English (Became an MP in 1990, Minister of Finance 2008-2016):

…completed an honours degree in English literature at Victoria University of Wellington.

From 1987 to 1989, he worked in Wellington as a policy analyst for the New Zealand Treasury.

https://en.wikipedia.org/wiki/Bill_English

Michael Cullen (Became an MP in 1981, Minister if Finance 1999-2008):

…achieved an MA in history at Canterbury University. Receiving a Commonwealth Scholarshiphe then gained a PhD in social and economic history from the University of Edinburgh. From 1971 to 1981 he was a lecturer at Otago University, with a term as a Visiting Fellow at the Australian National University from 1975 to 1976.

https://en.wikipedia.org/wiki/Michael_Cullen_(politician)

Bill Birch (Became an MP in 1972, Minister of Finance 1993-1999):

He was trained as a surveyor, and established a business in Pukekohe, a small town south of Auckland.

https://en.wikipedia.org/wiki/Bill_Birch

Ruth Richardson (Became an MP in 1981, Minister of Finance 1990-1993):

Richardson gained a law degree with honours from the University of Canterbury. After graduating, she worked for the Department of Justice.

https://en.wikipedia.org/wiki/Ruth_Richardson

Roger Douglas (Became an MP in 1969, Minister of Finance 1984-1988):

He gained a degree in accountancy from the University of Auckland in 1957. Afterwards, he was hired by Bremworth Carpets in South Auckland as company secretary. He married and moved to Mangere in 1961, becoming President of the Manukau Labour Electorate Committee. He began to run the Bremworth division individually after the company’s sale to UEB in the mid-1960s.

https://en.wikipedia.org/wiki/Roger_Douglas

Robert Muldoon (Became an MP in 1960, Minister of Finance 1975-1984):

He left school at age 15, finding work at Fletcher Construction and then the Auckland Electric Power Board as an arrears clerk. He studied accountancy by correspondence.

Many Ministers don’t have relevant education for their portfolios. For example from the current Cabinet:

Kelvin Davis – Minister for Crown/Māori Relations, Corrections, and Tourism:

He obtained a Diploma of Teaching from Auckland College of Education (1985–1987) and taught at Koru School in Mangere (1988–1990), Bay of Islands Intermediate School in Kawakawa (1991–1993), before becoming principal of Karetu School (1994–1998). He then held employment with the Education Advisory Service (1998–1999) and the education improvement and development project Te Putahitanga Matauranga (2000). He was then principal of Kaitaia Intermediate School from 2001 to 2007.

https://en.wikipedia.org/wiki/Kelvin_Davis_(politician)

Phil Twyford – Minister for Housing and Urban Development and Transport:

After studying politics at Auckland University, Phil worked as a journalist and union organiser before becoming the founding Executive Director of Oxfam New Zealand. Phil’s strong belief in justice led to him becoming Oxfam’s Global Advocacy Director, based in Washington DC.

http://www.labour.org.nz/philtwyford

Dr David Clark – Minister of Health:

Clark undertook university study at the University of Otago and Eberhard Karls University, Tübingen. He completed degrees in German and theology before a PhD on the work of German/New Zealand refugee and existentialist thinker Helmut Herbert Hermann Rex.

Ordained in 1997, Clark is a Presbyterian minister.

https://en.wikipedia.org/wiki/David_Clark_(New_Zealand_politician)

Dr Megan Woods:

Worked as a Business Manager at Plant & Food Research. She holds a PhD in New Zealand History from the University of Canterbury.

http://www.labour.org.nz/meganwoods

Chris Hipkins:

Completed a Bachelor of Arts majoring in Politics and Criminology at Victoria University.

After completing his study, Chris worked in the industry training sector. Before becoming an MP he also worked at parliament, first as Senior Advisor to two Education Ministers and later in the office of the then Prime Minister Helen Clark.

http://www.labour.org.nz/chrishipkins

Prime Ministers appoint MPs to ministerial roles based on much more than their academic background.

“Literally failed eight economic papers” is either deliberate dirty politics or a lazy attack line, and is a factual failure.

There was nothing dramatic or controversial in Joyce’s only budget as Minister of Finance in 2017.

Fiscal fight continued

Steven Joyce continues to push Minister of Finance Grant Robertson on expected net debt in relation to Labour’s pre-election fiscal plan. Joyce had been widely criticised for suggesting their was an eleven billion dollar hole in the plan. Robertson was adamant Labour’s plan was sound and accused Joyce was scaremongering.

Yesterday from Stuff: Economists see Government debt rising billions more than Labour’s plan

In Opposition Labour laid out a fiscal plan which would borrow around $11 billion more than National had proposed, but still cut debt as a share of the total economic output from 24 per cent to 20 per cent by 2022.

The plan formed a major point of contention during the election campaign, as National finance spokesman Steven Joyce was widely mocked for his claim that Robertson’s plan had a major “fiscal hole”.

But bank economists, who monitor the likely issuance of government bonds, are warning of pressure for Treasury to borrow billions more than Labour had signalled because of new spending promises.

The fiscal situation continually changes, but there was always a likelihood that spending would increase due to coalition bargaining.

ANZ chief economist Cameron Bagrie

ANZ has forecast that Labour will borrow $13 billion more than Treasury’s pre-election fiscal update maintained the former Government would over the next four years, although around $3b of that would go to the NZ Super Fund. This would see net Crown debt at 23 per cent of gross domestic product, 3 percentage points higher than Labour’s plan.

Outgoing ANZ chief economist Cameron Bagrie said the estimates for new spending were “conservative”, including an assumption that the new $1b a year regional development fund would come entirely from existing budgets.

“[S]pending pressures are all headed one way – and a lot depends on the economy holding up.”

BNZ senior economist Craig Ebert

BNZ has also indicated it expects borrowing to be stronger than Labour had flagged. Strategist Jason Wong said the half year economic and fiscal update would probably show “in the order of” an additional $2b-$3b a year in bond issuance in the coming years.

BNZ senior economist Craig Ebert said the figures were hard to determine so early in the term, but borrowing “could amount to a number of billion dollars” more than Labour had outlined.

“Some of this is taking place in a little bit of a vacuum still, because we’ve heard a lot of policies but it’s still a little unclear which ones have been confirmed confirmed, as opposed to just strongly proposed,” Ebert said.

ASB chief economist Nick Tuffley

However ASB chief economist Nick Tuffley now forecasts that unemployment will eventually fall to 3.9 per cent by 2021, while wage growth would gradually rise to 2.8 per cent by early 2020, on the back of both lower migration and plans to hike the minimum wage to $20 an hour by 2021.

Tuffley said based on its forecasts, and the assumption that Labour was able to stick to its spending plans, ASB was forecasting borrowing would be $1b higher than Robertson had signalled.

“Any slippage in [spending plans] will mean more debt issuance,” Tuffley said.

Joyce questioned Robertson about that in in Question Time yesterday, joining a patsy (question 1):

Tamati Coffey: What objective does the Minister have for core Crown net debt?

Hon GRANT ROBERTSON: As indicated during the Speech from the Throne, the Government is committed to reducing net debt to 20 percent of GDP within five years. Progress towards this will be set out by the Government during the usual Budget reporting cycle to the House, starting with the Half Year Economic and Fiscal Update, before Christmas.

Hon Steven Joyce: Has he seen amongst those reports the economic forecast from ANZ chief economist, Cameron Bagrie, who calculates that the Minister , in fact, won’t be able to meet his own Budget responsibility rule No. 2, to keep net debt below 20 percent of GDP, even with some rather heroic spending assumptions?

Hon GRANT ROBERTSON: I have seen those reports and I disagree with them.

Then in question 3:

Transcript (slightly edited):


3. Hon STEVEN JOYCE (National) to the Minister of Finance: Can he confirm core Crown net debt was $59.5 billion at 30 June 2017, and that it is his intention as Minister of Finance to increase net debt to $67.6 billion by 2022, as laid out in Labour’s pre-election fiscal plan?

Hon GRANT ROBERTSON (Minister of Finance): I can confirm that at 30 June 2017 net core Crown debt was $59.48 billion. I can further confirm that it is this Government’s policy to reduce net core Crown debt to 20 percent of GDP within five years. As the member knows, the exact dollar amount of debt in each year will be determined by the Budget process.

Hon Steven Joyce: I raise a point of order, Mr Speaker. That was a question written down on notice, and I don’t believe the Minister of Finance answered the second part of the question. He talked about something about 20 percent of GDP, but he didn’t actually answer yes or no to whether it was his intention to increase net debt to $67.6 billion by 2022.

Hon GRANT ROBERTSON: Speaking to the point of order, I’m not sure if the member heard the last part of my answer, where I did specifically address the question of what the exact dollar amount might be.

Hon Steven Joyce: He didn’t answer the question. Nobody is any the wiser as to whether, actually, he will allow net debt to get to $67.6 billion by 2022, as laid out in Labour’s pre-election fiscal plan.

Mr SPEAKER: Well, Speakers’ rulings are pretty clear in this area. I think somewhere around page 171 is the ruling that members cannot demand a yes/no answer, and I’m just about confident enough that the former Minister of Finance understands that these figures might be affected by growth figures.

Hon Steven Joyce: Sorry to prolong things, Mr Speaker, but actually it is possible to say whether it will be higher or lower or about that figure. It is a question on notice—it’s not a supplementary question—and I do think that the Minister of Finance could be a bit more specific as to that number, given that prior to a certain date in September he was actually accusing people of showing an affront to democracy for—

Mr SPEAKER: OK—[Interruption] All right, OK. I think where I’m going to leave it is that I might be slightly more liberal, as long as they are direct, on the supplementaries, if the member wants to drill down that way.

Hon Steven Joyce: Can the finance Minister confirm that the pre-election fiscal update forecasts net debt to reduce to $56.2 billion by 2022, meaning that his forecast of $67.6 billion is over $11 billion higher than in the pre-election fiscal update?

Hon GRANT ROBERTSON: I can confirm that those were the numbers in the pre-election fiscal update. What we have discovered is that those numbers did not take account of the need for increased spending in education capital expenditure, health capital expenditure, or a range of other areas.

Hon Steven Joyce: Is the Minister then saying that, actually, he expects to increase debt significantly higher than $67.6 billion because of his concerns about the matters he raised in the previous answer?

Hon GRANT ROBERTSON: The commitment of this Government has been that we will reduce net core Crown debt to 20 percent of GDP. The member well knows, from having prepared a Budget himself and being beside someone else who’s prepared Budgets, that the exact dollar figures for debt are never decided until later in the Budget process.

Hon Steven Joyce: Why doesn’t he agree with the ANZ analysis of 7 November that concludes net debt will be billions of dollars higher than he has forecast, and that he will breach his own Budget responsibility rule number 2 to reduce net debt to 20 percent of GDP within five years, particularly as he’s just told the House—

Mr SPEAKER: Order! The member’s finished his question.

Hon GRANT ROBERTSON: Because nothing that I have seen, in terms of the advice I’ve got to this point, would point to that, and because this Government is committed to reducing debt as a percentage of GDP—20 percent—within five years of taking office.

Hon Steven Joyce: If he doesn’t like the ANZ’s commentary, does he agree with the comments from the Bank of New Zealand on Monday, who stated that Labour’s election campaign budget was just too tight to be credible; if not, what does he think the BNZ has got wrong?

Hon GRANT ROBERTSON: What this Government has committed to is a set of Budget responsibility rules, and we will work within those. We made commitments before the election to address the social deficits in health, in education, and in infrastructure, and we will do that. I make no apology for having a slower debt track than that Government if it means that we build affordable houses, contribute to superannuation, and invest in our regions.

Hon Steven Joyce: Just to be clear, does he commit to meeting all the Government’s promises, including those in his coalition agreement and his agreement for confidence and supply with the Green Party, and also the Speech from the Throne, while increasing net debt by only $11 billion, from what it was going to be, over the next five years?

Hon GRANT ROBERTSON: I absolutely stand by those Government commitments and the Budget responsibility rules that we have put forward.

Hon Steven Joyce: Does he commit to meeting all the Government’s promises, including those in those coalition agreements from the Speech from the Throne, not in relation to a percentage of GDP but by increasing net debt by no more than $11 billion relative to the pre-election fiscal update over the next five years? A very specific question.

Hon GRANT ROBERTSON: The final exact dollar figures, as the member well knows from the Budgets he’s been involved in, will be decided later in the Budget process, but we remain 100 percent committed to our goal of reducing net debt to 20 percent of GDP within five years.


No doubt there will be continuing questioning on Government spending and deficits.

Minister of Finance refuses to commit to campaign promises

In the first Question Time (Oral Questions) in the new Parliament the Minister of Finance Grant Robertson was asked repeatedly whether he would stand by his fiscal statement made prior to the election. Robertson repeatedly refused.

Crown Expenses—Fiscal Plan

3. Hon STEVEN JOYCE (National) to the Minister of Finance: Can he confirm it is his intention as Minister of Finance to ensure core Crown expenses do not exceed $81.9 billion in 2017/18, $86.1 billion in 2018/19, $88.2 billion in 2019/20, $91.8 billion in 2020/21, and $96.1 billion in 2021/22, as specified in the Labour Party’s pre-election Fiscal Plan?

Hon GRANT ROBERTSON (Minister of Finance): I can confirm that it is my intention for core Crown expenditure as a percentage of GDP to be within the recent historical range. As to the exact figures in the member’s question, I cannot confirm those as, of course, they are subject to detailed Budget decisions and revenue forecasts that are yet to be finalised.

Hon Steven Joyce: Can he confirm that he stands by his statement from 4 September this year, and I quote, “Labour’s Fiscal Plan is robust, the numbers are correct and we stand by them”?

Hon GRANT ROBERTSON: I can confirm that the Budget that this Government is putting together will be robust and it will deliver on a commitment that this Government has made to ensure that all New Zealanders share in prosperity.

Michael Wood: What else, in addition to managing core Crown expenditure, will guide the Government’s approach to responsible fiscal management?

Hon GRANT ROBERTSON: The Government will observe the Budget responsibility rules as indicated in the Speech from the Throne: namely, delivering a sustainable operating balance before gains and losses; reducing net core Crown debt to 20 percent of GDP within 5 years; and ensuring a fair and balanced progressive taxation system. We will also never forget that the purpose of a strong economy is to give every New Zealander the chance to share in prosperity, and we will never be satisfied while children live in poverty or families sleep in cars.

Hon Steven Joyce: Does he stand by his statement also on 4 September, and I quote, that “Our operating expenses are above the line and are clearly stated.”?

Hon GRANT ROBERTSON: The Budget that this Government will prepare will be clear about what we are spending and where the revenue for that is coming from.

Hon Steven Joyce: So that’s a no. Can I also ask: does he stand by his statement, and I quote, “We have quite clearly put in the spending requirements to meet the promises we have made. Our fiscal plan adds up. We are absolutely clear that we have the money to meet the commitments that we’ve made.”, also on 4 September?

Hon GRANT ROBERTSON: The Government will prepare a Budget that shows how we will pay for the important commitments that we have made to ensure that every New Zealander benefits from economic prosperity.

Hon Steven Joyce: Can the Minister of Finance then confirm that it is not his intention to necessarily ensure core Crown expenditure does not exceed $81.9 billion this current financial year, $86.1 billion in the next financial year, $88.2 billion in 2019-20, $91.8 billion in 2020-21, and $96.1 billion in 2021-22? Can he confirm that’s not his intention, even though it was specified in the Labour Party’s pre-election fiscal plan?

Hon GRANT ROBERTSON: I can confirm that we will keep Government expenditure as a percentage of GDP in line with the historical range.

Hon Steven Joyce: Can the finance Minister then confirm that he doesn’t at all stand by the numbers he presented in the Labour Party’s fiscal plan prior to the election?

Hon GRANT ROBERTSON: The Government is currently going through the usual process of putting together a Budget. We are absolutely confident that we will deliver a Budget that is in line with the Budget responsibility rules that were outlined in the Speech from the Throne and that will deliver to New Zealanders a fair share in prosperity. As I said in my primary answer, the final numbers are the subject of the normal Budget process.

Hon Steven Joyce: I’m sorry, Mr Speaker, but just to be clear, the Minister released a fiscal plan prior to the election—

Mr SPEAKER: Order! I will sit the member down now and ask him to ask a question. Speaker Hunt used to have an old saying that questions start with a question word, rather than something else.

Hon Simon Bridges: I raise a point of order, Mr Speaker.

Mr SPEAKER: No.

Hon Simon Bridges: It’s a fresh, genuine point of order.

Mr SPEAKER: Right.

Hon Simon Bridges: It’s simply this. The question was straight, really: whether he stood by the numbers they had pre-election. There really wasn’t any attempt to answer that specific question.

Hon Chris Hipkins: Point of order.

Mr SPEAKER: No, I’m not going to take any further comments on that. Both the asker of the question and I thought that there was a very clear response.

Hon Steven Joyce: Is he saying that the actual numbers written on the Labour Party’s fiscal plan prior to this election, which he and his colleagues defended vigorously during the election campaign, are no longer relevant? The comments he has made suggest that he will put whatever numbers he likes in front of the public in due course in the next Budget.

Hon GRANT ROBERTSON: I have been absolutely clear that the commitment that we have made is that Government expenditure as a percentage of GDP will remain in line with the long-run historical trend. Members on the other side of the House well know that we will now be looking at new revenue forecasts and, indeed, new growth forecasts. They will determine the exact numbers that are presented. But we are very clear on this side of the House: our number add up.

During the campaign Robertson had also been absolutely clear about commitments on expenditure and the robustness of Labour’s fiscal plan.

From PDF of Labour’s  fiscal plan (3MB).

LabourFiscalPlan

Obviously coalition agreements and changing fiscal situations can force changes on a Government.

But the Opposition has kicked off by establishing a clear separation between campaign promises and what the new Minister of Finance is prepared to commit to at the start of his tenure in charge of the country’s finances.

The new Opposition

National is beginning a stint in Opposition after nine years in government. This will take some adjusting as the powerful become relatively powerless. They will have a large 56 member caucus, so they could be a force in holding the new government to account, but if not managed well they could factionalise and fight for ascendancy in some sort of new order.

It will be important that they don’t go to negative, and pick their battles wisely, and execute them well – and fairly. A criticism of the outgoing Labour Opposition was their tendency to attack and whinge too much, with ‘barking at every passing car’ becoming a common observation.

Bill English has to adjust from being at the top of the power pyramid, for eight years as Minister of Finance and deputy PM topped by a year as Prime Minister, to battling for attention and relevancy.

English has probably suffered worse before, his disastrous attempt at leading National into the 2002 election. He should have learned lessons from that, both personally and for the party.

Competing leadership ambitions may or may not challenge the party. At this stage English says he has no intention of standing down, a wise choice in the interim at least.

He will be aware of the problems Labour had when Helen Clark announced her exit immediately on losing the election in 2008, and the subsequent floundering of the party for nearly nine years. Just three months ago it looked like Labour could be disintegrating, until Jacinda Ardern took over and dramatically turned things around.

There is no obvious leader-in-waiting in the National caucus.

Steven Joyce has never seemed to have ambitions for the top job (so far) and may be too connected to National’s recent electoral failure in the Northland by-election, and the knarly recent campaign that was probably rescued by English’s performance.

I doubt that the re-confirmed deputy Paula Bennett would be publicly popular enough to rise to the top. She may also find it difficult to fight against some rumours and some dirty sly attacks that have been fomenting mostly outside the public gaze.

I doubt that Judith Collins has anywhere near the caucus or public appeal to make a serious bid.

English may well stay on as leader through to the next election, but he will find it difficult competing if the new generation government led by Ardern is reasonably successful.

At some time, perhaps in about a year, or forced by panic closer to the election if polls go badly for National, someone new will rise to ascendancy and look a good bet. Simon Bridges and Nikki Kaye are mentioned as possibilities but neither look ready for it yet.

One danger is MPs who have been busy as Ministers now with time to foment other ambitions.

There’s no rush for National. I think English is experienced and sensible enough to see out the year and then ease National into Opposition next year, and see how things develop, both with the Government and within his own caucus and party.

It will take some time to see how well National manages it’s time in Opposition. Like the Government in this role they start with a fairly clean slate.

Joyce v Robertson finance debate tonight

Stuff are streaming a finance debate from 7:00 pm between Grant Robertson and Steven Joyce. This may be challenging for Robertson in particular after today’s tax u-turn.

Ok, I’m getting sick of it already, same old arguments flying to and fro.

Robertson has just interrupted Joyce about five times in a row stopping him from talking. Waste of time.

Joyce is still claiming there is a fiscal hole, but seems to have changed his slant somewhat.

Robertson ‘best case’, Joyce ‘worst case’

It looks like the fiscal hole issue will continue to get a hammering today. Patrick Smellie says that it is a conflict between best case and worst case scenarios, with reality likely to be somewhere in between.

It has highlighted more than a hint of desperation in the National campaign, which is being led by Steven Joyce, but also shows that Grant Robertson doesn’t have a lot of money to play with.

Pattrick Smellie: It’s arithmetic, stupid!

Election campaigns mixed with forecasts of the future are a dangerous combination.

Now that the dust is settling, a somewhat banal conclusion is emerging: they’re both wrong, and the truth is likely to be somewhere in the middle.

Labour’s numbers are nothing like as compromised or wrong as Joyce claimed, but it requires some heroic assumptions about Labour’s ability to control all spending outside health and education to believe the numbers it’s published.

In other words, Joyce has claimed a worst case scenario. Robertson is claiming best case.

On that basis, it’s entirely reasonable to split the difference in the interests of trying to explain what’s at stake here, and to conclude that Labour’s forecasts will turn out to be anything between $4b and $6b short of its published fiscal plan, should it form a government after September 23.

If Labour turns out to be a spendthrift government, then Joyce’s alleged $11.7b miscalculation could prove to be too little.

Alternatively, if Labour turns out to be an unexpectedly tight-fisted government in a time of endless forecast Budget surpluses, its spending under-estimation might be far less than my punt of a $4b to $6b shortfall.

However, it is hardly unreasonable to expect Labour to end up spending more than forecast to stop the ship of state from springing politically unpalatable leaks. Public sector wage pressure, demographic demands on other public services and even the small amounts of inflation still pulsing through the economy will severely test the fiscal track that Labour has outlined.

That’s still a long way short of what Joyce claimed, but a problem for Labour’s fiscal credibility nonetheless.

So it looks like Joyce has sacrificed his own economic credibility, deliberately or not, in order to put the spotlight on Labour’s money manipulations.

However, it’s also likely to be a problem that a returned National-led government would face. National has already pledged about $400 million a year of the $1.8b a year it has available for new initiatives in each of the next four years, and on Joyce’s own admission, health and education routinely take the “lion’s share” of those new spending buckets.

In other words, National has probably just about run out of extra money to spend too.

That’s only a real problem for national if they want to keep throwing around election bribes. If they had stuck to ‘steady as we go’ they would be on stronger ground, relatively.

If Joyce now comes out and concedes he over-egged Labour’s fiscal pudding he could reduce the damage on National, leaving the spotlight on Robertson’s fiscal tightrope.

But if Joyce quadruples down he may drag National down with him.

Here is Joyce explaining his claims on RNZ yesterday:

Looks like Joyce stuffed up

Steven Joyce versus Grant Robertson plus a number of economists.

Looks bad for Joyce, for national, and for Bill English.

And by continuing to claim there is a hole they have kept digging a credibility hole of their own.

Economists have pointed out that Labour have left themselves with little economic room to manoeuvre, but their numbers largely stack up.

Joyce has left himself with no easy way out of this. A backfire, big time.

Not only does this look bad for National, it helps boost Robertson’s and Labour’s economic credibility.

The $11.7 billion hole continued

For many of the arguments that support Labour’s fiscal plan and slam Steven Joyce’s attack on it see The Standard –  Steven Joyce’s comprehension fail.

I also have a comprehension fail – I have no idea who is right and who is wrong, but I suspect that both Joyce and Grant Robertson are fudging some numbers and descriptions.

Hamish Rutherford at Stuff:  Does Labour have an $11.7 billion hole or a poor choice of words?

The latest move in the election campaign saw National launch a stinging attack on Labour’s economic credibility, which it said amounted to an “$11.7 billion hole”.

National has little to lose from doing so. Comparing fiscal plans is complex as they never follow a set template, probably because every political party uses confusion as a strategy.

And as it is easy to confuse on something this complex it seems likely that both sides will keep claiming to be right.

While Steven Joyce claimed there are four key errors in Labour’s plan, only one really matters, both because of its size, and because the error being claimed would be so extraordinary.

This is that Labour had signalled a series of generous increases in the “operating allowance” over the next years, without counting the cumulative impact.

The charge is that Labour is choosing to give parts of the public sector more money as soon as it is elected, then ignoring the reality that they will expect the money again next year, and the year after, and so on.

This simply never happens in the real world. Nurses who get a pay rise in 2018 expect that they will be paid at least as much for the same job in 2019, and will probably want some more.

Labour has sought to explain the difference as one of misinterpretation, which it accused Joyce of doing deliberately.

Grant Robertson fronted reporters saying that its figures already include the steady cumulative increases in different parts of the plan.

Spending on health and education, to cater to the inevitable increases in cost every year, Robertson says, will amount to $6.7b over five years.

The confusion? Semantics, apparently. If nothing else, Labour is guilty of a very odd choice of words.

Where Labour uses the term “operating allowance” it means something quite different to what Treasury, or anyone else, would assume it would mean.

Robertson actually admitted the term meant “leftover cash”.

Government forecasts are complicated, and involve a fair amount of sleight of hand, on all sides.

But the term “operating allowance” has a generally accepted meaning, at least insofar as once you allocate it, the bill will typically be the same or more, forever.

Labour claims that it has gone further than National has, and properly accounted for the rising, and inevitable, cost of demographic changes in New Zealand as the population grows more quickly.

But its choice of words is one which created the confusion.

As well as using a term which usually means something different, it leaves open the suggestion that Labour’s fiscal plan is presented in a way which is designed to make it seem much more generous than it actually is.

Confused? I am.

Do I care about this? Not much.

Campaign ‘promises’ come thick and fast, and I think most people don’t expect all the spending to happen when whoever gets into government has to actually find the money to do things.

Politik: Joyce looks like he may have got his sums wrong

The argument rests on a line by line table that is published in Treasury’s Pre Election Fiscal Update (PREFU). The first figure Joyce disputes is Labour’s estimate of its “Forecast New Operating Spending”.

He says that Labour has included its new spending only in the first year and failed to repeat the spending each year after that.

Thus, he argues, there is a $9.387 billion gap between what Labour has estimated and what it should actually be forecasting.

Certainly, Labour’s estimates look suspiciously low given that they are $4.775 billion lower than what the Government is proposing to spend and Labour is boasting about how it will spend more on health, education and police.

Labour’s economic consultants, BERL, says it boils down to an argument of where to put new spending in out years.

It says some Governments prefer to put the spending in “Forecast New Operating Spending” where the spending is known but not yet allocated (e.g. population adjustments for health and education funding.

“The Labour Party Fiscal Plan explicitly allocates these items to their relevant spending lines.

“This leaves the resulting ‘operating allowance’ as a clear measure of what is available for future spending for policies or initiatives currently unknown.

“In essence, the alleged ‘hole’ is a fiction arising from a disagreement over definitions.”

Understandably  Labour’s Finance spokesperson Grant Robertson was concerned about the headlines Joyce was getting with his claims and called an urgent media conference yesterday afternoon at Parliament.

“This is a desperate act from a flailing Finance Minister,” said Robertson.

No more clear to me.

BERL directory Ganesh Nana has just been interviewed on RNZ and stands by their figures (Labour used them to audit their numbers) and I’m still not much clearer.