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Thursday, May 28, 2009

Budget - no straight figures.



The budget and the government's individual announcements have been trawled through and analysed by all and sundry at this point, so I'll only mention a few things. The core concern has been to restrict the amount of money the government must borrow to cover the deficit. The superannuation wave of post-war retirees start drawing their state pensions from next year and there is a lot of speculation that abandoning payments by the government into the NZ Super/Cullen fund is imprudent. It isn't of course - it's what Labour would have had to have done too, despite whatever lines Cunliffe and Goff have been running this afternoon.

And for all of the Finance Minister's opening remarks about the importance of jobs I didn't hear anything in his speech that told us keeping unemployment down was a priority higher than containing core expenditure so that borrowing could be kept to a minimum. While peace of mind in this recession was boosted by the vow to maintain all the social security safety nets and benefit entitlements it does not address job creation. The National government is acting conservatively rather than radically, and the willingness to continue most of Labour's items fits in with the "pragmatic" pose it has struck after the first rush to the head of the 100 day blitz. This was confirmed in parliament when Sir Roger called it a lack of imagination - no doubt others would call his prescription an unnecessary nightmare.

The other thing to keep in mind is that English's doom-mongering over being in deficit until the 45th millennia is based on the same notoriously inaccurate forecasts by Treasury that had Cullen using their figures as an excuse to spend large cash sums on political follies like the gigantic black hole that is the railways. He could justify these ideological pet spends because the advice was that we would have massive surpluses forever and the age of fiscal Aquarius had dawned. A year or so later the Terrace Tarot readers are turning over death cards one after another.

The projections are necessary as part of any planning, but it's very difficult to take these predictions seriously since they change wildly and may be affected by events - domestic or international - that we have no control over. When you see timelines and graphs going off into years 3 and 4 and beyond it is absolute guess work. A plus 10% can end up a negative 10% in a few short years. So too all the sums flung around in the press statements. These are indicative of what they intend to do - only. The only figures that actually count is what they are authorising to spend for next year. We only have to look at the budget promises to build motorway tunnels and electrify rail and so on to know that it is what is spent in the next year that matters - not what is promised in years 2+. Some projects just never get started.

The media's reporting of budgets (at least recently) has played totally into the government's hands as they rarely bother to lay out the difference in spending between items over last year and cloud the issues with big numbers without mentioning what the time period the spending will cover. It gets very confusing - this helps the government of the day. It sounds great - a billion dollars... small print: over 15 years. And the programme can be dumped altogether next year. The re-branding of earlier initiatives and the now routine method of rolling out half the budget in pre-releases makes it tricky for the punter to work out exactly what is and what is not "new spending" without having to contend with all the different timelines. Some things are over two years, some 3, 4, 5, 10, 15 years. It obscures what the government is really doing.

It is impressive that the Green's insulation policy has been carried forward by National (they say improved from Labour's commitment) - and both parties deserve credit for taking the issue of substandard housing seriously - but look at the way the Green's explain it. No mention of the only thing that matters - the purpose of the budget indeed: how much money will be spent on it next year? Very simple question, and one that will speak directly to the sincerity of National's support - but no mention on Frogblog.
"Bigger and faster"!? Blah, blah, blah, blah, we'll spend a gazillion, bamillion, quizillion dollars on it... yeah... but this is an annual budget, so the only relevant piece of information that I want to know is: How much will be spent in the next year? We'll get to the "faster" bit later.

I won't bother copying and pasting what the link to Fitzsimon's statement says because it doesn't answer the question - it's waffle about all the accounting juggling going on to come up with the biggest number they can to make it look good. It's "if" funding blah, blah, blah then "900,000 houses" blah blah, blah... So, again: how much money is being spent on it this next year - and since she raises it - how many homes will be insulated because of it, and - while we are at it - how many extra homes does this cover that would not have been done otherwise. That's what we want to know - and that is what they take great lengths to avoid giving a straight answer on and it's as infuriating as it is suspicious.

It's crap communication at the very least, and game-playing, smoke and mirror bullshit the way it looks.

2 Comments:

At 28/5/09 11:03 pm, Anonymous bc said...

I agree with a lot of what you say there Tim. I too am disappointed with Goff and Cunliffe going on about suspending the contributions to the super fund. After all their guru Michael Cullun was wise enough to set it up so that contributions could be suspended when the government was running deficits.
Would Labour really borrow money to put into the super fund? If so then let's hope that they never get their hands on the countries purse strings. It's like increasing the amount on your credit card to pay the mortgage.
Ultimately, it's a very pragmatic budget. There was no way that the Government was going to cut welfare payments so the only way to cut spending was to trim the fat in government departments, and suspend contributions to the super fund and future tax cuts. That is why it's so hard for the opposition to attack it.

 
At 29/5/09 11:04 am, Anonymous Anonymous said...

No tax cuts. They fucking well GUARANTEED tax cuts and now there aren't any. How stupid can you be to guarantee something and then not deliver? Oh, LABOUR could deliver tax cuts but National can't, what an absolute joke, not a single red cent and they fucking guaranteed them. Liars. Fucking liars.

 

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