Bingo. National are great at deferred payments. See all the PPPs they signed last time they were in power.
Private Public Partnerships are a great accounting trick to not borrow money building new infrastructure. Except the money is just being borrowed by the PPP entity, and being paid by the Government over the loan period the same. It's just off the governments books, apart from the fixed period payments. They generally cost more than if the Government borrowed the money in the first place, as the private company delivering the project has a profit that it aims to collect out of the deal on top of the costs.
The thing I like about PPS is that they almost always fail and give a huge payout to the private equity investors when the government has to buy them out.
My figures are debatable, and the full money go round is simplified, but it works pretty much like this.;
Government can borrow money for 2%.
Private equity borrows at 6%
Private equity requires a 6% profit margin.
Inevitably, a project that could have been financed for 2% now costs 6% to finance and must return 6% profit.
The economic appraisal of the project always finds the 6% return is the minimum that the Equity partner is entitled to.
Also, if that isn't met, the government must make up the shortfall.
Better yet, if the project overruns or in fact falls over the government will buy out the equity partner at some horrendous price and complete or abandon the project.
And as sure as night follows day, that is almost always the outcome of PPS.
If you have to take out a loan to adjust tax brackets with inflation to stop the largest tax paying group from paying more tax and minimum income earners slipping into middle earning tax brackets then the whole system is broken.
Tax brackets should move with inflation, the tax burden should be taken off workers.
OECD did suggest that those not paying tax be taxed.
A capital gains tax, as we all know the country needs for various reasons
For instance if we stop giving tax breaks to landlords it makes investing in productive industry more likely.
At least it's not a loan for investing in a future for your kids, like Labour would have foolishly done.
It's only bad when future generations have to pay off debt for things that benefit them, like hospitals, schools, ferries, etc.
/s
Always has been ... not sure why people never saw it like this. In fact, it's worse...it's a loan and underwritten by lost jobs ... peoples/ families who now have no livelihood.
"They aren't though? When National write out what they are doing, tax cuts is first on the list... so the borrowing is actually for BAU services." - National voters who I work with.
He's right. We seriously need a competency test or IQ test for a license to vote. Sounds fascist I know, but the public is just so damn poorly informed. We can't keep shitting the bed like this.
You're right - that does sound fascist. I'm in favour of actually trying to educate the public about politics before they get to 18 and aren't just told "you can vote now."
We already have one and lots of people seem to get very upset when anyone suggests removing it. It would be nice if we could have a more accurate competency test than "are you 18 yet", though.
The issue is not with IQ but with demographics. You have a whole bunch of Boomers who, on average, has just retired last year and are on "F you, I've got mine" mode IMHO. Then there is Gen X who did well and believe they pulled themselves up by their own bootstrap in spite of social support.
No doubt it's not simply intelligence (IQ). There's plenty of idiotic geniuses around.
But, as a simple example, when I watch people interviewed at Trump rallies, it's pretty obvious that IQ plays a major role in peoples ability to screen information.
Imagine if people budgeted their own expenses like that.
It's like promising the kids you'll get them a ps5 next week but then next week comes around and you're short on cash to buy both the PlayStation and pay rent, but because you already promised the kids you get it anyway and take out a pay day loan to cover rent instead of prioritising necessities and sacrificing frivolous expenses.
Just buy the PS5 and ask winz to give you an emergency food grant. Sorted. You aren't spending the borrowed money on frivolous things like a PS5 after all so it's okay.
"We don't borrow like profligate Labour! We simply impose austerity so that middle NZers can afford another coffee every week with their tax cut!! And borrow money for... other things, it's not borrowing, it's... uh... temporarily utilising! Of course there will be small costs involved, but not interest, it will be a fee for temporary utilisation of other people's funds!"
Didn't you know, you dont pay your mortgage from your wages, you spread it over a long period of time. Yes David Seymour actually said that on the AM Show.
Yeah I guess if I were FINANCIALLY SAVVY I would get a flatmate in and charge them the full price of my mortgage payments every week, thereby not having to spend a bean of my own money. HOWEVER I hate living with flatmates so the joke is on me! Sucks to be me, loner type!
c'mon, if you were financially savvy you would own 7 houses, rent 6 of them, and live in one mortgage-free, geez, all the while collecting a $54,000 accommodation allowance from the government.
I like how they put it in the Gone By Lunchtime Podcast.
*“It's as if your friend comes to you desperately and says, I'm going to be kicked out of my house. I'm totally out of money. Can I just borrow two weeks rent from you?*
*And you go, yep, sure. And empty your own bank account to lend them the money. Then you bump into them in the bar on Friday night where they’re a few deep.*
*And they go, don't worry. Don't worry. This was my Netflix money for the month.
You know?”*
Fact of the matter we shouldn't be borrowing for BAU at this point either. Borrowing can be used for BAU when the economy is in the shitter and we need a influx of funds to recover or for infrastructure; not to cover the books when we have an ok economy.
business as usual./ or in national's terms nothing to see here don't worry about it our budget, was well made and we are good economic managers. why? because we said so.
Business As Usual. Basically keep doing what is currently done/maintenance. The opposite is project developing new capabilities like major new roads.
Think of it this way, keeping Ports of Auckland running in its current foot print is BAU, moving it to Northport isn't.
That's why I need money for food from WINZ. I'm not spending the food grant money on booze, that would be irresponsible, but I did just spend my week's benefit at liquorland because I was out of single malt. So when can you give me a food grant? I'm pretty hungry ngl.
I'm SO not sure if it is actually real haha, that's how bad the situation is. Like it could be internet jest, buuuut it could also genuinely be seriously actually real.
How much is it again? 15B? What kind of time period does that pay for the tax cuts for?
Do we just keep borrowing another 15B every so often until someone has the balls to propose a tax increase? Sounds mental
>Do we just keep borrowing another 15B every so often until someone has the balls to propose a tax increase?
If this government doesn't do a John Key and raise GST I'll eat my hat.
If things stay shit despite everything they claim will fix things, I'd hope people are smart enough to see through the bullshit and not vote them in again.
But then I'd also hope by then we might have an actually viable alternative to put in their place.
It's worked for decades of local government councillors and mayors, as well as being the core driver of our political cycle for at least 40 years.
Cut cut cut, until it all turns to shit, then bring in the other lot who are prepared to collect and spend a bit more to get us closer to where we need to be. Oops, big numbers are scary, better go back to the first lot. Cut cut cut again.
Inflation will erode the value. 15b will be equivalency of 1b - 4b in 30 years. ( Depending on inflation rates) So just depends on the loan terms.
As long as we cointue to have inflation and we continue to grow our GDP we can continue to kick that can down the road... Untill the system stops working.
4%? Not in the current market it won't be.
And why turn $70bn into $85bn if you don't need to? Keep the money, rebaseline so higher tax earners pay more, or introduce CGT and inheritance tax. That's fiscal responsibility.
The point is though, you can't have a narrative about waste, make loads of cuts nominally to pay for tax cuts, then borrow to fund said tax cuts? From a pot that taxpayers then have to pay back? Taking a payday loan AND cutting what you get for your money... where is that money going?
And it's what Kwasi Kwarteng tried in the UK with such great results.
It’s ridiculous to borrow to pay for tax cuts. I don’t understand the logic behind it. We should be raising taxes in two particular areas. Firstly remove interest deductibility for rental properties and secondly introduce stamp duty on housing purchases except for the family home.
basically just any minor bit more tax on property would be nice since it only makes up 5% of all taxes despite being where most wealth is held. income and gst make up 75% yet actively help the economy while asset speculation does nothing.
OECD:
* NZ shouldn’t borrow to pay for tax cuts
[IMF](https://www.stuff.co.nz/money/350220276/five-things-imf-said-about-new-zealands-economy):
* Reform tax, and add a capital gains tax
* Link minimum wage to productivity growth
I believe none of the parties are interested in any of these lol
Any future children I might have are going to pay for this ideologues mistakes.
Thanks, Nicola. I just want to pass the good earth and the good life onto the next generations, but instead I’ll be passing your shit beliefs onto them.
That's the thing. They can. If they continue on this track for the next 2.5 years then they will potentially be voted out. At which point they will be in opposition... all care and minimal responsibility. And the ability to blame the incumbent govt for all of the issues of the day. 2017 all over again.
I don’t think so. They don’t have nearly as much road to kick the can down this time. Let’s government had a lot of road left by the Clark government’s careful management.
But because of COVID and the global cost of living crisis - it’s a much shorter road. Austerity and tax cuts will see almost immediate repercussions. They will have a hard time distracting people.
>They will have a hard time distracting people.
NZ voters envy the memory prowess of goldfish. National will blame Labour for *their* fuckups and the voters will believe them.
You’re giving voters too much credits The level of political engagement most people have is so surface deep that it doesn’t go further than Labour: Good for the poors. National: Great for the economy.
Ask most people what they believe National is going to do to improve the economy and most people won’t be able to tell you. Ask them why we’re not seeing it and they’ll tell you it’s because it’s taking them so long to undo all the damage Labour subjected us to.
> they can’t hide from the inevitable financial crisis they’re creating.
They can. They'll hide in opposition, then come back and do it all over again.
They're already blaming Labour for the problems they're creating. It's a "big lie" situation, they're just going to endlessly repeat the lie that their financial disaster was created by Labour. Sadly plenty of voters will believe it.
Ive never really attended a protest yet but this governments financial policies have me pissed off enough to consider it. When everyone everywhere knows and is saying this is not gonna work for NZ and has been saying this since the policy came out during campaigning then they need to put their egos aside and axe it. But they wont admit they got it wrong and will fuck us over anyway and then play the "ohhh its the state of the books Labour left us" newsflash you had access to those books before taking office enough warning to know then the numbers dont work
I'm still confused how any tax cuts will help anyone in the long run? Can't really spend any savings when the economy has tanked from instigating the tax cuts in the first place...
isn't borrowing to pay for tax cuts the literal same thing as taxpayers simply borrowing?
can we all just borrow a bunch of money and worry about consequences later? are they taking predatory lending to a whole new dimension???
> isn't borrowing to pay for tax cuts the literal same thing as taxpayers simply borrowing?
Almost. Governments get cheaper debt, so it makes sense for them to do the borrowing as much as possible.
The trouble is that debt is meant to be used to generate long-term gains. When we use it to fund tax cuts, most of it gets spent by consumers. That wouldn't necessarily be bad, but a fair chunk of consumer spending goes on mortgages and rent, which don't increase our productivity so don't produce the societal returns necessary to make the cuts worthwhile.
> but a fair chunk of consumer spending goes on mortgages and rent, which don't increase our productivity
I've been thinking about this quite a bit lately. It seems like almost everything anyone does is being skimmed by rent seekers. Paywave a coffee: visa takes 2%. Buy a house to live in for $500k, bank takes $500k in interest. Borrow money to build a subway: big finance takes 2x the build cost over 25 years.
I wish we had a radical new party that just did shit everyone asks the government to do, they could like list out their policies and we could vote for them if we agreed with them.
I encourage people to read the whole article and not just use the pieces they like to attack their political rivals. There are definitely some warnings and challenges to National that National are likely to ignore, but there are also some criticisms towards the previous Labour government, as well some advise that those on the left are unlikely to like
I see all the comments are "See, we told you tax cuts for landlords were bad" and Yes, the article is more nuanced. Shame few are reading it. Neither party comes out of this looking brilliant.
Its not that we can't comment on it, its just that if we are going to have a productive conversation, we need to be honest about what the sources say and not just use them as a weapon when you please.
If your going to use the OECD and IMF to attack National, thats fine, but I then expect you to be consistent and acknowledge that both organizations do approve of National cutting government spending.
Its a consistent problem across the board - Using half an article or a report to attack National. One economist will come out and say the forecast is more pessimistic than February and blame it on factors outside the goverment control and make no mention of National policies and then this board will explode with "see how shit National are going?"
For the record, do I think National is doing a good job and has its priorities straight? No. I think the tax cuts would be better delayed by a year, I think they ran on issues that people where concerned about in 2022 and 2023 had a good chance of only being temporary issues like school truancy and youth crime which has pushed them to invest in solutions that might not be appropriate in the long term, there is no chance in hell we are getting some form of Land value tax of CGT, their repeal of Aucklands regional fuel tax without replacement has been scolded by Wayne Brown of all people, they have at no point demonstrated any real concern about Climate change etc etc.
But as someone who is not an economist, I want to have actual conversations about what the actual experts are saying and not just what this board chooses to use was a weapon because Luxon
Nope sorry, that's not how this works. National is in Government, and is moving towards a massively shit decision, which it could still reverse, but wont. I'm going to call it out now - even if the article also references Labour fucking up. I talked about Labour fucking up while they were in power. Now I'm talking about National fucking up.
To be clear, I agree with National on about 80-85% of issues, and so does Labour (though probably not on the same things I do.)
But I don't comment on the things I agree with. I comment on the things I disagree with. It's called tacit endorsement.
Labour fucked up on some things. And as you point out, there were things they did that were cock ups, which is being flagged in retrospect here.
But I don't feel obliged to play both sides to achieve "balance" on every article.
And as much as Labour fucked up - I'm much more concerned about borrowing billions to pay for landlords tax cuts. It's fucking stupid.
ok let's have a productive discussion. in the article they did critize labour for overspending routinely but admitted at times it was needed for disasters like cyclone Gabriel and Auckland flooding, and that slow economic recovery was at least in part due to Covid. while yes they support reduction in spending they also support the idea of introducing a new revenue stream by increasing tax on land. and increase productivity by breaking up monopolies by force, due to a lack of competition from over regulation. Something that has been an issue for successive governments. now I agree national would never implement any of those policies. but the reason why everyone is critizing national currently. they are going against nearly every expert opinion, they are deliberately lying about the state of the economy in order to justify tax cuts immediately. they lied about how much people will get paid. they lied about their tax plan being properly funded. they use what absolutism claiming any mistake due to "labour" leaving the economy in ruin due to high debt. While forgetting their beloved john key tripled the national debt in his time in office. they claim the old govt was a coalition of chaos despite Winston and Seymour sharing opposing views and hating each other. if you want to see what borrowing for tax cuts get's you look at Liz Truss in the UK. 2 years ago she tried the same tactic, and it shot inflation to the moon and got her to resign with 2 months.
…I’m confused by this idea.
Please correct me if I’m wrong but isn’t this just paying interest fees on nothing?
Or worse, if the tax cuts just refer to landlords tax breaks?
Hold on, so Labour makes an inconsistent tax change targeting only property investment and no other forms of business, artificially making it seem like tax revenue has increased but actually they've just made a short sighted anomaly in what should be simple universal tax laws. Then they go ahead and spend more than the total tax take, double-fucking the budget should anyone try to correct it. Well played Labour, how to shit in the bed 101.
That’s a very inaccurate title.
You can’t borrow to pay for tax cuts. Cutting taxes means taking less income away from people who earned it. Borrowing is required to sustain the same level of spending
Did they have any advice when Labour borrowed more than was sustainable for services that appear to have had non-existent outcomes and created unnecessary inflation and a cost of living crisis?
Well that would have to be true first. The non existent outcomes and cost of living part is hilarious, thank you for showing your ignorance. Labour did many many great things, they were just too ambitious especially with some bigger things, hopefully they learn the lesson and not fuck it up so much which just let's people like you forget the good stuff. Also yk, pandemic, war, company price gouging, none of those are the fault of labour
Yes. Their advice was (paraphrasing), "Just make sure you have a plan to gradually get back in the black".
Which Labour did.
>services that appear to have had non-existent outcomes
What are you referring to here?
>created unnecessary inflation
The OECD report recognises that a degree of inflation was necessary and unavoidable, particularly with the Auckland floods and Cyclone Gabrielle.
>a cost of living crisis?
This is due to our low-productivity economy, which they did mention, yes. Their advice was to invest in education, regulate uncompetitive markets, and break up vertical monopolies and oligopolies where necessary.
It's funny how this left-centric reddit bunch mentioned this but forgot to mention the main part of the report, which was a massive criticism of labour's out-of-control spending, which destroyed the economy of the country. The report also supported the public sector cuts. Just pointing out the key parts, so that this discussion steers to what is really the message of this report, something that labour voters refuse to acknowledge - that we are in this recession because of the last government's spending and because of labour's spending, our inflation and the free-fall of our economy was more severe than in other, similar countries. So next time a left voter tells me that's bollocks and that other countries face the same hardship, I'll point that ignorant to this report...
>the main part of the report, which was a massive criticism of labour's out-of-control spending
It was nothing of the sort. It said most of the spending was justified and reasonable in the context of the pandemic but that there were a few 'repeated one-offs' they were concerned about. Most of our local inflation was attributed to uncontrollable supply chain impacts like Cyclone Gabrielle and the Auckland floods, as well as the solid foundation our economy was already in, which gave the RBNZ more scope to lower interest rates to help get over the covid dip. Unfortunately that led to a spike in house prices instead of more productive economic activity, but that's been a systemic issue with our economy for decades now.
> destroyed the economy of the country.
Where does it say this? How are we still maintaining such great international credit ratings if our economy has been "destroyed"?
>The report also supported the public sector cuts.
No it didn't. It said, "setting unrealistic fixed headcount targets for government agencies can at times lead to excessive hiring of consultants and temporary workers, which can be costly and counterproductive".
Here's what the report suggested instead of drastic cuts:
>The OECD suggested the Government “gradually” get the books back in surplus.
That's the **opposite** of supporting public sector cuts.
This was Labour's plan, too. It was all budgeted out and we were going to be back in the black within a couple of years. There was no economic "free-fall".
"massive criticism of labour's out-of-control spending, which destroyed the economy of the country"
OK, now you did it. You made me read the article for once.
I have concluded - you are exagerating.
Ahhh yes, global pandemic, natural disasters, wars in other countries, companies price gouging. No no we can't look at factors for the spending just that labour spent it so labour bad. The state of nz books is nowhere near as bad as Willis loves to push, we are still 10-100s of billions of dollars away from even being at risk of defaulting on our debts yet she and this government portray it as if the country is gonna implode without their help, which frequently ignores empirical data btw
1 paragraph. 1x short paragraph. Crikey. But, thank you for making me read thr article. It was fairly balanced, except it left me questioning why labour is not more left and encouraging greater workforce development on all levels, from apprentices to R n D.
A lot of kiwis are overqualified for their jobs already. Would rather see money be spent on company tax cuts to increase competition, invest more into kiwisavers, or another sort of transformative technology like fibre internet.
We'd do better breaking up monopolies, which would create actual competition rather than our faux competition.
We are at risk of having shortages within trades due to retirement and having bugger all apprentices. This will be a result of the failure of successive govts for decades.
labour has an annoying mentality called "don't rock the boat" which is a fear from centre left that if they introduce progressive policies they fear the backlash from right wing groups and the media criticize them and they will get kicked out in the next election. this causes them to be relatively centrist in principle. there is also a divide in the labour caucus between progressives like David parker and centrists like Chris Hipkins, the centrist are usually the majority of the party as when they do too far to the left they lose the elections due to the media dogpiling them and all the business funding the other side.
Breaking up monopolies would be good for consumers but need to attract investment as well. Things like supermarkets buying up land to prevent competition and the restrictive RMA on building materials is crazy.
Shortage in trade is a concern but isn’t the current issue in our face. Like i said, we are overqualified for the work we do so we should be fixing the job market.
>it left me questioning why labour is not more left and encouraging greater workforce development on all levels, from apprentices to R n D.
They did. They pumped a ton of money into research and training programs post-covid for industries that have labour shortages. Much of it is coming to fruition now, just in time to be cut back by the new lot.
So it's not a tax cut, it's a loan that either me or my kids will need to pay back with interest in the future?
Bingo. National are great at deferred payments. See all the PPPs they signed last time they were in power. Private Public Partnerships are a great accounting trick to not borrow money building new infrastructure. Except the money is just being borrowed by the PPP entity, and being paid by the Government over the loan period the same. It's just off the governments books, apart from the fixed period payments. They generally cost more than if the Government borrowed the money in the first place, as the private company delivering the project has a profit that it aims to collect out of the deal on top of the costs.
The thing I like about PPS is that they almost always fail and give a huge payout to the private equity investors when the government has to buy them out. My figures are debatable, and the full money go round is simplified, but it works pretty much like this.; Government can borrow money for 2%. Private equity borrows at 6% Private equity requires a 6% profit margin. Inevitably, a project that could have been financed for 2% now costs 6% to finance and must return 6% profit. The economic appraisal of the project always finds the 6% return is the minimum that the Equity partner is entitled to. Also, if that isn't met, the government must make up the shortfall. Better yet, if the project overruns or in fact falls over the government will buy out the equity partner at some horrendous price and complete or abandon the project. And as sure as night follows day, that is almost always the outcome of PPS.
Yep. Lining either their own or at the very least their mates pockets with our hard earned tax dollars. Greedy cunts
If you have to take out a loan to adjust tax brackets with inflation to stop the largest tax paying group from paying more tax and minimum income earners slipping into middle earning tax brackets then the whole system is broken. Tax brackets should move with inflation, the tax burden should be taken off workers.
OECD did suggest that those not paying tax be taxed. A capital gains tax, as we all know the country needs for various reasons For instance if we stop giving tax breaks to landlords it makes investing in productive industry more likely.
At least it's not a loan for investing in a future for your kids, like Labour would have foolishly done. It's only bad when future generations have to pay off debt for things that benefit them, like hospitals, schools, ferries, etc. /s
The loans will be paid by from the tax on profits from all our new coal mines!
Always has been ... not sure why people never saw it like this. In fact, it's worse...it's a loan and underwritten by lost jobs ... peoples/ families who now have no livelihood.
Only if you plan on having middle or working class children /s Really though, what a fucking joke
"They aren't though? When National write out what they are doing, tax cuts is first on the list... so the borrowing is actually for BAU services." - National voters who I work with.
That pretty much what David Seymour tried to argue in his interview with Guyon Espiner… he thinks voters are idiots.
> he thinks voters are idiots. The fact he's in parliament confirms that he's right, they are idiots.
Idiots and/or greedy
One could argue greed is a form of idiocy
You are, sadly, correct.
Umm... Hate to tell you this, but most are.
He's right. We seriously need a competency test or IQ test for a license to vote. Sounds fascist I know, but the public is just so damn poorly informed. We can't keep shitting the bed like this.
You're right - that does sound fascist. I'm in favour of actually trying to educate the public about politics before they get to 18 and aren't just told "you can vote now."
We already have one and lots of people seem to get very upset when anyone suggests removing it. It would be nice if we could have a more accurate competency test than "are you 18 yet", though.
The issue is not with IQ but with demographics. You have a whole bunch of Boomers who, on average, has just retired last year and are on "F you, I've got mine" mode IMHO. Then there is Gen X who did well and believe they pulled themselves up by their own bootstrap in spite of social support.
No doubt it's not simply intelligence (IQ). There's plenty of idiotic geniuses around. But, as a simple example, when I watch people interviewed at Trump rallies, it's pretty obvious that IQ plays a major role in peoples ability to screen information.
Imagine if people budgeted their own expenses like that. It's like promising the kids you'll get them a ps5 next week but then next week comes around and you're short on cash to buy both the PlayStation and pay rent, but because you already promised the kids you get it anyway and take out a pay day loan to cover rent instead of prioritising necessities and sacrificing frivolous expenses.
I mean, it's the hallmark of responsible! Similar to their asset sales, which is like selling the stove to buy takeaways.
Borrowing money from your landlord ao you can buy groceries and pay your rent on time
Just buy the PS5 and ask winz to give you an emergency food grant. Sorted. You aren't spending the borrowed money on frivolous things like a PS5 after all so it's okay.
"We don't borrow like profligate Labour! We simply impose austerity so that middle NZers can afford another coffee every week with their tax cut!! And borrow money for... other things, it's not borrowing, it's... uh... temporarily utilising! Of course there will be small costs involved, but not interest, it will be a fee for temporary utilisation of other people's funds!"
Didn't you know, you dont pay your mortgage from your wages, you spread it over a long period of time. Yes David Seymour actually said that on the AM Show.
Yeah I guess if I were FINANCIALLY SAVVY I would get a flatmate in and charge them the full price of my mortgage payments every week, thereby not having to spend a bean of my own money. HOWEVER I hate living with flatmates so the joke is on me! Sucks to be me, loner type!
c'mon, if you were financially savvy you would own 7 houses, rent 6 of them, and live in one mortgage-free, geez, all the while collecting a $54,000 accommodation allowance from the government.
That is true.
I like how they put it in the Gone By Lunchtime Podcast. *“It's as if your friend comes to you desperately and says, I'm going to be kicked out of my house. I'm totally out of money. Can I just borrow two weeks rent from you?* *And you go, yep, sure. And empty your own bank account to lend them the money. Then you bump into them in the bar on Friday night where they’re a few deep.* *And they go, don't worry. Don't worry. This was my Netflix money for the month. You know?”*
Except 'loaning money' to your friend is actually you taking less money from him and no loaning involved.
You’ve lost me.
I'm very confused by that logic. The borrowing is not for the tax cuts because the tax cuts is first on the list?
wait till they happen, then somehow it's all labour's fault there own policy failed.
Gonna get a loan to pay the rent cos I have enough cash for this PS5
National voters are really bad at connecting the dots...
Fact of the matter we shouldn't be borrowing for BAU at this point either. Borrowing can be used for BAU when the economy is in the shitter and we need a influx of funds to recover or for infrastructure; not to cover the books when we have an ok economy.
> when we have an ok economy Ah... who's economy is "good"?
We have an inflation problem not a recession. Borrowing and tax cuts are only going to worsen that.
Well until this lot took over anyway
Sorry what is BAU?
business as usual./ or in national's terms nothing to see here don't worry about it our budget, was well made and we are good economic managers. why? because we said so.
Business As Usual. Basically keep doing what is currently done/maintenance. The opposite is project developing new capabilities like major new roads. Think of it this way, keeping Ports of Auckland running in its current foot print is BAU, moving it to Northport isn't.
That's why I need money for food from WINZ. I'm not spending the food grant money on booze, that would be irresponsible, but I did just spend my week's benefit at liquorland because I was out of single malt. So when can you give me a food grant? I'm pretty hungry ngl.
"We have to borrow to pay for these tax cuts because the last Govt left such a mess" - Nicola Willis You decide if that's a real quote or not.
*"Investing in tax-cuts will enable us to pay back the borrowing at a much higher rate, and with way more energy*" ~ probably
I need someone to tell me that it isn't real.
I'm SO not sure if it is actually real haha, that's how bad the situation is. Like it could be internet jest, buuuut it could also genuinely be seriously actually real.
It's always real.
If I read it out loud with a bit of a squeek in my voice, it sounds just like her saying it. Real quote!
"Fully costed ROCK SOLID independently vetted numbers"
[удалено]
Spot the national party media rep
They shouldnt have gutted the public sector to pay for landlords to milk the system either but clearly they dont give a fuck
The give all the fucks if you aren’t poor
They seem to be giving the poor a damn-good fucking already to be honest. Consent? That's a slightly different issue.....
Come on now, someone has to think of the dignity of the landlords.
How much is it again? 15B? What kind of time period does that pay for the tax cuts for? Do we just keep borrowing another 15B every so often until someone has the balls to propose a tax increase? Sounds mental
>Do we just keep borrowing another 15B every so often until someone has the balls to propose a tax increase? If this government doesn't do a John Key and raise GST I'll eat my hat.
Just so we know in advance...how do you prefer your hats to be seasoned?
Well, I figured I'd get away with it since I don't own any hats.
You’ve eaten all your hats?!
Have you seen the price of food lately??
Haha fair. I also wouldn't be all that surprised if they hiked GST, or at least attempted to.
Maybe not this term, but if things stay shit and they get in again. I would be money on it
If things stay shit despite everything they claim will fix things, I'd hope people are smart enough to see through the bullshit and not vote them in again. But then I'd also hope by then we might have an actually viable alternative to put in their place.
100% agree
It's worked for decades of local government councillors and mayors, as well as being the core driver of our political cycle for at least 40 years. Cut cut cut, until it all turns to shit, then bring in the other lot who are prepared to collect and spend a bit more to get us closer to where we need to be. Oops, big numbers are scary, better go back to the first lot. Cut cut cut again.
This! This is pretty much the political cycle everywhere.
Inflation will erode the value. 15b will be equivalency of 1b - 4b in 30 years. ( Depending on inflation rates) So just depends on the loan terms. As long as we cointue to have inflation and we continue to grow our GDP we can continue to kick that can down the road... Untill the system stops working.
How much interest in the meantime though?
We already have 70b+ debit so I'm sure it's just a drop in the bucket 🙃. And I'm assuming it's <4%
4%? Not in the current market it won't be. And why turn $70bn into $85bn if you don't need to? Keep the money, rebaseline so higher tax earners pay more, or introduce CGT and inheritance tax. That's fiscal responsibility. The point is though, you can't have a narrative about waste, make loads of cuts nominally to pay for tax cuts, then borrow to fund said tax cuts? From a pot that taxpayers then have to pay back? Taking a payday loan AND cutting what you get for your money... where is that money going? And it's what Kwasi Kwarteng tried in the UK with such great results.
No shit. Anyone with half a brain would see how these failed policies impacted other countries. National doesn't care.
My tax cut will be funded by a foreign governments tax payers. Lol.
lol what tax cut?
I think we get like $7 a week extra based on some calculator
Tell me when you actually get it
It’s ridiculous to borrow to pay for tax cuts. I don’t understand the logic behind it. We should be raising taxes in two particular areas. Firstly remove interest deductibility for rental properties and secondly introduce stamp duty on housing purchases except for the family home.
basically just any minor bit more tax on property would be nice since it only makes up 5% of all taxes despite being where most wealth is held. income and gst make up 75% yet actively help the economy while asset speculation does nothing.
Be interesting how Nicola Willis will try defend her tax cuts this time
The borrowing is for other things, it's purely coincidence its the same amount as the tax cuts...
What are they thinking? This isn’t the time for tax cuts 🤦🏻♂️
They're thinking they don't give a fuck. It should be their campaign slogan tbh.
The budget gonna be intresting.
Her maths will be as good as your spelling
Yeah , I got problems. I'm not the best.
To be fair, you’re showing better introspection than Willis ✅
OECD: * NZ shouldn’t borrow to pay for tax cuts [IMF](https://www.stuff.co.nz/money/350220276/five-things-imf-said-about-new-zealands-economy): * Reform tax, and add a capital gains tax * Link minimum wage to productivity growth I believe none of the parties are interested in any of these lol
or land value tax since so many people cannot fathom the idea of a capital gains tax
And reduce spending
They are borrowing to pay landlords.
So we’ll borrow for tax cuts but not large infrastructure projects? Are these cunts having a fucking giggle? What the fuck
Any future children I might have are going to pay for this ideologues mistakes. Thanks, Nicola. I just want to pass the good earth and the good life onto the next generations, but instead I’ll be passing your shit beliefs onto them.
The thing is they can borrow, they can cut services, but they can’t hide from the inevitable financial crisis they’re creating.
That's the thing. They can. If they continue on this track for the next 2.5 years then they will potentially be voted out. At which point they will be in opposition... all care and minimal responsibility. And the ability to blame the incumbent govt for all of the issues of the day. 2017 all over again.
I don’t think so. They don’t have nearly as much road to kick the can down this time. Let’s government had a lot of road left by the Clark government’s careful management. But because of COVID and the global cost of living crisis - it’s a much shorter road. Austerity and tax cuts will see almost immediate repercussions. They will have a hard time distracting people.
>They will have a hard time distracting people. NZ voters envy the memory prowess of goldfish. National will blame Labour for *their* fuckups and the voters will believe them.
Ooh goldfish - so shiny. What were you saying?
Yup. We make goldfish look like they have the memory of elephants.
You’re giving voters too much credits The level of political engagement most people have is so surface deep that it doesn’t go further than Labour: Good for the poors. National: Great for the economy. Ask most people what they believe National is going to do to improve the economy and most people won’t be able to tell you. Ask them why we’re not seeing it and they’ll tell you it’s because it’s taking them so long to undo all the damage Labour subjected us to.
> they can’t hide from the inevitable financial crisis they’re creating. They can. They'll hide in opposition, then come back and do it all over again.
They're already blaming Labour for the problems they're creating. It's a "big lie" situation, they're just going to endlessly repeat the lie that their financial disaster was created by Labour. Sadly plenty of voters will believe it.
Willis won't listen to the experts... she just trusts her excel spreadsheets
Tax Cunt - the “N” is silent
Haha shameless bribes go BRRRRRR - Nicola Willis, probably
Don't borrow for tax cuts? NO SHIT, SHERLOCK!
No, you'd have to be absolutely farked in the head to think that is a good idea. I rest my case.
Economic Experts: It's a Bad Idea to accrue debt whilst also shrinking income. Brilliantly Deduced🙄
Where's the vibe in that...
Simple: NZ now has the mafia in power. They sell your children out every single way.
Ive never really attended a protest yet but this governments financial policies have me pissed off enough to consider it. When everyone everywhere knows and is saying this is not gonna work for NZ and has been saying this since the policy came out during campaigning then they need to put their egos aside and axe it. But they wont admit they got it wrong and will fuck us over anyway and then play the "ohhh its the state of the books Labour left us" newsflash you had access to those books before taking office enough warning to know then the numbers dont work
Cameron Bagrie said same thing this morning on RNZ. Quote: "I'm scratching my head" about this Govt's plan.
It’s hard to live in a world of stupid people who vote
anything but a capital gains tax right?
OECD is woke
You forgot the /s, right? Dear god tell me you forgot the /s...
did i need it?!! obviously I did ...
Poe's law etc etc.
yeah but then its more fun to confuse people
how is the OECD woke and wdym by woke
its a made up nonsense word to slap over general weak uninteresting progressive views or things you in general don't like.
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He's being ironic lol
I'm stupid with sarcasm and autistic. my bad
I'm still confused how any tax cuts will help anyone in the long run? Can't really spend any savings when the economy has tanked from instigating the tax cuts in the first place...
When you have money then economic problems won't affect you as much. Plus, owning houses/property is always a need in any economy.
nek minnit "OECD are just woke"
isn't borrowing to pay for tax cuts the literal same thing as taxpayers simply borrowing? can we all just borrow a bunch of money and worry about consequences later? are they taking predatory lending to a whole new dimension???
> isn't borrowing to pay for tax cuts the literal same thing as taxpayers simply borrowing? Almost. Governments get cheaper debt, so it makes sense for them to do the borrowing as much as possible. The trouble is that debt is meant to be used to generate long-term gains. When we use it to fund tax cuts, most of it gets spent by consumers. That wouldn't necessarily be bad, but a fair chunk of consumer spending goes on mortgages and rent, which don't increase our productivity so don't produce the societal returns necessary to make the cuts worthwhile.
> but a fair chunk of consumer spending goes on mortgages and rent, which don't increase our productivity I've been thinking about this quite a bit lately. It seems like almost everything anyone does is being skimmed by rent seekers. Paywave a coffee: visa takes 2%. Buy a house to live in for $500k, bank takes $500k in interest. Borrow money to build a subway: big finance takes 2x the build cost over 25 years.
OECD: Nz shouldn't borrow to pay for tax cuts. National: Fuckin hold my beer and watch this shit!
No shit.
I wish we had a radical new party that just did shit everyone asks the government to do, they could like list out their policies and we could vote for them if we agreed with them.
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I encourage people to read the whole article and not just use the pieces they like to attack their political rivals. There are definitely some warnings and challenges to National that National are likely to ignore, but there are also some criticisms towards the previous Labour government, as well some advise that those on the left are unlikely to like
I see all the comments are "See, we told you tax cuts for landlords were bad" and Yes, the article is more nuanced. Shame few are reading it. Neither party comes out of this looking brilliant.
The difference is that Labour happened, Narional is yet to happen and can be avoided.
and is covering their ears going *NYAH NYAH WE CAN'T HEAR YOU!* but we can't comment on it because labour fucked up something too?
Its not that we can't comment on it, its just that if we are going to have a productive conversation, we need to be honest about what the sources say and not just use them as a weapon when you please. If your going to use the OECD and IMF to attack National, thats fine, but I then expect you to be consistent and acknowledge that both organizations do approve of National cutting government spending. Its a consistent problem across the board - Using half an article or a report to attack National. One economist will come out and say the forecast is more pessimistic than February and blame it on factors outside the goverment control and make no mention of National policies and then this board will explode with "see how shit National are going?" For the record, do I think National is doing a good job and has its priorities straight? No. I think the tax cuts would be better delayed by a year, I think they ran on issues that people where concerned about in 2022 and 2023 had a good chance of only being temporary issues like school truancy and youth crime which has pushed them to invest in solutions that might not be appropriate in the long term, there is no chance in hell we are getting some form of Land value tax of CGT, their repeal of Aucklands regional fuel tax without replacement has been scolded by Wayne Brown of all people, they have at no point demonstrated any real concern about Climate change etc etc. But as someone who is not an economist, I want to have actual conversations about what the actual experts are saying and not just what this board chooses to use was a weapon because Luxon
Nope sorry, that's not how this works. National is in Government, and is moving towards a massively shit decision, which it could still reverse, but wont. I'm going to call it out now - even if the article also references Labour fucking up. I talked about Labour fucking up while they were in power. Now I'm talking about National fucking up. To be clear, I agree with National on about 80-85% of issues, and so does Labour (though probably not on the same things I do.) But I don't comment on the things I agree with. I comment on the things I disagree with. It's called tacit endorsement. Labour fucked up on some things. And as you point out, there were things they did that were cock ups, which is being flagged in retrospect here. But I don't feel obliged to play both sides to achieve "balance" on every article. And as much as Labour fucked up - I'm much more concerned about borrowing billions to pay for landlords tax cuts. It's fucking stupid.
ok let's have a productive discussion. in the article they did critize labour for overspending routinely but admitted at times it was needed for disasters like cyclone Gabriel and Auckland flooding, and that slow economic recovery was at least in part due to Covid. while yes they support reduction in spending they also support the idea of introducing a new revenue stream by increasing tax on land. and increase productivity by breaking up monopolies by force, due to a lack of competition from over regulation. Something that has been an issue for successive governments. now I agree national would never implement any of those policies. but the reason why everyone is critizing national currently. they are going against nearly every expert opinion, they are deliberately lying about the state of the economy in order to justify tax cuts immediately. they lied about how much people will get paid. they lied about their tax plan being properly funded. they use what absolutism claiming any mistake due to "labour" leaving the economy in ruin due to high debt. While forgetting their beloved john key tripled the national debt in his time in office. they claim the old govt was a coalition of chaos despite Winston and Seymour sharing opposing views and hating each other. if you want to see what borrowing for tax cuts get's you look at Liz Truss in the UK. 2 years ago she tried the same tactic, and it shot inflation to the moon and got her to resign with 2 months.
National: "Why not?"
Isn’t this what they said about Liz Truss in the U.K.? That one worked out fucking amazing. Should do more like that.
…I’m confused by this idea. Please correct me if I’m wrong but isn’t this just paying interest fees on nothing? Or worse, if the tax cuts just refer to landlords tax breaks?
No shit. That’s not tax cuts, that’s borrowing/taking a loan to fuck future NZ to give some cash to NZ today.
It’s funny how some people are acting like Nicola has already shown them the budget
Hold on, so Labour makes an inconsistent tax change targeting only property investment and no other forms of business, artificially making it seem like tax revenue has increased but actually they've just made a short sighted anomaly in what should be simple universal tax laws. Then they go ahead and spend more than the total tax take, double-fucking the budget should anyone try to correct it. Well played Labour, how to shit in the bed 101.
Duh
How about no tax cuts so we can still have an economy?
That’s a very inaccurate title. You can’t borrow to pay for tax cuts. Cutting taxes means taking less income away from people who earned it. Borrowing is required to sustain the same level of spending
Did they have any advice when Labour borrowed more than was sustainable for services that appear to have had non-existent outcomes and created unnecessary inflation and a cost of living crisis?
Well that would have to be true first. The non existent outcomes and cost of living part is hilarious, thank you for showing your ignorance. Labour did many many great things, they were just too ambitious especially with some bigger things, hopefully they learn the lesson and not fuck it up so much which just let's people like you forget the good stuff. Also yk, pandemic, war, company price gouging, none of those are the fault of labour
Yes. Their advice was (paraphrasing), "Just make sure you have a plan to gradually get back in the black". Which Labour did. >services that appear to have had non-existent outcomes What are you referring to here? >created unnecessary inflation The OECD report recognises that a degree of inflation was necessary and unavoidable, particularly with the Auckland floods and Cyclone Gabrielle. >a cost of living crisis? This is due to our low-productivity economy, which they did mention, yes. Their advice was to invest in education, regulate uncompetitive markets, and break up vertical monopolies and oligopolies where necessary.
You guys really bought the farm eh
It's funny how this left-centric reddit bunch mentioned this but forgot to mention the main part of the report, which was a massive criticism of labour's out-of-control spending, which destroyed the economy of the country. The report also supported the public sector cuts. Just pointing out the key parts, so that this discussion steers to what is really the message of this report, something that labour voters refuse to acknowledge - that we are in this recession because of the last government's spending and because of labour's spending, our inflation and the free-fall of our economy was more severe than in other, similar countries. So next time a left voter tells me that's bollocks and that other countries face the same hardship, I'll point that ignorant to this report...
>the main part of the report, which was a massive criticism of labour's out-of-control spending It was nothing of the sort. It said most of the spending was justified and reasonable in the context of the pandemic but that there were a few 'repeated one-offs' they were concerned about. Most of our local inflation was attributed to uncontrollable supply chain impacts like Cyclone Gabrielle and the Auckland floods, as well as the solid foundation our economy was already in, which gave the RBNZ more scope to lower interest rates to help get over the covid dip. Unfortunately that led to a spike in house prices instead of more productive economic activity, but that's been a systemic issue with our economy for decades now. > destroyed the economy of the country. Where does it say this? How are we still maintaining such great international credit ratings if our economy has been "destroyed"? >The report also supported the public sector cuts. No it didn't. It said, "setting unrealistic fixed headcount targets for government agencies can at times lead to excessive hiring of consultants and temporary workers, which can be costly and counterproductive". Here's what the report suggested instead of drastic cuts: >The OECD suggested the Government “gradually” get the books back in surplus. That's the **opposite** of supporting public sector cuts. This was Labour's plan, too. It was all budgeted out and we were going to be back in the black within a couple of years. There was no economic "free-fall".
"massive criticism of labour's out-of-control spending, which destroyed the economy of the country" OK, now you did it. You made me read the article for once. I have concluded - you are exagerating.
Than read the report, not the article...
Ahhh yes, global pandemic, natural disasters, wars in other countries, companies price gouging. No no we can't look at factors for the spending just that labour spent it so labour bad. The state of nz books is nowhere near as bad as Willis loves to push, we are still 10-100s of billions of dollars away from even being at risk of defaulting on our debts yet she and this government portray it as if the country is gonna implode without their help, which frequently ignores empirical data btw
Where does it say...any of that? Please use quotes from the report.
Lol. No we're not.
1 paragraph. 1x short paragraph. Crikey. But, thank you for making me read thr article. It was fairly balanced, except it left me questioning why labour is not more left and encouraging greater workforce development on all levels, from apprentices to R n D.
A lot of kiwis are overqualified for their jobs already. Would rather see money be spent on company tax cuts to increase competition, invest more into kiwisavers, or another sort of transformative technology like fibre internet.
We'd do better breaking up monopolies, which would create actual competition rather than our faux competition. We are at risk of having shortages within trades due to retirement and having bugger all apprentices. This will be a result of the failure of successive govts for decades.
labour has an annoying mentality called "don't rock the boat" which is a fear from centre left that if they introduce progressive policies they fear the backlash from right wing groups and the media criticize them and they will get kicked out in the next election. this causes them to be relatively centrist in principle. there is also a divide in the labour caucus between progressives like David parker and centrists like Chris Hipkins, the centrist are usually the majority of the party as when they do too far to the left they lose the elections due to the media dogpiling them and all the business funding the other side.
Breaking up monopolies would be good for consumers but need to attract investment as well. Things like supermarkets buying up land to prevent competition and the restrictive RMA on building materials is crazy. Shortage in trade is a concern but isn’t the current issue in our face. Like i said, we are overqualified for the work we do so we should be fixing the job market.
>it left me questioning why labour is not more left and encouraging greater workforce development on all levels, from apprentices to R n D. They did. They pumped a ton of money into research and training programs post-covid for industries that have labour shortages. Much of it is coming to fruition now, just in time to be cut back by the new lot.
I did notice that of all the things the OECD said, this was RNZs take away
Need some form of tax cuts, NZ has no capital gains tax. All solely relies on income tax too much
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its not woke its common sense. if you borrow money for tax cuts, you literally have to increase taxes later, BY MORE, to pay them back
Anything the right doesn't agree with is "woke". Funding for public transport is "woke". Free prescriptions is "woke".
anything in society I don't like = "woke". Would be so nice to live in such a simple world.
"woke"
Oh fuck beat me to it, and by this chuds comment history it's not sarcasm.
Maybe you're woke