Labour govt 2020-23

[Logen Ninefingers]

Says the person ranting about spending, even though we are in one of the best shape in the OECD.

There is a world outside little old NZ.

Sounds great. Grant is borrowing $1 Billion a week, we are sitting on the most over-priced housing in the world, inflation is going bananas, and there is a recession brewing. I wonder just what ‘shape’ we will be in by the back end of 2023.

[Blue Skies]

Sounds great. Grant is borrowing $1 Billion a week, we are sitting on the most over-priced housing in the world, inflation is going bananas, and there is a recession brewing. I wonder just what ‘shape’ we will be in by the back end of 2023.

Worrying indeed & there are some real challenges ahead, but some economic perspective is helpful.

Following the GFC & Christchurch earthquake, National rightly increased debt and ran 6 annual deficits to help Kiwis through those crisis.

Labour is faced with running 5 years of deficits to help protect Kiwis from the economic effects of the Global Pandemic, the war in Ukraine & the disruption to energy & food supplies caused by both.
Our first surplus is expected in 2024/25 something most governments around the world would give their eye teeth for.

Comparing current General Govt Nett Debt as a % of GDP with some of our peer countries, we see -

NZ = 20%
Australia = 37.5%
UK = 76.1%
USA = 95.8%
Canada = 32.1%

And if we look just 4 years ahead to 2025 & compare Gen' Govt' Nett Debt as a % of GDP, we see -

NZ = 18%
Australia = 39.4%
UK = 61.9%
USA = 102.4%
Canada = 29.1%

These are most recent forecasts April 2022, IMF, World Economic Outlook Database.

So some of the criticism of Grant Robertson & catastrophising of the economy by the opposition & a media seems a bit emotive.
If you were Minister of Finance for any of these other countries, you'd be looking rather enviously at NZ's economic position.

Agreed it's certainly tough for a lot of NZ'ers at the moment, while many high wealth individuals have enjoyed spectacular increases in wealth over the last 2 years so lots of imbalances & challenges.
But I can't see National would have done any better & after they presented their last mistake ridden shadow budget, it didn't inspire much confidence in their financial management.
Its also worth noting when pressed, Christopher Luxon refuses to commit to spending $1 less than Grant Robertson.

[Panda-NZ-]

Tax increases are deflationary.

So if we were to truly believe the likes of seymour then we must logically conclude that "tax and spend" makes no difference to inflation.

[Panda-NZ-]

Long term permanent tax cuts in contrast cause inflation.

[nztx]

Tax increases are deflationary.

So if we were to truly believe the likes of seymour then we must logically conclude that "tax and spend" makes no difference to inflation.

More Govt Loan Shops bound to be being proposed in 2023 offering higher loan limits ?

RB Governor will say no problem - another $50 Bils on the inter-Govt Loan Tab
to be unpaid over the never never while the local fiat deflates itself further
and rising poverty inspires more dependence and screaming

The alarmed Political nobs will then play a game of try find a scapegoat to blame
to minimise egg splatter back on themselves and to buy a little more time..

Throw them a further few hundred to try to bridge the thousands gap they're
wearing and hope they'll go away until everyone gets totally fed up with the
circus and the job lands in some other unfortunate's lap to clean the mess up

Been seen before hasn't it ? .. but it's openly debatable whether the players were
all dreaming or sleepwalking at the time

How to lose control of the reins and deny all the signs and symptoms for today ..
don't worry about tomorrow .. a bit like a Bank Robber who thought he had the
Bank Manager tied up and stash safely in his pocket until he discovered
the trail of all the bills taken dropped on his escape had found him out

[nztx]

Long term permanent tax cuts in contrast cause inflation.

More so large scale Govt spending and the large Lolly scrambles of the past 2-3 years .. that is
unless one has been unfortunate enough to have been asleep under their rock for the whole time
so didn't notice

Perhaps not causing it the first place would have been more sensible ?

[dobby41]

Perhaps not causing it the first place would have been more sensible ?

How they caused the increasing fuel price (which flows through to pretty much everything) and the global supply chain issues (which exacerbates supply issues) is beyond me.
A lot was spent on employment support - the govt paying what business would have (a bit less actually) doesn't create inflation.
You have brought the opposition lies and exaggerations hook line and sinker.

[dobby41]

So what do Labour do for health yesterday, fund tvnz a bucket load more than health. Shows you where labours priority lies.

Quite a lot.
More ambulances etc.
Have a look here
https://www.newshub.co.nz/home/polit...increased.html

As far as Pharmac is concerned a 20% increase is not to be sneezed at - in Labours terms Pharmac funding has increased some 41%. There is always a need for more though.

The TVNZ/National Radio funding is not quite what it seems (the devil is in the detail).
Very small increase really. Have a read of this
https://www.stuff.co.nz/business/128...t-after-merger

[Balance]

Quite a lot.
More ambulances etc.
Have a look here
https://www.newshub.co.nz/home/polit...increased.html

As far as Pharmac is concerned a 20% increase is not to be sneezed at - in Labours terms Pharmac funding has increased some 41%. There is always a need for more though.

The TVNZ/National Radio funding is not quite what it seems (the devil is in the detail).
Very small increase really. Have a read of this
https://www.stuff.co.nz/business/128...t-after-merger

Pharmac increase is pathetic - $191m over 2 years for desperately needed LIFE saving medicine.

Just compare it with the $240m spent to BRIBE Maori & South Aucklanders with $150 supermarket, petrol & Prezzy cards to get Maori vaccinated!

And $56m for the cycle bridge (not to be) and $60m+ for Pike River non-recovery.

Shows where Labour's real priorities are - votes.

[nztx]

How they caused the increasing fuel price (which flows through to pretty much everything) and the global supply chain issues (which exacerbates supply issues) is beyond me.
A lot was spent on employment support - the govt paying what business would have (a bit less actually) doesn't create inflation.
You have brought the opposition lies and exaggerations hook line and sinker.

Wonder why all the Oil Explorers in NZ promptly waved adios and disappeared over the horizon ?

Just on the inflation bit - most recognise that it results from additional monetary supply v
available or same amount of goods. Excess injected into the economy for no real extra
productivity can clearly be seen as inflationary as well. as can reduced available goods too

Look no further than post lockdown stockmarkets and continued Property market pricing
growth for true measure of the effects of this. Sucking too much out too fast can be inflationary
as well leading to ramp up of financing costs, similar to tax increases in harder times -
the extra has to be found or financed from somewhere by those on the paying end
usually at a higher cost