Outgoing Treasury secretary John Whitehead gave an extraordinary and revealing interview on Q + A this morning.
First, challenged by Guyon Espiner on the 170,000 jobs/4 percent p.a growth forecasts, he claimed Treasury had a second to none record for such predictions. The Parliamentary Library confirmed for me this week that Treasury has got its growth forecasts wrong for 28 of the last 30 quarters. (Sure some differences are minor but some are .5% or even 1%+ out)
Secondly, he confirmed that Treasury had supported Michael Cullen in building surpluses rather than giving tax cuts and that these stood us in good stead for the current downturn. (So much for National’s continuing rhetoric about Labour’s economic mismanagement.)
Then he talked about Treasury’s concerns about growing inequality in New Zealand (we are now lag at 26th in the OECD on this measure). What has this Government done to address inequality – tax cuts skewed to those on high incomes? Increased GST? Assets sales?
And Dr Whitehead talked about how the way to address inequality is lifting skills. We’ve just had a budget that cuts such funding by $90m.
Finally, he defended state asset sales as a way to boost wealth. For whom?
First, challenged by Guyon Espiner on the 170,000 jobs/4 percent p.a growth forecasts, he claimed Treasury had a second to none record for such predictions. The Parliamentary Library confirmed for me this week that Treasury has got its growth forecasts wrong for 28 of the last 30 quarters. (Sure some differences are minor but some are .5% or even 1%+ out)
So how does that compare to Ken Ring?
Actually, the first thing he said was that the 2010 forecast was a three year forecast so it was a bit presumptuous to say they were incorrect given we are only one year in.
At least now you concede they are predicting not confirming Oliver. Only 2 days ago you were posting that 6000 jobs will be lost as opposed to might be lost.
Anyone got the figures on what the employer contribution going up by 1% will add to Ministry outgoings; I hear it will add $80m to the cost of the MOE alone. And on top they have to contribute to a $900m overall cut.
Well, I’ve know for awhile that mainstream economists are disconnected from reality and just proves it. Skill are important, yes, but the way you address inequality is to give everyone the same say over the nations resources, ie, go to a democratic economy rather than a capitalist one.
Or they could plant a few more money trees, eh Tracey.
In fact that might be a good idea. Lots of carbon credits as well as bumper harvests of $20 notes!
Cullen was the man!
!
George, when Whitehead was on morning report last week he clearly stated if Cullen hadn’t managed to repay the majority of the overseas debt built up by Shipley et. al. the country would be just like Greece, Portugal or Ireland.
Who was actually operating a more economically sound budget?
BTW, in Ireland 1000 families are leaving per week – care to comment on the most recent numbers leaving NZ for Australia? Of course this would be Labour’s fault too!
Well well, it appears that the boss of the treasury is the only public servant whose word isn’t taken as gospel by you, Brendon. Shall I assume that therefore you see an endemic issue with treasury and it’s advice?
If so, what are you and your party going to do to improve this? Or is this another case of no policies, no idea, just more hate and bile and attack?
“Anyone got the figures on what the employer contribution going up by 1% will add to Ministry outgoings; I hear it will add $80m to the cost of the MOE alone. And on top they have to contribute to a $900m overall cut.”
George they’re not my money trees they’re the PM’s. He says this will reduce our debt, but it wont in the numbers he says because the 1% kiwisaver increase will take alot back.
Brendon,
Firtly a niggley error: in saying a error of 1% in forcasts, you are wronng. A one percent error is not even near the margin of error in most predictions or forcasts. I think you meant ‘an error of one percentage point’. While this may seem trivial, it shows a weakness of analytical skill and a willingness to play fast and free with fact.
Secondly is your reiteration of ‘surpluses’. Recall where these ‘surpluses’ come from. Tax. Taxpayers. In running a surplus you are sayingthat that the govt is taking more than it needs. To continue the reasoning, NZ could return to surpplus tommorrow by trebling tax rates. Would that be desirable to anybody other than a hardened redistributive Marxist?
Dont forget where the money comes from to pay for Labour’s indugences: people who work.
Baron,I’ve never regarded public debate as hate, bile and attack. I was quoting the outgoing Secretary of Treasury. He seems by all accounts a decent enough man – perhaps one not entirely comfortable with the attacks on past Govt policy such as using surpluses to pay off Crown debt.
Misanthropic, the argument about cutting taxes rather than building surpluses to pay off debt is pretty shallow, given we now have a near $17b deficit after three rounds of major tax cuts.
Hey Misanthropic, go and educate yourself. Know what the biggest bill is on the Government books? National Superannuation. Know which Government brought that in? Hint: It wasn’t Labour.
The biggest f-up in the history of Govt in NZ was Muldoon introducing universal super. If you want to complain about paying taxes to fund Govt expenditure, there’s your starting point.
PS: the second biggest f-up was the deregulation of the building industry which gave us leaky homes. Guess who presided over that?
@Robbo, If you really want to go off-topic and get into a discussion about Super, then by all means. If taxpayers were given the option of opting out of paing for super (ie you dont pay in , and don’t receive it yourself) the average taxpayer could get a $6000pa tax cut. Just like that. Those who wanted to stay would still have the status quo: pay a portion of your income (in tax) and get whatever the polictician decide you ought to get. The curent system means the average taxpayer pays $6000pa, and should they die early their estate gets nothing. A lifetime down-pit for nowt. With personal reposnibilty, their estate would have a big wad of cash. I know what I’d opt for.
Further, you appear to habour the misapprehension that Muldoonism is some sort of similie to the National party that preceeded him and that which follows him. Given that Mulsoon was a Statist and a control-freak, a decent argumenst exists that Muldoon was more left than Clark et al.
IMNSHO, the best solution to super is a personal one: personalised and portable accounts for individuals. But the is no way on earth Labour would support that.
MC – a vast proportion of NZ society earn barely enough to survive; locally there are people in work who have to use food banks to feed their kids – and they are not junkies, alcoholic or playing the pokies. Where are they going to find the money to invest in a retirement portfolio?
@Ian’s comment on foodbanks appears to ignore thepriniciples that any ECON101 student learns: namely supply and demand. If you give stuff away for free, of course their will be a need/demand for it – its free stuff!
Oh c’mon Ian, if they REALLY wanted to do better, they would stop being lazy and get some “desire”. Of course Mr Key and Mr Joyce and Mr English and Ms Bennett all enjoyed their share of state support to get out from under, but let’s not let that get in the way of MC’s fantasy.
“Unemployment is not a mere accidental in a private-enterprise economy blemish. On the contrary, it is part of the essential mechanism of the system, and has a definite function to fulfil.” Sir William H. Beveridge
@Tracey’s refernce to people enjoyng state support and implying that they seek to remove it is flawed and erred, for (s)he fails to idenitify just what state support is being removed carte blanche as she implies.
What is being proposed is “vile” things like DPB recipients actually send their kids to school as a requisite for gettingthe DPB, and stoners on benefits actually attempt to break their habits.
MC, it is as flawed, if not less, than your thinking which has you determining who is entitled to state support, the basis for that support, and you also magically conjure an idea of how many are rorting the system without substantiation. You still make unsubstantiated generalisations dressed up as some kind of rationality. A pig in a dress, is still a pig MC
Beware getting your “facts” from soundbites, afterall not long ago Nick Smith said ACC couldn’t sustain itself and now he champions its surplus.
@Tracey, Not at all, and you’ll note my opinions on the Fletchers as lead contractor are not stated for given nor implied.
What I have done is note the double-standard displayed by those who comdemn the lead-contractor model while condoning complusory unionism.
Regarding enetilemenst to state support, my views are that people who _need_ it are entitled to it, as I have expounded on in these threads. Not those who choose it as a lifestyle – of which there are many.
@tracey, people who _need_ state support are entitled to it. My issue is with those who choose it as a lifestyle.
That NZ impports migrant workers to do work that beneficiaries refuse to do is evidence of a benefit as a lifestyle choice.
Kind of like how not being able to prove God doesn’t exist proves he does? IF your argument were accepted, then the number of those who choose dependancy as a “lifestyle” would, atbest, match the number of foreign workers coming in, not necessarily exceed it.
@MC – you really are the King of the Trolls! I’d suggest you get out of the city and into the provinces; go an live for a week in Minginui, or if that is too hard, Kawerau. See how easy it is to find work (no worries Uncle Bill is doing has magic and creating 170K of them).
You may have missed it, but food and fuel are all up in price, but wages and benefits aren’t.