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?