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Posts Tagged ‘Bill English’

OCR remains at 2.5% – now economy v english

Posted by Stuart Nash on March 11th, 2010

The Reseve Bank has held the OCR unchanged at 2.5%.  In the quarterly Monetary Policy Statement that accompanies each OCR announcement (see URL below), Governor Bollard has said (amongst many things): inflation predictions are around 2%, (however, there has been no modelling done for the proposed increase in GST and the cut in the top marginal tax rates for the 8% of Kiwis earning over $70K); GDP growth expected to be around 1% per quarter, or 4% per ann; and employment expected to drop by around one percentage point a year.  This begs a couple of questions / points:

1. if economy is expected to grow at 4% per year, then surely Minister English can now afford to give state sector employees a decent pay increase this year – remember he said last year possible wage freezes for up to 5 years.

2. if inflation is expected to be around 2% per year (without having yet modelled the impact of GST increases or tax cuts for the top 8%) then this implies a further reduction in the purchasing power for those 70% of extra-ordinary hard working kiwis earning $40k or less. 

3. Surely, with inflation forecast at 2%, and GDP growth forecast at 4% per year, the minimum wage has to increase more than the paltry 25c / hr given by the government last year.  Mr English? Mr Key?

Come on now Mr English and Mr Key – you have signalled what you are going to do for the 8% of kiwis earning over $70k/ann – now tell us what you are going to do for the other 92% – apart from increasing costs through increasing GST…

http://www.rbnz.govt.nz/monpol/statements/

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Filed under: GST, Tax
9 Comments

Time to plead guilty bill

Posted by Trevor Mallard on March 8th, 2010

Yet another inquiry into the Brash email leaks doesn’t find quite enough evidence to name the Deputy Prime Minister.

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Filed under: economy, history, jobs, journalism, law and order, national, parliament, politics, wellington
36 Comments

Improved Crown Accounts won’t justify savage Budget

Posted by David Cunliffe on March 5th, 2010

The latest Crown Accounts show that recovery is underway. Bill English should be frank with Kiwis that the books are improving, and ensure that he does not talk down recovery as cover for a tough Budget.

The government’s books are significantly improving and now the presure is on Bill English to ensure all Kiwis benefit from the recovery.

Kiwis who have battled through the recession need a credible long term for them to feel like they’re not struggling to pay the bills at the end of the week.

What they don’t need is for prices of groceries, power and services to rise to pay for John Key’s GST money-go-round.

A recurring theme in the Crown Accounts seems to be the investments in the New Zealand Super Fund and ACC both tracked above forecast, and NZSF is now worth $2.5b more than when the government decided to suspend contributions for a decade.

Does anyone now think National’s “decade of deferrals” of payments to the SuperFund at the last Budget was a clever idea

With these improved forecasts, Labour challenges John Key and Bill English to resume payments into the SuperFund.

Gross debt was $2.9 billion lower than forecast, and continues Labour’s legacy of low debt, with gross Crown debt the third lowest in the OECD.

Crucially the operating deficit was $1.4b lower than forecast, now only $630 million. While still significant, this closes the operating gap by about 70% and shows drastic reductions in services are not justified in the 2010 Budget.

New Zealanders have gone without during the recession. The improvement in the Crown accounts should provide comfort that there are better times ahead.

It is essential that all Kiwis share in the recovery and that the government not talk the recovery down as pretext for a tax-cut driven Budget in 2010.

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Filed under: Tax, Uncategorized, economy, finance
19 Comments

AXING THE TAX PACK

Posted by David Cunliffe on March 1st, 2010

Labour is taking the fight to the government on its unfair tax plan.  The “Axe the Tax” bus tour is covering the country.

We are campaigning against is whole tax package, which includes all of:

  • GST going up from 12.5% to 15%, even though National said before the election they would NOT;
  • The unfairness of the massive cut to the top tax rate, dressed up as “alignment”, which delivers windfall gains to the top few percent.

The government’s GST tax switch is really just cover for the massive shift towards top end tax reduction.

Politics is, at least partly, about who gets what – and guess who stands to benefit most from National’s plans?

Not the vast bulk of Kiwis, who are on middle and lower incomes and who have toughed out the recession.

Labour will release its tax policy before the next election.  Labour’s tax plan will be fair to all Kiwis, not one aimed at delivering big cuts only to a few.

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Filed under: GST, Tax, Tax Working Group, Uncategorized, business, economic, economy
54 Comments

Lies, Damned Lies and Statistics

Posted by David Cunliffe on February 25th, 2010

Bill English has been “trying it on” in his use of statistics, no doubt to try to get off the defensive around inequitable tax policy, his lack of a plan for growth and an embarrassingly strong performance by NZSF and ACC in the recent Crown Accounts.

Mr English alleged in a release last week that revisions to GDP data issued late last year showed the economy grew by “less than 1% a year”.

The Government Accounts  had been released the day before. Labour had attacked the government for having suspended superannuation prefunding and cutting ACC, when the investment performance of both had risen strongly.

Based on the Statistics NZ revised data, the average GDP growth for those three years was actually 1.74%.

The more relevant GDP growth benchmark, averaged over Labour’s last term in office, was 3.2% GDP growth per annum.

That was significantly higher than during National’s previous term in office of around 2.6%.

It was higher, year on year, for the three year period Mr English quoted, than the UK (2.6%), US (2.5%) or OECD average (2.3%)

This strong and sustained economic expansion was achieved alongside:

  • a massive reduction in Crown debt (net debt cut from 24.8%  of GDP to zero);
  • unemployment of 3.4%, the lowest in 21 years (less than half of today’s 7.3%)

This was achieved precisely because Labour did not follow Mr English’s advice in 2005 and 2006 to give early tax cuts. In short, not taking Bill English’s advice in 2005/06 meant NZ could afford a Budget in 2008 designed to support Kiwi jobs through the recession.

So if that was the real big picture, how did Mr English come up with his odd numbers?

  1. First, using highly variable quarterly GDP statistics, not the more aggregated and reliable annual numbers
  2. Second, choosing a short period impacted by the global recession to   bring the average down.
  3. Finally, by taking advantage of retrospective statistical revision  called chain linking whereby when recent data falls sharply (for example due to the recession) previous years are “smoothed” down to fit the trend.

The bottom line is National would give its right arm to have economic performance numbers today that matched the average under the last Labour government.

We have a Minister of Finance who has shown himself not above skewing data for political ends.

Lesson for Bill English: “when in a hole, stop digging”.

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Filed under: ACC, Budget, Tax, Unemployment, economy, finance, superannuation
19 Comments

Why don’t Nats want question time ?

Posted by Trevor Mallard on February 24th, 2010

It is not good form to go into details of discussions that happen “behind the speakers chair” between leaders of the house and their shadow or between whips.

But what is very obvious is that the Nats are very very scared of having a question time today. We are under urgency debating ACC legislation. We know that in the end we will lose and all we can do in debate and delay.  But that has its limits and what normally happens is that a deal is done – questions in and a limit to the length of the debate.

There was a fair deal on the table for the Nats but they have run away from it.

So what are they scared of.  Key or English on the differing views on GST. The housing question to credit card Heatley which goes to his priorities for government expenditure. Or Anne Tolley showing her ignorance of her own standards policy again.

But whatever it is they make chickens look courageous.

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Filed under: ACC, economy, education, housing, parliament, politics
16 Comments

Tax expectations

Posted by Trevor Mallard on February 22nd, 2010

Small not too focused group, majority from the right,  but not involved in politics, tongues loosened had a discussion on their expectations of tax changes. I listened.

No real interest in threshold changes. Their consensus was while they wanted more, but thought English and Key didn’t have it in them, the budget in May will drop the top rate to 30c (from 38) the middle income rate to 25c (33) and the under $48k rate to 15c (21). A couple of people thought that Key would phase the top rate change in over two years to make him look less personally greedy. But that it would be announced this May.

Would make for some interesting modelling.

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Filed under: Tax, economic, national
28 Comments

The people smile and wave is relying on

Posted by Trevor Mallard on February 22nd, 2010

The government has two very big issues running at the moment. GST (in the context of the budget) and National’s standards in primary education.

But the Ministers leading these areas are the two most damaged Ministers in the government.

Since his housing rorts have been exposed English has had very little credibility when is comes to fiscal prudence. His problem has been both actual and more importantly perception. Even natural allies are asking whether the change will come in the short term (Power) or later (Joyce).

And while those who work closely with her are mainly being polite the degree of exasperation with Anne Tolley is growing by the week. In this case it is pretty simply a Minister who can’t cope with the job. While that was most obvious in the tertiary area where she was removed following approaches to Key from within the sector it is increasingly clear that she can’t get her head around her own flagship standards policy. Tolley might have made a good junior Minister but she just doesn’t have the grunt to cope with the front bench and the education portfolio.

So should Labour be calling for their resignation. Probably not. Ministers who are seen to be performing poorly are like rust – it sometimes takes a long time to surface but eventually will wreck the whole machine.

I say leave them in place – for now.

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Filed under: Budget, GST, business, economy, education, inequality, national
9 Comments

English speech nothing new

Posted by David Cunliffe on February 18th, 2010

Today was another “Is that it?” day for National.

Bill English’s Chamber of Commerce speech had been hyped as his first major of the year, that would fill in the gaps commentators drove several buses through in Mr Key’s Opening address to Parliament.

Problem was, it was so lacking in new ideas that even Simon Power’s timid response to the worthy Capital Markets taskforce report upstaged it.

Mr English’s line was essentially:

  • NZ needs to export more, earn more and save more – all incontrovertible truisms with which we agree totally.
  • NZ’s economic dolrums are all Labour’s fault – get a grip Bill, you have been Finance Minister for 15 months and that is “so 2008″. Heard of the global financial crisis? Just get on with it.
  • The “common thread” in National’s plan (at least he has found one) is resource extraction (digging up national parks) and farming (sound familiar?) – but nothing much on smarts, innovation or value added. For that matter nothing on productivity or how to build it properly and sustainably (skills, technology and capital).
  • Deregulation will usher in a new nirvana – now that is even older than 2008! Try 1998!
  • His rich mates will still get their massive top rate tax cut, at least equal to the trust rate (collective “phew” in donor boardrooms).
  • The working stiff can still hope for “compensation” on GST (which is surely going up to 15%) and, wait for it, an acknowledgement that it will add 2% to inflation (but no mention of compo for that).
  • Oh, and he announced the Kopu Bridge upgrade for the 12th time!

All in all, you can’t help wondering how he filled his lost decade in opposition, because there is no sign of a new idea 15 months into government.

Come to think of it, this far in, just one extra kilometer of broadband fibre would have been nice too. Labour’s Broadband Investment Fund package was ready to roll out the day after the election.

Where does it leave Kiwis?

On the good side, perhaps there is the glimmering of a shared view of the nature of some of the economic problems: savings, investment and exports.

But there is a vast gulf between National’s implicit “strategy” of “mine it or farm it”, and the needs of a globalised world market where value increasingly attaches to smarts and mobile factors.

And while we are on it, how about some recogition that some of the value that is created here is bled off us by a financial system that is almost enitelry overseas owned.

Who is really being “farmed” or “mined” here?

Answer, the poor old working stiff who tries their best to make ends meet and raise a family. Welcome to the brave new National world – you get your GST supersized at the drive-though while all the fine dining is at someone else’s table.

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Filed under: Cost of Living, finance
19 Comments

Key flip flop on GST astounding

Posted by Stuart Nash on February 12th, 2010

Key has now said that he will not introduce an increase in GST if the data proves that some kiwis will be worse off, or if he can’t get support from the Maori party.  What..??? Astounding.!

The government’s Tax Working Group presented its discussion paper on GST at the end of July last year, so the govt has had all this time to do the figures around this important piece of tax reform.  What have English and Dunne been doing for the past 6 months?  Both Key and English have previously said in the House and the press that no New Zealander will be worse off when GST is increased to 15%, but now we have this amazing admission that perhaps they were wrong.  We always knew they were – and told them so – perhaps they should have listened to the party that represents the many not the few: NZ Labour. 

As for the Maori party – again, Key, English and co have had 6 months to consult and build concensus with their coalition partner on this important issue, but obviously didn’t even tell them their plans before the PM’s state to parliament.  Some coalition, some partnership - where’s the trust.? 

So Key’s flip flop appears to be an admission that he is wrong re the numbers and a case of out-and-out incompetence (wouldn’t want to be Bill English at this moment in time).  As for the Tax Working Group – they must be wondering why they bothered.!

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Filed under: GST, Tax, Tax Working Group
34 Comments

Where’s the Nat front bench?

Posted by Chris Hipkins on February 9th, 2010

I’ve been down in the House this afternoon listening to speeches on John Key’s statement. Interesting to note that their whole front bench, except for Chris Finlayson, who nobody has ever heard of, seem to have ducked for cover.

Instead we’ve been getting speeches from Pansy Wong and Phil Heatley. Where are the National Party’s big guns? Where is Gerry Brownlee? Where is Simon Power? Where is Judith Collins?

Colin Espiner notes in his blog:

“John Key has sketched out the direction he intends to take the Government this year. Now it’s up to Finance Minister Bill English to fill in the blanks.”

So why has English rushed out of the House? When is he going to fill in the gaps? If today was National’s first big test for the year, then they have failed miserably.

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Filed under: parliament
20 Comments

Is John Key racist for criticising Hone Harawira but backing Wiremu Pakeha?

Posted by Trevor Mallard on February 5th, 2010

Kelvin Davis has posted on whether it is appropriate to copyright the Maori Party flag. Interesting discussion but it now appears  that neither Hone Harawira nor his wife has any beneficial interest in any application that may be made in the future.

So why has John Key been so aggressive in his criticism of Hone?

Hone is a sometimes an easy target. He puts his head up and I’ve certainly had a go at him when it is appropriate.

But contrast this question of a perceived (but not actual) conflict of interest of a member of Hone’s family with the decade of the English whanau ripping the taxpayer off by pretending to live in Dipton. And Wiremu was found to have an interest. And it is continuing.

So is Key kicking Hone because he is Maori and if not what is his explanation for his hypocrisy?

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Filed under: Māori, coalition management, copyright, national, polling
23 Comments

Congratulations to school support staff for beating the wage freeze for low paid state workers

Posted by Trevor Mallard on December 16th, 2009

They have broken the government wage freeze for low income workers.  I was briefed in confidence a week ago and have had to sit on the good news. The Standard has covered it well today.

It just shows what a good campaign can do. Congratulations to the NZEI and especially to the thousands of support staff involved in tipping over the governments refusal to agree to any increase.

Remember the vast majority of these staff earn far less than Bill English got every year for a house in Wellington when he pretended he lived in Dipton for a decade.

Now it is important for Bill English to back Anne Tolley’s agreement with the cash.

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Filed under: Budget, Cost of Living, Pay Equity, economy, education, finance, inequality, national, protest, public services, women, workforce
8 Comments

Double dipton on public service ethics

Posted by Trevor Mallard on December 11th, 2009

Have been looking for a copy of the speech he gave.

Unusually not available on government website – wonder why.

Apparently didn’t mention housing rip off and was very unhappy when it was raised in the first question.

Link to the conference.

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Filed under: Budget, Pay Equity, democracy, economy, finance, inequality, national, public services
9 Comments

Key & English break the law

Posted by Chris Hipkins on December 8th, 2009

Once again the National-led government have been caught out changing the rules so that they can live the high life while they ask everyone else to stomach cuts. John Key has changed the rules so that Ministers are allowed to have a self-drive car in Wellington instead of at their primary place of residence.

The big issue though is that Bill English had a self-drive car in Wellington before the rules were changed, thus placing both him and John Key (who is the Minister responsible) in breach of the law. All year John Key has refused to take action against English on the basis that he hadn’t broken any laws. Now they both have. They have both breached the Civil List Act 1979.

When my colleague Pete Hodgson questioned Key about this in the House today he ducked out, leaving Gerry Brownlee to answer on his behalf. They must know they’ve really stuffed up on this one.

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Filed under: national
56 Comments

National’s ACC and Super scaremongering exposed

Posted by Chris Hipkins on December 6th, 2009

Earlier in the year John Key sent a letter to every senior citizen in my electorate reiterating his promise to resign if the National-led government cut the rate of superannuation or raised the retirement age. It was a hollow promise. Key knows it’s a promise he will never need to keep because he will be long gone by the time the crunch comes. It will be at least 10-15 years before the real pinch starts, and about 25 years before we feel the full effects of the “baby boomer” retirement. Key’s promise is all the more hollow because he, along with Bill English and the rest of the Cabinet, have cut savings to pay for future superannuation entitlements.

Under Labour, Michael Cullen set up the New Zealand Superannuation Fund and set aside some of the money that we’ll need in the future to pay for Super. Cutting contributions to the fund was one of Bill English’s first moves as Finance Minister. It was a stupid decision. Latest Treasury figures show the fund with higher than forecast returns of the $1.3 billion for the four months to 31 October. That return would have no doubt been higher if more money had been paid into the fund. National argued the cut was necessary due to the recession, ignoring that the best time to invest is when prices are low.

National’s scaremongering over ACC has a similar hollow ring to it. John Key and Nick Smith used the lower returns from the ACC investment funds to justify huge levy hikes and cutting of entitlements. But ACC’s investment funds had returns of $600 million in the four months to 31 October, which like the NZ Super Fund were higher than expected. Week by week, the National Party’s economic track record is looking all the more superficial and lightweight.

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Filed under: ACC, economy, superannuation
8 Comments

English in full bloom

Posted by Chris Hipkins on November 29th, 2009

If you were Bill English and you were preaching fiscal restraint for others, you’d go out of your way to make sure you were leading by example right? It seems not. First we had revellations that the Nats had doubled the number of Beehive staff earning over $100k a year. Then we had the housing allowance debacle. Then we had yesterday’s revellations about the motorcade incident. And now we have…the flowers!

Stats released last week show that the National-led government have pumped up the spending on flowers for Beehive office suites by about 15%. The biggest increase? None other than the ‘Dipton Petal’ himself, Bill English, who spent 110% more on flowers for his office than Michael Cullen did during a comparable period.

For the record, from 1 Jan – 17 Nov the National-led govt spent $52,010 on flowers compared to Labour’s $45,733. Labour weren’t telling hard working Kiwis they had to put up with a wage freeze for the next five years either.

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Filed under: national
23 Comments

Plain Wrong English

Posted by David Cunliffe on November 18th, 2009

Well folks, after weeks of dithering, the good folks at TVNZ have finally admitted what everyone else knew all along – that the idea of gifting hundreds of thousands of dollars of free ads to Bill English was wrong and ill conceived, and that their clearance process was flawed.

The interesting thing is that Bill still doesn’t seem to get it – he is still denying that there was any error of judgement on his part….. sound familiar?

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Filed under: Uncategorized
14 Comments

But rodney was just agreeing with bill

Posted by Trevor Mallard on November 6th, 2009

Rodney has to apologise for telling the truth about John Key when all he was doing was telling the truth and backing up Bill English.

Remember English’s comments about “John “bouncing from cloud to cloud” while he (Bill) grinds away on policy”

And btw we hear that it wasn’t the first time Rodney had made comments like this about the approach of Key and other Ministers. An Act meeting at a place I frequent most Tuesday lunchtimes?

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Filed under: act party, national, parliament
5 Comments

Where’s the plan?

Posted by Phil Twyford on November 1st, 2009

One of the most telling moments in this morning’s Q&A interview with Bill English was when Guyon Espiner asked the Minister: “Cutting spending isn’t really an idea is it? What other ideas have you got to make us more prosperous?”

English then reeled off infrastructure, cutting red tape, public sector productivity and the tax working group. None of which amount to a strategy to address the structural weaknesses of the New Zealand economy surely.  Finally Espiner tried again: “What is the key policy you want to implement?”  The Minister’s response: a thriving business environment. Which it needs to be said is a goal, not a strategy.

So let’s look at English’s four ideas and how the Government has performed in its first year:

Infrastructure – Delayed the roll out of broadband for a year causing uncertainty, shifted priority from  public transport to roads, not much else. Sorry I forgot the bike track.

Cutting red tape – RMA reforms scaled right back in the face of community and expert opposition, Hide’s core services agenda for local government reduced to a PREFU and plain English financial statements. Not much here to make the boat go faster.

Public sector productivity – Job cuts and a wage freeze. It is a kind of productivity increase.

Tax working group – Yet to report but the big idea seems to be a transfer of wealth from ordinary Kiwis to high earners by way of reducing the top rate and bumping up GST.

The Government could claim that it has been focused on riding out the recession. Yet as Brian Fallow writes, its measures here have been “pretty marginal in the overall scheme of things”. The Restart package for those made redundant is helping 5000, while there are 138,000  unemployed and 60,000  on the unemployment benefit.  The nine day fortnight is helping just 39 businesses.

Then there is education. Jon Johansson in yesterday’s Herald says: “…the three R’s announcement is so mediocre it barely constitutes an education policy, let along being elevated as one of the six crucial policies to enhance our economic performance as Bill English recently stated”.

So having done serious damage to Kiwisaver as a tool for turning around our poor national savings record, and axed the research and development tax credit, and replaced the Fast Forward Fund for commercialising agricultural technology with an inferior alternative, you are left wondering where is the plan?

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Filed under: Tax Working Group, economic, economy, jobs, productivity, public services
24 Comments

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