Finance Minister Grant Robertson wants to use the COVID-19 recovery as an “opportunity to reset our economy”.
Delivering a virtual speech to Business New Zealand on Wednesday, he outlined his vision for how the economy should eventually be rebuilt.
At the same time, Prime Minister Jacinda Ardern announced she, along with government ministers and public sector chief executives will take 20% pay cuts for six months.
She acknowledged the move was about “leadership”, and wouldn’t shift the government’s fiscal position, being valued at $1.6 million in total.
Back to Robertson - he said that while taking account of the “massive disruption to some sectors”, his longer-term plan is to also “address some of the long-standing challenges we face”.
He specifically mentioned climate change, inequality, New Zealand’s low productivity, and trade diversification.
Robertson reiterated the sentiment of a comment Ardern made on Tuesday, saying, “we must also not allow inequality to take hold in our recovery. In fact we need to take this opportunity to improve the prospects of all New Zealanders and tackle those long-standing divisions.”
He mentioned his “strong personal belief in the power of the state to do good”.
“It is of the utmost importance that the state continues to play an active part in the economic recovery, providing leadership and direction as we move forward through the challenging times ahead,” he said.
Yet he recognised that part of the recovery is charting a “course to return to a sustainable fiscal position”.
Robertson has made no secret of the fact the Government’s low debt position has given it headroom to borrow to inject money into the economy.
He also said the reset should see New Zealand “look at greater diversification of our export markets to make sure we are prepared for any future shocks to trade networks”.
“We’ve seen through this virus what happens when sectors and industries are overly reliant on certain markets for their export revenue.”
Robertson’s comments set the scene for his May 14 “Recovery Budget”.
“It will include funding for the cost pressures that are necessary part of keeping our country ticking over. But we will devote much of our resources to kickstarting this recovery,” he said.
“We will do this through the lens of the intergenerational wellbeing of our people and with the long-term adjustments we need to make in our sights.”
This is what the pay cuts look like:
Here is Robertson's speech in full:
Thank you to Kirk and Business NZ for hosting me again today, and indeed for all your help and input into the Government’s response to the COVID pandemic thus far. The relationship has been extremely beneficial and I look forward to continuing to work together as we move through the lockdown and out the other side.
For me, like many New Zealanders I think, the last month has been the most extraordinary of my life. Not least because having spent the last two and a half years as Finance Minister operating a tight fiscal ship, I have approved expenditure of more than $20 billion in three weeks. Despite the dramatic shift I am convinced it has been the right thing to do.
I am not saying for a minute that we have got every single action as a government 100% right but in a fast moving, uncertain and uncharted situation we have been as decisive, clear and compassionate as we possible could be.
And it appears to be working. We have turned the corner, or come down from the peak as the Director General of Health said yesterday. It’s the result of the whānau of five million pulling off a monumental team effort.
I recall when we were getting ready to move to Alert Level Four someone saying to me that they did not think New Zealanders had the discipline or the temperament to deal with a lockdown, as compared with countries who were seemingly having some success with these sorts of measures.
Well, New Zealanders have well and truly proved that wrong. I actually don’t think it’s about discipline so much as our innate sense of loyalty to one another and pride in our country to beat any enemy who comes our way.
And to carry that thought on - that’s why as I said to the PM, we can’t squander a good halftime lead by getting complacent. We will stay the course, break the chain, control the virus and come out the other side, ready to build our nation again.
Of all the things we have done, the wage subsidy scheme has been one of the most extraordinary aspects of an extraordinary time. In just over three weeks more than $9 billion has been paid out to support nearly 1.5 million employees. And actually paid out too.
While some may argue that schemes being put in place overseas are more generous, ours has paid out. No money will be paid across the Tasman from their scheme until May. In the UK it is just about to start- but only for furloughed workers.
The Wage Subsidy Scheme has as its core principle keeping people attached to their jobs. Giving business and households the cashflow and confidence to look to the future, uncertain as it is.
In some senses for me this draws together the threads of one of my driving forces for being in politics. My fundamental belief in the dignity and importance of decent work. Many of you know that the project that gave me the greatest satisfaction in opposition was The Future of Work Commission. It was both about how we make sure there is decent work and higher wages in our future, but also working differently, drawing together business, unions, academics, entrepreneurs and more to develop ideas and solutions.
Well now the Future of Work has arrived, and it looks a bit different than I imagined, but it is the challenge I have been waiting for, and one I want to work with you on making the best of for our people.
What I want to do today is further fill out the detail our plan for the response and recovery from COVID19, through the first wave of the immediate response, to the second wave of kickstarting the economy and the third wave where we reset and rebuild our nation from this once in a century shock.
I also want to spend a little bit of time on the economic context, and the topic on so many people’s minds - what our exit from Level 4 and moves through Level 3 and Level 2 look and feels like.
Our Plan to Respond and Recover
1. Wave One: Fight The Virus and Cushion the Blow
From the outset we have acted decisively to contain the virus and avoid the extreme human and economic costs of an uncontrolled outbreak.
That’s why this is first and foremost a health response - because the best protection for the economy is to stop the spread and eliminate the virus from New Zealand.
In doing so, we have applied three key principles to our economic approach: First to act swiftly with no regrets. Second to improve cashflow and confidence. Third to act in coordination to secure and support our financial and business sector.
Our response has already seen unprecedented support rapidly deployed by the Government.
Our initial $12 billion package included an initial $500 million boost for health, wage subsidies for affected businesses in all sectors and regions, a $2.8 billion income support package for our most vulnerable, a $100 million worker redeployment package, $2.8 billion in business tax changes to free up cashflow encourage investment, and support working from home, and a $600 million aviation support package.
But in acting swiftly, we have been prepared to shift our response as conditions change or new information comes to light. We have continued to add to and modify the range of policies aimed at cushioning the blow of COVID-19 on New Zealanders.
We’ve put together the Business Finance Guarantee Scheme, alongside the Reserve Bank and retail banks. The Scheme is designed to help enable banks to provide credit to customers where otherwise the bank may not be willing to do so.
Nine banks have signed up to participate in the scheme including ANZ, ASB, BNZ, Heartland Bank, HSBC, Kiwibank, SBS Bank, TSB and Westpac. Over the weekend I signed the deed, executing the agreement between the Crown and the banks, with some banks now able to deliver on the scheme as of yesterday.
We’ve also recently announced changes to the Companies Act to help companies facing insolvency remain viable.
These changes include giving directors of companies a ‘safe harbour’ from insolvency duties under the Companies Act, enabling businesses to place existing debts into hibernation, allowing the use of electronic signatures, and giving temporary relief for entities that are unable to comply with requirements in their constitutions or rules because of COVID-19.
In addition to these changes, this morning we announced a suite of further support measures for Small and Medium Sized Enterprises.
Our tax loss carry-back scheme will allow a large number of businesses to access their previous tax payments as cash refunds, at an estimated benefit of $3.1 billion.
We are bringing forward the tax loss continuity rules to make it easier for firms to raise new capital without losing the tax benefit of their existing losses. This is a useful initiative particularly for start-up companies.
We also know that some businesses are struggling to meet their non-wage fixed costs, like interest, rent and insurance, but are not currently in a position to take on additional debt.
That’s why we’re providing greater flexibility for businesses to meet their tax obligations, which should provide cashflow relief, as well as providing tailored support services to help businesses weather the storm, at no charge to the business.
Using established services including the Regional Business Partner Network and the helplines run by the Employers and Manufacturers Association and Canterbury Chamber of Commerce, we are providing $25 million to fund specialist, tailored advice to where it is needed, fast. We have been getting clear feedback that particularly small and medium enterprises are asking for support on business continuity.
We have also introduced measures to support commercial tenants and landlords.
Many businesses may be finding it difficult or impossible to pay rent if they are no longer able to access their property, and if landlords are not receiving rent, they may not be able to meet their mortgage obligations.
As a result, the Government will extend the current 10 working day timeframe that commercial landlords may cancel the lease to 30 working days. This will be for both the period the tenant is in arrears before the notice is given, and for the period to remedy the breach.
The Government will also extend the timeframes for lenders from 20 to 40 working days for mortgaged land, and from 10 to 20 working days for mortgaged goods.
These measures will support an orderly process to deal with commercial lease disputes caused by COVID-19.
These changes will require legislation, however we have announced these decisions early to give businesses certainty, and will be asking Parliament to agree to make some of these changes retrospective.
2. Wave Two: Kickstarting the Economy
Our response is not about distinct phases that follow one after the other. They are waves that are all under way at once, lapping over and under each other. Much of the work we have done and continue to do on the first phase – cushioning the blow and fighting the virus - will continue in the coming months.
We are also actively working on what comes after the Wage Subsidy Scheme, assessing what further backing businesses and households need as we further understand the impact of COVID 19, alongside further support for the health system.
The guidance we are releasing on Thursday for coming out of Level 4 will give businesses and workers a much better idea of what the more medium-term picture looks like for them, for the economy, and for society.
But we also have an obligation to work together now to prepare to kick start the economy as we move down the alert levels. Our way of working has to continue to be collaborative and decisive.
We have a range of workstreams well underway aimed at the medium term positioning for recovery. I will mention some critical ones today.
- We have established the Economically Significant Business Group inside the Treasury to guide our work with New Zealand’s major businesses. We have brought in outside commercial expertise to support this, and have begun conversations with a range of network critical businesses. There are a variety of options available should the Government need to support businesses that are essential to our recovery and our supply chains. We showed with our $900 million package for Air New Zealand what we can do.
- Phil Twyford and Shane Jones have tasked the Infrastructure Industry Reference Group to prepare a list of infrastructure projects and programmes from across central and local government, and the private sector, that are shovel-ready. These could be deployed as part of a stimulatory package as soon as the construction industry returns to normal.
The Reference Group is headed by the Chair of Crown Infrastructure Partners, Mark Binns. It is supported by the work David Parker is doing in terms of changes to the RMA and consenting process to move things forward as quickly as possible.
Phil Twyford and Shane Jones have also continued to work on redeployment support, especially in our regions and they will have more announcements to make about that in the near future.
- Megan Woods as Housing Minister is working to bring forward projects that will drive not only jobs, but also deal with our long term housing issues.
- I have asked Chris Hipkins to lead the work on the critical training and employment support programme that has to take place from here. Thousands of New Zealanders are going to need to re-train, gain new skills and support the kickstarting of our economy. This work is in partnership with business, with unions and with training providers.
- The Prime Minister, drawing on advice from her Business Advisory Group, has called for the creation of the world’s smartest border. Using technology and our ‘natural moat’ as she calls it, to give us not just protection against the virus but a window to a future where we can move people and goods safely again.
- Winston Peters and David Parker are charting a new course for trade and diplomacy in a radically changed world. We need to continue to trade, and look again at our relationships to see how we can leverage our natural advantages and excellent progress on controlling the virus.
In every sector of our economy and society we have a need, and an opportunity, to come through the other side of this with a strong recovery plan. We have tasked all Ministers with reaching out to their sector to help develop these plans.
It is important not to see this narrowly. Our ingenuity and innovation will matter as we re-imagine what our arts and music scenes look like in an era of physical distancing, as much as in other sectors of the economy.
As we move towards the Budget on the 14th of May we are drawing these recovery plans together to play our part in kickstarting the economy.
The Budget will be a Recovery Budget. It will include funding for the cost pressures that are necessary part of keeping our country ticking over. But we will devote much of our resources to kickstarting this recovery. We will do this through the lens of the intergenerational wellbeing of our people and with the long term adjustments we need to make in our sights.
And I know the same thing is happening in businesses around the country. I have heard the stories of people re-imagining their café or restaurant in a world of physical distancing. The manufacturers shifting gear to meet needs in the health sector, the exporters altering their supply chains in real time to keep exports going.
Supporting that optimism and spirit is essential to making this work.
3. Wave Three: Reset and Rebuild
We must also make this the opportunity to reset our economy, to take account of the massive disruption to some sectors, but also to address some of the long standing challenges we face. In doing so we also must chart a course to return to a sustainable fiscal position.
This work will again require us to develop new ways of working and break down the barriers between partners in our economy.
We have formed a core Ministerial Oversight Group for this work with the Prime Minister, the Deputy Prime Minister, myself and Minister Parker. We will soon be reaching out to both Ministerial colleagues but also the private sector, unions and more to have input into this work.
We must answer the big questions about our economy in these unprecedented times. What should we make and do here in New Zealand to ensure our sustainability; what institutions do we need to support our economy; what is the role of the State; how do we trade with the rest of the world in this new environment; and how will the financial system, both here and globally, cope?
Climate Change will continue to be a major challenge long after the effects of this pandemic have been mitigated. As Rod Carr raised yesterday, our economic recovery needs to be one where emissions continue to reduce and more sustainable technologies are invested in and taken up.
New Zealand has had a long-run problem of low productivity. We need to look at our uptake of new technology and new ways of working to ensure that this problem does not again become baked into the New Zealand economy through our recovery.
Underpinning all of this, as the Prime Minister said yesterday we must also not allow inequality to take hold in our recovery. In fact we need to take this opportunity to improve the prospects of all New Zealanders and tackle those long standing divisions.
We’ve seen through this virus what happens when sectors and industries are overly reliant on certain markets for their export revenue. New Zealand must always remain a trading nation, but we will need to look at greater diversification of our export markets to make sure we are prepared for any future shocks to trade networks.
The importance of the role of the state has been underlined by this crisis. I hold a strong personal belief in the power of the state to do good. It is through a well-funded, highly functional public service, that we have had the ability to coordinate and provide leadership for New Zealanders, guiding both the public health response and the economic response to this crisis.
I believe it is of the utmost importance that the state continues to play an active part in the economic recovery, providing leadership and direction as we move forward through the challenging times ahead.
Finally, I know that what we have asked New Zealanders to do in this crisis is huge. As we have all had to make sacrifices in doing our bit to stop the spread of the virus, so too will we all have a part to play in our economic recovery.
And as we have all made sacrifices, we all should benefit from our collective recovery on the other side.
A final note on our way of working in this wave. We recognise the important role that the business community has in supporting this big picture thinking. You will hear more from us soon on how we will look to shape that engagement.
Economic context
To finish, no doubt you will all be aware of the Prime Minister’s announcement last week that on the 20th of April, two days before the lockdown is due to finish, Cabinet will make a decision on next steps based on the most up to date data that we have.
That means, if we are ready to move to Alert Level 3, businesses will have two days to implement arrangements.
In order to support that, tomorrow we will release guidance for how businesses could operate under reduced alert levels and what measures need to be taken for them to do so.
We are taking lessons from the swift move into Alert Level 4, and aim to give as much clarity in advance as possible.
This means developing some basic principles for safe economic activity and then working through that on a sector-by-sector basis, and providing examples to businesses to guide their decisions. We will consult and iterate on these in the development and application.
What I can say now is that our emphasis at level 3 moves from “essential” economic activity to “safe” economic activity.
I am aware of the work that businesses large and small are doing to change their way of working to operate in as safe a way as possible so we can allow as much activity as possible. The critical questions are: is it possible for your business to have social distancing? Can you build in contact tracing tools or mechanisms to keep track of your supply chain and customers?
To be clear, any decision to move out of Level 4 will be made within the context of an elimination strategy for COVID-19. The primary factor that Cabinet will take into consideration is whether the Director-General of Health is confident that the disease is under control.
But I can also assure you that Cabinet will consider evidence of the impact of current containment measures on the economy and wider society.
The economic modelling released by the Treasury yesterday will help inform this decision, but I would caution that the path the economy takes from here remains extremely uncertain. What this analysis does do is help us weigh up the implications of different fiscal and regulatory policy decisions.
The Treasury’s economic scenarios detail how the COVID situation could play out differently for the economy based on the amount of time spent at each Alert Level.
These scenarios back our decision to go hard and go early in the fight against COVID-19 because the quicker we stamp it out, the quicker the economy can recover. The longer we waited, the more cases and deaths New Zealand would have had.
This also shows the importance of everyone continuing to do the amazing job they are doing to stay home, break the chain and save lives. This is giving our businesses and the economy the best chance to get going again on the other side.
173 Comments
@WAYMAD , dont panic mate there is going to be no economy to speak of to re-distribute or equalise after this .
Zero cannot be divvied by 5,000,000 people without getting the same result .............zero
Burger joints will be closed ( thousands of jobs and ) , our only oil refinery at Marsden point now certain to be closed (about 2000 direct and indirect jobs & Whangarei's entire economy ) , Tiwai smelter sure to be closed and thousands will be affected , hotels , motels , hotsprings , jetboats down to Bungy ropes will lie idle
Tourism is toast (likely our biggest single employer) , timber is not being exported ( another big employer ), food is being ploughed -in , GAS extraction is bascially BANNED( Gas was a major investment and FDI flow as well as Royalty source ) , dairy farmers are treated as cash-cows and as punchbags over environmental issues .
And now the HERALD today has the most stupid OPED ever, suggesting we "sell'citizenship to millionaires .
I am left shaking my head
Well, just a hint of book summary, then the speak.. it will be apparently clear, as who those movie actors - they essentially act the same:
https://www.scoop.co.nz/stories/HL1507/S00101/the-fire-economy-new-zeal…
https://www.youtube.com/watch?v=MGrBCtOt4Qs
I was curious to see that the talk of selling citizenship to millionaires did not mention whether simply parking the money in land would be excluded (i.e. they'd have to invest in productive enterprise). If it's not, it's just more screeching for propping up of property speculation.
Question though, have I missed some news on Marsden Pt? Last I heard was that they were just having to refine less because there was less demand due to less driving.
Also, we've just had the first gas discovery in decades. Let's hope better royalties for NZ are negotiated this time around, although potentially it's too late for that.
The smelter - are we reducing the welfare support we provide to it?
Hmmm, so reading Hosking's rant today, he certainly seems to be operating under the assumption that the $50 million amounts will be flowing into property (and this apparently is a good thing) rather than business.
Stupid idea. Transparently just wanting to change the rules to prop up property investment.
I thought we were already tackling that considering the redistribution of income going on already...socialism simply takes money from one area and distributes it to another. NZ tried it in the 70's where you were being taxed on a second job up to 90%. It discourages people who are willing to work hard to get ahead and gives one no incentive to do so. Hard workers left NZ in droves in the 70s and 80s due to this mindset at the time and caused massive economic problems..so buckle up if we are headed there again.
Great to see; something really aspiration as the growth of increasing inequality in New Zealand is sadly producing a society so different to values I knew 60 years ago.
My only hope is that the rhetoric has greater success is than KiwiBuild and introduction of a CGT.
Is it possible that the failure of Kiwibuild and CGT is because Labour have a minority government? That with a majority they would have delivered on these? National also failed to deliver on most of what they promised last time. Forced compromised is both one of the strengths and weaknesses of MMP in my opinion.
Politics is often portrayed in such a tribal and irrational way in these comments sometimes.
Look at the UK political situation as an example. A weak Tory government led to a toxic stale mate on Brexit for 3 years. No progress made. The minute Boris got a strong majority, things progressed rapidly. Even people that had previously voted Labour and/or Remain voted for Boris because the instability of the no-mans land was even worse. Not commenting at all one whether Boris or the Tories will do a good job or not, but they can actually deliver on what they pledged to do with such a sizeable majority. I'm pretty sure Labour doesn't have anywhere near that level of power.
Geez Lanthanide , what planet do you live on mate ...........Planet Labour , or that very distant Green coloured plant with a red circle inside it ?
The Government does not have the skills , financial resources, monetary resources or organisational ability to build housing for everyone .
Kiwibuild was a delusional idea based on wishful thinking by a politician who had never had a proper job in the real world
And few Governments have ever got it right , not even that bastion of socialism, Russia , those rows and rows of monotonous tenement blocks are just the pits
"The Government does not have the skills , financial resources, monetary resources or organisational ability to build housing for everyone ."
Yip, exactly what I said - neoliberal shackles preventing the government from getting involved in those things. They clearly have the financial and monetary resources to do it.
"Kiwibuild was a delusional idea based on wishful thinking by a politician who had never had a proper job in the real world"
Actually it was cooked up under David Shearer, and originally said to be 50,000 houses in 10 years, but that sounded a bit lame so they doubled it. Jacinda rose to the leadership merely 6 weeks before the election so had no scope to change the party's policy platform.
But it sounds more fun to talk about someone who only ever worked in a fish and chip shop eh, even though they're now the most powerful person in the country and got there ahead of many other more 'experienced' politicians.
Do recall that so many Kiwis in previous decades got their chance at home ownership because of government participation in NZ's building of affordable housing stock. Including my parents. Housing NZ is still a good builder of stock too.
You don't equate NZ's affordable housing of previous decades with the USSR's apartment blocks, do you?
I believe the supply chain issues couldn't be fixed easily, Twyford had a wish but not a clue how to make it happen and wasn't prepared to allow a PPP to do it for him. It was apparent that only business with govt money could make it happen and that would take away his kudos.
gingerminja
The days of a Labour (& Greens) minority government are most likely gone.
I think that the way Jacinda has handled the current situation she has shown far greater strength than in the previous 30 months and she has gained considerable popularity as a result. Winston will be acutely aware that after 19 September it is most likely Jacinda will have no further need for him and he is astute enough to sidle up to her as part of trying to be part the Labour future (and after all Simon has caste any hope of a coalition with Nats).
While I have posted many times criticising Jacinda, her current increase in popularity is why Winston and Simon are desperately calling for elections to be put off to November.
https://www.nzherald.co.nz/nz/political-poll-labour-down-national-up-bu…
Jacinda's popularity is crashing. The mask has slipped.
Nice sentiment, I doubt they will do anything like they think they will. Unfortunately this government is high on moral principle, low on execution skills. That means they respond reasonably in a crisis, but cannot execute meaningful change as they don't seem to possess the requisite skills to understand the problem.
For instance: "New Zealand has had a long-run problem of low productivity. We need to look at our uptake of new technology and new ways of working to ensure that this problem does not again become baked into the New Zealand economy through our recovery."
Technology uptake requires investment and R&D, hand in hand. Investment in this country goes almost completely into residential housing, an unproductive sector of the economy. The productive economy is left with investment scraps. Such a change to improve productivity will only come about when you change the tax system to favour productive investment over housing speculation. This government has already stated quite clearly that it will not change the tax system in this regard. Sure they upped some R&D tax credits, but then removed Callaghan grants (often used by startups in the "get going" phase). Additionally, they encourage migrant workers to enter low productivity industries for low pay, low job security, limited visas.
Ergo, they do not understand what effects productivity, therefore they have almost zero chance of improving it.
The lack of productivity "thinking" and innovation by our business owners can be attributed to their lack of "financial headroom", i.e. a healthy balance sheet with retained profits salted away. SME's and larger companies are always nose-to-grindstone, and being heavily focussed on their financials, whereas our productivity heroes of Japan and the USA have access to almost bottomless capital from a private sector willing to " take a punt", and Banks who are prepared to be in on the same game. No risk/No reward. Our business environment encourages no risk taking and therefore no innovation. Also IF you do manage to be a tall poppy and gain such a valuable position you are then crucified by the media and public and heaped with derision. A lot of property investors would happily invest in business instead of housing, but their cash pool is so low as to be useless. If our banks and the tax rules allowed us to leverage our deposit to make a bigger impact, then NZ business would be awash with funding for their productivity initiatives. Such high risk requires high reward to compensate and I am talking of returns after 1-2 years of 15-20% PA on capital. That covers your leverage costs of 8% plus a risk component and finally an actual earned profit. Even current venture funds here are struggling to return 8% and they are dying.
Why would you be productive in NZ based upon the incentives we have;
a) borrow from bank and leverage against housing, earning capital gains (no tax..)...
b) do no or little work and receive a benefit - (that goes into the hands of property investors and pushes the prices of para a up)
Then we say - where's the productivity?
You must be dreaming mate.....
After reading this it makes me wonder how focused the government really are / were
https://www.stuff.co.nz/business/120912415/coronavirus-how-tindall-morg…
Why did NZ business leaders have to take charge - this should have been the governments job. All governments seem to have the same problem - a lack of true leadership.
Let me rephrase my comments for the robot.
Ministers such as Twyford, Jones, Woods, Clark etc have not so far demonstrated competence.
If this government achieves what it says it will, it will easily win the election. If it is another shambles it will lose by a country mile.
Either way, I am not predicting a close result.
What does all of this mean? I watch the daily press conferences and note how tame most questions are. The PM seems to be on cosy first name terms with most reporters, who never get to chance to respond to her often evasive answers, which at times are plainly wrong. Bloomfield seems to have a better handle on things, but can someone ask why, when it was known some weeks ago that rest homes were particularly vulnerable, more steps weren't taken to protect their residents?
Pietro - the retirement village industry started to close up shop and protect residents in January, and to be fair, there has been a lot of communication from health authorities with the retirement village for a couple of months - rest homes are always the most vunerable because they have groupings of the oldest most vulnerable members, yet in NZ less than 1% of rest home have Covid-19 cases, compared to 10 times plus that in most other countries i.e. they seem to be doing a damn good job
Waiting for Full Scoff aka Phil Goff to take a pay cut as should all councillors, CEO and staff. Bloated council bureaucracies need to trim expenditure and stop borrowing for non essential projects like 20 million on attempts to cull fallow deer on the west coast of Auckland.
https://www.stuff.co.nz/national/health/coronavirus/121027654/live-coro…
Phil Goff should take a 50% cut.
Meanwhile the Mayor of Dunedin as has a discussion with himself and decided it's business as usual. Tax and spend. Mayor Aaron Hawkins is from the Green party, but it's the same old same old in Dunedin. Ratepayers are to be farmed to pay for pet projects.
Reset my arse !!!!!!
He should stop pontificating with all this socialist claptrap .
He starts with climate change , which is a smokescreen ( pun intended ) for his second point which is inequality.
Thats the sting in the tail .............he wants us to all be "equal", fine for him with a massive salary and lifelong pension , but having lived and worked in pseudo communist countries , I know that equality is a non existent concept , if everyone is ëqual"then everyone is poor
He has one thing on his mind and thats Capital Gains Tax , gains that have been achieved by those with discipline to save and invest and take risks .
He has never liked the productive sector of our economy , farmers are routinely used as punchbags , business is seen as a cash-cow for all manner of pet projects to be financed through higher taxes , levies and duties .
He wants all power to be centred in the STATE TO DO GOOD "and even says as much !!!!!!!!!!"
Its discredited, failed 1970's socialist BS and we dont want or need to ever go back to that
Boatman. Cindy a few days ago ruled out CGT or raising NZ super qualifying age. One of the few positives from the Cullen tax review fiasco was to highlight the administrative complexities and inefficiencies of wealth, land and inheritance taxes and these problems have not gone away. Our corporate tax rates are already upper quartile.
Lockdown getting a bit much for you boatman?
What if we all just lived $100k lifestyles instead of millionaire and billionaire lifestyles. Would we all be poor?
"gains that have been achieved by those with discipline to save and invest and take risks"
Could you detail your personal hard work and discipline that created the capital gain in your home please? Oh and what risks did you take? I'd like to learn...
To illustrate your point Boatman, a few years ago it was proposed under a UK Labour govt to redistribute the wealth of the haves and give it to the have nots. When they did the math the wealthy would be left with nothing, and the 60 million population (at the time) would each get £10, which was about 2x the average hourly rate. i.e. Two hours of pay. The proposal was quickly dropped out of sight.
They seem to understand inequality but do not want to address Capital Gain Tax - Hypocrat.
If daily wage earner is paying tax even on $1 that is earned, how come CGT is ignored on million earned.
Government takes cover behind 5 year brightline test knowing that almost everyone gets away with the loophole.
How buyers have to fill different forms like overseas investment and money laundering when buying a house, why can't the government add just one question for sellers : Do you own any property by self/jointly or as a trustee/as a director in a company with YES and NO options. If yes provide full details.
And the same to be immediately reported to IRD if the answere is YES and any false declartion will be prosecuted.
ALL investor house sales in under 5 years are currently paying tax. All reputable investors and yes house flippers are budgeting for and paying the tax on sale. IRD has been given funding specifically to review all house sales and ping the rogues who haven't paid. Reputable investors want a level market just like you do.
Look, if anyone knows how to run an economy its John Key, Steven Joyce, Jerry Brownlee and the smartest guy who never was an economist...Bill English. Just ask them what to do, afterall they did a brilliant job post gfc and post chch quakes....
Now that WOULD BE a horror story!
4th estate. You've had the nightmare on covid street then - the one where Genter spends the next few months widening footpaths, Shaw carries out his plan to cut the nations dairy herd by 50% and the Australian economy bounces back while we muddle our way through confusing lockdown rule variants which knee cap our urban economy and the nation finally has enough of being instructed to wash our hands and be kind by a reproving Ardern.
LOL thats is classic...
OK how about Simon Bridges starring in 'Benebusters' where he plays the protagonist who solves both the countries energy issues while eliminating the beneficiaries of the country by burning them alive in the furnaces of Huntly power station? You can see he'd be sooo good for that movie!
Whilst using a private superannuation scheme to "double dip" (as it was referred to when Bill English did it via a trust, that loophole now closed) into taxpayer funds:
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11154765
This leads me to doubt his sincerity re respecting taxpayer contributions.
Genter has turned truly wacko. But there is an upside.
Morning coffee with the neighbours, (suitably distanced) has come up with the following plan for our short dead end street.
We are going to apply for a million bucks to move those road cones left over by Downers to the middle of the street. Thus walkers and cyclists will be able to socially distance, as under Genter's new Scheme.
Should take about 10 minutes to set out the cones, a bit longer to divide up the consultancy and design fees amongst us.
The way this government is throwing money about, the million bucks should turn up about Monday.
Best of all, because of the lockdown we won't have to endure Genter at the opening. Magic.
I think you mean Cullen, who ran budget surpluses for 9 years straight and paid us down to net-0 government debt, which is what allowed Bill English and John Key to run up the largest public debt this country had ever seen (until now, obviously).
If it weren't for Cullen's conservative careful nature, we would have had a much harder time through the GFC and earthquakes than we did and would likely have had to have had actual austerity policies like most of Europe did.
In 2009 after the election, Bill English said "this is the rainy day the government has been saving for" with respect to the GFC.
Just imagine where we would've ended up if Brash had won in 2005 and given out the massive tax cuts he was promising.
What a load of bollocks. " The facts are somewhat different. Having spent taxpayers' money like a drunken sailor to stay in power, Labour left office in 2008 with surplus having turned to deficit through the combination of a domestic downturn and the global financial downturn.
National had barely got its feet under the Cabinet table before the Treasury further revised its forecasts and projected deficits of $6 billion-plus.
So much for "careful management". Labour is relying on short memories to rewrite history, however. It won't fool everybody. But in the heat of an election campaign, it is easy to spout fiction and difficult to establish fact."
https://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=1…
1. National kept hounding Labour to give tax cuts. Cullen finally did in his last budget, which is what contributed to the deficits. That is when Cullen infamously delivered the line that the "cupboard was bare" - he had spent every spare penny on the tax cut and didn't believe National would be so reckless as to borrow money to fund tax cuts. Unfortunately Cullen was wrong - National had no qualms about borrowing for tax cuts.
2. National borrowed money to cut taxes during the worst recession since the depression, and again during the worst natural disaster this country has ever seen.
3. The forecasts were just that - forecasts based on the then-spending plan. Had Labour won the election, they would have changed the spending plan to avoid the deficits.
..."every spare penny on tax cut..." Spare me - you and th forgot thee odd lazy billion on a worthless train set. He was such a sad individual he left the country in a deficit so he could spite national. Even Audrey was on to it.
"Phil Goff's revealing comments this week showed that Labour is into legacy politics and this is a legacy Budget - a legacy to National. It will make it harder for National to win and if it does win, it will make it harder to govern.
Cullen told journalists before delivering his speech: "I would not want to repeat the famous Robert Muldoon statement that the cupboard is bare - actually Sir Robert had sold the cupboard off and pawned the house at the same time - but I would say that we are in this Budget reducing the fiscal position to one which is quite tight and does not allow for any significant further loosening at all.'
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10511832
and the odd billion swept under the ACC's covers... "Official documents indicate former finance minister Michael Cullen would have been briefed about the billion-dollar blowout at ACC long before the cut-off point for inclusion in the pre-election "opening of the books".
The absence of the blowout from the Pre-Election Economic and Fiscal Update (Prefu) has National accusing Labour of deliberately trying to hide the sum to make the Government accounts look better than they were."
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10…
Some people just prefer an infrastructural deficit, apparently. As it turns out, poor per capita investment in healthcare has seen us placed in a less than ideal situation when the ship hit the flan. National unfortunately "balanced the books" by simply deferring investment investment whilst running up massive immigration and encouraging asset bubbles and money.
Lanthanide, and you still say that your comments about everything relating to government (which is always defending them) is not politically motivated (sigh). Anyway, I see that you have attacked Neo Liberalism in an earlier post, and now you are defending Cullen on his surplus budgets. Do you know how he managed to do that? with crazy tax income from new lending to built new houses. Opening credit tap, inflating asset prices and collecting tax from aforementioned loans (calculate how much of money spent on a new loan to built a Mac Mansion goes back into the government's pockets). THat sounds extremely new liberal to me. Yet if it is done by Labour it would be magnificent.
I have to emphasize that it not only you (and other labor supports) who are so one eyed. There are plenty of right leaning profiles who do the same. But those right wingers are so obvious in their bias and they seldom claim fairness, balance and transparency as their virtues.
Well lower the OCR to negative territory and interest rates must be slashed to very low rates!Capitalism and democracy can work with historically high amounts of capital in the world this has the best effect of spreading wealth to who needs it most.We don't want a more controlling dictating government as this is heading towards Socialism and what not one NZer would ever want Communism!What is happening to our beautiful NZ?
The mass breakout of Covid19 was first reported in Wu Han China.
The origin of the Covid19 virus is still a myth. Highly likely from a military lab the US.
I wonder if you have ever watched the news of hundreds soldiers on 4 of 9 US's aircraft carriers got COVID19.
Highly likely it is from a lab. The lab doing all the specific research and publishing the papers before its release date was ...the lab in Wuhan, if anything on this video is to be believed https://www.theepochtimes.com/coronavirusfilm. But hay...it could be a US plot.
That’s why this is first and foremost a health response - because the best protection for the economy is to stop the spread and eliminate the virus from New Zealand.
In doing so, we have applied three key principles to our economic approach: First to act swiftly with no regrets. Second to improve cashflow and confidence. Third to act in coordination to secure and support our financial and business sector.
There we have it.
If we do not see a major decrease in infection numbers by the 20th April we go into another week of rock down. Health, first and foremost!
Went to the supermarket in Orewa for the first time in 3 weeks today. Passing through Hatfields beach was like a camp site. Never seen as many people out walking cycling in my life. About 1 in 5 people tops wearing any PPE and supermarket full of old people. Seriously what lockdown ?
health first and foremost -- an interesting concept -- spending more in a single day in subsidies than was announced for a year to tackle the 668 annual suicides and poor mental health - spending more in four hours than is to be spent in a year tacking and preventing domestic violence and abuse - what is not known -- and may never be known is that for each covid 19 related death we have prevented - how many suicides, domestic violence incidents, murders, additional numbers in child poverty, unemployed, specialist expensive medicines not bought, that we will have - not to mention how much money will be spent paying back the 50 billion they intend to borrow --that wont be available for health education welfare and social care for he next 20 years - its never a zero sum decision -- never health or economy --
And a lot of the mental health stuff is probably related to the way our economy was functioning - high debt, high risk, FOMO, every man/women for themselves, must win the auction, 'living my best life'....
Hopefully this reset has been time for people to reconnect and reflect about family, community and personal values/priorities.
Precisely. I've been screaming for weeks at the radio and tv around this very issue... headless, mindless following of Governments lockdown approach has taken our eye off what is really important... mitigating full impacts on our society from this threat. Not just immediate, but, taking long-run view as well.
Problem for democratic politicians is they have a short life at the top. The focus by the press mainly on infection rates and death, from all parts of the glob, has made it neigh impossible for a rational view of the problem. The thing becomes very emotive.
We forget Government weigh the cost of life and health all the time through policy and budgets. They know $$ not spent here (improving roads; subsidising drugs etc) will mean certain death to some; yet you don't see mass protest; people in concert willing to trash their lively-hood for saving lives of others! We hardly battered an eyelid!
I dont think there has been any evidence yet of an increase in suicides or other negative things you highlight, it will be interesting to see what happens.
However overall deaths should reduce during this time, less car crashes, quick processing through emergency departments, increased fitness and exercise levels in the community, reduced pollution and also it will be keeping the seasonal flu at bay for the moment.
Point is - we're not digging mass graves for our people right now and I will take that any day over some of the measures we have seen in countries where COVID has taken hold.
Too right Kezza. Ban smoking as of midnight, Fizzy drinks, bacon, sugar and alcohol too, and cut the speed limit to 20km/h. That will save thousands of lives each year. And impose a 50% top tax rate that be used to buy the lifesaving cancer drugs that Pharmac can’t afford.
In years to come , boats will round the cape , and see the new forest dotted by fallen concrete and recall the final great tribes and people that once inhabited the islands. Once wealthy, they had sold each other houses, brought more houses and became more wealthy. . Banks, once tall imposing concrete structures encouraged and accommodated new arrivals to continue the new found wealth creation. They became wealthy. The government became wealthy. One day, the arrivals stopped coming. The government spoke of well being and kindness and dope , eventually bailed out the banks , but without growth ,the banks shuttered and departed . the newest arrivals left , others soon followed. The government , having previously praised and bedded the once great banks and the wealth creating tribes , of Barfoots and Harcourts and Ray White , who in years gone, appear .to have marked their regions with posts and signs and large selfies , were sometimes seen scurrying thru the shadows by sailors that rounded the cape.
Now is an ideal time to liquidate the country. Reset properly. Get together some of our highly skilled RE's, have them polish the turd, get some nice pics with white on white (think southern alps with coro beach), put it on Juwai...job done. Anyone know what the CV is? With the proceeds we can all move to Bolivia where our dollar goes further, we'll take an Air China flight direct.
Nothing will change other than more control and power to the state. If he believes in ‘power to the state’ then we can sit back, put ye little kettle on, make a cup o tea while the state takes full care of its comrades (you and I).
Well soon be marchin down the street shouting
“Power to the state”
“Power to the state”.
Currently 80% of the public support the government's actions so far, and 66% of them would support them being extended if necessary.
If anything, by September we should be starting to see green shoots and probably have gotten this disease eradicated apart from any new arrivals.
All they have to do is remind people of the 75000+ people they have saved by doing it. Pretty easy sell really.
Boatman probably the saddest thing is seeing you hope and probably want that unemployment ramps up just to make a political point.
The rest of us are hoping that the next step of measures will keep it to less than 10% which treasury has outlined is possible.
remember the good old days, when the road to riches was to make something, you know the, grow it, mine it, make stuff days of old.
Today it's the civil servants, the local body Mandarins the University elites. Thats where the money is son, no skin in the game and guaranteed job for life, holidays and free flights ,cushy meetings going on for days, best hotels. All you have to do is learn to play the game.
Pretty much screwed now. Cold last night with 2 mls of rain, snow on mountains. Not going to be much growth left in this season, even if everything goes right. Works on go slow, dropping schedules every week. Local farmer sold steers two years ago for over $1220 just took $800.
Must be a tonne of pain out there.
I just don't know how much of the country is in trouble but sounds wide spread. Friends in Southland are talking of a 'perfect storm'. Malaysia has stopped PKE exports due to Virus, farmers will have trouble getting through with existing reserves.
We've had enough rain in the Eastern BOP to get us going and hopefully another month of growth left and this week the rest of the annuals be in the ground, first lot up and away. Finally convinced the consultant to dry of, more of a a we're just going to. So just wait and hope, but I do think I can manage our way through. Only 2% down for the season so we'll take that.
Pretty much screwed now. Cold last night with 2 mls of rain, snow on mountains. Not going to be much growth left in this season, even if everything goes right. Works on go slow, dropping schedules every week. Local farmer sold steers two years ago for over $1220 just took $800.
Must be a tonne of pain out there.
I just don't know how much of the country is in trouble but sounds wide spread. Friends in Southland are talking of a 'perfect storm'. Malaysia has stopped PKE exports due to Virus, farmers will have trouble getting through with existing reserves.
Reagan was to small government what John Key was to productivity. Say one thing, do another.
Under Reagan, the federal workforce increased by about 324,000 to almost 5.3 million people. (The new hires weren’t just soldiers to fight the communists, either: uniformed military personnel only accounted for 26 percent of the increase.) In 2012, the federal government employed almost a million fewer people than it did in the last year of Reagan’s presidency.
Under Reagan, the national debt almost tripled, from $907 billion in 1980 to $2.6 trillion in 1988.
Nice try, but if you look at the people who are adding to the rich lists, they are property speculators and supermarket owners. Not sure there are any civil servants on there... only one sitting MP, Nationals Ian McKelvie. Luckily there are still a few people who actually make something on there, but not many.
Got it in one AJ, but you forgot to mention the fact that those who make and bend the rules on Housing in particular, Land in general and can fiddle the Interest Rates, tax rates, GST and parliamentary privilege to suit themselves, will all ways milk this land of plenty out of all proportion.
Orr Bank theft by another name, Screw a Saver, then tax the poor bastard ...anyway they can....to boot the economy...yeah Right.
Capital gain....not bloody likely. Save ahsouls......yes...speculatives one and all.
A lot of anti housing talk here. Where would we all be taking cover under lockdown if we did not have these investors houses. Despite all that we still had to hire 1,000's of motels for emergency housing while under lockdown, we could not make it to the 100,000 kiwibuilds in time.
C S Lewis had a word or three to say about statements like "I hold a strong personal belief in the power of the state to do good."
Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.
Great - a vision. Yes the devil will be in the detail. The scariest part of this is actually the comment stream! But most have acknowledged that the current economic/fiscal systems have not been serving our societies well, and we must acknowledge that COVID19 presents an opportunity. The capitalists will weep into their cups because if this works they won't be able to get rich as easily as before, but they will still be able to get rich. they'll just have to work a bit harder for it! And, if this Government gets it right, without trampling others into the dirt in the process.
So what social good, removal of inequality, would be the best outcome for kiwis. I recon it would be removing the average kiwi worker from the under the thumb of paying so much of his/her hard won income in rediclious debt servicing. Be it either his own, or via the banks proxy, Mr Speculord.
Will be really interesting what Labour role out next, especially with an election imminent.
Interesting subject my daughter and I watched for her literacy programme on TV2+1 earlier. Focussed on a group of Tuvaluan families who had moved from Auckland to Oamaru in recent years. Working in horticulture and the freezing works. Overwhelmingly better off financially (cheaper rent or mortgage payments) while clearly richer due to improved family time with less financial stress. Sadly, the banks are poorer but talk about the fabric of the country, community and wellbeing and there are quite a few winners.
I figured this out years ago - the Government should offer tax breaks for companies to relocate/set up in the regions. Everyone gains. But too many have a blinker on about the big cities, but they're under pressure for resources. By moving out of the cities employment opportunities improve in the regions, company costs are usually less, life styles are better, health is better, and while giving a tax break to the company the Government doesn't lose much if anything as people come off the dole, and pay tax on their income, less crime and so on. In all healthier communities.
As you say, Debt Servicing to the bank for the option to occupy "his" house, that's not really his, until he's paid for it; or Debt Servicing via rent to allow the "landlord" to pay his mortgage for the house he doesn't really own, until he's paid for it.
I would add Debt Servicing to the Government (income tax plus ACC on earnings, plus GST on everything else he buys, other than interest or rent) for "helping him" so the government can pay the interest on its loans too, after deducting a suitable salary fund for the government tribe, of course.
Beware Greeks bearing gifts, as they say, or used to.
What we need is money in the hands of Consumers! Henry Ford realised this and manufactured and paid his workers to ensure he had a large market.
We need to get away from the obsession of business with productivity at cost of labour. Ultimately, people need to have the ability to contribute to society and their families in a meaningful way - food on table, roof over head! What's the end game for humanity...
I'm not advocating Socialism just smarter Capitalism that has a holistic view of purpose.
Some like Chamath Palihapitiya are advocating for inefficiency to be an initial response to the economic destruction: https://www.youtube.com/watch?v=_hA3TV1bGsg&t=3739s
The five dollar day is great until you read up on exactly who got it and who didn't. It wasn't just 'everyone gets it', it was 'everyone who lives in the manner to which Henry Ford personally thinks a man should live gets it, everyone else gets stuff all'. It was more an exercise in social engineering than anything else, and probably the worst example of the concept you could think of once you get into the nitty gritty of it. I recommend reading Robert Lacey's Ford: The Men & Machines if you have downtime to spare, it's staggering stuff.
Real capitalism is about risk. The sort of risk individuals take when they start a new venture. Crony capitalism is investing in shares like formerly govt owned power companies, with rules written to make sure prices only ever go up. (Thanks Bill for that one). The basic means for true capitalism lie in access to the means of production, like affordable electricity, affordable property, access to markets, etc etc. The corporates always ensure that what gets offered, and taken up, is the crony form of capitalism, after all, the public enjoy the lack of ingenuity such an effort takes. NZ was once the home of such ingenuity, because individuals had to be resourceful. Thanks to regulation, people are lucky if they're allowed to change a light bulb without a certificate. People gladly swap a fireplace for a heat pump, cause wood is simply is too hard, and too messy. A generation that believe they are genuinely middle class, capable of negotiating meetings, sipping soy late' and a firm belief in meritocracy, ie I am obviously pretty deserving, look at what I've got! They wouldn't understand wealth if it came and bit them on the bum. Well I hope Grant manages to get this lot to understand what productivity actually means without causing a national outcry.
Jacinda Ardern is great!and her govt will be ok.This is what I thought after all Jacindas promises in the last election to the people of NZ.Well how I have changed my mind.
Kiwibuild-a failure,No homeless-homeless has increased,including street people and people being housed in motels,Keep rents down-rents have increased,No new taxes- 7 new so called taxes,get immigration down-immigration has increased,clean up our rivers-more rivers closed!,and now when they finally get talked into putting NZ into Lockdown by our amazing top Doctors Professors and Business people it was too late!The borders should have been closed much much earlier and all people entering NZ put into 14 day Quarantine,so then the economy could keep going and we would not be in Lockdown.Now we as NZers all have to pay the price economically and it's going to be very tough and difficult times ahead!And yet Jacinda and Labour seem to have the upcoming election won already.Interesting how people forget broken promises so soon!
As neoliberalist & very much supporters of F.I.RE economy. What he meant is just that..those in medium or lower income of essential service workers, must pass on the current wages subsidy, loan break handout etc. to the Banks, via private/commercial Landlords. To maintain stability of the NZ RE upward trajectory valuation. Kiwis you've been taken out for ride too long, move out while you can - Lab/Nat, have a solid plan to re-inject capital outflow again from CCP into NZ/OZ via local banks, hence? the first border country opening, is to welcome the people movement from there to NZ/OZ... you'll hear this word often '.. capital investment..'
I have a problem with this paragraph: "Robertson has made no secret of the fact the Government’s low debt position has given it headroom to borrow to inject money into the economy."
It is not a "fact" that the Government’s low debt position has given it headroom to borrow to inject money into the economy. It is Mr Robertson's opinion, and it is a non-factual opinion.
The amount of govt bonds outstanding has no bearing on the govt's capacity to inject money into the economy either to address the virus or to guide the recovery. The "debt" is nothing more than bonds (govt liabilities) swapped for dollars spent into the economy (also govt liabilities). And the govt can always issue more such liabilities at any time.
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