There will be no surprises in Budget 2024 as the Government will be focused on reducing public spending and cutting taxes, Prime Minister Christopher Luxon said on Wednesday.
In a speech to the Auckland Business Chamber, the Prime Minister said there would be more money for health, education, and law enforcement in the Budget.
But there wouldn’t be many unexpected announcements or expensive new initiatives.
“I’m not expecting this year’s Budget to be a surprise. And that’s exactly the way it should be. We will do exactly what we said we would do,” he said.
“No bells. No whistles. Just the basics done brilliantly to rebuild the economy, restore law and order, and deliver better public services”.
Luxon's speech contrasted against the newly-released Australian budget which lifted net spending by AU$24 billion and will shift the Federal Government from a surplus to deficit.
New Zealand’s Budget won't have that kind of spending as the Crown finances are facing a $9 billion annual deficit and are not likely to return to surplus until 2028.
The Prime Minister said previous big budgets had resulted in higher taxes, more debt, and an economy dependent on government interventions.
“It might feel good at Budget time, but there’s absolutely no kindness in spending up large, only to see businesses close and families go without as the consequence of inflation”.
While the Coalition has promised more prudent budgets, it has also committed to tax cuts and given itself permission to add up to $3.5 billion in new spending.
Finance Minister Nicola Willis has said the operating allowance would be below what Labour had forecast but may be higher than the $3.2 billion put forward in her party’s fiscal plan.
This has been criticized by some economists who think the Government should be reducing operating allowances and using spending cuts to reduce the deficit — before cutting taxes.
Luxon reiterated Willis’ view that bringing down public spending had to be done gradually to reduce the risk of stalling the already fragile economy.
“We could throw the whole country into austerity. I just don't think that would be a good thing [but also] we can't carry on the way that we've been going”, he said after the speech.
“I think we've found a third way through, where we can actually get the balance right of that investment in frontline services, get the bureaucracy down, and then have a plan for the future”.
Five point plan
The Prime Minister said five things were needed to set the economy up for future growth: world-class education, more tech research, better infrastructure, less regulation, and stronger international connections.
Luxon said education was the thing that had worried him the most during his three years as a politician and it needed to be a focus for his government.
More science and technology research was needed to drive the development of higher value products and services which New Zealand can export around the world.
Modern and reliable infrastructure, such as the Waikato Expressway, would have economic, social, and environmental benefits.
Reducing regulations could encourage more competition in the NZ economy and strong international connections would lead to more trade and foreign investment.
“If we focus on those five things, as government, business, and communities, we can change the quality of life in New Zealand. And there's no reason, on the 200th anniversary of the founding of this country, that we shouldn't be the leading small advanced country on Earth”.
“But we've got a bit of work to dig ourselves out of the hole around inflation in particular, and then we've all got to focus on driving for growth and economic productivity”, he said.
41 Comments
A heart that's full up like a landfill
A job that slowly kills you
Bruises that won't heal
You look so tired, unhappy
Bring down the government
They don't, they don't speak for us
I'll take a quiet life
A handshake of carbon monoxide
With no alarms and no surprises
Basics done brilliantly?
These folk wouldn't know basics if they fell over them. And they get away with it because nobody challenges them.
The truth is that the First World is sliding off the top of the biggest ponzi the planet has ever seen. Or will ever see. The biggest hegemony we've ever seen, is dividing, disintegrating, crumbling. We are attached to it, too silly (too timid?) to tell them to got get .....ed. But irrespective of the macro-politics, this is all down from here on. Yet expressways are environmental wins? Where the F is this F-wit coming from?
Education? Yes, we need to reorganise tertiary education; the 'business model' has broken (as it was always going to do). But the team Gluckman has assembled, looks like back to the future; business types all. Yet business is the blind mantra which has gotten us to this polycrisis. Go figure - they aren't.
Oh, and 'brilliantly'? Give us a break.
I get on and off the bus depending on the distance, but I prefer to walk. Ideally just sit, which is what I'm doing at the moment.
We still really can't say what point we are in human trajectory. And there's no need for weeping, it appears we're undertaking a period of elective depopulation that's going to see a substantive fall off in consumption, and eventually some form of reconfiguration.
It'll take politics a while to catch up.
More science and technology research was needed to drive the development of higher value products and services which New Zealand can export around the world
Luxon's government is leading by example on all fronts.
30 jobs to go at Callaghan, 30 at Scion (Crown-owned forestry research institute), a handful of modelling roles at NIWA are on the chopping block and all of Stats NZ staff offered voluntary redundancy before the bureaucrats at the top bring out the machete.
Meanwhile, charter schools are back on the cards, i.e., deregulate and privatise schools but keep feeding them taxpayer money. The biggest irony is that Seymour promising to create a new agency to monitor these schools. ACT really needs to change its name as it no longer represents taxpayers but a different cohort of beneficiaries!
Yeah, we can't have people telling us truths we don't want to hear.
Couldn't have that at all, eh?
That is a contributing factor to the increase in fundy-religious 'leaders'; the need to believe, rather than the intellectual ability to investigate dispassionately. The are all that fits, the further the GROWTH lie is pushed...
There's a couple of core aspects that PDK doesn't factor into his reasoning:
- Western growth has stalled because it's been migrated to cheaper labour markets due to neoliberalism and global trade that took off since the 80s. He lauds flat growth in the West as evidence of an energy return on investment theory coming into fruition, but the return still exists, it's just happening in other markets.
- peak oil keeps getting pushed back. So likely the peak hasn't been reached, just possibly the end of super cheap oil.
- global birth rates have fallen below replacement levels almost everywhere except Africa over the past 20 years (and the rate is also falling in Africa), global depopulation will rapidly increase during this century. So overpopulation, isn't the big boogey monster it was in the 80s, or even the 90s.
Things are definitely in flux, but it's also strayed in nature fairly substantially from PDKs script.
No, you misunderstand. More likely, you filter through a pre-lens.
Yes, production has been offshored. Yes, that was because of neoliberalism. Yes, the reason it went offshore was the proximity to slave wages, coupled with slack environmental regs.
But EROEI is orders of magnitude a bigger issue than labour; that stuff from China comes to us un container-ships, not rickshaws. It's a scale thing. Stand back, and its just a global energy-use thing - doesn't matter where anything is made. I'm about the big picture (under/into which all else fits).
Peak oil can be thought of as a bell-curve. Yes, you can force growth beyond the natural peak of a bell-curve, but the area has to come from somewhere, and by default, that somewhere is the right-hand side of the bell-curve. Meaning the drop-off gets ever-steeper, the more you push the point. We can know - hype and bullshit aside - that we are past the natural peak; we are down to fracking, and tar-sands... And we can note that at this level - let alone at a lower - we already cannot service global debt.
Overpopulation is indeed the bogey - the overshot population IS ALREADY HERE. It is being supported by a temporary resource draw-down, on multiple fronts; indeed, collapse is the more likely outcome.
Draw-down is an inexorable trend, not a 'flux'.
But EROEI is orders of magnitude a bigger issue than labour; that stuff from China comes to us un container-ships, not rickshaws. It's a scale thing. Stand back, and its just a global energy-use thing - doesn't matter where anything is made. I'm about the big picture (under/into which all else fits).
But you've cited low growth in Western economies as validation of the old models you draw upon. Such models pre-date the massive rise of developed nations.
that we are past the natural peak; we are down to fracking, and tar-sands..
And natural gas, and solar, and wind, and tides, and eventually fusion. Again, these and the fracking and tar sands are advancements that post date much of your scrolls.
Overpopulation is indeed the bogey - the overshot population IS ALREADY HERE.
And it's going away. Potentially faster than it arrived.
More likely, you filter through a pre-lens.
Not so much. I read some of the scare-mongering you abide by back in the day, much of it's been made thoroughly redundant. There's new problems and challenges now.
Nothing wrong with being a greenie, not consuming more than you should, recycling, being efficient, etc. But to yammer on about science, without ever really absorbing new information, is counter intuitive. The great thing about science is it never stops.
Wrong. You wrongly conflate knowledge with growth. It is not the same thing; you cannot conjure up energy, nor resources. Either they're there, or they aren't. And the energy will be available at some EROEI. And the process is dissipative.
So many folk go wrong when they conflate feelings/emotions with physics. Depletion is depletion - and you would do well to start by separating the possibilities into depletable/non-depletable (and of course, 'renewables' are really 'rebuildables').
I listened to the speech. Platitudes, misunderstandings, and some straight lies. Quick highlights:
- Public services defined, delivered and evaluated through the lens of social investment...
Bad news Nicola. Treasury did a major review of the effectiveness of social programmes - no longer on the website. They found, unsurprisingly, that throwing services at people struggling with day-to-day poverty and a history of trauma delivers sweet nothing in terms of real, sustained results. Everyone who knows anything about this stuff will tell you that you get far better results by making sure there are enough jobs and houses for people so they can build their own lives. This went to crap in the 1970s when we decided that we needed to keep 100,000s of people unemployed (and increasingly unemployable) to control inflation (aka ensure a cheap supply of desperate labour).
- We're working hard to reduce inflation and enact pro-growth policies to end the recession we inherited at the end of last year...
That's not true though is it? Govt's that have actually tackled inflation have used targeted subsidies to prevent short-term price spikes propagating through their economies. This Govt actively removed subsidies that were helping us get through the worse of the imported price shocks. The Australian budget will actually reduce inflation - they have calculated the amount that their CPI will reduce as a result.
- The recovery in business confidence since last year suggests that while conditions are difficult, the future looks bright for both the boardroom and the building site. .
Have you lost your marbles?
- Even while the economy has stagnated in recent years, the size of the state has surged. In per capita terms, the economy is just 3 per cent larger than it was at the end of 2017. By contrast, government spending per capita has grown by more than 50 per cent.
This Govt spending number is correct in nominal (not inflation adjusted) terms. But the GDP number is a straight lie (I cannot work out they twisted the numbers to get this result). The correct, comparable figure (unadjusted for inflation & per capita) is a GDP increase of 32%.Did he miss out a 2?!?
- We're also rolling out $153 million for charter schools because we know the difference those schools can make in lifting achievement among young people.
That's hilarious.
- We will deliver $429 million in savings in Education over four years, the vast majority of which are concentrated in the back office at the Ministry of Education
Net of the cost of the paid off staff who you will be hiring back as contractors?
I could go on.
Fair challenge. Govt's approach to social investment is primarily based on delivering social support programmes to people who are in a bit of trouble on the basis that such programmes will improve their future outcomes & reduce future costs. This is known as secondary or tertiary prevention - intervening when there are identifiable risks to try and get people 'back on track'.
What I am advocating (jobs, housing, decent public services etc) is about creating the conditions that prevent people needing help in the first place. This is typically called 'primary prevention'. The Govt are showing very little interest in this approach.
This primary prevention absolutely works. Secondary and tertiary prevention is ridiculously difficult and the benefits are tenuous.
My father had lots of friends who were GPs. They saw first hand the effects on people when 'primary prevention' was ignored. My own GP was so incensed by the lack of it that they moved up to an impoverished area up north and did what they could. Thousands turned up to their funeral. A wonderful, wonderful Kiwi who was not just a great doctor but also an extremely knowledge economist from whom I learned so much.
- We will deliver $429 million in savings in Education over four years, the vast majority of which are concentrated in the back office at the Ministry of Education
Net of the cost of the paid off staff who you will be hiring back as contractors?
Doesn't matter to them, the usual playbook rules says that contractors go on another spreadsheet so govt spending numbers on employees looks good so mainstream media leaves them be for a while and it 'looks' like they're delivering results. What we will need to monitor or somehow find is the number of contractors taken on in the coming 12months relative to the number of staff they gave the sack. How one would track this I'm unsure.
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