Craig Elliffe: Small cuts, big consequences
Honestly, who would want to be Nicola Willis at this point?
The effect of $14.7 billion of tax cuts is going to mean a dramatic rethink on expenditure in New Zealand in the long term, and about what sort of public services we expect as a country. The government’s cut-it-back strategy appears focused on the next four years, not a longer horizon.
From a broader economic perspective, the hope is the cuts will provide help for households. But that is not great relief if interest rates do not come down. So, the story for 2024 will be increasing job losses and a gloomier economy.
The tax cuts spread a little over a lot of people. And you have to ask, will $50 or $100 a fortnight really make a difference if interest rates stay high and the ability of the government to pay for core services reduces?
If the government keeps tightening the belt to pay for what are, in reality, small tax cuts, we’re going to end up with poor infrastructure, low wages and a struggling economy.
One positive thing about the tax policy, however, is that the government is facing up to the fiscal drag question. More than 14 years of inflation have moved people into new tax thresholds, eating away at the benefits of salary increases.
Taking a longer-term view, organisations such as the International Monetary Fund and OECD would have preferred the government to focus on paying down debt to get New Zealand to a surplus faster. To do that, those organisations suggest New Zealand introduce a tax on capital – but this budget avoids such big questions.
Our review of Budget 2024 shows that tax cuts were as advertised but there in less money in the kitty and hence more debt and less of a braking effect of the Budget on the economy than the RBNZ would have hoped. The path to surplus is going to be long - 2028 is now the best guess pic.twitter.com/efFyWqwQ3Z
— Kelly Eckhold (@kellyenz) May 30, 2024
Dennis Wesselbaum: Prudent fiscal management
Fiscal budgets involve the crucial task of strategically allocating resources across various vital sectors, such as health, education and infrastructure.
The big-ticket items in this year’s budget are the tax relief – adjusting tax thresholds and the FamilyBoost childcare payment – and spending increases in health, schools and policing.
Tax relief is achieved by adjusting tax brackets for those on low and middle incomes. This should have a positive effect on the economy without creating inflation.
Spending is financed by redistributions, cuts in other areas, and by shrinking the public sector (by about 4,000 jobs), with fiscal surpluses predicted to return by 2027-2028. The underlying economic outlook from the Treasury looks reasonable, and we should see interest rate cuts by early to mid 2025.
Overall, this budget is a welcome return to focusing on outcomes and prudent fiscal management. Delivering a budget that simultaneously addresses many structural problems during a recession is always a difficult task, but this is a step in the right direction.
Timothy Welch: Infrastructure funding falls further behind
The 2023 budget was all about rebuilding and resilience: the extension of free public transport for children under 13 and half-price fares for under-25s; millions for rail and road restoration and resiliency; funding for more public housing and a clear emphasis on protecting the country from natural disasters and climate change.
All of that is gone now. While not exactly an austerity budget, it significantly cuts public spending, aside from on roads, as New Zealand falls further behind on funding critical infrastructure.
The budget does allocate some funding to important transport initiatives, such as Auckland’s Rail Network Rebuild Programme ($159.2 million). But this comes at the expense of Auckland Light Rail, the Clean Vehicle Discount, Clean Vehicle Standard Administration – and, surprisingly, from cuts to the Community Connect public transport affordability programme.
Much of the transport budget ($1.955 billion) goes to implementing the Draft Government Policy Statement on Land Transport, primarily dedicated to delivering the Roads of National Significance program, with another $1 billion being held in contingency.
The budget does not mention the cycling, walking or important green infrastructure investments that would help deliver decarbonisation. It is also silent on needed investments in storm water management and flood control, while taking “savings” from the repealed Three Waters program.
There is a bright spot for infrastructure, however, with the creation of the National Infrastructure Agency – though operational details are not yet available.
While the cost of living looms large for many, tax cuts in place of essential infrastructure upgrades and investments look short-sighted in the face of increasing traffic congestion, more extreme weather and flooding, and the threat climate change poses to all infrastructure.
Mark Barrow: Education funding favours the private sector
Generally, the government has (so far) kicked the tertiary sector can down the road. The university system review and winding down of Te Pūkenga (the merged polytech system) has left the focus mainly on schools, schooling and teachers.
As such, the education policy settings supported by the budget resurrect old conflicts around theory versus practice, whole language learning versus structured literacy, and university teacher training versus school-based apprenticeship models.
Ahead of the budget, both Education Minister Erica Stanford and Associate Minister David Seymour painted a grim (frequently inaccurate) picture about the state of New Zealand’s education system and the people who work in it.
Their answer has been to use the budget to direct public money to the private sector. This includes funding for new charter schools (where school owners will not face the restrictions being imposed on state schools), and increased support for the private early childhood education sector and private teacher training establishments.
While schools will welcome the relatively small increases in operational and property funding, this budget is moving more money into the hands of the private sector.
Anna Matheson: Health holds steady
With $8.2 billion in new spending over four years, it is good to see health being prioritised, although most will cover existing cost pressures. The current fragmented state of the health system cannot be blamed on this government, but those in power now have a choice: bow to expediency and continue with superficial or isolated attempts to fix things, or learn from the past and deliver an improved system.
But opting for tax cuts instead of signalling effective and sustainable approaches to the country’s complex health, social and environmental challenges seems shortsighted.
Yes, an additional $20 a fortnight from tax cuts may be the difference between seeing a GP or not. But the removal of free prescriptions for most people could also mean the difference between having access to medicines or not.
A better investment would be to make access to primary care easier and more affordable. And we know primary care, alongside healthier local environments, can keep people out of our expensive hospital system.
So, the focus on the health workforce is essential and overdue. But part of keeping people out of hospital is what happens within other sectors, not just health. Depending on how it is implemented, the new Social Investment Fund could help here, but we need more detail to know.
Budget 2024 health: No funding for promised cancer drugs disappoints breast cancer patient - extension to screening welcomed https://t.co/lcnp24xMrb
— Suzanne Pierce (@PierceSuzanne) May 30, 2024
Hiran Thabrew: Not enough for mental health
Despite the National Party’s pre-election promises to improve mental health and the government’s introduction of a minister for mental health, it is disappointing to see the limited amount of funding overall: private provider Gumboot Friday ($24 million over four years) and a Mental Health Innovation Fund ($9.7 million over four years).
Tax cuts and the relatively small amounts they will put into the pockets of the “squeezed middle” may alleviate some stress-related mental health issues. But one in five New Zealanders experiences mental distress and illness. This costs $12 billion (5% of the GDP) each year.
The previous Labour government invested $1.9 million in primary and community-based services for those with mild to moderate mental health issues. Meanwhile, demand for specialist mental health services grew by 75% over the past decade, without a corresponding increase in resourcing.
It is a shame the needs of those with moderate to severe mental illness remain ignored. This is the group with the greatest need of support, and many New Zealanders and their whānau could be among them at some point in their lives.
In 2022, specialist mental health services saw a 12% staff departure rate, versus a 9% recruitment rate. Some 20% of psychiatry positions are currently vacant, and crisis-driven acute care is becoming the norm.
If the government doesn’t urgently address workforce shortages, ring-fence mental health funding, and update a 20-year-old mental health survey on which current funding is based, it won’t have the Labour Party to blame by the next election.
Julia Talbot-Jones: Silent on the environment
Leading up to its first budget, the coalition government has dismantled environmental protections and introduced new legislation to support economic growth.
Environmental advocates have called it “a war on nature” and some have compared the pace and magnitude of reform underway to the “Think Big” mistakes of the 1975-1984 National government.
The controversial Fast-Track Approvals Bill has received much attention and is now going through a submissions process. But the government is also replacing freshwater and biodiversity legislation, and it has relaxed marine protections and cancelled a swathe of climate policies.
The budget does nothing to allay public concern about the repercussions of these policy decisions. Instead, it underlines the government’s support for development. It delivers nothing new for the environment, climate or conservation.
Willis was notably silent about the environment in her budget speech, only mentioning a continued $2.6 billion investment in existing climate initiatives, and the growing importance of the Emissions Trading Scheme. A preliminary assessment of Treasury documents shows a reduction in overall funding across most environmental protection domains over the next five years.
Climate and environment are not solely “environmental” issues, they are economic matters: both of New Zealand’s largest export earners (agriculture and tourism) depend on New Zealand upholding its international image as a healthy environment.
This cannot be maintained without continued government involvement and investment through strong environmental policy and financial commitments. To do otherwise is to jeopardise New Zealand’s long-term economic future.
*Timothy Welch, Senior Lecturer in Urban Planning, University of Auckland, Waipapa Taumata Rau; Anna Matheson, Associate Professor in Public Health and Policy, Te Herenga Waka — Victoria University of Wellington; Craig Elliffe, Professor of Law, University of Auckland, Waipapa Taumata Rau; Dennis Wesselbaum, Associate Professor, Department of Economics, University of Otago; Hiran Thabrew, Senior Lecturer in Child Psychiatry and Paediatrics, University of Auckland, Waipapa Taumata Rau; Julia Talbot-Jones, Senior Lecturer in Environmental Economics, Te Herenga Waka — Victoria University of Wellington, and Mark Barrow, Dean of the Faculty of Education and Social Work, University of Auckland, Waipapa Taumata Rau.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
106 Comments
That’s highly unusual for a GP and there would have to be a significant private component to that eg minor surgery and practice ownership. Even then I call BS on that one. GP’s welcome to put their salary in NZ in the chat and the aus comparison. To quote the Chilli Peppers ‘pay your surgeon very well to break the spell of aging’.
https://www.nzherald.co.nz/nz/tokoroa-doctor-with-the-400k-job-offer-iv…
No BS. This offer without any practice ownership. But ownership of one sort or another is the norm after a GP settles down in a practice.
NZ Dr magazine runs a survey where respondents are free to enter their annual income. It has some biases eg self selection but IIRC the last one showed $220k as the average income. For most GPs that would be a 45+hr week with sig stress. Brisbane pays approx 100k more.
I’m currently working with a young female who left clinical medicine at an Auckland Hospital to work non-clinically and is enjoying the change.
9000 families worst off from the taxcuts, anyone with kids using public transport worst off. Didn't know about the community transport cuts, that's just plain mean. As for the climate. Well. Ride on saturday, hopefully a huge turnout to make them think again. Not that they put much thought into it the first time.
"vision" in terms of illusion to sell us, or clear perspective?
The current underpinnings of what we have is not capable of delivering to everyone's expectations, wants and needs, short term or long term.
The only thing we are growing at the moment, other than an IOU, seems to be disharmony. With decreased inter-personal co-operation, we gravitate towards relying on a central authority to provide for us what we cannot provide ourselves, care and education for our children, shared communal resources, elder care, local projects, community.
To outsource this comes at a significant cost, and cannot deliver it in as caring, diligent, or relevant manner as what may come from kin/your own community.
What we currently have, whether the flavour is Blue, Red, Green, whatever, fundamentally can't work, and it especially can't work if we're changing the script every 3-6-9 years.
Anything of real substance also won't be understandable (or palatable) by most voters.
Our growing deficit on productivity, wages, infrastructure, living standards and overall economic outcomes is widening will only make the decision for skilled people to move to Oz easier.
Just compare our recent budget with their Federal budget announced last week, while also factoring in the tens of billions their state governments also pump into health, education, infra, etc. initiatives.
The 62 billion-worth Queensland Energy and Jobs Plan itself is causing huge attrition in my sector (construction and engineering) with plenty more to come.
Yes. The company I work for is looking at redundancies later this year due to the current economic situation with a likelyhood of things worsening. Speaking with co workers the majority are looking at a move to Australia if made redundant, several have already applied for jobs over there.
These are hard working productive people looking at moving away from this country, leaving behind an ever growing population of unproductive, self centred and entitled people who couldn't care less about doing their bit, they are just looking for the next handout and will vote accordingly.
“One positive thing about the tax policy, however, is that the government is facing up to the fiscal drag question. More than 14 years of inflation have moved people into new tax thresholds, eating away at the benefits of salary increases.”
We can worry about fiscal drag when we have a comprehensive capital gains tax, gift tax and inheritance tax.
Sorry mate there is no way we want the inheritance tax back. Best move ever when they dumped that well over 10 years ago now. We are already getting taxed to death in this country that's why nobody is getting ahead and they don't want to work or are leaving for Australia. You don't get ahead by removing incentives.
“The question is not what anybody deserves. The question is who is to take on the God-like role of deciding what everybody else deserves. You can talk about 'social justice' all you want. But what death taxes boil down to is letting politicians take money from widows and orphans to pay for goodies that they will hand out to others, in order to buy votes to get re-elected. That is not social justice or any other kind of justice.” Thomas Sowell.
I like how he's employing pathos with the inclusion of "widows and orphans" to evoke sympathy and rage. I could say the same with GST taking food out of babies mouths, or income tax stealing money from hard working struggling families.
So why not just get rid of taxes all together?
But what death taxes boil down to is letting politicians take money from widows and orphans to pay for goodies that they will hand out to others
No. Not having death/inheritance taxes is letting politicians take money from future generations by way of running deficits and further borrowing.
Not quite correct, Zwifter was given a house deposit by his parents and he was also given money to pay off his mortgage (see comments below). It puts his often flippant comments about people buying houses into context.
I'm interested in those stats about how we're being taxed to death, if you get around $2 extra a week from the tax bracket adjustments you're certainly not paying your fair share of tax or being taxed to death as you put it.
by 26@Main | 10th Nov 23, 4:35pm
You've commented before that you were given a house deposit by your parents Zwifter, were you given any money to pay off your house?
by Zwifter | 11th Nov 23, 10:31am
Yes but like I said I paid it off as fast as possible. Just because I got given some money didn't automatically mean it was going on the mortgage, most people would spend it on something else.
by 26@Main | 11th Nov 23, 7:26pm
Thanks for your honesty, and fair point. It was a lot easier for Generation X and those that came before them though, especially with parental help.
“But opting for tax cuts instead of signalling effective and sustainable approaches to the country’s complex health, social and environmental challenges seems shortsighted.”
Totally agree. There are plenty of advanced economies that run much higher tax revenue to GDP ratios than NZ.
NZ is run by a bunch of accountants that wouldn’t know a socioeconomic cost benefit assessment if it hit them in the face.
NZ is being run like Boeing and is well on the way to being in the same position.
There are plenty of advanced economies that run much higher tax revenue to GDP ratios than NZ.
And often higher tax regimens.
We're in the unfortunate (although totally not unique) situation of wanting/needing much more national public expenditure, from a fairly low tax base, with the typical western economic and productivity growth plateau.
We can increase the debt to finance it, but then we have to work out how to actually pay for it.
Tax base needs to be widened. If CG, land and inheritance taxes were applied there would be a decent increase in revenue to fund more infra etc spending without raising tax rates or additional borrowing. Budget was a serious missed opportunity, but serious decisions are too hard for the government, so the slide to third world continues
I have proposed a blanket Stamp Duty on all property sales in the past here as a pragmatic way to widen the tax base.
Pay the tax when you get paid yourself, seems pretty simple to me. If the coalition announced that I dont think there would be a massive backlash. A bit old fashioned but who cares.
CGT and particularly a Wealth tax are unlikely to be implemented. Paying tax on something you have not yourself been paid for would result in a huge backlash in NZ. It will introduce loopholes like the 'family home' that the tax sneaks will rort like there is no tomorrow.
The problem with Stamp Duty is it is not punitive enough for the disaffected. It doesnt cause enough pain and they want to see the knife inserted and they also want it twisted.
They dont actually want the tax base widened, they want the landlords out on the streets cap in hand.
I can't see why a stamp duty is any better than a capital gains tax, and I don't particularily like capital gains taxes either. I do agree that a wealth tax isn't a good idea.
And a stamp duty is punitive, it distorts economic decisions. It discourages property transactions, which can lead to a less efficient allocation of housing and commercial property. People may choose not to downsize or relocate for work due to the additional cost, which can affect labor mobility and economic productivity.
Locking up housing and reducing the ability of the market to be a market isn't exactly going to fix anything.
Stamp Duty revenues are also highly volatile and depend on the number of transactions, which can fluctuate significantly with the housing market cycle. Which again, not ideal, we just end up in the same situation we are in where we are far too dependent on workers incomes.
And unlike other forms of property/asset taxes that are ongoing and reflect current property/asset values, Stamp Duty is a one-time payment based on the property value at the time of transaction. This means it does not provide a continuous revenue stream.
And it's not about being punitive it's about broadening the tax base to become less reliant on workers incomes, which is an increasingly pressed source of revenue as more and more people begin to retire. A stamp duty doesn't do this and in fact would likely hurt younger working people who have more reasons to move than more settled older demographics who aren't looking to upsize or move for work.
Damien Grant: This Budget does not matter
https://www.stuff.co.nz/politics/350292427/damien-grant-budget-does-not…
What do you value more Albert, being able to see a doctor, hospital wait lists < 3y, drive on decent roads, have classroom sizes <35, or a spurious target in 2050?
It's incredible that Kiwi's still come on here wittering about the climate while 50% of the nation are struggling to house and feed themselves. The fact you can worry about the climate is a luxury many don't have.
This sounds like a false dichotomy.
Another way of putting it might be, "what do you value more - larger cars with more tech, a bigger house, more extravagant holidays, or the long term maintenance of our habitat?" After all, it's those living most comfortably and often extravagantly that are drawing down our 'environmental credit' most.
Ultimately, people care about security, community, agency, and the opportunity to live up to their potential most. In our current society a lot of effort is put into convincing people that what they should really care about is 'getting ahead' (a ridiculous term imo - of who? can we all do this?) and living a life of convenience. Unfortunately when too many pursue those things too fervently it undermines the things we really need to live a good life (maybe not personally, but on the whole).
We live in entitled times. We can't have it all and future generations will judge us to be amongst the most self-centred. But that is to be expected - we embraced a political system that is unapologetically selfish. It's called Neoliberalism. For a broad overview of how and why we got here I'd recommend the excellent documentary 'The Century of the Self' (https://www.youtube.com/watch?v=eJ3RzGoQC4s)
We live in entitled times. My point precisely, some of us do however many don't. I see the spectrum, I am fortunate enough to live in a leafy suburb surrounded by wealth as well as direct involvement with several charities. My neighbours do not talk about climate change privately (maybe at work) and neither do the lower socio-economic. The people that do are the upper middle liberal city types.
I'm not denying climate change nor that we shouldn't invest in the gradual move away from fossil fuels - but to me the urgency is one purely born of capitalism (ROI on my green investments) and trendy liberals
and neither do the lower socio-economic.
I think you're likely wrong there Te Kooti as it is a statistically proven fact that the poor suffer the greatest amount as a result of climate change. Take the AKL floods - generally poorer neighbourhoods suffered greatest damage/dislocation. That's because the best/most valuable/safest land is always the first to be urban developed. In other words, the higher and better ground is that most valuable. Society fills in the flood plains and the peat swamps (cheap/low value land) well later in the urban development of a city/town.
And then think about the location of major stormwater drains; and/or sewerage treatment plants... - it's not the affluent who are housed near these.
Also think about the higher cost of petrol/energy as scarcity beds in - the poor suffer the greatest amount as energy costs make up a far greater percent of their overall household incomes. And in the NZ situation anyway, the ETS is intended to raise the price of FF energy products.
Lower-socioeconomic households definitely have these day-to-day effects of climate change top of mind.
Kate, in the nicest possible way, you are exactly the city liberal type I was referring to (all be it a very polite, articulate, & thoughtful one). Blaming the rain event on man made climate change feels like telling my kids that if they didn't behave and go to bed early, Santa wouldn't come. I certainly feel very uncomfortable blaming an ideosyncratic event on man's emissions.
The impact of fossil fuel depletion will hit everyone, but that's not man made climate change. If you build on a flood plain, surely it's already a flood risk? NZ is roughly 0.5b years old, what is the sample period you are using?
You seem to be contradicting yourself - you said;
I'm not denying climate change nor that we shouldn't invest in the gradual move away from fossil fuels
So, I pointed out two examples as to why the less advantaged, suffer the most from those two points you made - and that these effects are not only discussed but 'lived'.
Sadly on a climate and sustainability side you are right and Kate is less informed here with that point that building on a flood plain with poor drainage infrastructure will flood housing regardless of global climate changes. Also that it is mostly the poor forced to live in those environments and that most of our current climate spending is actually directed away from measures that would protect and provide support for the poor, e.g. we stopped clearing drainage and cleaning the waterways of dumped rubbish, slash and blockages (up to and including whole containers) and it will flood even in mild conditions. Even Auckland council only started back with a little maintenance it used to do after the worst flooding over multiple years, and they had to be dragged kicking and screaming to do that. As they were so hoping to spend on another art piece and cycle lane in the CBD instead of the households who are most likely to die without that maintenance.
Even the greenest region, with cities that have the highest rates of walking & cycling they are removing air quality measurements & management team while at the same time having cities with the highest levels of air pollution, (often on the order of the highest in australasia) and air pollution deaths (because burning wood, waste and toxic by products in residential areas is green right eh). We plant trees sure but we focus on massive pine plantations in the worse places with no mitigation or management for the destructive slash and zero responsibility when it wipes out a town or key road connections for essential community needs. Even the silent generation was out planting natives in reserve areas with better management decades before as volunteers with Doc. We waste money on festivals while at the same time removing community access to public spaces. It is mental that the actions taken are literally achieving the worst and opposite like the clean car tax that penalised the poorest with the least access to transport the most.
The problem is not the climate change spending per se but what we are spending on and in most cases we are stripping the essential mitigations & protections, promoting less social accessibility, while at the same time making things worse for those who are poorer who do face the worst effects.
That will never change given who we have in the council and government departments around climate change organisations are not well educated engineers & scientists who come from those lower socioeconomic groups. We always employ based on bias that is towards those with the least sustainability engineering experience with the wealthiest and most able bodied perspectives. It is the same for who we employ making management decisions around heathcare and social services so they benefit the wealthiest in the country the most. They will never even see those who are the most vulnerable as even existing in society, the have zero understanding of the social issues and barriers to equity, and have zero clue about drainage, or the biggest mitigations we can actually make (e.g. to prevent the effects of bad air quality in residential areas). Our climate groups are actually making the social damage 1000x worse while at the same time making the effects of poor resource management & infrastructure more costly on both environmental & social levels (as well as financial).
When I was looking to setup an accessible development site that was out of a flood zone with lots of transport access to essential needs I found most the major cities areas for development were the worst flood zones known in history, the name of some of the areas was literally XXX Flood Plain. So I rejigged. Most accessible housing is sadly needing flat land with lots of vehicle access (e.g. for social services, family connections, basic transport access since all PT in NZ is not designed to be accessible, and CBDs are becoming far less accessible). Even if there was a doctors, supermarket, post, bank, school and pharmacy in a 5min distance many families will still need vehicles because not all human bodies and families are the same. If you ever dealt with neurodiverse children or joint, autoimmune, genetic & birth injuries you would understand in a second. Also before the wider use of vehicles most of these people were imprisoned and denied access to the community... people forget that fact in human history. So while the distance to needs is an essential factor so too is the access to get to them.
Looking at all flood zone mapping across NZ and the historical records dating back 120years. Of which clearly show large scale flooding in areas people now claim must be solely because of climate change,... (sadly we have forgotten hard data research in the internet age and reading normal land topology maps). Climate change will make flooding more frequent in many countries, inc. greater king tides, sea level & atmospheric changes but the areas were always flood prone esp. without infrastructure & land maintenance which is the greatest cause for flooding now. I also had to look to reduce any landslide risks and geotechnical ones as well as any natural disaster would put any low income family with low social accessibility at risk of death (NZ actually has many geotechnical reports & research already that can be scraped for free).
It took a while as I found most cities in NZ are doing the opposite for their housing development intentionally picking flood plains, river beds and areas that slip. I found land that was lucky to be cheap, brought at the right time. Engaged a social organisation for community housing. Then found in 2 years the value of the land I brought had multiplied x3 so the benefits pretty much worked on multiple levels. Then out of it there will be a massive profit too. Which goes right back into the community. So it is very possible but the massive gains in value were primarily because areas being chosen for most development in cities were really bad (see the massive KO loss on a whole new build development in a flood zone, during the Auckland floods because they forgot drainage infrastructure & basic house design factors). Councils had been investing in central city beautification & removing transport access instead of drainage & community support in the major community residential areas and there was no major housing developments to match the booming rate of population increase and the ageing population who needs different more accessible housing. It is like doing a Ryman or Summerset but with less risk & debt on a smaller scale with more community housing benefits. I was lucky my predictions on many factors were right to get the value shifts I did, but even without them the social development is highly beneficial and stacks up well financially.
Not correct assuming people with genetic, thyroid and metabolic disorders are overfed, also not correct as we actually find in areas with obesity there are also greater rates of malnutrition disorders.
You see there is an issue with the types of food, and the affordability. People in medical & food poverty often have no choice and may be forced towards the worst types of food. For example those without the ability to do food prep or cook & in poverty often have to resort to food delivery services and trust me these are pretty bad nutritionally and have very bad options if they have medical dietary restrictions. Tip: If you are coming up to losing your hand joint functionality or looking for elderly relatives it really pays to use takeaways over meals on wheels just for the higher rates of low carb, low sugar, more vegetable & more nutritious options; but sadly it does not compare to actual home cooked food. Those in emergency housing often have no cooking facilities & at campsites no safe cooking facilities. It is of no surprise then the type of foods people choose. Also it is of no surprise the lack in medical understanding in NZ (have you seen the joke that is education in NZ).
Also if you look at what you can get in areas without substantial meat & vegetable market competition often people cannot afford the basic options for those things. Food banks and community centers get more often food that is less ideal nutritionally and dumpster diving often is more highly processed less nutritious food (less available as an option now with locks on bins & more security).
As a child I did a lot of dumpster & food waste sourcing, but I also thought it was a luxury to have bakery bread as a meal and we often had rice bowls with an egg on top or pasta with canned fish (before the massive spike in eggs & canned fish prices now). Nowadays we have higher rates of food poverty in NZ and even less facilities and homes that low income families can cook in. We also have more processed food and less competition in our food markets. We also have more metabolic disorders and disease with rates increasing due to natural environmental factors, less health system functionality and access to treatments & influenced by global events.
Most NZ families cannot afford the diets that are associated with longevity and many cannot even afford to source the ingredients for that. We also cannot afford the diets that promote brain & growth development. In many families options can be even more limited now then even what they were 5 years ago. Food banks are stretched and there is more reliance on food services simply due to a lack in facilities, time, ability and equipment.
Also protip don't look at the meals at retirement venues & hospitals. Hospital food will make you pack on pounds like crazy and most of it is medically unsafe to those with medical diets. Hence plan to BYO food that needs no cold storage (sadly that is mostly junk types but some food services will deliver to hospitals if you are lucky). There is a limited time you can go without water but food can be cut for longer periods as in hospital sometimes it is safer to starve then to eat the food. If you have family able to deliver food to hospitals or retirement facilities you are pretty lucky. Although on the plus side when older with more heart issues you naturally feel more nauseous and less hungry.
Jeeze we already have two weather and climate organisations that dont work together and dont provide the data we pay to be collected back to us! And you want to give them more money!
They have even refused to provide commercial weather services to other operators as they dont like competition.
Axe NIWA, stick the good bits into Metservice. Or vice versa.
Take the spare money and use it.
Done.
Like I said before, it really is a stupid contest.
The budget was a minor shuffling of money, which will, when the dust settles, mainly favour corporate interests. The few dollars from tax changes are irrelevant - wiped out several times over by increases in other household costs. The apparent increases to health and education are nothing-burgers - health needs double-digit increases to budgets for the next few years just to keep up with the rising costs of modern medicine and the declining health outcomes associated with an increasingly unequal society. The education funding is mainly money for the old, tattered rope of 'charter schools'; rope that will break when tested (again).
My main problem with the budget though is that it simply doesn't add up. The Treasury forecasts are inconsistent - they are forecasting continued Govt deficit spending of around 2% of GDP and a current account (rest of the world) deficit of 4% - 5% of GDP. Yet, they believe GDP growth will return to 2% - 3% per annum for the next few years. Where is the stimulus coming from for this growth? I can only assume that they expect private sector debt to start growing quickly again. A rough calculation would suggest we would need to see private debt increasing by around 7% of GDP next year - that's around $30bn (this year's increase will be around $14bn).
whole wealth effect back in action to get the economy roaring again
We're a lot lighter on our skilled workforce this time around, having lost over a 100k to Aus since the end of lockdowns. Our infrastructure is a lot more crammed than the 2010s.
In short, with our constrained economic capacity and tight global supply chains, the rate cuts will be fairly limited and could may generate "purring" economic outcomes at best.
I alluded to the global oil supply glut in 2010 and NZ having less crammed infrastructure back then compared to now (with 700k more people living here compared to a decade ago for context).
You don't seem to be a big believer in things like reading someone's comments properly before replying.
"...and the economy will rise like a phoenix from the ashes in early 2025" ... Only to experience another bout of non-tradable inflation as workers can't be found to build stuff and the wage / price spiral kicks off all over again? (I'm reminded that those leaving for Oz are likely to be the more experienced workers capable of managing 4-6 less experienced workers but still achieving a quality outcome. Like is said, armies are run by sergeants, not generals.))
Golly. Maybe stagflation is on the cards? Or maybe just more immigration / emigration as NZ becomes a transit country before recently immigrated 'Kiwis" head off to Australia?
Just quietly - the RBNZ (with ample help from clueless governments elected by equally clueless voters) have got us all in a real pickle.
May you live in interesting times.
Yeah, I'm with both of you on these comments. And I'd add that we won't be returning to the halcyon days of house price inflation and economic stimulus that has aided in the past. The highly skilled, highly educated that own houses here and choose to move to better pastures, will in many cases become unintended landlords. And hence they won't be upgrading the kitchen and bathroom anytime soon.
This makes for interesting reading ... https://www.stuff.co.nz/money/350295653/5-households-5-very-different-t…
A superannuitant, living alone and with no other income will get tax relief of $4.31 per fortnight, or $112 a year.
While ...
A couple with no children at home and a combined income of $180,000 will be in line for fortnightly tax relief of $80.19 or $2085 a year.
Anyone care to explain that?
Correct the Super is getting automatic cost of living increases. Personally I think the Super is a huge monthly pay-out if you have your life in order by the age of 65. Currently I would get $519 a week, that's creaming it if you have your mortgage paid off and a new car in the garage and a few hundy in the bank.
Don't look then at the support systems for those who truly cant work. Compared to say disability support the super is a luxury that is handing out the next overseas cruise for the wealthiest who have the highest rates of home ownership and investment properties and then they choose not to work even though they are able.
It amazes me that we even have to say it out loud. You don't need an advanced degree in econ to understand that adding low-skilled workers en masse from 3rd world countries won't lead us to economic prosperity.
"Common sense is the most uncommon thing in today's age"
If home ownership was a dealbreaker, global talent from all over the world wouldn't be dying to move to the likes of Seattle, Denver and San Francisco.
Aussie and Canada despite similarly low home ownership rates do create plenty of high-paying STEM opportunities in mining and adjacent sectors. NZ doesnt have the required industrial base for global talent to see a decent future here.
Your response is precisely the ignorance among typical Kiwis I was trying to describe in my previous comment.
This discussion is about low-skilled migration, not replacing an aging population. And here you are again confusing quantity with quality.
For the 100th time, we cannot run a first-world economy by importing an army of cooks, cleaners and Uber drivers.
Last year, 20,000 people went on the benefit - at the same time, we brought in 52,000 low-skilled workers," Erica Stanford told Morning Report on Monday in April 2024
For the 100th time, we cannot run a first-world economy by importing an army of cooks, cleaners and Uber drivers.
I'm trying to think of a first world economy who's status and function isn't predicated on an army of lower cost labour, either located domestically or conveniently somewhere else, to do a large amount of the heavy lifting for it.
Can you?
High skilled/educated workers at the top of their game are usually the least likely migrant candidates. They're highly unlikely to resolve serious skills shortages anywhere outside of maybe the United States, and the odd wealthy niche economy with super deep pockets.
The fact we have a fairly long "green list" of skills for accelerated migration, while not also offering free domestic education/training in the same fields, is pretty dumb.
The budget didn't go anywhere near far enough, and I doubt if Luxon has the balls to do what it takes to get the economy, and our country, back on track.
1/ By the end of this financial year the public service should be back down to FTE staffing levels no higher than they were in 2002. With the increase in automation through the use of computers we should be seeing a downsizing of the public service, not an increase, and getting back to what it was in 2017 is just going back to how things were without increasing efficiency.
2/ ALL references to the Treaty of Waitangi should be removed from all laws that are not directly relevant to managing the Waitangi Tribunal.
3/ The Waitangi Tribunal should be reformed to refocus it back onto dealing exclusively with historic claims, and clarifying exactly what powers it has outside of the power to make recommendations.
4/ The Local Government and Electoral acts should be reformed to abolish Maori wards and Maori seats. Neither are requirements under the Treaty of Waitangi.
5/ Maori Land currently managed on behalf of any Maori tribe or tribal group by any government department should be returned back to being directly managed by those Maori tribal groups, and those tribal groups should be required to manage those blocks of land using their own resources. The government is not required to manage Maori land under the Treaty of Waitangi.
6/ Sex-specific or race-specific government agencies, ministries, or departments should be abolished except for schools, and health agencies/ministries/departments.
7/ The Human Rights Commission should be reformed to refocus it exclusively on those areas explicitly spelt out in the Human Rights Act, and "gender" (not sex) should be explicitly and specifically excluded.
8/ The tax system should be reformed to remove all the many distortions put into it caused as a result of wages being inadequate to support a family.
8a/ Working for Families should be removed.
8b/ The Accommodation Supplement should be removed.
8c/ Subsidies for preschool fees should be removed.
8d/ Tax rates should be indexed to CPI inflation, and
8e/ Tax rates should be set so that a person earning the median wage can afford to pay the mortgage, get to and from work, and feed, cloth, and educate 2 adults and 2 children.
9/ The right to Free Speech should be enshrined in the Human Rights Act alongside the existing right in the HRA to have and express opinions.
I don't expect the National Party to come close to doing any of that because they lack the desire to do the necessary things to get New Zealand back on track. But I do expect the Labour Party to make things much worse if they ever get back into power, which I sincerely hope they never will.
8e/ Tax rates should be set so that a person earning the median wage can afford to pay the mortgage, get to and from work, and feed, cloth, and educate 2 adults and 2 children.
The median wage in NZ 2024 is a bit under $66,000. Let's just start at the beginning - paying the mortgage (or rent). That simply cannot happen until house prices/rents reduce significantly.
How can we achieve this?
Regulate rent prices to a measure pegged to the median wage;
https://www.interest.co.nz/property/119377/katharine-moody-takes-look-r…
I wish rent controls worked but they don't. They didn't in London 50 years ago which is why they disappearred. Maybe they work in some developed countries such as maybe Germany but they require a class of uncorruptible disciplined administrators. They not only have the nice job of telling landlords to take less but also end up with the ugly responsibility for kicking out bad tenants. That is what they find difficult. Ref state housing in NZ.
Build too many houses where they are needed and the problem of prices and rents disappear. There was a govt that promised 10,000 new houses a year and immigration under 30k per year. If they ad delivered I would be voting for them and that despite owning a single rental property..
It was a solid budget in the circumstances. After 2 terms of waste and mismanagement, the public sector and Treasury need to earn back credibility with the public.
Until that point, the best place for any $$ is back in the hands of working people.
I reiterate the generational opportunity that Labour wasted with the ability to borrow at zero interest rates and an absolute majority in Parliament. Billions pissed up against the wall with little or nothing long term to show for it. Just grift and pet projects. Now National are having to clean up the mess, I feel sorry for them.
Labour wasted critical time chasing "sexy" infrastructure projects for photo opps (light rail, cycleways, Te Huia, etc.) to flaunt to their greenie voters.
In fact, so much could've been achieved by simply underwriting water and transmission asset upgrades around the country.
Now the tax/ratepayers are left to fund those upgrades in their entirety amid already high living costs.
Auditor-General John Ryan has heavily criticised the $15 billion infrastructure spend-up during the Covid-19 pandemic, saying the previous government should have ensured better transparency and value for money.
He says the public has a right to expect more, pointing to previous criticism of similar programmes, and has made three recommendations for Treasury.
The Labour-led coalition government announced the $12b New Zealand Upgrade Programme (NZUP) and the $3b Shovel-Ready Programme (SRP) in 2020 to shore up the economy in the face of the Covid-19 pandemic, and invest in long-term infrastructure.
Then-prime minister Jacinda Ardern at the time called it a "once in a lifetime opportunity to invest in New Zealand".
Ryan said he had decided to look at the funding because of the scale of investment and the long-term and potentially intergenerational impacts, noting that ministers decided to act quickly in anticipation of worsening economic conditions.
Finding funding and announcing the NZUP took only a few months, the SRP taking just weeks, he noted.
"It concerns me that significant decisions on the spending of public money continue to occur without appropriate processes for ensuring value for money and transparency," Ryan said.
"I think that Parliament and the public have a right to expect more for spending of this scale."
Have they released the report on the effectiveness of the spend yet (or just made comments about transparency)? I've checked their website and can't find it.
https://www.oag.parliament.nz/2022/annual-report-2021-22/highlights/scr…
This is what I'm looking for (mentioned at the link above):
We have additional work under way that we intend to publish in 2022/23 looking at the central response to Covid-19, the reset of the Provincial Growth Fund, and the significant investments the Government has made in the New Zealand Upgrade Programme and the "shovel-ready" projects.
cough cough...Covid.remember that? Here is a refresher from Chat GBT
When COVID-19 initially emerged, most governments implemented fiscal policies aimed at addressing the immediate health crisis and mitigating the economic fallout. These policies typically fell into several categories:
-
Emergency Healthcare Spending: Governments allocated funds to bolster healthcare systems, such as increasing hospital capacity, acquiring medical equipment (e.g., ventilators, personal protective equipment), and funding vaccine research and development.
-
Income Support: Many governments provided financial assistance to individuals and families affected by the pandemic through measures such as direct cash transfers, expanded unemployment benefits, and wage subsidies to prevent job losses.
-
Business Support: To prevent business closures and job losses, governments implemented measures like grants, loans, and tax relief for affected industries. Some also offered support specifically tailored to small and medium-sized enterprises (SMEs).
-
Sector-specific Aid: Certain sectors hit hardest by the pandemic, such as tourism, hospitality, and transportation, received targeted support to help them weather the crisis.
-
Infrastructure Investment: Some governments used the crisis as an opportunity to accelerate infrastructure projects, creating jobs and stimulating economic activity.
-
Debt Relief: Measures such as mortgage forbearance, rent freezes, and suspension of loan repayments were implemented to ease financial burdens on individuals and businesses.
-
Stimulus Packages: Governments introduced economic stimulus packages to inject liquidity into the economy, boost consumer spending, and encourage investment.
The near-zero interest rate borrowing was the RBNZ responsibility. And plenty of property investors spent the billions bidding up residential real estate and building spec townhouses. So, something to show for it - but was it wise investment?... that's left to be seen. But the building that went on is truly amazing in our neck of the woods.
Seven experts/left wing academics follow the money. Are there any "experts" outside academia we could ask?
Now here is some interesting money to follow.
https://www.thepost.co.nz/politics/350293431/stats-nz-investigating-pot…
Sadly my opinion of economic tertiary education, research and teachers dropped like a boulder off a cliff after I saw the complete lack in basic mathematics & any economic & science education they were actually teaching. It was all make a wild assumption, use social media to back it up. Then rely on ChatGPT these days. We are in for a wild ride if anyone listens to any economic consultancy reports... damn that is mostly all governments.
Of course nothing will be done on privacy breaches and election breaches because any country that favours nepotism and corruption is bound to have a folio of wet bus tickets to hand.
In addition in direct contrast to economic advice I have yet to see how the past migration policies were a net benefit when we seem to now be one of the countries running the biggest scam and fraud scheme for entrapment of migrants into illegal labour hire contracts & illegal housing.
We only are below the worst because it is not gangs who are the biggest perpetrators running sex work & labour hire schemes with slavery tied in. So the level of violence is lower here.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.