It's one of those rare occasions, this budget, when commentators have mostly taken the finance minister's own spin as a given and burrowed instead into the details. The result however is to ignore context, and to focus on the irrelevant to the exclusion of the important. That's why the finance minister is looking so goshdarned pleased: because her lies are going mostly unchallenged.
The finance minister tells you that this election-year budget contains "no sugar hits." That New Zealanders won't be bribed on election year with their own money.
That's a lie.
The small matter of a $450 million "emergency contingency fund" has been set aside "in a time-limited contingency" if the cork remains in the Straits of Hormuz -- betting, of course, as she does in her heroic forecasts, that the cork will at least be loosened, allowing a wee flutter when polls show it's needed.
Yes folks, the true "emergency" being provisioned for is an election debacle. That's what the slush fund is for.
The finance minister also tells us repeatedly that she's being responsible.
That's why she's set aside "just over $1 billion" for unspecified "improvements" to KiwiRail. Which is of course a big win for Shane Jones and his friend Winston. This is their billion-dollar slush fund for the election, which is just over double the fund she's allowed for her own party.
Responsible?
It's also handing councils $400 million in “growth incentives” now while only walking slowly to bring council's rates under control. And this is only because the finance minister can't bring her own govt's costs sufficiently under control to allow the GST component of new housing to go to councils (the real growth incentive she was encouraged to enact).Responsible?
As Michael Reddell observes (one of the few commentators to put his head under the bonnet with the proper focus, New Zealand remains among the advanced countries with the largest structural fiscal deficit -- which have got "materially worse" under this Government.
As the Taxpayers Union notes, "Despite branding this a 'responsible Budget,' Nicola Willis has today confirmed the Government will have borrowed more by 2029/30 than Treasury forecast just five months ago." Over a billion dollars more.
So have things got any better under this National finance minister rather than the last Labour liar? Has it hell. Reddell again:
In the last full year Labour was responsible for core Crown operating expenses were 31.7% of GDPIn 24/25 32.6%In 25/26 32.6%In 26/27 32.6%
Responsible, hell!
And of course, this Government went to the country promising "no new taxes." That's another long-term lie.
The budget has announced three new taxes on banks and shareholders -- sorry, two "levies" and one "charge" -- that will of course immediately be passed on to customers -- "the Beehive can try to frame it as a levy on the big banks, but this new tax will be paid by savers and mortgage holders. It’s a sleight of hand."
So that's just yet more charges and "levies" to add to the other new taxes already whacking New Zealanders since the last election's promise of "no new taxes (Levy (n.) an officially imposed fee, tax, or penalty demanded by a government or organisation). The full list:
Road User Charges on Electric Vehicles (April 2024)
GST on Digital Platforms -- the "App" Tax (April 2024)
Trustee Tax Rate Increase to 39% (April 2024)Offshore Online Casino Gambling Duty (July 2024)Customs and Excise Goods Management Levies (April 2026)Prudential Regulation Levy on Banks and Insurers (announced Budget 2026)Company Shareholder Loan Integrity Rules (Budget 2026)Thin-Capitalisation Changes for Foreign-Owned Banks (Budget 2026)
Not only has the projected date for getting back to budget surplus (on the standard OBEGAL measure) kept being pushed back but the projected surpluses for 26/27 (the yearr today's Budget directly relates to) have worsened by more than 4% of GDP in 3 years (under both governments).
If you want to be even more depressed, realise that allowing the State to remain this large and/or grow further, is National playing into the Left's hands one or two elections down the line, when a new Labour coalition government will justify new and increased taxes to do "fiscally conservative" things like reduce the deficit and pay down debt.
ReplyDeleteAnd what good National Party person would disagree with that?
Frankly I've long put Willis in the same category as their failed leader of 2020, Todd Muller, who was also hailed as the $600k a year manager from Fonterra. As far as I was concerned they were simply part of the group that fucked up Fonterra from the late 2000's on, as I described here in 2020.
Incidentally the last story I included in that post, taken from a post by Professor Woodford, is a picture perfect example of where Willis is leading us, as she and other six-figure management geniuses led Fonterra:
A few months later, the Global Financial Crisis (GFC) had struck and I suspected that Fonterra might be facing a liquidity crisis. I decided to do some analysis on Fonterra’s finances, using public documents. My calculations quickly showed that Fonterra was highly indebted, with inventories apparently overvalued, and almost certainly running up against its bank covenants.
Rather than putting the analyses into the public arena, on 23 December 2008 I sent my document to Fonterra’s Chair Henry van der Heyden, to Fonterra’s CEO Andrew Ferrier, and to Blue Read as Chair of the Shareholder Council. I asked them if they agreed with what I was seeing.
Within 24 hours, Henry van der Heyden came back to me and said that I must come up to Auckland to talk to their financial team. That meeting happened in the first few days of 2009. I spent a day with CFO Guy Cowan, who called in various other people to assist with information. Andrew Ferrier rang in several times during the day to see how we were going.
Guy Cowan was very frank. Yes, Fonterra was in a cash crisis. Later I learned that they had been at risk of not being able to pay farmers the previous month. The details are a story for another time.