"Rome fed 200,000 families free grain by 46 BC, and it called this generosity. Julius Caesar inherited a dole of 320,000 recipients and trimmed it, not out of principle but because the treasury was bleeding. This was the annona, the grain distribution that started as emergency relief under the Gracchi in 123 BC and hardened into a permanent entitlement. Once free grain became a right, no politician could touch it and keep his head.
"You already know how this works, because you watch the same play run today. A subsidy arrives as mercy. It stays as an expectation. Then it becomes the thing men vote for instead of working for.
"The Roman citizen once farmed his own land, served in his own legion, and expected nothing from the state but courts and roads. By the time Trajan was staging 123 days of games in AD 107, slaughtering 11,000 animals and pairing 10,000 gladiators for the crowd, that citizen had become a spectator. He no longer fought Rome's wars: hired auxiliaries and Germanic mercenaries did. He no longer fed himself: Egypt and North Africa did, shipped in on the public account. He no longer chose his rulers in any meaningful sense: he cheered them in the Colosseum and collected his ration.
"The free grain and the free games purchased compliance, not compassion. A man dependent on the state for his dinner and his entertainment does not organize resistance to that state, and every emperor from Augustus onward understood the arithmetic. Panem et circenses [bread and circuses] was a bribe paid in exchange for civic surrender, and the mob accepted the terms gladly.
"Here is the mechanism the welfare enthusiast never grasps. Virtue is not a feeling. It is a practice, and practices atrophy when the incentive to perform them disappears. Take away a man's need to provide, defend, and decide, and you domesticate him rather than liberate him. Rome spent four centuries proving it, then handed the ruins to Odoacer in AD 476 without much of a fight, because the men who might have fought had long since learned to wait for the grain ship instead."
"Freedom is not empowerment. Empowerment is what the Serbs [had back in the Yugoslav civil war]. Anybody can grab a gun and be empowered. It’s not entitlement. An entitlement is what people on welfare get, and how free are they? It’s not an endlessly expanding list of rights — the “right” to education, the “right” to health care, the “right” to food and housing. That’s not freedom, that’s dependency. Those aren’t rights, those are the rations of slavery — hay and a barn for human cattle.
"There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences."
Happy 96th birthday to Professor Thomas Sowell, one of the greatest thinkers of our time.
"Thomas Sowell is 96 years old, and the man has spent seven of those decades teaching the same lesson the political class refuses to learn: there are no solutions, only trade-offs.
"He started as a Marxist. Worked in the federal government in 1960, studying minimum wage policy in Puerto Rico. The data told him what the textbooks would not: when you raise the price of labor by law, you price the least-skilled workers out of a job. His government colleagues cared more about protecting the programme than protecting the workers. That killed his faith in central planning faster than any theory.
"Read 'Knowledge and Decisions' (1980) and you get the whole architecture of his thought. Prices carry information. No planner in Washington, however credentialed, can gather what millions of buyers and sellers signal every second through their bids and refusals. Hayek made this point in his 1945 paper on the use of knowledge in society. Sowell took it and built an entire method around it, applying it to housing, education, race, crime, and the endless parade of 'compassionate' schemes that reliably wreck the people they claim to rescue. Rent control empties buildings. Occupational licensing locks the poor out of trades. Sowell documented every one of these disasters with numbers, not slogans.
"You want the sharpest example? Look at his work on race and economics. He showed that black Americans made faster gains in employment and income in the decades before the great expansion of the welfare state than after it. The programs sold as help became a ceiling. He said it plainly when saying it plainly cost him invitations to every respectable dinner party in the country. He never flinched. He wrote another column instead and another book, well into his nineties.
"This man never mistook good intentions for good results. Go read him. You will emerge harder to fool."
"It's appalling that a quarter of a million children now need an income from the state to feed, clothe and house them. ...
"More than a third of all Maori children were dependent (36.5 percent) ...
"Over two thirds of the children rely on a single parent. Half of the children depending on Sole Parent Support are Maori. ...
"[S]since December 2017 (when Jacinda Ardern made herself Minister for Child Poverty Reduction) the ... number of under 18-year-olds dependent on a main benefit has risen by 31.2 percent.
"Jacinda's prescription for solving child poverty [of raising benefit incomes and reducing the margin between work and welfare] was wrong.
"New Zealand's 'child poverty' problem will not be solved while high numbers of children [still] live in unemployed households. ... [N]ormalis[e] benefit dependency for children and the habit becomes inter-generational. ...
A career summarised: no ideas, no direction, no success -- and not one car crushed
What does a career in politics achieve?
This afternoon Judith Collins will give her valedictory speech in Parliament. Journalists call her career "colourful." They call her "Crusher." Let's review what she's done there over the years.
she was always ready to give the trough a decent nudge -- costing us in 2023 more than $24,200, made up of more than $6000 for accommodation and just over $18,000 on travel (a massive saving for us from 2009 when her limos and international travel were costing us nearly $200,000)
need we mention using her position to help the export business for which her husband was a director?
brought down for the first time (of many) by her own Entitle-itis, one wag suggested 'Trougher' Collins would be a better nick than 'Crusher'
as Police Minister she continued to ensure that gangs could make decent profits on illegal drugs, while also ensuring police focus more on revenue-gathering than resolving real crimes (cementing an image as tough but crushingly ignorant)
apart from, of course, bringing in pathetic new laws to "crush" cars instead of simply applying laws already on the books -- the main goal of which "seems to be the generation of positive media coverage for Judith Collins"
as opposition MP in 2007 she stood up on the steps of Parliament to swear total opposition to the anti-smacking amendment; and then one month later filed obediently into the lobbies to vote for it
as Opposition MP in 2005 and desperate to be noticed, she did point out that the Labour Government's Working for Families package is an election bribe paid being paid for with voters' own money -- and then as government MP and minister continued to administer the bribe
keeping alive the tradition of promising and reneging, Collins was happy to be photographed firing a pistol to court the gun lobby (posting one on her own Facebook page in case you missed it); before being the only National MP to support banning semi-automatic weapons for civilian purposes, and to boast about it
as Opposition Leader, Collins did promise the National Party would reverse any attempts by the Ardern government to criminalise speech beyond the threshold of "inciting violence," and warned against ending up with "UK-style hate speech legislation that has ended up with people being criminalised and even imprisoned for foolish and silly comments." All good, except that as (In)Justice Minister she had already drawn up much the same thing under her Harmful Digital Communications Act which hit us in 2015
as Police Minister in 2016 she did correctly observe that the primary welfare problem to solve is not a poverty of money, the premise behind Labour's Working for Families programme, but "a poverty of ideas, a poverty of parental responsibility, a poverty of love, a poverty of caring. ... it is not just a lack of money, it is primarily a lack of responsibility." And then sat back as her Government and Party kept the policy, and did nothing to arrest the real poverty she'd identified
And just to be clear: 'Crusher Collins never even crushed one car. Not one. (Only three cars in total were crushed under her legislation, all of which were after she was moved on from the job.) Which could be her real legacy: one of image over reality.
On the credit side,
she did, as opposition MP, do a mini-Rosa Parks in walking out when women were refused permission to powhiri except from the back of the room
she did, as leader, once proclaim National to believe in property rights (despite it being National who introduced the property-rights-destroying RMA) and did accurately point out that the ACT Party did not, saying "there they are arguing for more planners doing more planning rather than actually letting people get on with building their houses"
she did, as leader of that same National Party, lead it to its second-worst-ever election defeat in 2020, with a 19% swing against
she was one of the two National MPs who signed up to the bi-partisan accord on housing that helped lower rents and begin the blessed fall in over-priced house prices -- and then disgracefully remained silent has her new boss kicked it into touch, delaying real housing reform now for nearly four years.
Judith Collins arrived in Parliament after a decade in law and (govt-appointed) directorships as a young, fresh-faced MP in 2002, eager to solve the country's problems and to advance her own career. Without any ideas to guide her however she did nothing to solve anything, helped expand the role of government, and spent a life in service to the trough.
So, more exposure than most, but in the end no different to any of the other highly-paid beneficiaries there, really.
And now she's off to another taxpaid trough at the Law Commission ...
There are people who think the world in recent times has been suffering under something called "neoliberalism" in which "social spending"is savaged ....
... and others who claim governments have recently been inflicting something called "austerity." Here's the UK's "austerity" measured over the last three centuries. Their experience is not unique ...
There was a time not that long ago when only one member of a family needed to go out to work.
But that was several moons and many tax increases ago.
Now, one member of every couple goes out to work just to pay the tax bill.
Yet we still have the Sole Parent Support (SPS) benefit, known for decades as the DPB, aka the Domestic Purposes Benefit -- introduced in November 1973 for "sole parents, carers of the sick, and people living alone."
In 1971, there were about 19,000 sole parent households with children under 15[1]. By the middle of 1974, 12,000 of them were receiving the DPB. There were 110,000 when it was replaced in 2013 with a suite of new benefits. (Politicians love to change a name instead of the reality; and a name-change always makes a thing easier to hide.)
In today's world the DPB is, says Lindsay Mitchell, "an anachronism. It has lost context in modern society."
Why?
Because most mothers work.
They take paid parental leave, which has a maximum entitlement of 6 months, and return to their jobs. Whether they want to would vary, but most would say they have to. Mortgages or rent need to be paid, power, groceries, childcare, etc....
22 percent of the mothers were supported by a benefit. For the vast majority, that would be Sole Parent Support. ... So the mothers returning to work - like it or not - will be paying taxes to enable other mothers to stay reliant for most of their newborn's childhood.
Fair?
...
Currently 234,000 children rely on welfare, with over two thirds on SPS.
If those children had a parent on a Jobseeker benefit, the expectation and effort to get their parent into employment would be far greater.
That's not just hot air. The reason Bennett got rid of the Sickness Benefit (in favour of Jobseeker/Health or Disability Condition) was to make sure 'expectation and effort' also went into getting temporarily unemployed unwell people back to work.
Societal expectations matter. And benefits should reflect them.
Get rid of the sole parent benefit. Lift aspirations for those mothers, and better outcomes for their children will follow.
Even better: get rid of all the costs from government that make it necessary for one partner to seek full-time employment just to pay the government's bills!
Q: Governments and central banks have inflated asset prices for decades—making housing, education, and healthcare unaffordable for many.
Is the 'system' designed to turn Millennials and Gen Z into lifelong renters and debt-serfs? Is there a way out?
Doug Casey: It’s a natural consequence of Statism.
First of all, taxes are high and have been increasing for decades. After taxes, you have less money left over to save. And if you do try to save, inflation eats away at the dollars that you put in banks or investments. Worse than that, welfare and government benefits make saving feel unnecessary for many people. They feel they don’t need as much because the cradle-to-grave welfare state will cover them. There’s a reason why Klaus Schwab famously said, 'You’ll own nothing and be happy.'
A lot of people believe it. This feeling is abetted by schooling, where everyone is inculcated with this collectivist meme. On top of that, the rich are viewed as parasites. And who wants to be a parasite?
This is all caused by State intervention in the economy. Schools almost always teach students that the State is their friend. It’s not; it’s their enemy. ....
Q: We’re seeing a collision between AI/automation and a credential-heavy job market. Which parts of today’s white-collar economy do you think are most fragile?
Doug Casey:.... The bright side is that while AI and robotics will destroy huge numbers of jobs—starting now—they’ll also level the playing field. A person of less than average intelligence can have AI do things for him that he might otherwise be unable to do. A further benefit is that the world doesn’t need paper pushers and cubicle dwellers who are sitting around doing marginally productive labor. Very much like the world no longer needed people working like drones in textile mills 200 years ago, at the start of the Industrial Revolution.
While AI is going to create some major problems in the short run, it’s going to be a very good thing after those bumps in the road. Just like the Industrial Revolution itself created problems while vastly improving the world. ....
Q: What should a 25-year-old do to build real, durable earning power in the next 5–10 years?
Doug Casey: Ayn Rand answered that question in a speech I heard 40 years ago. When asked, she said: 'The best way to help the poor is not to be one of them.'
I confronted this problem with my friend Matt Smith when we wrote 'The Preparation.' The book explains why young people should avoid college. In fact, it urges them to treat college like the poison that it now is, showing how college has become a serious detriment in almost every way. More importantly, we describe what young men should do instead during the four years between 18 and 22, a time which is critically important, but generally wasted.
We demonstrate—exactly—how a young man can qualify himself with the equivalent of a BA, a BS, and elements of an MBA. That’s in addition to learning practical things in a hands-on way. We divide the four years into 16 quarters. The student will learn everything from flying a plane to sailing a boat around Cape Horn to operating heavy equipment. He’ll qualify in welding and metalwork in Canada. Cooking at a professional level in Italy. He’ll be farming in one quarter and building a house in the next. He’ll learn martial arts skills in Thailand, as well as shooting and scuba. You get the idea. It’s a productive and busy four years.
The critical thing, since we don’t know how the world is going to evolve because of AI, is to become a Renaissance man, enabling students to do anything and go anywhere. To avoid trying to climb a greasy corporate ladder, but build a web where you can reach out in any direction. That’s necessary in the world of AI. It’s training to be an entrepreneur, and an employer—not an employee."
"Their study was based on a population of children aged 0-14 years 'informed by a cohort analysis of individuals ... who can be observed through to age 21 .'... One of four risk factors for poor outcomes later in life [is b]eing 'mostly supported by welfare benefits since birth'...
"[In other words,] children raised on welfare [tend to] become adults who are less educated, have poorer mental health, are more likely to become single parents, to rely on welfare and fall foul of the law.
"If being born onto welfare and staying there long-term is a risky business for children, why would any government want to encourage this? In other walks of life we are bombarded with health and safety regulation. And in an environment where 'sustainability' is a constant clamour, how does growing costly dependency stack up?
"Those who advocate limitless number and duration of child benefit payments — the situation that currently exists in New Zealand and the UK is returning to — are ignoring the evidence.
"Those saying we need more welfare in order to produce more children are pushing a remedy fraught with risk, cost and irresponsibility."
"Today [now yesterday] is the last Tuesday of January. It is a date that should matter more in New Zealand’s political memory than it does.
"On the last Tuesday of January in 2004, Dr. Don Brash stood at the Orewa Rotary Club and delivered what remains one of the most important political speeches given in this country in modern times. It was calm, forensic, unapologetic and, most importantly, correct.
"More than two decades on, the speech reads less like a product of its time and more like a warning that New Zealand chose to ignore.
"Brash opened by setting out five priorities that would be familiar to anyone paying attention today. Declining relative incomes compared with Australia. An education system failing the least privileged. Welfare dependency eroding personal responsibility. A justice system more concerned with offenders than victims. And finally, the issue he focused on that night, the dangerous drift toward racial separatism and the entrenchment of what he rightly called the treaty grievance industry.
"That phrase alone was enough to end his political career.* Not because it was wrong, but because it was accurate."
* To be fair, his political career didn't end immediately; but it had been put on notice. Even a near-reversal in National's worst-ever election loss under Bill English wasn't enough to save it.
"The beneficial effect of State intervention, especially in the form of legislation, is direct, immediate, and, so to speak, visible, whilst its evil effects are gradual and indirect, and lie out of sight. ... Hence the majority of mankind must almost of necessity look with undue favour upon governmental intervention.
"This natural bias can be counteracted only by the existence, in a given society, ... of a presumption or prejudice in favour of individual liberty, that is, of laissez-faire. The mere decline, therefore, of faith in self-help — and that such a decline has taken place is certain —is of itself sufficient to account for the growth of legislation tending towards socialism."
"After nearly ninety years of social security it would be reasonable to conclude that the state cannot solve 'poverty.' Indeed, the more the state does, the more the state is expected to do."
A simple principles explains how democracy really works to benefit one group at the expense of several others — and why a Capital Gains Tax would be harder that it looks. The principle is something called Director's Law.
"Director's Law states that the bulk of public programmes are designed primarily to benefit the middle classes, but are financed by taxes paid primarily by the upper and lower classes. The empirically derived law was first proposed by economistAaron Director.”
Director’s Law is so-called after the delightfully named Chicago economist Aaron Director. Director’s Law states that
“Government has coercive power, which allows it to engage in acts (above all, the taking of resources) which could not be performed by voluntary agreement of the members of a society. Any portion of the society which can secure control of the state's machinery will employ the machinery to improve its own position. Under a set of conditions to be discussed below, this dominant group will be the middle income classes.”
Milton Friedman calls it the Robin Hood Myth: “the myth that government has benefited the poor at the expense of the rich.” They key essentially is to fuck the poor and the fairly rich (we’ve never enjoyed a “very rich” here) in order to benefit the middle class.
As Michael Cullen was to confirm for us when he designed the middle-class subsidy scheme Welfare for Working Families, this is still the logic of local democracy.
“On The Logical level you have a political system under which laws are passed by 51% of the people voting One Way against 49% of the people. Now the way to get a law passed therefore is to form a coalition covering 51% of the people.
“You might think that you would take the bottom 51% versus the top 49% but the more you think about it the more you realise that's not a very effective way to form a coalition. Why? Because those people who are at the bottom tend to be much less skilful in political activity for the very reasons that leave them at the bottom in the economic scale. …
“The most effective people in political activity those of us in the middle classes. Where are the people who are literate; where are the people who write for the newspapers; where are the people who mount the hustings; where are the people who provide the candidates.
“Well you might say why doesn't the Coalition come from the top 51% all the way down. The answer is that those people at the top [are]a place we can get a lot of money from! And it's worth sacrificing a few votes to get a large fraction of a tax base.
“And therefore the logically most reasonable Coalition is sort of 51% of the people running from the lower-middle class through the upper-middle class, and leaving out both the very rich at the top and the very poor at the bottom.”
So why does that make implementing a Capital Gains Tax harder that it looks? It's very simple. Because as every astute politician knows, those people on whom it would fall are right inside your 51% of voters...
"While Māori children are being beaten, abused and killed right here in New Zealand, Te Pāti Māori’s leaders are too busy preaching about Gaza to notice the blood on their own doorstep. ... "It’s easy for [them] to shout about oppression halfway around the world, but where is [their] voice when Māori kids are dying up in Northland while under the care of Ngati Hine? Where is her anger when Māori families are trapped in gang-run communities plagued by drugs, violence and generational trauma? ... "Rawiri Waititi and Debbie Ngarewa-Packer are demanding the New Zealand Government expel the Israeli ambassador unless Israel halts its military campaign and opens up Gaza to humanitarian aid. That’s their priority. Not the Māori kids being buried, not the Māori women being beaten, not the Māori offenders clogging up the justice system with violent crimes. Their outrage is selective and political, not moral."
"[C]hildren who get murdered ... were definitely short of ... love and care. That is what lies at the heart of New Zealand's high rate of child abuse and neglect. Not material poverty. Not a lack of money.
"It's a fact ex-Prime Minister Jacinda Ardern either wilfully or naively chose to ignore. Her solution to the plight of too many suffering children was [instead] greater wealth redistribution. Inventing new payments for families with babies, lifting benefit rates and installing families in motels were three major policies designed to alleviate poverty. But the mayhem goes on. ... 'Violence against children is increasing. The number of children admitted to hospital with injuries because of assault, abuse or neglect increased sharply in 2024 to the highest number in at least a decade. Violent offending against children also continued to increase ....'"
"Throwing money at people who become parents willy-nilly, who lack any financial or emotional wherewithal, who can't look after themselves let alone a demanding, time-intensive baby, is nothing more than a salve to the conscience of people who have misdiagnosed the problem. Led by the likes of Jacinda Ardern.
"This is what Ardern's famous form of kindness and compassion actually looks like. ...
"So while we endure the massive media-hype around Ardern's biography, and most detractors focus on her horribly hypocritical claim to a compassion-driven Covid response, remember, her main reason for entering politics was to help children.
"Not only did she fail, but she may have made matters worse."
"The struggle of well-fed pressure groups for larger shares in the national booty is not a battle which engages the highest faculties of the human heart or mind. It is the consequence of our material health as well as of our spiritual sickness that from the exaggerated structure of the state there emerges something less than the human voice."
~ Hubert Witheford, from his prose article 'Background to a Magazine,' Arachne No. 2, Feb. 1951 (p. 20)
The New Zealand Government's gross debt — the amount taxpayers must service — will now increase by another $73b by 2029, reaching a massive $283b. That's $94,000 for every New Zealand family (with nearly $6000 of that just to pay the government's interest!).
Things are desperate. It's the middle year of an election cycle. Time for something bold.
No?
No.
Its not about doing more with less, or vainly trying to to. It's about doing less with less. Less with our money.
Several years ago when Helen Clark's Labour Party was about to lose an election , then Finance Minister Michael Cullen placed a fair proportion of New Zealanders onto welfare. His Welfare for Working Families programme made sure that, until ended, more than half of the country will now be beneficiaries. On the mooch. More than half of the country pulling down more from other taxpayers than they can ever give back.
This National Party Finance Minister could have done nothing with the programme — allowing inflation to make the maximum threshold for the programme dissolve.
She could have ended it altogether — signalled in good time, of course, to let folk plan ahead — but ending it could have saved $2.5-3billion.
Instead, she raised that threshold below which working families get welfare. Around 142,000 New Zealand families. Which means even more working New Zealanders will continue to be moochers off (further normalising the behaviour perpetuating the Welfare State).
Many years ago a National Party Finance Minister introduced an Accommodation Supplement to, supposedly, help out poorer renters. Of course, it did nothing of the sort: instead if helped out their landlords, who could simply raise their rents to meet this new "supplemental" monetary demand for their supply. The Supplement — a grant to landlords — currently costs around $5 billion.
This National Party Finance Minister could have announced a lowering of the Supplement, saving some of those billions.
She could have announced it would end altogether, saving them all (while lowering rents). Instead, another expensive, destructive market-distorting subsidy continues.
I highlight these two measures because, for all Nicola Willis's hand-wringing about being prudent, about being responsible, about needing to achieve a surplus — and with the economic system flatlining while government debt vaults up decade by decade, bold measures to get there are not just a nice-to-have but a have-to-have — this budget is neither prudent, nor careful nor responsible.
Not being bold is to be irresponsible.
It's to be a coward.
Opposition parties are trying to paint this as an austerity budget. National Party pollster David Farrar boasts that it isn't.
"Nicola Willis has failed,” says Taxpayers’ Union Spokesman Jordan Williams. “This Budget could easily have been delivered by Grant Robertson."
“Willis promised to tackle the last Government’s ‘addiction to spending’. Spending is going up as a proportion of the economy in this year’s Budget compared to the current year. Core Crown Expenses are forecast to be 32.9 percent in 2025/26 compared to 31.8 percent under Robertson in 2022/23.
“She promised to balance the books. The OBEGAL never gets into surplus according to Treasury forecasts. Willis has had to make up a new measure to exclude the ACC deficit to create an illusion of a laughably small surplus in 2029.”
“And she promised growth. But the headline measure – an accelerated depreciation regime – is basically no better than what the last Labour Government tried immediately after COVID.”
“According to the Budget documents, the Government's headline ‘growth’ policy adds just 1 percent to GDP over 20 years. It is laughable in its small size.”
“More spending, more debt, and nothing to materially shift the dial and grow the economy. It’s not a Growth Budget, it’s a fudge-it."
It's very much a centrist budget to not please those wanted a balanced budget and shrinking of the state, and of course isn't a budget of new grand larceny and profligate handing out to preferred causes, it basically just holds the line of NZ's Jacinda-era bloated state. ... a[nother] kick-the-can-down-the road budget.
Eric Crampton mentions some political sleight-of-hand:
"At some point, we have to wonder about the fiscal responsibility provisions in the Public Finance Act matter, because those effectively say you should not be running structural deficits for a decade, and we will have been running structural deficits for a decade. The ones during Covid were excusable - now, not so much. ....
"If you want to see the state of the government's books on the more traditional OBEGAL measure, rather than the one that excludes substantial ongoing ACC deficits, you have to go to the "Additional materials" in the online appendix.
"The Growth Budget" has just one growth-oriented policy [i.e., accelerated depreciation for business investment], estimated by Treasury to raise GDP by a mere 1% over 20 years (0.5% in total in the next five).
"[T]he government chose to title its effort [yesterday] 'The Growth Budget.' The Minister spoke today against a backdrop emblazoned repeatedly with that label.... the Prime Minister made a big thing of the need to accelerate growth ... The Minister of Finance in announcing the Budget date ... [boasted] 'the Budget will contain bold steps to support economic growth' ...
"They did not deliver.
"There was a single growth-oriented initiative in the Budget ... [T]he best Treasury estimate is that it will lift GDP by 1 per cent, but take 20 years to do so
"This year’s Budget represents another lost opportunity, and probably the last one before next year’s election when there might have been a chance for some serious fiscal consolidation. The government should have been focused on securing progress back towards a balanced budget. Instead, the focus seems to have been on doing just as much spending as they could get away with without markedly further worsening our decade of government deficits. ...
"We used to have some of the best fiscal numbers anywhere in the advanced world, but as things have been going – under both governments – in the last few years we are on the sort of path that will, before long, turn us into a fairly highly indebted advanced economy, one unusually vulnerable to things like expensive natural disasters. ...
"The government seems to have become quite adept at rearranging the deckchairs (cutting spending that they consider low priority and increasing other spending) but they are choosing to make no progress at all in reducing the structural deficit. ...
"Which brings us to the most recent IMF Fiscal Monitor released a few weeks ago [showing how our] primary deficit now compares ... Depending on your measure we were (based on HYEFU/BPS numbers) worst or close to worst in the advanced world. Today’s Budget will have done nothing to improve that ranking."
"New Zealand’s fiscal position doesn’t look good. Last year’s Budget slightly widened an already uncomfortably large (estimated) structural fiscal deficit. ...
"[T]his is a measure of the primary deficit (ie excluding net interest) not the overall balance. ... [T]he overall deficit ... it is a reflection of past choices. The primary balance is a reflection of current policy choices. ... [T]he chart ... shows New Zealand [is] estimated to have the highest cyclically-adjusted primary deficit of any advanced economy this year. ... We used to be better than the average advanced economy. Once upon a time, not so long ago. But not now. ...
"There can be a case for cyclically-adjusted (or structural) primary deficits, even large ones. Wars, for example, are often financed by a mix of debt and taxes. Pandemics can be another example – big disruptions to output and activity almost from out of the blue – and so no one really quibbles much over primary deficits in (calendar) 2020 and 2021.
"But we don’t face a war or a pandemic. Our politicians – first Labour and now the National-led coalition – have simply chosen to run large primary deficits. ...
"In case you are wondering about the overall structural balance picture, here is that chart:
"We don’t have the largest overall structural deficit among advanced countries, but there aren’t many worse than us.
"And we are heading in the wrong direction. ...
"These New Zealand structural fiscal deficits aren’t some consequence of Covid but a series of choices to act, and not to act, by both governments in succession. ...
"[B]ack ... when we had feeble productivity growth and weren’t closing the gaps on the rest of the advanced world we had an enviable record of fiscal stewardship. These days, productivity and real GDP per capita growth is [still] lousy, and we are running big deficits and rapidly increasing debt.
Looking for signs of a form improvement, Reddell notes that in Finance Minister Nicola Willis's pre-Budget Speech this morning"although there is talk of a 'significant savings drive' freeing up 'billions of dollars' ... there have been no announcements of things the government is going to stop spending money on, or of agencies/departments it is just going to close down." And: "it sounds as if more handouts are still part of the plan."
We should no doubt be thankful for small mercies – this morning’s announcement may be one – but the outstanding imbalances are large and do not yet seem to being addressed seriously. Those imbalances are bad, both absolutely and in international comparison terms. They are political choices. Unfortunate ones.
"Robert F. Kennedy Jr.’s transition from semi-prominent Democrat to third party spoiler to Donald Trump endorser is emblematic of a broader, decade-long 'crank realignment' in American politics.… "The partisan shifts of both Trump and RFK Jr. are part of a long term cycle in which .... a generic suspicion of institutions and the people who run them has come to be associated with conservative politics. Conservative cranks are not even close to new (the John Birch Society, for example), but they’ve become increasingly prominent ...
"If I’m agitating for a 'liberal' realignment of American politics, it’s partly because I live in terror that the realignment will come anyway—but it will be illiberal…. "Let’s talk about what kind of implicit idea would cause someone to combine a traditionally conservative proposal (keeping out immigrants) with a traditionally leftist proposal (government price controls)—and do so in a way that so overwhelms every other consideration, including democracy itself, that it causes them to flip their vote. "The implicit premise is that government exists to hand out favours to 'people like me'—and to kick everybody else in the teeth, especially poor immigrants coming here in search of a better life. That particular policy combination indicates a tribal mindset…. "At any rate, this is precisely the political realignment I’m trying to avoid, one that brings together the worst of both worlds: bloated Big Government welfare-statism and paranoid, xenophobic nationalism."
Te Pāti Māori's electioneering shenanigans at Manurewa Marae are small beer compared to their pāti president's financial shenanigans at the Waipareira Trust, which looks increasingly like he regards it as his personal and pāti ATM.
That's where the real enquiry needs to be focussed — on the slush fund known as Whanau Ora. And the deals done by several parties to create it.
It was predictable. When there's this much money and power sloshing around unaccountably, there's always someone who will make it his job to take advantage ...
WHAT WE SAID IN 2010:
"If stimulus and bailouts are welfare for bankers-who’ve-failed, and Kiwisaver is welfare for suits-with-nothing-in-them, then surely the new politically-correct Whānau Ora scheme is just welfare for 'welfare providers,' isn’t it? Welfare that is primarily to keep the likes of John Tamihere and Rongo Wetere in the manner to which they’ve become accustomed. Welfare for a Browntable of well-heeled ambulance chasers. Welfare that will end up costing us all more in the long run than the current welfare bill."
"Whanau Ora is ... simply welfare for separatist welfare providers. "In short, a scam. "That much is fairly clear even from the Auditor General’s findings on funding, to whit: 'During the first four years, total spending on Whānau Ora was $137.6 million…. Nearly a third of the total spending was on administration…' "You see? A very well-paying scam … if you’re inside that tent clipping the ticket. "What Whanau Ora is primarily, is welfare for separatist welfare providers.... "So what has the scam achieved? "It has achieved a great deal indeed … for all those inside the tent. "What it achieved for the Maori Party was to buy them the backing of welfare providers – and as you can see I mean 'buy' in the very literal sense. Sure, it’s been hard to keep the backers inside the tent as bigger game seemed to appear elsewhere, but for a while at least it bought support for the new party. "And what it achieved for the Key Government was to buy the backing of the Maori Party – 'buy' here being used in the very political sense of buying the Maori Party’s votes, with which it was able to stay in power. "So quite a great deal indeed was achieved, if you’re one of the ones in power."
"Although Ardern tried hard to divide Kiwis along every imaginable line for her own political benefit, an inescapable fact is that a profound cultural factor, way bigger than her, unites us all together. We have our roots in making our way through our own industry.
"When people started to migrate to NZ, whether indigenous or not, they had to depend on themselves, friends and family for survival. There was no welfare state back then. Out of this history, an important part of our culture became the 'can-do' attitude — Kiwi ingenuity, the number 8 fencing-wire, practicality —the taking calculated risks that many in the Old World had lost. Cut to modern times however, and this is the current philosophy of the NZ Labour Party, as espoused by its current and former leaders:
Ardern: 'People ... look for light, hope, a fulfilment of their own ambition and they will either find that in political leadership or they will seek out reasons why they have been failed.'
Hipkins: 'Governing is about choices — choosing subsidies ... '
"What stupendously depressing words, declaring the only way a human can be fulfilled - can achieve their dreams & ambitions - is dependence on politicians..."
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