The Dim-Post

May 29, 2009

Framing the budget

Filed under: Politics — danylmc @ 3:35 pm

Media and opposition parties like to coin cute little phrases to describe budgets: ‘the Colby budget’, ‘the chewing gum budget’ etc. Labour have tried to label this one ‘the dishonest budget’, which is really more of an indication of how tin-eared and unimaginative the opposition party is in these sad days. So in the interests of public service I humbly suggest they try ‘the dog food budget’, the talking point being that that’s what New Zealanders are going to spend their retirement years eating for dinner under the National Government.

The decision to scrap the Cullen fund seems like an odd move politically. Why didn’t they just announce that they were suspending it for two to three years and that they’d review it based on the state of the economy at that time ? The only reason I can come up with is that they didn’t want it to become an election issue which is a rather vain and naive hope – even Labour are going to be able to make something out of the fact that around a million New Zealanders are set to retire over the next few decades and and there isn’t any money to pay for it.

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14 Comments »

  1. Come on, Standard but Poor! thats a real humdinger.

    Comment by JakeQuinn — May 29, 2009 @ 4:17 pm

  2. I thought Government set the super rate and did so independently of the Cullen fund? The fund was a way of managing funding but was not the sole funding of super. General revenues would smooth out any falls in fund performance and any similarly over performance would not be paid out like a bonus but could limit the need for Crown contributions.

    To say “around a million New Zealanders are set to retire over the next few decades and and there isn’t any money to pay for it” seems to misrepresent the way super works and the way the fund works.

    Comment by insider — May 29, 2009 @ 4:30 pm

  3. Excellent – you get my vote with that one…!

    Comment by Sam — May 29, 2009 @ 4:47 pm

  4. The decision to scrap the Cullen fund seems like an odd move politically. Why didn’t they just announce that they were suspending it for two to three years and that they’d review it based on the state of the economy at that time ?

    I presumed it was a way of making the debt projections start to level off in the medium term without cutting spending or taking back the first round of tax cuts (which would have had an hilarious effect on the right-o-sphere…). I don’t know much the contributions contributions would have contributed to debt but I can’t imagine a political reason for freezing the fund for that long.

    Comment by david w — May 29, 2009 @ 5:29 pm

  5. The ‘dog food budget’, indeed. Genius.

    Comment by Zoo Neeland — May 29, 2009 @ 5:56 pm

  6. When all you guys have drawn down on your mortgages and bought shares in the coming weeks, then you can criticise this gummint for not

    Comment by Clunking Fist — May 29, 2009 @ 6:17 pm

  7. err, doing likewise. (Damn those obese fingers.)

    Comment by Clunking Fist — May 29, 2009 @ 6:18 pm

  8. ps I thought the budget sucked a bit: timid. Someone on MornReport tagged this the “nagging mother-in-law of all budgets”.

    Comment by Clunking Fist — May 29, 2009 @ 6:20 pm

  9. i thought natrads “the bookkeepers’ budget” was a good one.

    Comment by Che Tibby — May 29, 2009 @ 6:44 pm

  10. ‘When all you guys have drawn down on your mortgages and bought shares in the coming weeks, then you can criticise this gummint for no’

    Ummm, if you have a mortgage then you are already borrowing money to make an investment.

    How about the ‘management not leadership’ budget.

    Comment by ieuan — May 29, 2009 @ 10:01 pm

  11. “Ummm, if you have a mortgage then you are already borrowing money to make an investment.”

    No ieuan. That can’t be true because no one does that, apparently. It’s stupid. Leverage is also a word that only applies to actual physical things, like see-saws. No company, ever, has gone on a spending spree buying up assets with funds derived from debt. Does. Not. Happen. So stop saying that.

    Comment by Pascal's bookie — May 29, 2009 @ 10:40 pm

  12. Well, that’s why we are having a recession: most everyone considers a house an “investment”. But it’s not really (if you live there): it is a form of consumption called housing. You buy a house as an alternative to paying rent. The whole idea that it will go up in value is what got us into the property bubble.

    Comment by Clunking Fist — May 30, 2009 @ 9:11 pm

  13. Companies borrow when the cost of borrowing is less than the return they expect to make from the assets purchased. The return on shares over time is probably not much more (and could well be subtaintially less) than the ineterst the gummint would pay on borrowing, esp if the rating worsened.

    Comment by Clunking Fist — May 30, 2009 @ 9:15 pm

  14. Jane Clifton called it “The Mother-in-law of budgets”

    Comment by llew — June 1, 2009 @ 7:15 pm


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