The Dim-Post

November 4, 2011

Guessing game

Filed under: finance,Politics — danylmc @ 5:10 pm

The thing that jumps out at me in Labour’s fiscal strategy document is the as-yet-unannounced policy that costs $0.7 billion/year after a couple of years. What could it be?

29 Comments »

  1. That, and the fact the whole document appears hastily drafted… but mainly that.

    Comment by Bed Rater — November 4, 2011 @ 5:27 pm

  2. A staged increase of paid parental leave, as they promised back in January. Though they’d need to go all the way to a full year (as recommended by the Families Commission) to cost that much.

    Comment by Idiot/Savant — November 4, 2011 @ 5:36 pm

  3. Some change to “business as usual funding”, which includes sub-inflation rises to education and health? Reversing ECE cuts?

    Comment by Idiot/Savant — November 4, 2011 @ 5:40 pm

  4. Hmm, how about a “make Treasury forecasts more real” policy? Whereby they set aside extra monies on the assumption Treasury is always wrong, and usually optimistically so?

    Nah. $0.7 billion/year after a couple of years wouldn’t be enough…

    Comment by MeToo — November 4, 2011 @ 5:45 pm

  5. are they planing to up civil servant numbers back to pre-National or will they quietly go about being fiscally conservative. There doesn’t look to be any above inflation (if that) budget increases).

    Apart from more police that is.

    I was surprised to see that the CGT is actually a major net tax increase, I thought it would be fiscally neutral. As there’s no free lunch there has to be a down side with taking money out of the economy. (there are up sides clearly but as with asset sales it’s always snakes and ladders.

    Comment by NeilM — November 4, 2011 @ 6:23 pm

  6. 700 web security experts

    Comment by bradluen — November 4, 2011 @ 6:32 pm

  7. As there’s no free lunch there has to be a down side with taking money out of the economy.

    I guess the thing about CGT is that it is, to an extent, counter-cyclical. The government is taking money out of the economy when it runs a surplus and uses it to pay down debt. When it’s running a deficit, it’s putting money into the economy. Just because it’s still collecting taxes doesn’t change that. Right?

    Comment by Pascal's bookie — November 4, 2011 @ 7:01 pm

  8. I do wish they would stop calling the northern motorway extention a “holiday highway”

    They built a highway to Puhoi. What was that – a highway to nowhere?

    And they still plan to build bits of the “holiday high”. If the entire project really is so superfuous then why opt the most worst option – to do it half heartedly.

    Dear lord, I can accept that perhaps the rail loop might be better done first but how about making the argument like an adult and leave out the childish sneering.

    Comment by NeilM — November 4, 2011 @ 7:04 pm

  9. Like Tim Watkin said, it’s for “rainbows and puppies”. Such things are not free, you know.

    Comment by Grassed Up — November 4, 2011 @ 8:11 pm

  10. My budget would involve halving police numbers and reducing prison numbers by a third. Oh, and abolishing NZSIS and GCSB. With the tax revenue from newly legalised drugs, I reckon we could get a “freedom dividend” of around $5 bil a year.

    Comment by Rich — November 4, 2011 @ 8:24 pm

  11. NeilM,

    I’m not sure the argument “we’ve already built x kms of highway, therefore we should build y kms more” is a very good one. The case for the proposed upgrade only works if you tweak the “Wider Economic Benefits” assumptions in ways that are … unusual (see Rod Oram’s piece here: http://www.stuff.co.nz/sunday-star-times/business/4366408/Going-down-the-wrong-road).

    As for why the Govt should spend any money at all on that road, if it doesn’t spend the full amount to build the proposed upgrade … there’s been some pretty major safety issues on that particular stretch of SH1 (as well as some congestion issues) that require fixing. So even advocates of the central rail tunnel say that something needs spent to fix the problems. See here: http://transportblog.co.nz/2010/08/11/operation-lifesaver-a-better-solution-for-puhoi-wellsford/

    As for “how about making the argument like an adult and leave out the childish sneering” – there’s a lot of pretty good analysis behind the proposal. But we’re in election season. So what do you expect from politicians – see here: http://www.oweourfuture.org.nz/

    Comment by Andrew Geddis — November 4, 2011 @ 8:34 pm

  12. 8. I do wish they would stop calling the northern motorway extention a “holiday highway”

    As a north of Auckland Aucklander, I see why they call it that. The road is clogged/at a standstill on holiday weekends; apart from then, improvements to dangerous corners, intersections, some widening in places and overtaking lanes are all that is necessary to improve safety and traffic flows. At a fraction of the cost and disruption to the environment.

    National doesn’t need to do this for votes the north will all vote for them no matter what they do.

    Comment by MeToo — November 4, 2011 @ 9:25 pm

  13. They built a highway to Puhoi. What was that – a highway to nowhere?

    Technicaly speaking, yes.

    Comment by Idiot/Savant — November 4, 2011 @ 11:48 pm

  14. “As there’s no free lunch there has to be a down side with taking money out of the economy.”

    But the issue is that at the moment there is a free lunch because those profiting from the sale of properties are not paying tax. And where are those profits going? Overseas holidays, imported goods perhaps – where the money is leaving the economy! If the Government is spending the proceeds from the CGT domestically, then there will be no money taken out of the economy.

    Comment by Ross — November 5, 2011 @ 6:30 am

  15. Excel Help, fuck fuck fuck, if anyone asks we’ll say its a super secret policy.

    Comment by fil — November 5, 2011 @ 6:33 am

  16. i/s, technically it’s a highway to Puhoi, or part of the arterial route connecting Auckland to Whangerei.

    Comment by fil — November 5, 2011 @ 6:48 am

  17. Reserve bank figures show that 50% of my gross income are spent in my local comunity (1.5 mil) which is the reason with the growth of dairy central canterbury has record low unemployment and little poverty.CGT and ETS are rich prick taxes designed to take money from the provinces .

    Comment by graham lowe — November 5, 2011 @ 7:32 am

  18. The old phrase “Up the Boohai”, meaning “in the middle of nowhere”, was probably a reference to Puhoi.

    Comment by Ben Wilson — November 5, 2011 @ 9:29 am

  19. I love hearing it called a ‘holiday highway’ after years of having left-wing policies mislabelled – fart tax, smacking bill etc. Getting a misleading nickname on any progressive legislation is one of the right’s most effective methods of stopping them. Arguing the point, less so.

    Comment by Myles Thomas — November 5, 2011 @ 9:40 am

  20. Reserve bank figures show that 50% of my gross income are spent in my local comunity (1.5 mil) which is the reason with the growth of dairy central canterbury has record low unemployment and little poverty.CGT and ETS are rich prick taxes designed to take money from the provinces .

    Comment by graham lowe

    Yeah, and in the meantime, fuck everyone else in the country, they can keep on subsidising our dividends by buying our overinflated dairy, and our local tax spends by paying more in other areas.

    FUCK YOU, NEW ZEALAND. GRAHAM LOWE NEEDS A NEW UTE.

    Comment by Dizzy — November 5, 2011 @ 10:10 am

  21. Does it really matter what it is? Labour could promise everyone a winning lotto ticket and still no-one would vote for them.

    Comment by gazzaj — November 5, 2011 @ 12:25 pm

  22. Graham, I don’t know why you’re complaining about a CGT. It’s not like your entire capital gain is going to be taken by the government. It’s only 15%, so you keep the other 85%. Wage and salary earners would just love to pay 15% tax on their income.

    Comment by Ross — November 5, 2011 @ 2:56 pm

  23. @ NeilM. It is a “holiday highway” because the main reason the Minister (seems) to have for building it is to prevent congestion on State Highway 1 during the 10 or so long weekends during the year in which the road becomes highly congested.

    Most of the time State Highway 1 between Puhoi and Wellsford simply doesn’t have the level of traffic (I think it is about 13,000 vehicle movements/day for most of the way, 17,000 at the busiest piont) to justify a $1.7 billion investment. There are many (many, many) regional arterials in Auckland which have say 40,000 vehicle movements/day that would never get anywhere near this level of investment.

    This is why the benefit cost ratio of the project is poor – it simply doesn’t make sense based on vehicle traffic on the highway.

    What does make sense is to make some small improvements to the highway to stop accidents because right now it has a pretty dismal crash record. Hence the suggestion to put in some median barriers, some more passing lanes on the windy bits etc.

    Comment by Amy — November 5, 2011 @ 4:17 pm

  24. Dizzy, are you always such a tosser?

    Comment by fil — November 5, 2011 @ 5:13 pm

  25. The CGT wont hurt me ETS will
    there wont be enough from farm sales for the state so houses will end up being caught up in it so the middle class will pay
    i dont purchase shit like new utes and crap like that i focus on production and profit
    if you dont want our dairy dont buy it china will
    but heres something to cheer you up banks are predicting a drop in the payout by up to a dollar so next year we will just be pricks
    Labours view is that since the proviences dont vote labour we deserved to be punished

    Comment by graham lowe — November 6, 2011 @ 8:49 am

  26. Or, perhaps, Nationals feeling is that since the provinces vote for them they don’t want to jeopardise that vote and instead have the rest of us pay for the agricultural Kyoto liability out of general taxation.

    But, y’know, I’m sure your logic is sound too.

    Comment by Simon Poole — November 6, 2011 @ 10:20 am

  27. Looks like I got it half right. paid parental leave and an extension of the “in work” payment to turn it into a universal child benefit.

    Comment by Idiot/Savant — November 7, 2011 @ 3:08 pm

  28. “Technicaly speaking, yes.”

    A little less of that big city sneering, I/S, we’re not all lucky enough to live in the swanky metropolis that is Palmerston North.

    Comment by Hugh — November 7, 2011 @ 3:29 pm

  29. Good on you rich. That would be $5billion each, aye?

    Comment by Betty — November 15, 2011 @ 9:24 am


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