Govt managing our money for political ends

Treasury papers released under the Official Information Act show that it is providing advice on short-term measures the Government can employ to help it post a surplus this year.

The advice includes possible savings from delaying the rebuild of Canterbury; delaying foreign aid expenditure; holding back ACC savings; and new taxes on alcohol, tobacco, and travel. Treasury also advises the Government to focus on finding savings in Social Development and the Office of Treaty Settlements as these savings flow directly through to the Government’s bottom line.

The Government has already acted on Treasury’s ACC advice, holding back $178 million of ACC levy cuts this year instead of passing on the savings to businesses and households.

Would they seriously delay the rebuild of Canterbury simply to post a modest surplus this year?

Whatever the answer, National has turned the government’s operating balance into a political tool and is now managing taxpayer money for their own short-term political gain. And the Treasury, as dutiful public servant, is advising how they can do it.

By politicising the government’s operating balance, National is undermining trust in the accuracy and fairness of the government’s own books.

Good fiscal and economic management focuses on the medium-to-long term. Even Treasury advise that the Government’s fiscal credibility is not based on arbitrary savings and accounting tricks. In fact, it warns that the Government’s strategy of pushing out essential spending by a year puts the 2015/16 surplus forecast at greater risk.

Link to Treasury Papers released under the Official Information Act:
https://home.greens.org.nz/sites/default/files/green_partytreasury_oia_budget_deficit_advice.pdf

6 Comments Posted

  1. To add to this sentiment I would add, the issue of spying on our Pacific neighbours by the GCSB is not a passive issue. The Pacific rim’s volcanic nature is high in minerals. Much of the political unrest in this region are attempts to be in power of these resources.
    US policy is to pursue strategic advantage in these matters, and often overstep sovereignty issues in these attempts. There are huge short term Corporate financial gains to be made in these same policies, often to the disadvantage of local communities long term lifestyles – Papua/New Guinea. In Peru legal action about such matters, cost multinational companies billions.
    With both the GCSB policies and actions, and for the TPPA trade deal we see evasive behaviour in the National Government.
    It is time John Key’s government came clean on policies that are taking us further toward the US policies of resource control, and further away from being a good citizen in the Pacific.
    There is no mandate for this type of policy as the debate has not been open, and I would be keen to know of the resource policies of those under survellance in the Solomons.

  2. I totally agree about the direction of our economy. It is driven by this one model fits all outlook that forgets where our resources are coming from. We see more and more state dependant people as we loose basic life skills. We have an economy subtly telling us we need capital to achieve. We need resources to achieve but we have too many marketers jumping aboard the sales bandwagon selling these resources to an unsustainable market that is not in touch with its limits. Self reliant production trains us on these limits while sustaining ourselves. Money is a counter of the resources but adds in human dimensions such as greed and monopoly in ways not countered in the neo liberal structure. We need to have a full democratic discussion whether endless money supply thus endless unsustainable consumption, or restricting monopoly of the common resource and a greater common good are the way forward.

  3. This government is little more than a 51st state wannabe with delusions of competence. It isn’t honest with the people of New Zealand about what is happening with the economy at the macro level and it isn’t honest with the people of New Zealand with its accounting.

    That it gets away with these misleading accountings and narratives is a failing of the NZ press corps, such as it is and what there is of it. A democracy is only strong if its population is informed, and if the information is accurate. That is a condition that is less and less true as our news services are gathered into more concentrated private hands. The information we collect, that the Green party itself understands, does not get out into the wider New Zealand.

    The end result is that if one takes away the Christchurch rebuild, that’s our “growth” and now deferring it provides our “surplus” – accounting games, and a devotion to being part of the club and signing the TPP that brings to mind a puppy dog trying to please its master.

    The bad news about the TPP is that even if Key manages to get unfettered access to the American Market for the Fonterra’s milk product, the promised growth cannot occur without sacrificing the New Zealand environment to that sacred cow. We already produce as much as (actually more than) we can sustainably produce.

    The misreading of “comparative advantage” that is common in New Zealand and not reported on by the news media (another fail), is that we can’t allow government intervention in the sacred market, and we cannot compete at building things, even things we actually use here in New Zealand, because that market is not large enough. Ricardo never imagined such a distortion and he specifically discussed the limitations of his concept himself. We cannot run New Zealand and grow its economy by adopting the extractive, third-world models that are all that remain once the limitations of free-market fundamentalism are adopted. Not without destroying our own environment. This is part of what lies behind the government drive to sell off assets… and the reason it is so desperate to gut the RMA.

    The answer has to lie in a very different economic direction, and a critical review of the lessons of Reaganomics, Rogernomics and Ruthenasia… (none of which have actually worked to our benefit). None of which would have been necessary had the bankers been kept under control in the 1980’s. Bankers who now control more of our economy than they ever did, and who market debt through our housing market, and encourage that market to obscene “values”, reaping the profits to the benefit of overseas corporations.

    What we need is to make our own furniture, we have the wood, and the power, and could have the skills, if we only valued them .

    What we need is to make our own clothing, we have the wool, and the power, and could have the skills, if we only valued them.

    What we need is to make our own pharmaceuticals…

    What we need is to make our own. There are any number of areas in which we CAN do that… and by doing so reduce the money we export to obtain those things, and by so doing employing New Zealanders and by so doing, needing less of our extractive industry production to feed our appetite for imports.

    Globalization does not benefit New Zealand. It benefits the corporations that own the USA and much of the world.

    For an isolated sovereign nation, it is of questionable value.

  4. All people in this world know about how mass-media influence people with they news. For the next step, Govt managing our money for political ends

  5. Thank you for posting like this blog. Good fiscal and economic management focuses on the medium-to-long term. Even Treasury advise that the Government’s fiscal credibility is not based on arbitrary savings and accounting tricks.

Comments are closed.