Saturday, May 31, 2008

Cullen Takes The Bait

The Labour dim bulbs just don't have enough brains to know when they are being suckered.

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While Mallard re-invents his tired 'policies written in Washington' story, re-branded as 'assets being sold to Ockers,' Cullen tells the Greens that he bought the train wreck for 'environmental reasons' and every man and his dog screams 'National will sell state assets.

At the same time as all this high pitched squawking is going on, Cullen is spending every last penny of nine years' surpluses to ensure there's no money for National in 2009.

John Key will be rubbing his hands with glee.

Why?

Because Cullen is setting the scene for public approval of the biggest asset sales programme since 1985.

By early 2009, the economy will be in much poorer shape than it is now, petrol prices will have risen to $2.50, interest rates will remain high, food prices will be up another ten percent, about 5,000 more jobs will have been lost and middle income Kiwis will be facing starvation or foreclosure. Most, if not all, of these problems are a direct result of Cullen's blinkered and ideological economic mismanagement - predominantly his failure to reign in massive growth in wasteful government expenditure.

Under those circumstances, John Key will announce an emergency mini-budget in which excise on petrol will be slashed, income tax further reduced, the RBNZ inflation criteria extended to 5.0% for two years, all pseudo government departments abolished immediately, government department staff numbers reduced by a huge 20% and selected state owned "assets" sold, with proceeds directed to funding the infrastructure necessary to pull us out of the mire.

But, but, but what about the milk solids bonanza? I hear you ask.

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Well indeed, what about the milk solids bonanza?

You don't seriously think all those cockies are going to pay tax on it do you? No, cockies don't pay tax. They pay accountants instead. They'll go out and borrow to the hilt and buy more land - no matter what the interest rate - rather than pay tax.

That's the way it's always been.

13 comments:

Bogusnews said...

Well said.

There are few things that annoy me more than hearing the constant refrain "Cullen is a very frugal finance minister".

He has been nothing of the sort. There has never been a more wasteful government.

Further, his complete focus has been to redistribute the economic cake rather than to grow it. In fact he has admitted rather proudly that he has taken redistribution as far as anyone can go.

History should not look kindly on this failed history teacher.

John Tertullian said...

Adolf, that's a quite apposite scenario. Not unlikely or far fetched at all it seems to me. I have this sneaking expectation that we will go through a "Mother of all Budgets" scenario when National is elected, in the same vein as Richardson had to bring forth in 1991.
The cupboard was bare (then and now); economic crisis at hand. But, as you imply, the circumstances are sufficiently different in a delicious kind of way. Due to Douglas et al. all that could be left to cut was benefits. This time, due to Cullen's profligate and reckless wastefulness, benefits can stay the same, but huge cuts can be made into nine years of narcissistic government spending, so that now a big fat bloated government does little more than fawningly admire its own reflection in the bureaucratic regulatory Jabba like monster-slug it has created.
The one election promise I expect Key to have to disown once elected is his undertaking that no civil servants will lose their jobs. But somehow I don't think that the rest of NZ will care two rotten figs.
Roll on November, December and the emergency mini-budget!
JT

Psycho Milt said...

History should not look kindly on this failed history teacher.

Yes, I expect this nightmare period of stability, falling unemployment and rising wages under his stewardship will stand as a terrible warning to future generations...

Adolf, on the one hand you write of Labour "...every man and his dog screams 'National will sell state assets" and on the other you write that National will sell state assets. So Labour are correct to be pointing that out, aren't they?

I think you're pushing it uphill with the "public approval" bit. The reason Key is pretending he's not going to sell public assets is because people well remember that the last time the economy was in trouble, National took the opportunity to flog our assets to their asset-stripper mates at bargain-basement prices, as Prebble and Douglas had done before them - thus making their mates very rich at our expense, and saddling us with crap infrastructure. Public approval for a repeat performance is pretty unlikely. The only way Key could get public approval for selling assets is if he were getting good prices for them - which he wouldn't.

Adolf Fiinkensein said...

Milt, have you no imagination? You are locked in last year's thought warp. When enough people have their backs to the wall, their aversion to sale of so called state assets will be replaced by their aversion to eviction.

Anonymous said...

"period of stability, falling unemployment and rising wages"

I get really annoyed when I hear this bullshit. It may have been a good ride for those who generated their wealth in the 90's, rode the property boom, or work in the public service but I can assure you recent graduates who choose to stay in this land are struggling to get anywhere, due to Cullen and Co. And don't tell me how great student free loans are - it means fuck all up against LOW wages and high living costs.

Anonymous said...

This time, due to Cullen's profligate and reckless wastefulness, benefits can stay the same,

There's no way they can stay the same!

What with Welfare for Families, mass movement of people of the dole onto sickness (paid at a much higher rate) and a huge increase in the number of beneficiaries, cuts bigger than 1990 are needed now. In fact we can finish the job: get rid of most of 'em entirely, even retire National Super.

The one election promise I expect Key to have to disown once elected is his undertaking that no civil servants will lose their jobs.

Check the quotation & you'll find Key never made such a promise. I think we can look at a 30% across the board cut in headcount, plus any remaining civil servants with ties to Unions or Labour should be removed forthwith.

Then, Housing needs to be fixed; schools and hospitals simply moved to more productive ownership - and most importantly, the job Ruth Richardson never got to:

fixing the electoral system so that we'll never end up in this mess again

FAIRFACTS MEDIA said...

The issue is PM, how much of the recent prosperity was down to Cullen.
And like the other commentator, because I did not work in the public service, nor do I own my own home, none of that prosperity seemed to trickle down to me.
Cullen was lucky in having the most fortious set of economic circumstances.
The overhang of the Rogernomics era helped drive prodictivity for a while, until his own efforts ruined it and productivity growth fell.
The farmers doing well also geenrated wealth and we can also credit the chinese for their flood of imports helping to keep prices down.
May I refer you to previous blog posts on the impact of Cullens tax raising on the impact on property prices and the subsequent boom and bust.
Initially PM Cullen did see prudent, a bit like Gordon Brown in England.
But it didn't take long for him to become a spendthrift as the vast growth in public expenditure has shown- nearly doubly in nine years, up eight percent this coming years (twicxe the official rate of inflation) and set to exceed economic growth in the next three years or so.
The state is eating up the economy.
Consequently, as in the UK, a once former prudent finance minister is now sees asa spendthift who has budened us with heavy government spending, excessive taxation that eaither directly and indirectly is wrecking the economy.
Thus in both countries, the people are increasingly happy as the hardships caused drives the message home furthe r and Liarbour poll ratings down yet more.

KG said...

"...get rid of most of 'em entirely, even retire National Super."

Unlike the vast majority of dole bludgers and sickness beneficiaries, Anon, some of us have worked hard and contributed one hell of a lot of taxes to National Super.
You regard it as fair that those people should be left with no payments?

emmess said...

>>National took the opportunity to flog our assets to their asset-stripper mates at bargain-basement prices, as Prebble and Douglas had done before them - thus making their mates very rich at our expense, and saddling us with crap infrastructure

That is bullshit
Your just repeating the same stock standard left wing mantra without any evidence.
But your statement could correctly apply to Cullen's nationalisations though especially rail.

Psycho Milt said...

...mass movement of people of the dole onto sickness (paid at a much higher rate)

This is a straightforward propaganda lie, Anonymous Lefty Agent Provocateur. For the record: over the last 5 years the number on unemployment benefit fell by something like 80,000, while the number on sickness benefit increased by something like 8,000. ie, not a mass movement from the dole to the sickness benefit but a massive net decrease in the number of "dole bludgers." Also for the record: the sickness benefit isn't worth more than the unemployment benefit - the only gain is that WINZ stops hassling you to look for work.

I can assure you recent graduates who choose to stay in this land are struggling to get anywhere

And I can assure you that recent graduates were doing the same bleating back when I left university, nearly 25 years ago. Some things don't change.

FFM, you have a point re excessive growth in the state sector. But I think you're completely wrong with this:

Cullen was lucky in having the most fortious set of economic circumstances.
The overhang of the Rogernomics era helped drive prodictivity for a while, until his own efforts ruined it and productivity growth fell.


A Treasur paper in 2005 put it this way:

We find that the capital intensity in New Zealand has not been increasing as fast as in Australia for nearly 25 years. Between 1995 and 2002, lower capital intensity explains 70 percent of the difference in output per hour worked. Whereas the cost of labour relative to capital has been rising in Australia, it has fallen by 20 percent in New Zealand between 1987 and 2002. The relative price of labour to capital in New Zealand fell to 60 percent of the Australian value in 2002 after being comparable in the late 1980’s. It is to be expected that New Zealand enterprises would therefore tend to adopt less capital intensive production methods.

How did our price of labour fall so drastically between the late '80s and 2002? ECA, anyone? Certainly nothing to do with Michael Cullen...

Anonymous said...

yes, we have had 25 years of this shit. I think it was mostly needless. We are been held back from our full potential. I wouldn't listen to what Treasury has to say either. Didn't they make some spectacular blunders recently?

Anonymous said...

Unlike the vast majority of dole bludgers and sickness beneficiaries, Anon, some of us have worked hard and contributed one hell of a lot of taxes to National Super.

Let's just get this straight: you didn't make private provision for your retirement. You believe labour (or Socialist National) politicians who said that I would always be happy to pay taxes to fund your high living (look at the latest report on elderly poverty). And then you have the cheek to expect me to pay taxes to fund your retirement you were to selfish to fund yourself

Frankly you are no different from dole bludgers or hospital bludgers or dbp bluders or all of the rest.
They (some of 'em at least) have paid taxes for years, not as long as you perhaps, but still a long time. Or their parents paid taxes for them. They believed the Liabour & Muldoonist governments who said the dole or DBP or health system would always be there (and even Roger in ACT is still saying this - the taxpayer funds vouchers for all!). And they expect me to pay for them, too.

You regard it as fair that those people should be left with no payments?

Well you see to regard it as fair that I have pay for your fucking super every week. I have absolutely no confidence whatsoever that the government will provide any super for me.

I'd keep the war veterans pensions. Honour demands the country pay that. Everything else, NZ cannot afford it and it should be cancelled overnight

Anonymous said...

yes, we have had 25 years of this shit. I think it was mostly needless

Indeed we have! And ACT & National will have a once-in-a-generation chance to stop this all shit for ever at the end of the year.

I hope MMP and the Maorimander lets them take that chance.