OnPoint: Spending "Cap" is Fiscal Anorexia
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Keith Ng, in reply to
Keith claims it is "fiscal anorexia" which in good times if the Nats/ACT were offering tax cuts would be a good call. But it is not good times and the Nats/ACT aren't offering tax cuts - its just austerity.
When times are lean and there is less food to eat, some choose to eat less and live a more austere life. This is not a sign they have an eating disorder.
First, eating less when times are lean is intuitive but wrong. The whole point of countercyclical fiscal management is that you *save* when times are good, so that you're able to spend when times are bad. The government should act as a counterbalance to the rest of the economy by doing the opposite thing.
Second, this is not austerity when times are bad, or austerity when times are good. It's about putting in place a rule which says "no matter how much money we have, no matter how well the economy is doing, no matter what the country needs, we should have a smaller government next year".
That's why I called it fiscal anorexia.
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HenryB, in reply to
When times are lean and there is less food to eat, some choose to eat less and live a more austere life.
I don't know. How much food would John Key's extra $1000 per week from the last round to tax cuts buy him? Sounds more like a recipe for obesity than anorexia.
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Graeme Edgeler, in reply to
It’s about putting in place a rule which says “no matter how much money we have, no matter how well the economy is doing, no matter what the country needs, we should have a smaller government next year”.
I thought it was about saying "we should have a government just as big next year as we have this year."?
edit: noting of course, that the things that government spends money on might have to change (aging population etc.).
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Graeme Edgeler, in reply to
Yes, but a Budget is not an executive thing, it is a Parliamentary thing. ... This proposal is a way of restricting Parliament’s ability to make decisions.
How would this proposal, if enacted, restrict Parliament's ability to do anything at all?
c.f. The Colorado taxpayer bill of rights, which did restrict the ability of the Colorado legislature and Colorado governor to do things.
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Sacha, in reply to
the things that government spends money on might have to change (aging population etc.)
Saying "might" is being disingenuous. We know darned well that demographic changes will increase the cost of health services and retirement income support over the next two decades. What expenditure will be cut to pay for those demands if the overall total is not allowed to increase and if tax increases are magically off the table?
And annual inflation means that a zero spending increase is actually a cut in real terms.
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Sacha, in reply to
How would this proposal, if enacted, restrict Parliament's ability to do anything at all?
I do tend to agree about that, unless this Act is constantly used in the face of incompetent opposition as sufficient justification for doing what the neolibs want to do anyway - drowning, bathtub, etc.
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Graeme Edgeler, in reply to
And annual inflation means that a zero spending increase is actually a cut in real terms.
It is inflation indexed.
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p.s. I'm not saying this is other than a bad idea, just that, as I have said previously (here?) ... rumours of the Apocalypse are greatly exaggerated is all.
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nzlemming, in reply to
rumours of the Apocalypse are greatly exaggerated is all.
Dammit, Graeme! You lawyers even take the fun out of a good armageddon!
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Richard Grevers, in reply to
I thought it was about saying “we should have a government just as big next year as we have this year.”?
Not really, because not everything the Government spends money on goes up at the rate of inflation. Bitumen, for example, has increased much faster than inflation (30% in 6 months in 2008, equivalent to an extra $43m a year for the Government). And the TPPA, from the little information that has leaked, seems destined to see pharmaceutical costs soar (or availability slashed) as Big Pharma blocks the use of generics.
There is also this lovely "including natural disasters" clause. The Canterbury quakes have not reduced the probability that one of the other potentially multi-billion dollar disasters might happen next month: Wellington quake, new Auckland volcano, Taranaki eruption, NI east coast megaquake, Waimakariri River taking out NW Christchurch, Alpine fault going. (Actually that last one would cost less now because there isn't so much left to break in Christchurch). With insurability way down (or premiums doubled, another more-than-inflation cost for the govt), what would they have to cut to absorb a $20 billion disaster?
Lastly come external shocks - if the petrol price suddenly goes north of $2.50 a litre it would probably put another 50,000 people on a benefit and send our GDP negative by several percent. -
HenryB, in reply to
And annual inflation means that a zero spending increase is actually a cut in real terms.
It is inflation indexed.
But I thought the whole point of Keith's analysis was to show that what is proposed is a cut in real terms:
Putting this spending cap into Treasury's Fiscal Strategy Model, it shows that real per capita Core Crown expenditure (excluding NZ Super, finance costs, unemployment benefit, asset impairments and spending on natural disasters) will fall by 8.9% in 10 years.* To put that into perspective, that's roughly the Law & Order and Defence budgets combined, or a bit more than a third of the Health budget.
And did they `exclude NZ Super'? I thought the only benefit they made allowances for was the unemployment benefit - not unsurprisingly given that following the policy prescriptions that they are going to engage this is going to increase.
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How would this Bill restrain Parliament? Well, it aims to forbid the introduction of a Budget that doesn't conform. That seems clearly an attempt to restrain Parliaments in the future. Now, we all know that that it is, after all, not going to work. But it is still quite different from laws that constrain the executive.
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Kumara Republic, in reply to
Lastly come external shocks – if the petrol price suddenly goes north of $2.50 a litre it would probably put another 50,000 people on a benefit and send our GDP negative by several percent.
Not to mention the potentially terminal disruption to the McMansion & Hummer set. Cheap petrol is the single most effective way to self-segregate from the proles. If there's one good thing to come from permanently high oil prices, it'll sort out those who are capable of pulling together from those who choose to continue living in denial.
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Lucy Telfar Barnard, in reply to
The Dompost also has an editorial endorsing charter schools (except for a brief mention of concerns about it being used for ... possible cherry-picking).
Sorry, I'm three pages out of date and off-topic, but can someone please explain to me why cherry-picking is a bad thing?
I mean, sure, the schools losing their cherries (ahem) may not like it, but what about the cherries themselves? When you're a cherry, you may want to be able to learn in the company of other cherries, even if you weren't previously being marginalised by all the apples and tomatoes (the latter being unsure if they're even fruit at all).
Anyone?
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Well for a start it can mean that schools are being rated not on how well they are teaching students but instead on how well they can exclude kids who need more, more expensive support- throwing the profit motive (rather than actually teaching people) in as the prime mover of the people running a school distorts what's important - I mean why pay for all those expensive remedial work if you can avoid it by - getting the best results from standardised tests to get the most funding and the most efficiently running school is great in your for-profit charter school
But it doesn't scale it also means there's a school somewhere full of the kids who weren't able to be cherrypicked - that school's probably getting less money because it's not showing the wonderful gains of your cherry picked leading lights and it's also cutting back on remedial work because it doesn't have the money
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merc,
Hey John there's a school for sale in South Auckland, you want to buy it?
Off topic but topical for me, Mr Joyce your trucks are getting out of control on the Newmarket Viaduct, speed limit 70kph, what are you going to do about it? -
Sacha, in reply to
When you're a cherry, you may want to be able to learn in the company of other cherries, even if you weren't previously being marginalised by all the apples and tomatoes (the latter being unsure if they're even fruit at all).
Seems like an issue of personal vs social benefit though I'm not sure that "marginalised" is the right word. Overlooked? Getting less of the teachy sunlight than a cherry feels they deserve, perhaps?
Is claiming to thrive better in a monoculture - unlike most organisms - one of the undercurrents here? Do we want a society with less understanding of human diversity? That could affect not only our social fabric but our ability to make a living in the world marketplace.
Maybe 'bright' students actually do better in a hothouse? Or it might be a difference between perception and actuality. I don't know if the research on charter schools also covers the advantages/disadvantages for children who would have qualified for selection but stayed behind - and for students who would otherwise continue sharing a school with candidates who left.
And as for the oranges..
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Sacha, in reply to
what are you going to do about it?
don't tempt him to build another road
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Sacha, in reply to
that school's probably getting less money because it's not showing the wonderful gains of your cherry picked leading lights and it's also cutting back on remedial work because it doesn't have the money
I fear you are spot on. This fits well with the ideology of rewarding the already successful at the expense of others. Much like the endgame for 'national standards' is now on the table as directing funding according to league tables to the better-off schools out of the same fixed budget. Do we all lose?
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merc, in reply to
I see the two issues as linked, I am like that. We could call it Govt. cherrypicker funding.
1. insurance, ACC, sell the profitable stuff, taxpayer funds the rest
2. health, as above
3. public transport, as above
4. roading, as above
5. education, as above
6. cargo, as above
7. energy...
8. telecoms...
9. mining...
Labour were the same. There's no business like Govt. business. -
merc,
Case in point, I think we deserve more than the promise that,
"There will be no change in the quality and standard of our operations and our clients and other partners can be reassured that the company will continue to honour all of its commitments."
Considering that,
According to Reuters Veolia Environnement is seeking to shed $8.6 billion of assets in the next two years. It is reportedly trying to reduce its net debt to below $20.6b by 2013.
http://www.stuff.co.nz/auckland/local-news/6110735/Aucklands-rail-operator-in-global-turmoil
Sound familiar? -
Richard Aston, in reply to
And as for the oranges..
You say I am mysterious
Let me explain myself
In a land of oranges
I am faithful to applesElsa Gidlow
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Sofie Bribiesca, in reply to
And as for the oranges..
“Us and them” in society is not healthy no matter what way you want to polish it, it still stinks.This feels like we are going backward x 100 years. Geez ,what if you are bright? What if you are black? where will it end? :(
I should add, if you want to run a private school ,go to it. State school isn't private and I don't trust the abuse that is starkly obvious. -
merc,
Plus, Independent schools are publicly funded to quite a large degree. Let's look at all the funding that goes on and see how we can do that better, no?
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Kumara Republic, in reply to
Because in short, it's a recipe for Social Darwinism and socialism for the rich. They could get away with saying, "charter schools are a roaring success", but largely because the special needs and 'problem' students are blocked out and written off as unteachable.
America tried to solve the problem with compulsory bussing, were it not for one fatal weakness - it only applied to the public school system.
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