Posts by Gareth Ward
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Pfffft, egg heads. Who needs them to develop an economy?
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I know this sounds hyperbolic (is that a word?) and I don't mean it to as I'm certainly not considering actioning it...
but it's this sort of approach that is more inclined to "force me offshore" than anything the previous Govt were doing. A complete lack of investment in growth doesn't exactly bode well for those of who'd like to be working in a healthy, modern economy in 10-20years time.
I'm not going overseas, and there are much bigger factors IMO than Govt policy in THAT decision, but given the howls about the last Govt policy pushing people overseas...
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Yes. But it can't go up forever, right? So the fact that it's coming down is not necessarily catastrophic.
Agreed, it just has to be clearly articulated at such - we are going to have less money each year to spend on services. TBH I'm not too against that (spending as a percentage of GDP has to have a point that you want it to level out at) but let's be upfront.
Forecasts past the next Parliamentary term are pointless anyway - basically all we've had is National telling S&P "honest man, we'll spend HEAPS less if we're around in 10 years". It's borderline nonsense.
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Remember when it comes to Super that right now our super cost is 3.5% of GDP and would rise to 5.6% within 20 years. The point is that by spending at total (including Cullen Fund contribution) of, say 4.5% now we bring down that 5.6% later on.
It's less about "borrow vs invest" as it is about "holy shit it will be tough to do either in 20 years if we have to spend THAT much on super, but we can afford to do it now"
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I'd much rather they save more (into the fund) when they're in surplus, and cut it right back when they're in deficit.
It's not money on top of the Budget though - it's spending WITHIN the budget. So it's part of the surplus/deficit.
There is a strong argument for funding to the level they were laid out here. That was based on a regular spending as a percentage of GDP which seems fair to me - assuming a relatively regular tax income, a relatively regular prefunding of Super makes sense - your deficit/surplus then comes from other decisions around spending or tax levels.
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Rich, I believe GDP growth IS factored into that debt curve - but not until 2011.
We are forecast to go even further backwards next year -
So, how has National managed to reduce future debt? By cutting a fuckload of future government spending.
Spending growth will in fact be negative in real terms (and going backwards as a percentage of GDP). So someone in fact got more than their "cap spending at inflation" demand.
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Oh, and spending is going backwards in real terms after next year - when you see the revenue slash (largely through the tax cut programs of Labour and National I believe) that's perhaps to be expected though.
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All seems pretty minor if I can be honest except that god awful GUTTING of the Super Fund. It will mean the fund will be smaller, be available later, and cover a lower portion of payments meaning more will have to be made up from taxation if entitlements are to remain the same.
I could have handled a reduction for a couple of years, but this is a serious change in it's intent. Oh, but they're still putting in $250m and will force the Guardians to invest here. =|I wait to see details of the $2b "reprioritisation" in spending as to how those priorities have worked out as well.
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Super Fund: "The automatic contributions are likely to be suspended for 11 years"
11 years! Fucken hell!