Ardern's legacy is $923b in extra net wealth for home owners, business owners, landlords and the Crown itself, but a tripling in demand for food parcels & social housing & 96,600 in severe rent stress
Yeah, and she also got us through Covid in a way no other leader did, keeping the sick and vulnerable alive. It had a cost, as everything does, something so huge as avoiding the deaths of thousands would have to have a big cost.
Might be worth a deeper dive on the issues in the Bent Flyvbjerg piece in relation to the planning being done for big projects in NZ like Lake Onslow, new harbor bridge, comparing Kiwibuild against Simplicity homes process etc.
Appreciate this compilation. Most informative. However, it is still backward looking and narrow given today's realities. When will we break out of this now well-tried and failed mould of "accounting" and develop a new one that factors in the cost of not doing things?
I think her heart was always in the right place... she saved many lives with her actions through covid...but then many of those people turned against her..it’s quite incredible to watch greed consume a large part of a nation!
Bernard, I agree with your criticism of prioritizing low debt-low tax over the wellbeing of the most volunerable in our society. But the voting public needs to take a hard look in the mirror. This is what we keep voting for.
And the none voting public needs to start voting for those who will battle to better their lives.
NOTE: this comment was posted as a knee-jerk reaction to a total miss-reading of a the tl;dr blurb Mr Hickey gave a day or so ago. I miss-read and thought The Crown had run a $932B surplus over the Adern years. Which was a total misreading!!! It put me in an emotive mood, and so I wrote the below rant *under the impression* the NZ government had run a net $932 B fiscal surplus over the Adern years, which would represent a massive recessionary pressure putting the private sector into unheard of debt for the period. Reader JohnP corrected me, thankfully. But I am leaving the post below here for posterity as an (horrific) counterfactual which supposes "What if the NZ Crown *had* run a $932B surplus over the last few years?"
geezusxrist! When you note the government made the Crown ..."$923 billion richer..." that's your answer to why child poverty and affordable housing were not accomplished. Near to one trillion NZD taken off the private sector for no good reason, not re-issued for child and housing programs. You can make friends by making "home owners" wealthier, but if you don't make home buyers wealthier and low income parents wealthier (and provide the social services needed) you will never solve the two problems Adern wanted to solve *in a monetary economy*. She had completely backwards neoclassical "loanable funds" thinking and/or terrible economics advisers who don't understand the NZD system.
Government is the monopoly issuer, so they ought not ever be making a surplus if the population is growing, except by accident (an unexpected high tax drain from over-consumption perhaps, or a sudden unexpected export boom). Every NZD returned to the government is a drain of private NZD wealth, to the dollar. You cannot run a government surplus without a private sector deficit, simple sectoral balance accounting (absent fraud). No one in Parliament seems to understand this, with the possible exception maybe one or two Green MP's who have bothered to study the monetary system.
And the media are the worst, always fear-mongering about "the public debt". Well, they mean "the government accumulated deficit over all history," which is nzd-for-nzd the net private sector NZD wealth. If they "pay off the public debt" (meaning all cash and deposits as well as bonds) they reduce all Kiwis to utter poverty. If they only "pay off" the fraction of past government deficits held in Treasury bonds then they at least only reduce the incomes of the rich. That'd perhaps not be a problem, unless the mindset is all trickle-down (starve the peasants feed the rich, rely on charity).
Adern should have been advised to secure votes in Parliament for expanded public works hiring and a Job Guarantee, thus injecting new currency at the base, to real workers. Then no bonds are needed, the rbnz can go to permanent zero interest rate, the top-end-of-town don't get to trickle down upon us plebs. Why was she not so advised? Because her advisers do not understand our monetary system. A tragedy of epic proportions. (Since I do believe she meant well and wanted to come through on her promises.)
Finally some commentators are walking up to the divisive Arden Govt years. She loved a good disaster and she had the genuine empathy and PR communication skill-set to to sell it and to use to push through a wider ideological mindset. Funny thing is though that through the gap between the theory and the (lack of) delivery, the well-off are generally better off while those who were struggling are likely worse off.
I agree with your comments, but I wish you had named the main culprits in this policy of keeping debt around 30%. The National Party, and those who label this “good government.” You should also point out that, if Labour followed your recommendations this would mean electoral suicide. You also failed to mention another major legacy of this government, the huge numbers of houses built and being built. There will be a surplus of housing in many parts of NZ and, if Labour scrapes back in this will start to impact the rental market. I know I am not an expert and would like some comment from you about what can be done; that’s politically achievable
I’m also pretty horrified at what’s happened in terms of inequality over the last few years. Just one point, doesn’t the Reserve Bank, who were the ones to unleash all these billions, deserve a bit of a mention here? Could Labour have stopped them doing this? I suppose they could have directed the money away from mortgages more effectively. Those useless open letters they wrote to each other, it’s such a song and dance in the end that achieves absolutely nothing. Helicopter cash for everyone would’ve been better on hindsight- who would’ve guessed hey
Yes JCA and as the statistics show New Zealand/Aotearoa had one of the lowest number of Covid deaths in the world. Seymour of course recently criticised the handling of the Covid response by Jacinda but I can recall an interview with Q&A’s Jack Tame where he refused to say how many Kiwi deaths would be acceptable as a result of Covid. All I can say is thank goodness he wasn’t the Covid Response Minister otherwise it would be like a nuclear explosion and we would all be dead.
It would be very interesting to compare and contrast the J. Ardern numbers with the J. Key numbers. I reckon the trend would be the same, just turbocharged by Covid fiscal and monetary policies. That trend btw, is for NZ to continue its steady descent to Banana Republic level. Sadly, an almost inconceivable form of political and social upheaval will be required to change this outcome.
Yeah, and she also got us through Covid in a way no other leader did, keeping the sick and vulnerable alive. It had a cost, as everything does, something so huge as avoiding the deaths of thousands would have to have a big cost.
Might be worth a deeper dive on the issues in the Bent Flyvbjerg piece in relation to the planning being done for big projects in NZ like Lake Onslow, new harbor bridge, comparing Kiwibuild against Simplicity homes process etc.
P.S. feel free to open this one up
Appreciate this compilation. Most informative. However, it is still backward looking and narrow given today's realities. When will we break out of this now well-tried and failed mould of "accounting" and develop a new one that factors in the cost of not doing things?
I think her heart was always in the right place... she saved many lives with her actions through covid...but then many of those people turned against her..it’s quite incredible to watch greed consume a large part of a nation!
Bernard, I agree with your criticism of prioritizing low debt-low tax over the wellbeing of the most volunerable in our society. But the voting public needs to take a hard look in the mirror. This is what we keep voting for.
And the none voting public needs to start voting for those who will battle to better their lives.
Terrific, balanced assessment as ever Bernard. Thank you. Please keep banging on those doors.
NOTE: this comment was posted as a knee-jerk reaction to a total miss-reading of a the tl;dr blurb Mr Hickey gave a day or so ago. I miss-read and thought The Crown had run a $932B surplus over the Adern years. Which was a total misreading!!! It put me in an emotive mood, and so I wrote the below rant *under the impression* the NZ government had run a net $932 B fiscal surplus over the Adern years, which would represent a massive recessionary pressure putting the private sector into unheard of debt for the period. Reader JohnP corrected me, thankfully. But I am leaving the post below here for posterity as an (horrific) counterfactual which supposes "What if the NZ Crown *had* run a $932B surplus over the last few years?"
geezusxrist! When you note the government made the Crown ..."$923 billion richer..." that's your answer to why child poverty and affordable housing were not accomplished. Near to one trillion NZD taken off the private sector for no good reason, not re-issued for child and housing programs. You can make friends by making "home owners" wealthier, but if you don't make home buyers wealthier and low income parents wealthier (and provide the social services needed) you will never solve the two problems Adern wanted to solve *in a monetary economy*. She had completely backwards neoclassical "loanable funds" thinking and/or terrible economics advisers who don't understand the NZD system.
Government is the monopoly issuer, so they ought not ever be making a surplus if the population is growing, except by accident (an unexpected high tax drain from over-consumption perhaps, or a sudden unexpected export boom). Every NZD returned to the government is a drain of private NZD wealth, to the dollar. You cannot run a government surplus without a private sector deficit, simple sectoral balance accounting (absent fraud). No one in Parliament seems to understand this, with the possible exception maybe one or two Green MP's who have bothered to study the monetary system.
And the media are the worst, always fear-mongering about "the public debt". Well, they mean "the government accumulated deficit over all history," which is nzd-for-nzd the net private sector NZD wealth. If they "pay off the public debt" (meaning all cash and deposits as well as bonds) they reduce all Kiwis to utter poverty. If they only "pay off" the fraction of past government deficits held in Treasury bonds then they at least only reduce the incomes of the rich. That'd perhaps not be a problem, unless the mindset is all trickle-down (starve the peasants feed the rich, rely on charity).
Adern should have been advised to secure votes in Parliament for expanded public works hiring and a Job Guarantee, thus injecting new currency at the base, to real workers. Then no bonds are needed, the rbnz can go to permanent zero interest rate, the top-end-of-town don't get to trickle down upon us plebs. Why was she not so advised? Because her advisers do not understand our monetary system. A tragedy of epic proportions. (Since I do believe she meant well and wanted to come through on her promises.)
Finally some commentators are walking up to the divisive Arden Govt years. She loved a good disaster and she had the genuine empathy and PR communication skill-set to to sell it and to use to push through a wider ideological mindset. Funny thing is though that through the gap between the theory and the (lack of) delivery, the well-off are generally better off while those who were struggling are likely worse off.
I agree with your comments, but I wish you had named the main culprits in this policy of keeping debt around 30%. The National Party, and those who label this “good government.” You should also point out that, if Labour followed your recommendations this would mean electoral suicide. You also failed to mention another major legacy of this government, the huge numbers of houses built and being built. There will be a surplus of housing in many parts of NZ and, if Labour scrapes back in this will start to impact the rental market. I know I am not an expert and would like some comment from you about what can be done; that’s politically achievable
Thanks for the stats and data! I will reference them straight into my IEA research proposal addressing energy injustice and hidden hardship!!
I’m also pretty horrified at what’s happened in terms of inequality over the last few years. Just one point, doesn’t the Reserve Bank, who were the ones to unleash all these billions, deserve a bit of a mention here? Could Labour have stopped them doing this? I suppose they could have directed the money away from mortgages more effectively. Those useless open letters they wrote to each other, it’s such a song and dance in the end that achieves absolutely nothing. Helicopter cash for everyone would’ve been better on hindsight- who would’ve guessed hey
Gary Dyall
Yes JCA and as the statistics show New Zealand/Aotearoa had one of the lowest number of Covid deaths in the world. Seymour of course recently criticised the handling of the Covid response by Jacinda but I can recall an interview with Q&A’s Jack Tame where he refused to say how many Kiwi deaths would be acceptable as a result of Covid. All I can say is thank goodness he wasn’t the Covid Response Minister otherwise it would be like a nuclear explosion and we would all be dead.
It would be very interesting to compare and contrast the J. Ardern numbers with the J. Key numbers. I reckon the trend would be the same, just turbocharged by Covid fiscal and monetary policies. That trend btw, is for NZ to continue its steady descent to Banana Republic level. Sadly, an almost inconceivable form of political and social upheaval will be required to change this outcome.