Blaming Treasury & Labour, Willis looks for even more Austerity

The Kākā by Bernard Hickey

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Blaming Treasury & Labour, Willis looks for even more Austerity

Willis says she’ll double-down on spending cuts to get back to surplus earlier than Treasury forecast in HYEFU; Councils, doctors, nurses, builders blame austerity for unnecessary & extended recession

Bernard Hickey

Dec 17, 2024

Transcript

Willis blamed Treasury for changing its productivity assumptions and Labour’s spending increases since Covid for the worsening Budget outlook. Photo: Getty Images

Mōrena. Long stories short, the six things that matter in Aotearoa’s political economy around housing, climate and poverty on Wednesday, December 18 in The Kākā’s Dawn Chorus podcast above and the daily Pick ‘n’ Mix below are:

Finance Minister Nicola Willis has pledged to find even more public spending cuts to achieve an earlier return to Budget surplus than the 2028/29 year forecast yesterday by Treasury, which bank economists have said would require even more aggressive austerity than seen after Ruth Richardson’s ‘Mother of All Budgets’ from 1991 to 1993. Willis blamed Treasury for lowering its productivity assumptions and Labour’s spending for the worsening Budget outlook.
Treasury’s lowering of growth and tax forecasts yesterday has also increased the Government’s borrowing plans over the next four years by $20 billion, which was three times more than bank economists expected. Market interest rates for Government bonds rose around four basis points to 4.51% in the hour or so after the surprise increase was announced, but then eased to close unchanged at 4.47% to show the Government may fear Government bonds, but the market doesn’t.
GDP figures for the September quarter due later today are expected to show the economy is in a triple-dip recession, with GDP per capita now more than 5% below its 2022 peak and not expected to recover to that peak until well into 2027. See more below in Chart du Jour.
Mayors and Councillors are kicking back at the Government blaming them for rates increases, saying it was the Government’s decision to abandon Three Waters and cut various Transport and capital grants that forced the big rates increases. Christchurch City Council revealed this morning another surprise cost increase for councils. See more in Quotes du Jour and the Pick ‘n’ Mix.
In another case of penny-wise and pound-foolish behaviour, RNZ reports a successful immunisation programme for pregnant Māori and Pasifika and their babies in South Auckland had its funding cut earlier this year, amid warnings of a looming whooping cough epidemic. See more below in the Pick ‘n’ Mix and Quotes du Jour.
A group of homeless people living in tents on a council park in Whangānui have been evicted by the council so boat racers can park there for a five-day event over the holiday period. Many have mental health issues, leading supporters to ask in this 1News article last night: ‘Is this how we treat human beings.’ See more in Quotes du Jour below.

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The Top Six in the Pick ‘n’ Mix

Infrastructure & Austerity news: 'So unfair' - Mayors fear spending crackdown will deepen woes RNZ
Infrastructure & Austerity news: Mayors challenge claim not sticking to basics ODT-$’s Grant Miller
Health & Austerity news: Anger at immunisation programme funding cut RNZ’s Ruth Hill
Infrastructure & Austerity news: Government ‘forces’ surprise $2m-a-year bill onto Christchurh. Two sudden, unexpected water service levies from the Government will cost ratepayers across the country as much as $28 million a year. The Press’ Sinead Gill
Infrastructure & Austerity news: Dunedin library, hub size cut by half ODT’s Mary Williams
Op-Ed by Craig Renney in The Post: The only thing you can count on is more cuts

The Pick ‘n’ Mix of the best of the rest for Weds, Dec 18

Healthy Homes Initiative - Five year outcomes evaluation Health NZ paper showing that for every one dollar spent insulating and heating homes by Health NZ, there was $5.07 in health savings over the following five years

Quotes of the day: Blaming the victims

‘They’re gaslighting us’

“The Government just said they want us to keep rates low, yet they’re forcing a rates increase,” Christchurch City Councillor Jani Johanson via The Press

‘It’s not our fault’

The reason for the delayed return to surplus has nothing to do with any Government decision or global shock. Instead, it was a result of the Treasury continuing to unwind what she described as “overly optimistic assumptions about the state of the economy.” Nicola Willis via Newsroom’s Marc Daalder.

‘I made him think it was his idea’

Asked whose idea the Minister for Rail position was, Winston Peters said: “Put it this way, we planted the seed and it became his [Christopher Luxon’s] idea.”
Asked why rail-enabled ferries needed to be considered, Peters said: “Well, as Don Braid from Mainfreight said this morning, it’s really a no-brainer.” Via NZ Herald-$’s Georgina Campbell

‘The true cost of homelessness’

“A lot of them have chronic mental health issues. Mental health organisations that are involved with them are also anxious and extremely distressed for their clients.” Sherron Sunnex, founder and manager of charitable organisaton The Koha Shed in Whangānui on the eviction of 15 people living in tents on council land.
“If they don’t have shelter they’re going to have to sleep in doorways or hide in bushes like stray animals. Is this how we treat human beings?”
At the moment there are services and agencies coming down daily to dish out medication and pick people up for appointments and whatever they need.
"For them to start to fit into the wider community, first of all we need a community of support around them, and that’s what has been developing."
Sunnex said the council’s actions had thrown the homeless group into crisis.
"These people have nowhere to go. Their belongings will be removed and they will be scattered throughout the city. The progress we have made with those who have engaged with alcohol and drugs services will be completely lost." Sunnex via 1News’ Moana Ellis