Dawn chorus: The day after the anti-MOAB
Broadly positive tone to reaction to Budget 2021, although Ruth Richardson saw the 'righting the wrongs' of the 'Mother of All Budgets' as a 'cheap shot'
TLDR: Here’s a summary of the reaction and a range of views as the dust settles on the ‘anti’ Mother of All Budgets.
Other places I’ve written and spoken
Here's my latest 'When the facts change' podcast from @TheSpinoffTV on Budget 2021. Good chat with VUW's @kate_prickett and BERL's Hillmare Schulze
And here's my morning chat with @JohnJCampbell and Hillmare Schulze on @Breakfaston1 about the Budget.
Reaction and views on Budget 2021
Good backgrounder here from @justinCgio on the social insurance idea, which I'm a sceptic on, given it creates a two-tiered benefit system. Lots of unanswered questions around who pays and how it links with the welfare system.
Richardson shot back, calling the slight a “predictable cheap shot, further reinforcing my point that the budget expenditure choices are driven more by politics than economics”.
Excellent from @kiwieconomics on the misplaced debt fear: "All you need is your nominal GDP to be materially higher than your interest rate. We’ve got that already and we should be able to continue that for quite a while.”
Radical incrementalism? More incremental than radical, in my view. Here's @MaxRashbrooke 'The core weekly unemployment benefit may now be $315, but it’s still well short of, say, the Super rate of $435.'
Good context here from Danyl Mclauchlan: 'The hard part for Labour will be getting all the pieces of the poverty-wage-productivity-migration puzzle into place simultaneously.'
From @PartnersSense Rosie Collins on infrastructure: '$11.5bn per year over 5 years is a stand-still figure (last year we spent $11.7bn). We needed to see that up by at least 50% to be confident we can climb out of our $75bn infrastructure gap.'
The problem with unemployment insurance: 'It creates a two-tier system: those already well off due to high wages continue to be privileged by receiving higher benefits than those on lower wages when they become unemployed.'
Good big picture stuff in ANZ's Budget review: 'While
the Covid response protected many jobs, it has also contributed to a widening wealth and generational inequality divide – one that NZ is yet to really have a detailed conversation about.'
A reminder of what the 1991 'Mother of all Budgets' meant: 'The benefit cuts were severe, Dean said, with the domestic purposes benefit dropping by 17 per cent, the unemployment benefit by 25 per cent and the sickness benefit by 20 per cent.'
Elsewhere briefly in our political economy
Along with the resignation of the CEO: 'The plan to replace 50 stevedores with a fleet of 27 unmanned straddle carriers was unveiled in 2016 and then expected to be running in 2019.'
Chart of the day
Is the Govt stimulating the economy? It is a bit more this year than seen in Dec 2020, but it's still actually contracting the economy for 3 years to 2025. The RBNZ needs much more fiscal policy help from its monetary policy mate if it's going to quickly normalise interest rates
There was another lost opportunity. At 2:06, Hillmaré Shulze says "the future has to pay". That is pure capitalist indoctrination. Money doesn't have to be debt. Wouldn't it have been great to have it pointed out that the NZ$ only exists because the government says it does? And so the government can produce it debt-free in any amount it wants? It is preposterous that the government borrows its own money, and with the accompanying notion that now "the future has to pay". Even when the government "borrows" from its own bank, somehow "the future has to pay". This is debt scaremongering designed to keep the people down and it's why our world looks the way it does.
Let's dispel the indoctrination about debt.