Reti says spending cuts to continue into 2027 as Health NZ reduces its 'deficit'; Willis can’t cite evidence austerity works to grow economy, but ploughs on; Polls show coalition losing lead
A more correct statement from Reti would be to say that the government “will continue to cut services until the arbitrary spend we (the government) have chosen is met.” There is no “deficit” crisis. It is instead a choice by this government to fund health care for Nz communities at this level, and a choice to make this a declining level of spend per person.
Quite. I don’t remember an election pledge that said the health system had to turn a profit, or break even. I’ve had far more to do with the health sector than I wished to over the last month and it needs more money and more staff, not even more cuts and fewer staff. And given the increasing number of factors that drive people to need healthcare - like mouldy homes and unemployment, an aging population and increasing poverty - the cuts will continue ad infinitum as the deficit will continue to grow. Heartless (insert profanity of choice here).
Having Reti and Willis making the choices really sends a signal that we need to prepare for even more despair without the vaguest idea of how we might do this, when it might end or if there will be anything left to repair after the destruction is wrought and the dust settles - except possibly in the next election.
Anyone interested in getting a feel for the thinking behind our economic history summarised by Bernard, especially within the first Labour Government and the logic of 'Fortress New Zealand' have a read of Simple on a Soapbox by John A Lee and Poverty and Progress A Reassessment (1969 published) by W B (Bill) Sutch.
I felt the Royal Commission on Abuse in Care's findings challenged us to have a re-look at how our welfare state is delivered. That led me to read "Simple on a Soapbox" which is a devastating summary of what happens to politician's principles as they sup from the cup of power handed to them by their voters. It left me in despair as I contemplated the small number of politicians capable of addressing the serious recommendations from the Royal Commission and how the vested interests within the bureaucracies who will fight to resist the necessary changes called for by the Royal Commission.
Always a big ask from Labour and Hipkins unfortunately.
Great read, fascinating to see the breakdowns on what’s driving the support for the Opposition, and not surprised to see people, particularly younger men, inspired by TPM’s visible, strong, and focused message. Makes me want a McAnulty-led Labour even more.
Greens need to pick an issue and hammer it relentlessly too. Wishing Davidson well and looking forward to her and Swarbrick (who’s had a rough introduction to leadership) being more visible in 2025.
Why is a healthcare surplus good? Does it not indicate that there are services that could be provided but are not; ie wasting your budget? What does a surplus even mean for a non-profit making sector?
In the similar vein, NZ universities are required to generate profit. Universities have to generate a percentage return to the government each year. I agree with Bernard and others that the use of the word 'deficit' in this context is (purposefully?) misleading.
Yes, we're still impaled on Maggie Thatcher's miserable utterings - "there is no such thing as society". It seems such ideas still infect behaviour long after we think we've moved on. Like Covid it is still there.
At least NZ Universities can generate additional funds via overseas students to 'generate a profit'. The poor old NZ Public Health system can't flog off its surgical services to private health organisations to generate extra funds. Perhaps the brains trust in the government is thinking about organ harvesting to generate some extra funds ;)
Well over to the opposition. They could have the best opportunity to send the coalition packing and create the first one term MMP government... Will they cease the chance to connect with kiwis to deliver the transformational change everyone is asking for...? Or will they fumble it?
On RNZ this morning Chris Hipkins was heard to (tentatively) say that the government's austerity programme was making the economy worse. It seems we might finally have an alternative political voice on how best to drag this country out of recession.
Off topic, apologies Bernard. Yesterday's Kaka received over 100 likes - is it open to share? I'd really like a young family member to listen to the history lesson podcast (which I thought was fantastic, thanks). She is genuinely confused by Govt messaging about debt (amongst other things) and is trying to understand why she and her partner are finding buying their first home impossible. My explanations to her are nowhere near as good as yours!
Sure. That's open. In the last couple of days I've opened them from the start. This one is open too. About to try experiment with something before Christmas. Watch this space.
I agree that it is difficult for young to understand how NZ mismanagement made life difficult today. Muldoon, excessive GST tax, lack of good infrastructure,etc. I have many discussions with family & the historical mismanagement appals them. Who tells them if not those who recall a different way is possible. Vote & give vote at 16. Change can happen.
We need more people like you you in this world, Rae & Glenys.
And it's true, younger generations including mine grew up thinking that Aotearoa is poor & that Auzzy is the "rich country", & we can't afford much ... And we are one infrastructure project away from economic disaster. It has been subliminally passed on from generation to generation. When I try to have discussions with my Dad he refers to examples from 30 or 40 years ago. I try to (respectfully) tell him that our economic parameters has changed a lot since then. I've course I'm not as articulate as Bernard so I tend to blurt out a word salad trying to explain LOL.
It's generational trauma... and to be fair to to the older generation it sounded like a very traumatic time to live through. I get why they have the instinct to try & avoid it happening again by passing that info onto the next generation, unfortunately a lot of those same older people do not realise how much things have changed.
Those poll numbers have given me a glimmer of hope, and restored some faith that at heart, most kiwis are decent people with a strong sense of fairness.
Would it be possible for our “beloved” finance minister to learn the lessons on Austerity. Doubt it. She is incompetent and living in the past and is doing a Hue( vietnam war “ we had to destroy it to save it”) on the economy. It is an agenda designed to “ save the rich pricks who vote for us first” then see if there is enough left to trickle down to the rest of us. Health Cuts Don't heal.
no wonder they are ignoring the growing long covid crisis. how do you cut health funding after a pandemic has taken out up to 10% of the workforce, and people remain, or are getting so damn sick they are dropping out of employment? wtaf
In all the roles I've played. (ala Shakespeare all the world's a stage, and all the men and women merely players) from CEO to tea towel specialist, the one creed i have lived by is 'If you look after your people, your people will look after you'. Pretty straight forward stuff. They're more productive, happier and 'go the extra mile'. Sure there's anomalies along the way, but that's the tikanga. But here we have the opposite. The sicker, poorer and more divided we can make our people, the more money we can save. You will save money in the short term and it might look good on the semi-cooked books as in you can't record discord amongst the ranks. But ultimately you'll pay the price and we are seeing that in opinion polls. Just dumb ass politics :-)
so we printed $53billion in a health crisis, which mostly went onto house prices, and caused massive inflation, now the people that are sick from the health crisis are getting funding cuts, effectively ignoring the reason for the printing and inflation. IT WAS A HEALTH CRISIS, WHERES THE MONEY FOR THE AFFECTED PEOPLE? fucking clowns.
"massive inflation"? What do you describe the level of price increases from the disruption to transport, oil supply, Ukraine war, Gaza genocide, and manufacturing? Even more massive?
There's no intention to grow the economy- that's just a cover-story. "until the economy improves" refers to improving the Balance of Payments deficit. Austerity will shrink the economy. That's the point and is why the government appears to be being so boorishly stubborn.
Trying to achieve surplus while there's a balance of payments deficit and a weak economy is a recipe for continued recession. Recession, however, is a cure for the balance of payments deficit- it's called 'demand destruction'. The other cures are to increase exports, reduce imports by tarrifs and outright rationing (like the 1960's), Import substitution (make more of what we need in NZ).
These are all either 'too hard' or would breach trade treaties. Hence both government and opposition following the same private advice from RB economists, 'demand destruction by induced recession'- at least in the short-to-medium term.
The Right have additional reasons to promote Austerity, one of which is to create private investment opportunities in the things the government used to provide before the cuts, Another is to force you into debt to pay for those things- and private debt is far more profitable to banks than government debt. Another highly ideological one coming out of the usual think-tanks is to restore 'discipline' to the labour market- ie make workers more compliant on pay and conditions through fear of unemployment. This is the deviant rationale behind harassing beneficiaries at the same time as creating unemployment.
Why is a large BoP deficit such a worry for the RB?
Because trade has a balancing promise to pay, then, except for a country like the USA that issues a reserve currency (i.e. can be freely spent into multiple economies), the net value of the promises that are outstanding in international markets will have a bearing upon the way in which those markets react to the issue of further promises. If it is perceived that the country does not have the ability to fulfill its promise, the integrity of future promises will be reduced and the currency will be devalued as a consequence
Shane Reti seems to be the only one in this government that can answer a question. Which probably makes him a poor politician, but I do respect him for that.
I also used to have a lot of respect for Nicola Willis (when she was in opposition) but her behaviour lately, as exemplified in her select committee appearance, is appalling. Perhaps she has been taking lessons from Trump and Musk, to fire out irrelevant attacks when her ideas are challenged. It was her government that introduced scrutiny week, but all she has done is attempt to avoid scrutiny by belittling the various questioners.
And here lies the problem: “Finance Minister Nicola Willis can’t supply a select committee with evidence austerity works to grow economies.” My first question is why not? Then I would be following that question up with a barrage of ‘whys’ until the root cause of such mind-numbing arrogance and quantum stupidity is revealed. Amplify the inability of this government to provide evidence across most of its ministries and you have a recipe for disaster. The fact that Willis can get away with this reveals a systemic flaw in NZ’s political system. She has already torn up $500million plus on ferries. Her tenure is proving to be very expensive and her financial navigation skills have NZ heading for the rocks. Ironic. Happy Austerity everyone.
The cuts will continue until the economy improves - sound like a threat.
By which standard? What happens if the economy improves but not enough - or not for long enough? Which Economy Tsar will make the decision - let's hope it's not Willis
But while on the subject of when is enough actually enough - Though the government's initial response was commendable, what did the recommendation that in the next pandemic "normal life continue for as long as possible" actually mean?
Until our unprepared health system starts to seriously crumble?
Until vital services can no longer be delivered because essential workers are unwell?
Until our mortuaries and burial grounds are full?
And again - whose shaking hand will be on the button for this one?
A more correct statement from Reti would be to say that the government “will continue to cut services until the arbitrary spend we (the government) have chosen is met.” There is no “deficit” crisis. It is instead a choice by this government to fund health care for Nz communities at this level, and a choice to make this a declining level of spend per person.
Quite. I don’t remember an election pledge that said the health system had to turn a profit, or break even. I’ve had far more to do with the health sector than I wished to over the last month and it needs more money and more staff, not even more cuts and fewer staff. And given the increasing number of factors that drive people to need healthcare - like mouldy homes and unemployment, an aging population and increasing poverty - the cuts will continue ad infinitum as the deficit will continue to grow. Heartless (insert profanity of choice here).
Exactly!
Reti speaks of a mythical deficit, relative to an arbitrary budget disconnected from reality.
Having Reti and Willis making the choices really sends a signal that we need to prepare for even more despair without the vaguest idea of how we might do this, when it might end or if there will be anything left to repair after the destruction is wrought and the dust settles - except possibly in the next election.
Anyone interested in getting a feel for the thinking behind our economic history summarised by Bernard, especially within the first Labour Government and the logic of 'Fortress New Zealand' have a read of Simple on a Soapbox by John A Lee and Poverty and Progress A Reassessment (1969 published) by W B (Bill) Sutch.
I felt the Royal Commission on Abuse in Care's findings challenged us to have a re-look at how our welfare state is delivered. That led me to read "Simple on a Soapbox" which is a devastating summary of what happens to politician's principles as they sup from the cup of power handed to them by their voters. It left me in despair as I contemplated the small number of politicians capable of addressing the serious recommendations from the Royal Commission and how the vested interests within the bureaucracies who will fight to resist the necessary changes called for by the Royal Commission.
Both books still on my shelves . . .
Martyn Bradbury is very excited by the Roy Morgan poll, and has a few suggestions for Labour on how not to look like zombie do-nothings:
https://thedailyblog.co.nz/2024/12/04/new-roy-morgan-poll-maori-party-soar-to-9-government-sinks-further/
Always a big ask from Labour and Hipkins unfortunately.
Great read, fascinating to see the breakdowns on what’s driving the support for the Opposition, and not surprised to see people, particularly younger men, inspired by TPM’s visible, strong, and focused message. Makes me want a McAnulty-led Labour even more.
Greens need to pick an issue and hammer it relentlessly too. Wishing Davidson well and looking forward to her and Swarbrick (who’s had a rough introduction to leadership) being more visible in 2025.
I wonder what that issue could be, perhaps the environment...
I do enjoy a good rant from comrade Bomber
Why is a healthcare surplus good? Does it not indicate that there are services that could be provided but are not; ie wasting your budget? What does a surplus even mean for a non-profit making sector?
In the similar vein, NZ universities are required to generate profit. Universities have to generate a percentage return to the government each year. I agree with Bernard and others that the use of the word 'deficit' in this context is (purposefully?) misleading.
Basically, it's just more of the neo-liberal policies which rot our society.
Yes, we're still impaled on Maggie Thatcher's miserable utterings - "there is no such thing as society". It seems such ideas still infect behaviour long after we think we've moved on. Like Covid it is still there.
At least NZ Universities can generate additional funds via overseas students to 'generate a profit'. The poor old NZ Public Health system can't flog off its surgical services to private health organisations to generate extra funds. Perhaps the brains trust in the government is thinking about organ harvesting to generate some extra funds ;)
What an amazing idea!
Liver, fava beans & chianti.
🤣🤣🤣🤢👍
The Waiparera Trust has a healthy surplus.
Well over to the opposition. They could have the best opportunity to send the coalition packing and create the first one term MMP government... Will they cease the chance to connect with kiwis to deliver the transformational change everyone is asking for...? Or will they fumble it?
On RNZ this morning Chris Hipkins was heard to (tentatively) say that the government's austerity programme was making the economy worse. It seems we might finally have an alternative political voice on how best to drag this country out of recession.
I would like to see the left bloc start working together on some issues.
seize
As soon as i read it back i noticed that 😅
if you click on the 3 dots to the right of your original comment there is an edit function. (I use it at times to amend my original comments)
Not in my android version it seems! I only get hide or delete
Yup same here
Off topic, apologies Bernard. Yesterday's Kaka received over 100 likes - is it open to share? I'd really like a young family member to listen to the history lesson podcast (which I thought was fantastic, thanks). She is genuinely confused by Govt messaging about debt (amongst other things) and is trying to understand why she and her partner are finding buying their first home impossible. My explanations to her are nowhere near as good as yours!
Sure. That's open. In the last couple of days I've opened them from the start. This one is open too. About to try experiment with something before Christmas. Watch this space.
I agree that it is difficult for young to understand how NZ mismanagement made life difficult today. Muldoon, excessive GST tax, lack of good infrastructure,etc. I have many discussions with family & the historical mismanagement appals them. Who tells them if not those who recall a different way is possible. Vote & give vote at 16. Change can happen.
We need more people like you you in this world, Rae & Glenys.
And it's true, younger generations including mine grew up thinking that Aotearoa is poor & that Auzzy is the "rich country", & we can't afford much ... And we are one infrastructure project away from economic disaster. It has been subliminally passed on from generation to generation. When I try to have discussions with my Dad he refers to examples from 30 or 40 years ago. I try to (respectfully) tell him that our economic parameters has changed a lot since then. I've course I'm not as articulate as Bernard so I tend to blurt out a word salad trying to explain LOL.
It's generational trauma... and to be fair to to the older generation it sounded like a very traumatic time to live through. I get why they have the instinct to try & avoid it happening again by passing that info onto the next generation, unfortunately a lot of those same older people do not realise how much things have changed.
Those poll numbers have given me a glimmer of hope, and restored some faith that at heart, most kiwis are decent people with a strong sense of fairness.
Morning Bernard,
Would it be possible for our “beloved” finance minister to learn the lessons on Austerity. Doubt it. She is incompetent and living in the past and is doing a Hue( vietnam war “ we had to destroy it to save it”) on the economy. It is an agenda designed to “ save the rich pricks who vote for us first” then see if there is enough left to trickle down to the rest of us. Health Cuts Don't heal.
Patrick Medlicott
no wonder they are ignoring the growing long covid crisis. how do you cut health funding after a pandemic has taken out up to 10% of the workforce, and people remain, or are getting so damn sick they are dropping out of employment? wtaf
In all the roles I've played. (ala Shakespeare all the world's a stage, and all the men and women merely players) from CEO to tea towel specialist, the one creed i have lived by is 'If you look after your people, your people will look after you'. Pretty straight forward stuff. They're more productive, happier and 'go the extra mile'. Sure there's anomalies along the way, but that's the tikanga. But here we have the opposite. The sicker, poorer and more divided we can make our people, the more money we can save. You will save money in the short term and it might look good on the semi-cooked books as in you can't record discord amongst the ranks. But ultimately you'll pay the price and we are seeing that in opinion polls. Just dumb ass politics :-)
Like it - thanks Murray!
so we printed $53billion in a health crisis, which mostly went onto house prices, and caused massive inflation, now the people that are sick from the health crisis are getting funding cuts, effectively ignoring the reason for the printing and inflation. IT WAS A HEALTH CRISIS, WHERES THE MONEY FOR THE AFFECTED PEOPLE? fucking clowns.
this is what thousands of kiwis have as well (im one). And the numbers are growing . Ever hear about it? 😑 https://www.theguardian.com/wellness/ng-interactive/2024/dec/02/matt-mcgorry-long-covid
"massive inflation"? What do you describe the level of price increases from the disruption to transport, oil supply, Ukraine war, Gaza genocide, and manufacturing? Even more massive?
i was referring to what NZ did.
There's no intention to grow the economy- that's just a cover-story. "until the economy improves" refers to improving the Balance of Payments deficit. Austerity will shrink the economy. That's the point and is why the government appears to be being so boorishly stubborn.
Trying to achieve surplus while there's a balance of payments deficit and a weak economy is a recipe for continued recession. Recession, however, is a cure for the balance of payments deficit- it's called 'demand destruction'. The other cures are to increase exports, reduce imports by tarrifs and outright rationing (like the 1960's), Import substitution (make more of what we need in NZ).
These are all either 'too hard' or would breach trade treaties. Hence both government and opposition following the same private advice from RB economists, 'demand destruction by induced recession'- at least in the short-to-medium term.
Suggested resources:
https://en.wikipedia.org/wiki/Sectoral_balances Just the intro and graph will do.
https://www.ceicdata.com/en/indicator/new-zealand/current-account-balance to view NZ's dire BoP situation. Click on ‘max' and select 'line' in the menu.
The Right have additional reasons to promote Austerity, one of which is to create private investment opportunities in the things the government used to provide before the cuts, Another is to force you into debt to pay for those things- and private debt is far more profitable to banks than government debt. Another highly ideological one coming out of the usual think-tanks is to restore 'discipline' to the labour market- ie make workers more compliant on pay and conditions through fear of unemployment. This is the deviant rationale behind harassing beneficiaries at the same time as creating unemployment.
Suggested resource:
https://www.dissentmagazine.org/online_articles/the-dawn-of-austerity/
So, Labour++ is still marginally better than the Right block, if only because they aren't intent on perverted cruelty to the majority of NZ'ers.
Why is a large BoP deficit such a worry for the RB?
Because trade has a balancing promise to pay, then, except for a country like the USA that issues a reserve currency (i.e. can be freely spent into multiple economies), the net value of the promises that are outstanding in international markets will have a bearing upon the way in which those markets react to the issue of further promises. If it is perceived that the country does not have the ability to fulfill its promise, the integrity of future promises will be reduced and the currency will be devalued as a consequence
Thanks Kevin, appreciate the insights.
Thanks from me too. Will follow up your links.
Shane Reti seems to be the only one in this government that can answer a question. Which probably makes him a poor politician, but I do respect him for that.
I also used to have a lot of respect for Nicola Willis (when she was in opposition) but her behaviour lately, as exemplified in her select committee appearance, is appalling. Perhaps she has been taking lessons from Trump and Musk, to fire out irrelevant attacks when her ideas are challenged. It was her government that introduced scrutiny week, but all she has done is attempt to avoid scrutiny by belittling the various questioners.
And here lies the problem: “Finance Minister Nicola Willis can’t supply a select committee with evidence austerity works to grow economies.” My first question is why not? Then I would be following that question up with a barrage of ‘whys’ until the root cause of such mind-numbing arrogance and quantum stupidity is revealed. Amplify the inability of this government to provide evidence across most of its ministries and you have a recipe for disaster. The fact that Willis can get away with this reveals a systemic flaw in NZ’s political system. She has already torn up $500million plus on ferries. Her tenure is proving to be very expensive and her financial navigation skills have NZ heading for the rocks. Ironic. Happy Austerity everyone.
On a lighter note - a cup of tea infused with wetland flavours sounds delicious.
The cuts will continue until the economy improves - sound like a threat.
By which standard? What happens if the economy improves but not enough - or not for long enough? Which Economy Tsar will make the decision - let's hope it's not Willis
But while on the subject of when is enough actually enough - Though the government's initial response was commendable, what did the recommendation that in the next pandemic "normal life continue for as long as possible" actually mean?
Until our unprepared health system starts to seriously crumble?
Until vital services can no longer be delivered because essential workers are unwell?
Until our mortuaries and burial grounds are full?
And again - whose shaking hand will be on the button for this one?