TLDR: The big events this week were Grant Robertson’s reinforcement of the Government’s decision to ‘bank’ the $30b improvement in the debt track since the election in the form of less borrowing, rather than spending it on child poverty reduction, extra housing or climate change infrastructure.
Also the Government announced a pay freeze for most public servants, ostensibly to avoid extra borrowing, even though the New Zealand was just given a sovereign credit upgrade and its net debt is about a half that of Australia and a third that of America. Borrowing costs of around $2.5b a year are less than 1% of GDP and less than a sixth of annual spending on NZ Superannuation.
Thirdly, the Government announced it would legislate for Fair Pay Agreements, which will allow workers on different pay and conditions in a sector organise to come up with a national ‘award’-style agreement. Employers called them radical and dangerous, but they would simply bring New Zealand more into line with Australia and undo some of the damage of the 1991 Employment Contracts Act.
In this week’s ‘hoon’ (the collective noun for Kākā) I talk through these events with Craig Renney, who is the CTU’s policy director and who worked as an economist and advisor to Grant Robertson in Labour’s first term.
He describes the lack of analysis being done about the long term benefits and costs of the focus on debt reduction instead of spending on the Government’s priorities around child poverty, housing and climate change. He points to the Canadian Government’s more progressive Budget released last month.
Craig (pictured below) also goes through the public sector pay announcement and how Fair Pay Agreements work. Enjoy and we welcome your feed back and comments.
Other places I’ve been this week
Longer reads for the weekend
Charts of the week
The week that was for the weekend