Postponing the future — the real fiscal deficit

Where was the future in the budget? Postponed. Yet again. Ministers’ minds were on past sins and present preoccupations.

Nearly all economists agree that those preoccupations — balanced budgets, an efficient tax system, well-designed regulation and a public sector that is efficient and effective — are necessary to a well-functioning economy. They agree also that investing in and maintaining the hard infrastructure — roads, broadband and water storage, for example — and soft infrastructure — education, for example — are also necessary. read more

Brash, the budget and building a new strategy

Here’s what the leader of one of National’s support parties wrote to John Key last Thursday: “a heavy heart”, “mounting dismay”, “totally irresponsible”. With such a friend, Key has no need of enemies.

Don Brash’s letter enumerated six policy areas where he said Key had not carried through the promise of 2008: “wasteful” spending; the youth minimum wage; the emissions trading scheme; “reality” on superannuation, the wage gap with Australia and special arrangements for Maori. read more

A budget (not) about the nice-to-haves

Is the economy in a bad way or coming right? It depends which John Key you are listening to. At last Monday’s post-cabinet press conference two Keys were on offer.

Flagging a slimmer KiwiSaver, Key talked up “very poor economic conditions”. (Code for: “we have no alternative to doing some hurt.”) A little later, talking up his record, he cited jobs added, low interest rates and a lower crime rate. At other times he enumerates rising real after-tax wages and a 19 per cent lift in payouts to national superannuitants. (Code for: “it will all come right if you stick with us.”) read more

Off the field, where are the Maori?

The launch of the “real New Zealand showcase” to visitors for the rugby world cup last Thursday was an uplifting buzz of energy and excellence. Then a niggle: where are Maori in this showcase?

Serving the drinks.

Of course, Maori (and Pasifika) will be indispensable on the rugby field. But what about the economic New Zealand the organisers hope to go on selling after the fans have gone home? That is the aim of the spinoff events featured in the “real showcase”. read more

Water, water, everywhere — now in the cabinet

Nick Smith has a message from China where he has recently been. China has 20 per cent of the global population, eight per cent of the arable land and 2 per cent of the water. New Zealand is No 2 for water quality and No 3 in water per person after land-poor Iceland and Norway.

Add to those statistics a recent study by the Asia Society which suggests China is set to make $US1000 billion of direct investments in foreign productive assets this decade. read more

Can the purists come in from the fringes?

Purity is what counts out on the fringes. Don Brash wants to bring purity to John Key’s government. Hone Harawira wants to bring purity to representation of Maori.

Political purists feel morally superior but, unless the society they operate in goes badly mad, which is not about to happen here, they have to settle for part-measures or irrelevance. read more

It's fringe-theatre politics: enjoy the show

It’s been a week of fringe-theatre politics: Don Brash on his white charger trampling Rodney Hide to save the nation; Hone Harawira making a Maori future with Matt McCarten and Nandor Tanczos; and free air time for the ever-renascent hero of xenophobics, Winston Peters, attacking both.

Under first-past-the-post fringe parties were truly fringe. Labour and National ran single-party governments. read more

The budget: balancing present and future

After the first Christchurch earthquake Bill English and John Key cut new spending for 2011-12 from $1.1 billion plus 2% to $700-$800 million. After the second earthquake they cut that to zero. This is not your usual election-year budget.

The election pitch in the budget will essentially be: you know the economy is in a hole, you know earthquakes have made the hole a lot deeper and so you know government (and household) finances have got tighter and you know a financially sober cabinet is the safest way out of the hole. read more