Policy purge propels Robertson to $4b saving
The finance minister is touting the bump in funding for next week’s budget, but critics say it’s a drop in the bucket.
Mōrena and welcome to The Bulletin for Friday, May 12 by Catherine McGregor. Presented in partnership with Z Energy.
In today’s edition: Investigation finds ‘toxic’ environment at Gore Council; ruling out te Pāti Māori has made National’s path to power much tighter, polling model shows; and could standardised, mass produced housing drive down prices? But first, a little bit of good news ahead of a belt-tightening budget.
Image: Jose Barbosa
$4b more to play with
With a week until budget day, finance minister Grant Robertson has kicked off the customary series of pre-budget speeches by announcing just how much the government’s cavalcade of cost-cutting has saved the public purse. The 2023 budget will include “$4 billion of savings and reprioritisations over the four-year forecast period”, including those garnered from prime minister Chris Hipkins’ recent policy purge, Robertson said in a speech yesterday. Talking to reporters afterwards, Robertson said a significant portion of the savings came from cutting budgets for staffing vacancies within the public service. Exactly how the $4b in savings – about $1b a year over the next four years – will be added to the budget will be revealed on budget day itself, Robertson said. A proportion may support the cyclone recovery, and Robertson is due to make a new announcement on next steps regarding the recovery project on Sunday. He’ll also give a speech today in Auckland “that will give more pre-budget guidance on infrastructure investment”, Businessdesk’s Pattrick Smellie reports (paywalled).
Just how much is $4 billion?
Immediately following the announcement, a debate erupted over whether $4b is a big number or, in the grand scheme of things, a very small one. Speaking to Toby Manhire on The Spinoff this morning, Craig Renney comes down on the side of “big”. “A billion dollars a year of new money [is] quite a lot of cash,” says the economist, who worked on Robertson’s first three budgets. “The most we could ever achieve [when I was there] was, I think, one year when we saved $1.7 billion over four years.” Writing in the NZ Herald, Jenée Tibshraeny argues the opposite. Saving $4b isn’t much given the size of the government’s books, she says, especially when you consider that many billions of the “whopper $81b allocated towards the Covid-19 response” were never spent. National’s finance spokesperson Nicola Willis also thinks it’s a piddling amount, all told. Having “sprayed the public money hose around with wild abandon” in last month’s budget, Robertson “now expects New Zealanders to be grateful that he’s cleaning up a small corner of the spending mess…. It’s simply too little, too late,” she said.
Seymour blasts ‘humblebrag’ tax letter
Following his speech, Robertson was asked about the open letter from 96 high-income New Zealanders calling for higher tax rates on the wealthy. While he wouldn’t be drawn on its content, Robertson did reaffirm that the government was not contemplating tax cuts now. The letter was criticised by Newstalk ZB’s Heather du Plessis-Allan, who notes that most of the signatories are not the “high net worth” individuals that were the subjects of the IRD’s recent survey. “So let me ask you this,” says du Plessis-Allan, “if extreme wealth is not the thing these signatories have in common, what is it really? Political leanings, maybe?” Another opponent is Act’s David Seymour, who says the group's call for higher taxes is "anti-aspiration" and a “humblebrag” about how much they earn. The Greens’ Ricardo Menéndez March says a tax on the wealthy would make New Zealand more fair. "It's beyond doubt that the money we need to support everyone in Aotearoa is already there."
Beneficiaries and small businesses among Aussie budget winners
Across the Tasman, the Australian federal government has just announced its own 2023 budget and The Guardian has a good rundown of the budget’s winners and losers. Among those celebrating are low-income renters, small businesses, most beneficiaries, and politicians (they’re getting a big budget boost for frontline staffing and travel expenses), while the losers include middle-income renters and “rail lovers” – the latter because, despite an election pledge to prioritse a long-promised high-speed rail track along the east coast, the budget contained no new funding for the initial Sydney-Newcastle section, “nor for any other significant commuter rail projects around Australia”.
Teaching rangatahi to lead in our southernmost city
An ambitious initiative by One NZ in the deep south aims to dramatically reduce the amount of youth disadvantage in Invercargill - where rates are higher than the national average.
Three of the catalysts of this change spoke to The Spinoff about the importance of this mahi, and how the change they’re helping to create now will have impacts far into the future.
Read the full story on The Spinoff now (sponsored)
Investigation finds ‘toxic’ environment at Gore Council
The issues within Gore District Council go much further than the current controversy over 23-year-old mayor Ben Bell, a Newsroom investigation alleges. Freelance writer Vaneesa Bellew uncovers a history of workplace complaints going back two decades, and reveals that the council has paid out hundreds of thousands in severance settlements with staff. “One dispute, with a former top executive Rebecca Tayler, who is the mother of new mayor Bell, cost the former council more than $300,000 in legal fees,” Bellew writes. The “toxic” environment has had a long-lasting effect on staff, she says: “Newsroom has been told past employees have been left ‘shattered’ and their confidence destroyed after working for the council.” Tracy Hicks, who was mayor during most of the years in question, says he doesn’t believe anyone was bullied during his time in office. Meanwhile, seven of the 10 Gore councillors met with 23-year-old mayor Ben Bell on Wednesday night to ask him to resign. Bell declined to do so.
National’s path to power now much tighter, ‘poll of polls’ shows
The latest NZ Herald “poll of polls” (paywalled) shows that National is taking a big gamble by ruling out working with te Pāti Māori. According to its data model, there’s a 99.91% probability National, Act and te Pāti Māori would have the votes to form a government if the election was held this weekend, dropping to 93.51% if the election was held on polling day, October 14. But with that coalition off the table, the next most likely governing formation is a Labour-Greens-te Pāti Māori agreement, with a 78.44% probability if the election were held this weekend, or 57.57% on October 14. The Herald’s poll of polls works by using data from a number of different pollsters and running multiple election simulations. The Herald ran the simulation 8000 times for this poll of polls.
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Could standardising housing drive down prices?
Most new homes in Aotearoa are still designed with bespoke elements and a multitude of building materials, says Bernard Hickey. It feels a lot like the early days of motor vehcicles, when there were thousands of manufacturers with many more thousands of models of cars. Then along came Henry Ford and Toyota to standardise and mass produce cars, driving prices down and quality up. This week on his podcast When the Facts Change, Hickey talks with Simplicity Living MD Shane Brealey about how to build the Toyota Corolla of homes at two thirds of the cost of other homes.
Click and collect
Top Auckland girls school St Cuthberts College is ditching the new NCEA Level 1 curriculum in favour of its own self-created diploma. “We don’t think it provides sufficient, in-depth learning for our students,” principal Justine Mahon said.
Prime minister Chris Hipkins will travel to Papua New Guinea on May 21 to attend a meeting between United States president Joe Biden and Pacific leaders.
Freezing gale force winds are believed to have caused the deaths of dozens of tītī (muttonbirds) who fell from the sky over Central Otago, northern Southland and the Lakes District on Wednesday night, the ODT reports.
A wealth tax, removing GST from food, and exiting the Five Eyes military spy pact are among te Pāti Māori’s demands for supporting a coalition government, party president John Tamihere tells Stuff.
Got some feedback about The Bulletin, or anything in the news? Get in touch with me at thebulletin@thespinoff.co.nz.
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Sporting snippets
Super Rugby returns to Yarrow Stadium in New Plymouth tonight for the first time since 2017, with the Waikato Chiefs playing the Queensland Reds.
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Brazilian authorities have launched a federal investigation into soccer match-fixing,
It’s Friday, so…
You need a great podcast to listen to on your way to work this morning, or puttering around the house over the weekend. The Spinoff’s Gone By Lunchtime is a must-listen this week, with topics including coalitions, coronations and chaos. And talking of podcasts, here’s the excellent Michael Spicer on the unique brand of tedium that so many podcasts excel at. Not GBL, we hasten to add.
