We don’t need Treasury – surely – to tell us not to bank on Banks to turn out smarter kids

December 25, 2012

Funny thing about Christmas day is that Alf has a serious compulsion to find something to read, while Mrs Grumble gets on with cooking the Christmas turkey.

And his Christmas Day reading today led him to something he missed the other day.

Something about charter schools.

Dunno if we needed a set of Treasury papers to find expressions of scepticism about the charter schools improving student performance.

Read the rest of this entry »

Michael Bay might be the bloke we need to transform our public service (and make it bleed)

March 3, 2012

Stripping our public service to bare essentials is not so easy.

The public service has been doing a lot of yelping for an outfit that has shed bugger-all blood.

One of the top manadarins has revealed that the squeeze on state service backroom functions has saved just $20 million in two years.

Or $10 million a year.

Let’s stack that alongside soccer celebrity David Beckham’s earnings of $US40 million last year…

The story about the scant savings made so far in the Government’s assault on public service profligacy is told at Stuff today –

The Government has shed more than 2500 jobs in the past three years and ordered chief executives to shave their IT and human resources bills as part of a drastic overhaul of the public service.

But despite ambitious plans to save $1billion over three years, a `benchmarking’ report to be published next week will show 31 agencies and departments have managed to reduce spending by just $20m.

Read the rest of this entry »

The casting couch won’t work for Gerry – maybe that why he’s giving millions to movie moguls?

January 9, 2011

And if we can come up with another $100 million, they will let me play Henry VIII.

Alf finds it hard to fathom what’s going on in the Beehive nowadays.

Mean, lean Bill English is banging on about the need for fiscal rigour (although he is apt to forget this when throwing money around for Polynesian employment projects)

Generous and chubby Gerry Brownlee, on the other hand, is doling out millions of dollars to American movie moguls – the sorts of people who can count their profits in billions.

The long-suffering taxpayers of Eketahuna North accordingly are confused.

Today they have been pressing Alf for explanations, after the Sunday Star-Times disclosed that the public purse bankrolled blockbuster film and TV productions to the tune of $75 million over the past two years.

Read the rest of this entry »

Update on the Peda file: the lad from Dipton has a PESS mess to clean up

January 7, 2011

My involvement in the Peda matter? Let me think about it...

When the Beehive announces something just before Christmas, Alf learned long ago, they are hoping people are so preoccupied with preparations for the festive season that they won’t pay much attention.

It worked with Alf, when the Peda file was updated.

In effect, the announcement was that Santa would not be bringing goodies to the Pacific Economic Development Agency (Peda).

This company with a single shareholder – some of us might recall – was given a generous dollop of dosh ($4.8m over four years) in the May Budget to “improve the economic wellbeing of Pacific people in Auckland”.

But this handout caused something of a ruckus about shortcomings with the tender process and the over-riding of Ministry of Pacific Island Affairs advice that Peda was unproven and a risky investment.

Read the rest of this entry »

Wow – does a promise to lend money to the IMF mean our debt worries are over?

April 14, 2010

Alf is pleasantly surprised to learn that New Zealand has agreed to lend the International Monetary Fund (IMF) up to US$1 billion (NZ$1.34b) if the shit hits the financial fan again.

News to that effect was announced by Finance Minister Bill English.

Alf thought it more likely we would be having to go to the IMF for help in such a crisis, rather than the other way around.

But no.

New Zealand has agreed to lend the International Monetary Fund (IMF) up to US$1 billion (NZ$1.34b) if the world faces another economic crisis like the 2008/09 global meltdown, Finance Minister Bill English says.

“New Zealand’s commitment is a part of the US$550 billion expansion of the IMF’s financial resources to make the IMF better able to support the international financial system during times of significant crisis,” Mr English says.

It seems the commitment will only be called upon if needed and only if the IMF has exhausted all other options.

Coming to us – Alf suggests – would be real desperation stuff.

New Zealand is one of about 40 countries contributing to the IMF in this way.

The contribution is in line with our economic size and similar to New Zealand’s other contingent liabilities to the IMF, which total US$1.4 billion.

Included in those liabilities is US$265 million lent to the IMF as part of a range of measures to help it support countries facing balance of payments problems caused by the global economic crisis.

Having a balance of payments problem was something Alf thought New Zealand could claim.

The resultant debt problems explain why the Treasury last September was banging on about the mischief done by too much public debt (which accounts for just a small portion of the total overseas debt).

Using debt to finance increased government expenditure…means that future taxpayers will be paying for the government services enjoyed today.

With net debt projected to increase so sharply, debt financing costs increase over time, using a larger and larger share of future government income. In 2050, debt servicing would be around $110 billion (13% of GDP) annually.

The fact that New Zealand typically has higher interest rates than many other developed economies means that our financing costs are higher for a given level of debt. Furthermore, because net debt continues to increase indefinitely in the historic trends scenario, financing costs also increase exponentially.

In addition to the increased financing costs, funding the deficits through increased debt means future generations are burdened by greater debt than we currently have; it will impair New Zealand’s national debt position and our access to capital at a reasonable cost; and it leaves a smaller buffer against further economic and fiscal shocks – which are almost certain to occur over a 40-year period.

Does our agreement to help the IMF mean we have overcome those problems and concerns?

We all must help pull NZ out of the crap

July 23, 2009

Brian Fallow in the Herald is a recommended read today.

No, he’s not very cheery. But he has done a good job of putting us in the picture about “the hard word delivered to the rest of the public sector, in a pointedly public way, by Treasury secretary John Whitehead this week…”

He also reminds us we all have a part to play in pulling NZ out of the economic crap.

You only have to look at the spending track, past and forecast, in the Budget to see that some serious belt-tightening is expected.

Over the past four fiscal years annual spending grew by $17.5 billion, or about 9 per cent a year.
Over the next four years spending is forecast to grow $11 billion, less than 4 per cent a year or 1 per cent at most in real per capita terms.

But that would still, on the Treasury’s forecasts of economic growth and revenue, see a cumulative $35 billion in operating deficits, driving gross debt from 25 per cent of GDP now to 39 per cent in 2013.

Whitehead noted that the government is a large part of the non-tradeables sector, which over the past five years has grown by 15 per cent. The tradeables sector, where the country earns its living as a trading nation, contracted by 10 per cent.

“To help New Zealand compete internationally and lower costs to exporters we have to raise the quality of public spending and ensure the lion’s share of increased national resources goes not to the public but to the private sectors,” he said.

“In other words the public sector has to raise its productivity – provide more for every dollar spent – and grow more slowly than the private and export sectors, to rebalance the economy.”

This was likely to be echoed in the work of the taskforce led by Don Brash which has been asked to recommend policies to achieve the goal of closing the income gap with Australia by 2025, Fallow pointed out.

But then he noted:

* We need to be realistic about how compressible Government spending is in a democracy.

* The message about living within straitened means applies as much to the household sector as to the Government.

* And the message about raising productivity applies as much to the business sector as to the public sector.

A major rebalancing is needed – less spending and more saving by households, more investment and a stronger export focus by the business sector, and a tight rein on Government spending. But this won’t happen automatically or easily.

Couldn’t agree more.

Berl, the booze bill and a backdown

July 7, 2009

Because boozing is among his favourite activities (he prefers to call it networking), Alf has been interested in the brouhaha over a study by Berl.

The NBR kicked it off, at least in terms of news media coverage, and Business Roundtable executive director Roger Kerr today gets in on the act in the NZ Herald.
Read the rest of this entry »

A crushing rejoinder to Treasury twaddle

July 6, 2009

Some tossers in the Treasury have become much too keen to show off their flair for analysis, and have advised the government there’s no proof its proposed new laws to prevent boy-racing will work.

The department’s objections to the law changes which include the crowd-pleasing proposal to crush the cars of repeat offenders are contained in Cabinet papers on the new laws released to The Press under the Official Information Act.
Read the rest of this entry »

Chauvel’s caution had already been sounded

April 15, 2009

From the Labour side of the political divide comes a media statement headed “Latest NZ carbon position no cause for complacency”.

The statement was issued by Labour’s Climate Change Issues Spokesperson Charles Chauvel, who said there were four reasons why the Government’s announcement of a better-than-expected carbon emissions position should be treated with caution.

Alf was pleasantly surprised by Chauvel’s numerical skills. Obviously he misunderstood when – in a chat with mates in Bellamy’s about Labour leadership prospects – someone said Chauvel didn’t count.
Read the rest of this entry »

So who’s out of touch, when it comes to gloom?

April 7, 2009

The lefties put an interesting spin on Vernon Small’s Dom-Post story today portending a further 60,000 workers losing their jobs by next year.

Note Alf’s use of the word “portending”. This is the stuff of economic forecasting, notoriously subject to change.

Just take a look at the positive forecasts from the Treasury in December 2007, which fast came unravelled as the recession took hold in 2008.

Never mind. Small sees this as jolly good stuff for a story.
Read the rest of this entry »