Consumers will be feeling unsettled as the reliability of electricity supply is tested.

A cold snap and low wind generation meant the country faced a potential supply shortfall, and Transpower asked people to reduce electricity use between 7 and 9am.

Consumer Advocacy Council chair Deborah Hart says this kind of situation is not new, but the market model is obviously not working.

She said that we need to turn our attention from only building infrastructure to delivering energy efficiency and innovation.

LISTEN ABOVE

Consumers will be feeling unsettled as the reliability of electricity supply is tested. 
A cold snap and low wind generation meant the country faced a potential supply shortfall, and Transpower asked people to reduce electricity use between 7 and 9am. 
Consumer Advocacy Council chair Deborah Hart says this kind of situation is not new, but the market model is obviously not working. 
She said that we need to turn our attention from only building infrastructure to delivering energy efficiency and innovation. 
LISTEN ABOVE

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Kerre Woodham Mornings Podcast

Deborah Hart: Consumer Advocacy Council Chair on the impact of the strain on the power supply

Here’s how I would sum up the Government’s changes to the free speech rules for universities.

It wants more Posie Parkers and less posey political statements.

Which I’ve got no problem with - but I don’t think it should stop at universities. I think the Government also needs to look at other public entities, such as local councils, which actually seem to be making more posey political statements than universities.

Because, if the Government doesn’t want universities taking positions on things like the war in Gaza because - whatever position they take - won’t reflect the views of all staff and students, then the same could apply to local councils, couldn’t it?

If a council boycotts Israel, for example, there’s no way everyone who works for these councils or who pays rates to these councils will agree, is there?

Let me come back to that. But the gist of all this is that the Government wants two changes to the way universities deal with free speech.

For starters: It wants them to stop being so antsy about having guest speakers coming onto campus who might upset a few people with their views.

Which has seen some universities pull the plug on certain events. Massey University, for example, stopped Don Brash from giving a speech there once because of what one person described as his "separatist and supremacist rhetoric".

A more recent example is Victoria University cancelling a freedom of speech debate this year because of concerns it would turn into a cesspit of hate speech.

So the Government wants no more of that. Because it thinks universities are places where all sorts of ideas and thoughts should be shared and debated. And I agree with that.

So that’s what I mean when I say it wants more Posie Parker.

The other change it’s making to the regulations that universities operate under, is to stop them taking positions on matters that don’tdirectly relate to their core business of research and teaching.

Now this is not something that is going to impact academics who enjoy what’s known as academic freedom - which pretty much means they can think and say what they want. Although some academics have questioned that in recent years, saying that they don’t feel as free to think and say what they want as they used to.

But, essentially, what the Government wants to stop is universities - as institutions - taking a view or a stance on international issues, for example.

Some of our universities have been under pressure to condemn Israel for what’s going on in Gaza and the Occupied Territories. But, as far as I’m aware, none of them have given-in to that pressure.

The closest example I could find here in New Zealand is an announcement three months ago by Victoria University's fundraising arm - the Victoria University Foundation - that it would be getting rid of its Israeli government bonds and its shares in companies listed in Israel.

So maybe this is a pre-emptive move by the Government, as much as anything. And it says the reason it’s doing this, is that if a university takes a stand on something - it doesn’t reflect the views of all staff and students, and that is unfair.

So, if that’s the motivation, then I reckon the Government needs to come down just as hard on other public entities. Public entities which, at the moment, seem to be going harder on this thing than any of our universities.

And I’m thinking, specifically, about local councils around the country which have been more than happy to pile-in on Israel this year, with decisions to boycott companies which operate in Israeli settlements on Palestinian land.

Christchurch City Council has done it. Environment Canterbury regional council has done it. And Nelson City Council’s done it. They’re the ones I’m aware of. There might be others.

But, if we apply the argument the Government’s using to stop universities taking positions on global issues - because they won’t necessarily represent the views of all staff and students - then the same can be said of these local councils, can’t it?

In Nelson, for example, after the council there voted to go with a boycott - there were some pretty fired-up locals. The mayor Nick Smith, who voted against it, got a whole lot of abuse too.

And who says everyone working at these councils agrees with the position their employers have taken? They won’t. And who says everyone paying rates to these councils agrees with their anti-Israel positions? They don’t.

Which is why I think the Government should be telling councils not to take political positions on issues outside their core business, just like it's telling the universities.

<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">Here’s how I would sum up the Government’s changes to the free speech rules for universities.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">It wants more Posie Parkers and less posey political statements.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">Which I’ve got no problem with - but I don’t think it should stop at universities. I think the Government also needs to look at other public entities, such as local councils, which actually seem to be making more posey political statements than universities.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">Because, if the Government doesn’t want universities taking positions on things like the war in Gaza because - whatever position they take - won’t reflect the views of all staff and students, then the same could apply to local councils, couldn’t it?
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">If a council boycotts Israel, for example, there’s no way everyone who works for these councils or who pays rates to these councils will agree, is there?
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">Let me come back to that. But the gist of all this is that the Government wants two changes to the way universities deal with free speech.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">For starters: It wants them to stop being so antsy about having guest speakers coming onto campus who might upset a few people with their views.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">Which has seen some universities pull the plug on certain events. Massey University, for example, stopped Don Brash from giving a speech there once because of what one person described as his "separatist and supremacist rhetoric".
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">A more recent example is Victoria University cancelling a freedom of speech debate this year because of concerns it would turn into a cesspit of hate speech.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;"><span style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; background-position: 0px 100%; background-repeat: repeat-x; background-image: var(--urlContextualSpellingAndGrammarErrorV2,); border-bottom: 1px solid transparent;">So the Government wants no more of that. Because it thinks universities are places where all sorts of ideas and thoughts should be shared and debated. And I agree with that.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">So that’s what I mean when I say it wants more Posie Parker.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">The other change it’s making to the regulations that universities operate under, is to stop them taking positions on matters that don’tdirectly relate to their core business of research and teaching.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">Now this is not something that is going to impact academics who enjoy what’s known as academic freedom - which pretty much means they can think and say what they want. Although some academics have questioned that in recent years, saying that they don’t feel as free to think and say what they want as they used to.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;"><span style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; background-position: 0px 100%; background-repeat: repeat-x; background-image: var(--urlContextualSpellingAndGrammarErrorV2,); border-bottom: 1px solid transparent;">But, essentially, what the Government wants to stop is universities - as institutions - taking a view or a stance on international issues, for example.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">Some of our universities have been under pressure to condemn Israel for what’s going on in Gaza and the Occupied Territories. But, as far as I’m aware, none of them have given-in to that pressure.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">The closest example I could find here in New Zealand is an announcement three months ago by Victoria University's fundraising arm - the Victoria University Foundation - that it would be getting rid of its Israeli government bonds and its shares in companies listed in Israel.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">So maybe this is a pre-emptive move by the Government, as much as anything. And it says the reason it’s doing this, is that if a university takes a stand on something - it doesn’t reflect the views of all staff and students, and that is unfair.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">So, if that’s the motivation, then I reckon the Government needs to come down just as hard on other public entities. Public entities which, at the moment, seem to be going harder on this thing than any of our universities.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">And I’m thinking, specifically, about local councils around the country which have been more than happy to pile-in on Israel this year, with decisions to boycott companies which operate in Israeli settlements on Palestinian land.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">Christchurch City Council has done it. Environment Canterbury regional council has done it. And Nelson City Council’s done it. They’re the ones I’m aware of. There might be others.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">But, if we apply the argument the Government’s using to stop universities taking positions on global issues - because they won’t necessarily represent the views of all staff and students - then the same can be said of these local councils, can’t it?
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">In Nelson, for example, after the council there voted to go with a boycott - there were some pretty fired-up locals. The mayor Nick Smith, who voted against it, got a whole lot of abuse too.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">And who says everyone working at these councils agrees with the position their employers have taken? They won’t. And who says everyone paying rates to these councils agrees with their anti-Israel positions? They don’t.
<p style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 16px 0px; padding: 0px; user-select: text; overflow-wrap: break-word; white-space: pre-wrap; vertical-align: baseline; font-kerning: none; background-color: transparent; color: windowtext; text-align: left; text-indent: 0px;">Which is why I think the Government should be telling councils not to take political positions on issues outside their core business, just like it's telling the universities.

John MacDonald: Free speech rules shouldn't stop at universities

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/e4cd46de-6d3b-43c7-859b-b24c00153692/transcript

Some people think the Government’s offer of a $150,000 rapid payment to Lake Alice torture survivors is an insult, but I think it’s a mistake.   

Not because I don’t think compensation should be paid. It’s just that I don’t think the Government should be offering it right now for people who went to Lake Alice between 1972 and 1977 and went through electric shock treatment or had paraldehyde injections. And here’s why.  

Remember last month when the Prime Minister formally apologised to the victims of abuse in state and religious care?  

On the day that happened, some survivors of that terrible time in our country’s history weren’t happy that the Government didn’t say anything at the same time about redress or compensation.  

As Christopher Luxon explained it, the Government needed to take the time to make sure it got the compensation scheme right and wouldn’t be making any announcement until early next year.   

Which I thought was perfectly reasonable. I acknowledged at the time that it was probably easy for me to say that, given I hadn’t been through the living nightmare that those 200,000 people went through.  

But I genuinely believed that the Government was taking the right approach. I still do for the simple reason that compensating people for horrific abuse isn’t something that can be rushed. Because, whatever the Government decides to do, it will be setting a precedent.  

There will be more survivors coming forward - as they should. So, this abuse in care compensation scheme isn’t going to be a one-off. It’s going to be something that will determine the scale of government compensation for abuse ongoing.  

Which is why I think it’s making a mistake offering money to the Lake Alice survivors right now. Even though some compensation has already been paid to some and that this money specifically relates to the torture that was done to them.   

Because, just as some of them are saying the $150,000 is pitiful, there’ll be others who think it sounds alright, they’ll take the money and get on with their lives.   

People like Robyn Dandy who is in the news today saying that she’s going to take the rapid payment of $150,000 because it will mean she can buy a house bus and travel around the South Island with her pets.   

She’s saying today: "I'm happy. I'm glad it's going to come to an end now and we can just all relax and concentrate on the rest of our lives and a bit of happiness which I really believe we deserve now.  

"I just think $150,000, why fight it? That's a lot of money for us now. We're all elderly. I can have my dream.”  

So I imagine that she’ll be taking up the Government’s invitation to register for the payment this week. The money should be in her bank by March.  

Whereas another survivor also in the news today, Malcolm Richards, feels very differently.  

He says: “It’s pathetic. I’ve spent more than that fighting to this point.”  

He says the compensation guidelines for wrongful imprisonment say someone could receive up to $150,000 per year of wrongful imprisonment. And he thinks the Government should be offering Lake Alice survivors millions of dollars each.  

Now, of course, different people will feel differently about whatever compensation offer is made - but, in this case, I think we need to see it as something of a canary in the mine.   

The government Minister responsible, Erica Standford, says this is completely different and separate from the abuse in care compensation and most of the victims have received compensation but this is a new offer because the State has acknowledged that they were tortured. 

Nevertheless, I still think the Government is jumping the gun making this offer to Lake Alice victims before it’s said anything about compensation or redress for abuse in care victims.  

Because, while Robyn Dandy —who I mentioned earlier— might think that $150,000 is perfectly fine right now - what if the abuse in care survivors are offered more?  

What if the likes of the guy who thinks $150,000 is pitiful manages to, eventually, get himself a better deal from the Government?  

See what I mean? What’s being offered now might sound good, but she may feel differently down the track when she sees what other people start getting. And that’s why I think the Government is making a mistake doing what it’s doing.  

Some people think the Government’s offer of a $150,000 rapid payment to Lake Alice torture survivors is an insult, but I think it’s a mistake. &nbsp;&nbsp;
Not because I don’t think compensation should be paid. It’s just that I don’t think the Government should be offering it right now for people who went to Lake Alice between 1972 and 1977 and went through electric shock treatment or had paraldehyde injections. And here’s why. &nbsp;
Remember last month when the Prime Minister formally apologised to the victims of abuse in state and religious care? &nbsp;
On the day that happened, some survivors of that terrible time in our country’s history weren’t happy that the Government didn’t say anything at the same time about redress or compensation. &nbsp;
As Christopher Luxon explained it, the Government needed to take the time to make sure it got the compensation scheme right and wouldn’t be making any announcement until early next year. &nbsp;&nbsp;
Which I thought was perfectly reasonable. I acknowledged at the time that it was probably easy for me to say that, given I hadn’t been through the living nightmare that those 200,000 people went through. &nbsp;
But I genuinely believed that the Government was taking the right approach. I still do for the simple reason that compensating people for horrific abuse isn’t something that can be rushed. Because, whatever the Government decides to do, it will be setting a precedent. &nbsp;
There will be more survivors coming forward - as they should. So, this abuse in care compensation scheme isn’t going to be a one-off. It’s going to be something that will determine the scale of government compensation for abuse ongoing. &nbsp;
Which is why I think it’s making a mistake offering money to the Lake Alice survivors right now. Even though some compensation has already been paid to some and that this money specifically relates to the torture that was done to them. &nbsp;&nbsp;
Because, just as some of them are saying the $150,000 is pitiful, there’ll be others who think it sounds alright, they’ll take the money and get on with their lives. &nbsp;&nbsp;
People like Robyn Dandy who is in the news today saying that she’s going to take the rapid payment of $150,000 because it will mean she can buy a house bus and travel around the South Island with her pets. &nbsp;&nbsp;
She’s saying today: "I'm happy. I'm glad it's going to come to an end now and we can just all relax and concentrate on the rest of our lives and a bit of happiness which I really believe we deserve now. &nbsp;
"I just think $150,000, why fight it? That's a lot of money for us now. We're all elderly. I can have my dream.” &nbsp;
So I imagine that she’ll be taking up the Government’s invitation to register for the payment this week. The money should be in her bank by March. &nbsp;
Whereas another survivor also in the news today, Malcolm Richards, feels very differently. &nbsp;
He says: “It’s pathetic. I’ve spent more than that fighting to this point.” &nbsp;
He says the compensation guidelines for wrongful imprisonment say someone could receive up to $150,000 per year of wrongful imprisonment. And he thinks the Government should be offering Lake Alice survivors millions of dollars each. &nbsp;
Now, of course, different people will feel differently about whatever compensation offer is made - but, in this case, I think we need to see it as something of a canary in the mine. &nbsp;&nbsp;
The government Minister responsible, Erica Standford, says this is completely different and separate from the abuse in care compensation and most of the victims have received compensation but this is a new offer because the State has acknowledged that they were tortured.&nbsp;
Nevertheless, I still think the Government is jumping the gun making this offer to Lake Alice victims before it’s said anything about compensation or redress for abuse in care victims. &nbsp;
Because, while Robyn Dandy —who I mentioned earlier— might think that $150,000 is perfectly fine right now - what if the abuse in care survivors are offered more? &nbsp;
What if the likes of the guy who thinks $150,000 is pitiful manages to, eventually, get himself a better deal from the Government? &nbsp;
See what I mean? What’s being offered now might sound good, but she may feel differently down the track when she sees what other people start getting. And that’s why I think the Government is making a mistake doing what it’s doing. &nbsp;

John MacDonald: Timing of Lake Alice compo offer is wrong

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/9de8a86e-a5f3-434f-ae8d-b24b0003f14f/transcript

If New Zealand was a company staring down the barrel of running at a loss for at least the next five years and finding itself needing to borrow $20 billion more than it thought it did just six months ago, it would be lights out, wouldn’t it?  

And no amount of creative accounting could change that picture.  

Essentially, that’s the state we find ourselves in after yesterday’s fiscal update from the Government. With pretty much the only good news coming out of it being in the housing market, and an expectation that it is going to come back to life the year after next.  

Unfortunately, I think Dunedin can kiss goodbye to winning the fight over cutbacks to the new hospital. I think all the noise about the IT cutbacks at Health NZ will fall on deaf ears in the Beehive too.  

But I also think that the Government is doing the right thing holding its nerve and I think doing a Ruth Richardson and going harder and faster on the spending cuts would be a disaster.  

I was listening to independent tax expert Geoff Nightingale on Newstalk ZB this morning and one of the things he mentioned was how much of a role welfare costs are playing in the Government’s overall financial position.  

Which is why I mention Ruth Richardson. It was 1991 and Ruth Richardson was Minister of Finance and delivered what is forever known as the “Mother of all Budgets”. Because it was brutal - especially for beneficiaries and families.  

Unemployed people had their dole cut by $14 a week. Anyone on the sickness benefit ended up $25 worse off each week - in fact it was nearly halved, going from $52-a-week to $27-a-week.  

Universal payments for family benefits were completely abolished. She also brought-in more user-pays in health and education. Remember that was something Labour’s Roger Douglas stated in the 80s but Ruth Richardson took it further.  

And, 30 years later, Labour’s Grant Robertson delivered a budget that he said was increasing benefit payments to “right the wrongs” of Ruth Richardson’s 1991 budget.    

Nevertheless, the Finance Minister is saying today that, despite the way things are, we’re not going to see the Government going harder and faster on the spending cuts because it has already made spending commitments to the public.  

But she says re-prioritising spending will happen.  

So it seems that Nicola Willis isn’t going to channel her inner Ruth Richardson and deliver the Mother of all Budgets Volume 2. Which I think is wise.  

Not that I’m saying that the Government isn’t to blame for any of the shambles unveiled in yesterday’s update. As you’d expect, it’s pointing the finger at Labour - accusing it of economic vandalism, and how this just shows how much of a fix-it job it has on its hands.  

And don’t get me started on the creative accounting we saw yesterday, which Treasury was against the Government doing in the first place, and which some economists think is a justifiable thing to do but still kind of cheeky.  

I’m not going to get bogged down in numbers, but I can’t resist pointing out that part of the problem is the Government’s revenue from taxation being down.  

Over four years it’s going to earn $13 billion less. The cost of this year’s income tax changes is going to be $14.5 billion over five years. Just saying. But the tax cuts horse has bolted and there’s no going back from there.   

The other reason for the tax take being down is that businesses aren’t earning so much - which, of course, means they’re paying less tax too.  

And that’s going to be a key thing for the Government —and Nicola Willis said so this morning— it needs to do what it can to stimulate economic growth. It will say that that’s what things like the fast track legislation will do, all of that stuff.  

But it can't fix things with legislation alone, the Government needs to keep investing. Which is why it would be a terrible mistake for it to go all knee-jerk on it.  

If New Zealand was a company staring down the barrel of running at a loss for at least the next five years and finding itself needing to borrow $20 billion more than it thought it did just six months ago, it would be lights out, wouldn’t it? &nbsp;
And no amount of creative accounting could change that picture. &nbsp;
Essentially, that’s the state we find ourselves in after yesterday’s fiscal update from the Government. With pretty much the only good news coming out of it being in the housing market, and an expectation that it is going to come back to life the year after next. &nbsp;
Unfortunately, I think Dunedin can kiss goodbye to winning the fight over cutbacks to the new hospital. I think all the noise about the IT cutbacks at Health NZ will fall on deaf ears in the Beehive too. &nbsp;
But I also think that the Government is doing the right thing holding its nerve and I think doing a Ruth Richardson and going harder and faster on the spending cuts would be a disaster. &nbsp;
I was listening to independent tax expert Geoff Nightingale on Newstalk ZB this morning and one of the things he mentioned was how much of a role welfare costs are playing in the Government’s overall financial position. &nbsp;
Which is why I mention Ruth Richardson. It was 1991 and Ruth Richardson was Minister of Finance and delivered what is forever known as the “Mother of all Budgets”. Because it was brutal - especially for beneficiaries and families. &nbsp;
Unemployed people had their dole cut by $14 a week. Anyone on the sickness benefit ended up $25 worse off each week - in fact it was nearly halved, going from $52-a-week to $27-a-week. &nbsp;
Universal payments for family benefits were completely abolished. She also brought-in more user-pays in health and education. Remember that was something Labour’s Roger Douglas stated in the 80s but Ruth Richardson took it further. &nbsp;
And, 30 years later, Labour’s Grant Robertson delivered a budget that he said was increasing benefit payments to “right the wrongs” of Ruth Richardson’s 1991 budget. &nbsp; &nbsp;
Nevertheless, the Finance Minister is saying today that, despite the way things are, we’re not going to see the Government going harder and faster on the spending cuts because it has already made spending commitments to the public. &nbsp;
But she says re-prioritising spending will happen. &nbsp;
So it seems that Nicola Willis isn’t going to channel her inner Ruth Richardson and deliver the Mother of all Budgets Volume 2. Which I think is wise. &nbsp;
Not that I’m saying that the Government isn’t to blame for any of the shambles unveiled in yesterday’s update. As you’d expect, it’s pointing the finger at Labour - accusing it of economic vandalism, and how this just shows how much of a fix-it job it has on its hands. &nbsp;
And don’t get me started on the creative accounting we saw yesterday, which Treasury was against the Government doing in the first place, and which some economists think is a justifiable thing to do but still kind of cheeky. &nbsp;
I’m not going to get bogged down in numbers, but I can’t resist pointing out that part of the problem is the Government’s revenue from taxation being down. &nbsp;
Over four years it’s going to earn $13 billion less. The cost of this year’s income tax changes is going to be $14.5 billion over five years. Just saying. But the tax cuts horse has bolted and there’s no going back from there. &nbsp;&nbsp;
The other reason for the tax take being down is that businesses aren’t earning so much - which, of course, means they’re paying less tax too. &nbsp;
And that’s going to be a key thing for the Government —and Nicola Willis said so this morning— it needs to do what it can to stimulate economic growth. It will say that that’s what things like the fast track legislation will do, all of that stuff. &nbsp;
But it can't fix things with legislation alone, the Government needs to keep investing. Which is why it would be a terrible mistake for it to go all knee-jerk on it. &nbsp;

John MacDonald: Kneejerk reactions won't fix the fiscals

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