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Have your say: English says it's time to withdraw stimulus

Posted in News

In an indication of what might come in the 2010 budget, Finance Minister Bill English yesterday said the government would be withdrawing stimulus and spending in 2010, the Associated Press reported on Stuff.

"We are pulling back from pumping money in," he said. "The concern is that the United States needs to keep stimulating their economy because it's in a pretty bad shape. We are in a better shape, we can afford to pull back and get a more balanced recovery so that the private sector can get up and running, providing new jobs."

Your view? How tough will Budget 2010 have to be?

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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32 Comments

I think we are going

I think we are going to have to get rid of two bureaucrats out of every three (the the Government down to only five ministries, not over forty - given Switzerland on twice the pop. has only seven), and each of the political parties only send two representatives to meet in the debating chamber, everything else can be done by online conference.

Bulk fund those MP's left who have to travel. No ongoing benefits once they leave parliament. MP"s super plan scrapped, their entitlement restricted to National Superannuation.

Top personal tax rate down to 25%. Company and Trustee tax rates down to 25%, with commitment to bring all income tax rates down below 20% within five years.

GST down to 5%. All taxes lifted off energy: including fuel. Taxes off alcohol and tobacco.

Age of Superannuantion up to seventy.

Working for Families scrapped in its entirety.

Pre-paid parental leave scrapped.

Eligibility for DPB to be restricted to only children not born while on DPB, and only until the child is five years of age (as in most Western democracies), not eighteen years old, and only to mothers over twenty years of age. A commitment to basically phasing out this benefit.

Ask every sickness beneficiary when they were actually last sick. If they can bend over and touch their toes, then they should be moved back to the unemployment benefit.

Strengthen requirement for unemployed to look for work while taking the dole.

Reserve Bank to go and a return to 'sound money'.

A salary cap on all State sector workers at $120,000, and CEO's at $200,000.

That's a start ...

No more interest-free loans for

No more interest-free loans for anyone . The previous Gumnut claimed the $ 10 billion ( now $ 12 b. ) student debt as an asset on their books . Another indicator of Labour incompetence . As if all of these monies will be returned to the treasury one day . Sorry tax-payers , of NZ , but your dough has gone .........Milk some more cows , or tourists , quick !!!!!!

@ Mark Some good ideas.

@ Mark
Some good ideas. Re. the 25% tax rate, I agree but would suggest that this is the flat rate, with a tax exemption for the first say $10k. This will provide reflief to lower income earners. I would also suggest making Kiwisaver compulsory at say 4% (both employer and employee). This would be a similar tax system to Singapore which is very successful. It generates national savings (a major problem for NZ). It also encourages companies to invest in capital and productivity (as they do not need to pay employer contributions on capital).
Re. the GST, I think we would need to keep GST at least at its current levels in the short term to allow for the income tax reductions, but should have the target of reducing to 10% (consistent with Australia).
Re. the unemployment benefit. This should be abolished in favour of a short term transitional package (9-12 mths) which provides training to allow the person to move into new employment. After that, the allowance should stop.

What stimulus? they only just

What stimulus? they only just started the cycleway yesterday...

Exactly dogma. The "stimulus" (or

Exactly dogma. The "stimulus" (or New government spending) was primarily on roads and broadband - with the token cycleway and home insulation scheme thrown in for 'fool the masses' purposes. They will not cut out the roading and broadband rollout programs. I can guarantee it.

What they intend to withdraw from is social spending - education and health.

Pure spin - setting us up for further privatisation of those two sectors.

I hope this is not

I hope this is not just political spin....that's like the most comonsensical thing that came out of his mouth. We should stop building "cycleway to nowhere" with nobody to use it.

Stop throwing money into everything that moves and let the market takes care of itself.

"....we can afford to

"....we can afford to pull back and get a more balanced recovery so that the private sector can get up and running, providing new jobs."

This implies that our esteemed finance minister believes that public sector money is crowding out legitimate private enterprises. Anyone seen any evidence of labour or resource shortages so far? No? Rather confirms the "privatise and damn the torpedoes" thesis I think.

Mark H,.... Some really good

Mark H,....

Some really good ideas.... especially about Govt and state sector. ( Love the idea of a salary cap )

Agree with thoughts on DPB.... no DPB for Kids born while on DPB... ( not sure about age it should stop at ).

I'm ok with GST....
I'm ok with petrol tax
I'm ok with alcohol and tobacco tax.

I think PAYE is unfair and unjust ... so the lower the better.. ( prefer to have first $20,000 of income, tax free... for a start)

Some really solid, realistic, good ideas Mark H.

If English implemented only a couple of them ... it would be great.

AND about the emissions trading scheme.... Why don't we just invest money in R&D..and actually reduce emissions.. ( as well as creating a new export industry)
What is the point of simply paying an emissions tax..???? Does that actually reduce emissions..?? ( excuse my ingnorance, I don't know much about this)
NZ can't really afford to pay billions in Carbon taxes... If we can do our own thing , and reduce emissions...why do we need to be part of a global scheme..??

roelof asks, <i>Why don’t we

roelof asks, Why don't we just invest money in R&D....

Because this government took the Labour proposed tax incentives off R&D expenditure and chose to invest the existing tax collected from those potential productivity gains into more roads.

They are 'betting' on a different horse. Apparently, traffic congestion in Auckland is a massive brake on GDP growth.

No more 900 a week

No more 900 a week to live in your own house, and trips to Paris and Hawai with partners?

@Mark Hubbard thanks for your

@Mark Hubbard

thanks for your great ideas, would agree with all of them 100%.....problem is just, how would our government pay for the tremendous debt it has created over the years??????

It is strange that the

It is strange that the People blogging on this site have afar better idea than the POLLIES and Banking manipulators as to what is needed. Taking control of the OVERHEADS...is the PROBLEM.

But then it is not in their vested interests...EH.

We do need less GOVERNMENT and make work schemes.

But we also need a NEW political party with RESOLVE to make these CHANGES, I believe.

The TAIL has been WAGGING the dog for way too long....and the dog has fleas.

Change has been the theme of all my blogs, trying to point out the OBVIOUS contradictions in the POLLIES and Civil Serpents, Snouts in Trough attitudes, as opposed to the needs of the COUNTRY.

Was listening to some late night talk back and there is a lot of ground swell opinion on the need for CHANGE with Government thinking. (OR NOT THINKING...to be precise).

One question MARK...why taxes OFF alcohol & tobacco.? We would have a lot more room in the hospitals, if we doubled it.

I started making a list of changes too, that I thought were urgently needed and kept writing for hours and the list was no where near EXHAUSTIVE.

Where did we as a NATION get so twisted and warped for so long.

However, unlike Mark....I am not willing to publish it for debate, unless we can get some serious people to start another COMMON SENSE political party first, with centralised, informed and altruistic intent.

I certainly do not want to join ANY of the SNOUTS in the TROUGH parties that currently miss-manage New Zealand., to OUR detriment.

We need NEW ZEAL, not more of the old cover up the rorts, ponzi schemes and a patch up the idiot stuff mentality we have to endure today.

Two WONGS do not make a right as one individual so named who bloggs on here SUGGESTS.

And was there not another blatant individual so named who had their hand in the TILL recently....so two Wongs do not make a right.

I am not racist, just use these whimsies as CANNON FODDER for CHANGE.

I can recognise those with their hands in the till, whatever their racial persuasion.

I do not give quarter to any corrupt individual, or PARTY, maori, pakeha, asian, labour, national, green, or other...wise.

There is no room for CORRUPTION of thought, ACT or deed from any of the races that should be involved.

That mentality has already existed prior to LABOUR/NATIONAL and is PERPETUATED by those existing PARTIES....and it is mostly SNORTING and EXTASY parties.... in power today.

Each and everyone of them has way too much BAGGAGE and no SHAME... to make the CHANGES required and make them urgently.

I am not going to debate every item suggested with some of the misguided and corrupt individuals who haunt these blogs and allow the POLLIES and those Corrupt individuals with vested interests to KNOW what is in STORE for them.

As you can see from my question to MARK, I may have a different point of view on some things, but basically I can agree on many. It is the WHY, not the OPPOSITION to CHANGE, I am intrigued by.

There have been suggestions of meetings....Well now is the HOUR guys.

Then how to sell those ideas to the CITIZENS......but the PLANNING really comes first as I was always wont to do, when preparing a DISASTER RECOVERY or BUSINESS CONTINUANCE plan.

It would be good to offer the COUNTRY a party that gave a good choice for CHANGE that will actually benefit the whole of New ZEALAND, not just SUM....money-tarily.........and yes I can spell.

The Disaster has already hit the WORLD, because of very poor planning and greed by the vested interests of FINANCE and POLITICS.

The individuals involved we all know who they are....in each and every existing PARTY it seems here in NZ.

The task ahead is now is Business CONTINUANCE...

Well my simple question is....

Would you want more of the same DISASTER, or the opportunity to PLAN a better future for all New Zealanders and their CHILDREN, not just PAY into the same old SLOT MACHINE and pray your DESTINY is a win.

I cannot resist a dig at the trough. It is there for all to see.

Let us do something about it.

MARK.. my WORDS, ......KATE, RODGER, ALEX, ANDREWs, IAIN, W.KUNZ, BERNARD, WE ARE STUFFED, FROM THE SIDELINES, et.al....of a like mind for CHANGE.

We may not always agree, except on that one thing.

There are so many frustrated people who all want that same very KEY thing...

HONE-ST.....CHANGE.

FAIR PLAY and a LEVEL PLAYING.. FIELD....(TITO), with nowhere to hide.

JEEZ ...there are so many corrupt in POWER...and only one in JAIL....I can NAME.

I would have thought those

I would have thought those ideas are consistent with Act Party policy, if not Libertarianz. Between them, did they break 2% of the vote at the last election?

We do need to bring government spending down and reduce the tax burden, but we cannot throw the baby out with the bathwater. If NZ ends up with no safety net for those left at the bottom, it will not be a country worth living in.

Does that mean construction has

Does that mean construction has stopped on the cycle path?

MARK HUBBARD FOR PM!!! Seriously

MARK HUBBARD FOR PM!!! Seriously Mark, you're bang on the money. I pretty much agree with every single one of your proposals.

Mark H, congrats. The above

Mark H, congrats. The above proposals are miles away from a voluntary tax regime and a totally minarchist state. These are potentially do-able alternatives given the ideological 'big bang' is unlikely to get much traction. Don't take offense, but I think your proposals have a certain incrementalist pragmatism and social responsibility about them.

Really Veedub? I guess you

Really Veedub? I guess you will be able to buy your house in Wellington, it will be a ghost town.

<b>Kate</b> that is not the

Kate that is not the official Libz budget, that will be released next year when English releases his. But yes, Libz do not pretend we can go from Nanny State to minarchy on the day after an election. It took about four generations to get to Nanny State, probably a couple more to remove Her ... the rationale being simply that every move would be to pare back the State, not increase it.

I support Mark's proposal mainly

I support Mark's proposal mainly in the WFF and beneficiaries arena. And in particular the DPB - it shouldn't be given for subsequent children had while the DPB is being claimed - that's crazy!

It is a bloody difficult

It is a bloody difficult balance trying not to encourage the having of children as a route to an ongoing benefit, whilst always recognising that the baby didn't exactly ask to be born into that situation but should still be given a chance in life.

We can't just look at these issues from the perspective of the irresponsible parent, there is also a helpless dependent in the picture.

In the long term, the only solution to welfare dependancy must be to break the cycle somehow. My view is intensive resources spent on the next generation in education, healthcare and other related areas is our only chance to lift the overall participation rates of those currently stuck at the bottom of the heap.

<i>My view is intensive resources

My view is intensive resources spent on the next generation in education, healthcare and other related areas is our only chance to lift the overall participation rates of those currently stuck at the bottom of the heap.

And that was just why the Welfare State was designed by Savage how many tens of years ago now? And what were the last Labour government doing for their nine years?

The Welfare State has only proven proficient in creating 'the bottom of the heap' the Welfare State was set up to rise up, in their hundreds of thousands now, with no seeming way to break the stranglehold short of bankruptcy of the nation and violence.

Altruism has turned into it's ugly twin. The law of unintended consequences ...

I don't think the welfare

I don't think the welfare state 'creates' a bottom of the heap. I have no doubt whatsoever that where there is a complete lack of state support, there is also poverty and a lack of opportunity for those who get left behind.

You may be able to argue that it does nothing to solve it (or even that it perpetuates it - neither of which I believe), but that is not the same.

I'm not arguing that our current welfare policies are working, just that we can't do nothing and leave it to a mythical market.

A mother has three children

A mother has three children to three different fathers, all born on the DPB. All these children have had the disadvantages of a fatherless upbringing, plus seeing their mother able to live on the DPB, not having to go to work. The children grow up as best as the mother can provide for them, she's a good woman, but they are angry, have many unresolvable issues concerning their fathers, have no work ethic (where was this to come from(?)) and are maladjusted as individuals, this leading to truancy and anti-social behavior. At sixteen the oldest, a girl, who has been hanging out with her peers, from similar backgrounds, becomes pregnant. She chooses to keep the baby, and go on the DPB, her boyfriend splits ...

What created these individuals? What is perpetrating this system?

Your alternative is to take

Your alternative is to take away the only means the mother has of putting food on the table. This is the way in other countries, though funnily (or not) those same countries (e.g., India) have booming child slavery and prostitution (sex slavery) industries. Trading in children is widely considered to be the world's third most profitable industry after weapons and drug trading.

I agree we need to work on finding a better way to solve the problem (by offering the daughter a better alternative and somehow igniting the desire to take it), but just taking away all support it aint.

The solution is not to

The solution is not to create the incentive to have the child with no means to bring it up adequately. The solution to the child slavery issue is to pull societies out of subsistance living, and free markets have been proven the only economic system capable of doing just that.

Of course, the measures the world is taking to combat AGW are precisely the measures to ensure these subsistence societies will never be able to get cheap power, thus will doom them forever to subsistence. Pretty sick when you consider none of the measures will solve an AGW, (even if you believe in it, and there is a credible body of science to disprove it).

But now full circle. I'm off this thread also.

Put the babies in the

Put the babies in the wheelibin! The lazy mother can get a job and work! or get sterilised.

Some day one of those

Some day one of those DPB kids will become a bloody good doctor and be there when Mark arrives DOA but being a highly skilled cardiologist he manages to revive the old coot and send him back into the workforce to pay some more taxes.

I do not believe I

I do not believe I am exaggerating when I say New Zealand runs the real risk descending into an economic armageddon. Huge tax take, swollen public sector, fewer wage earners, increased beneficiaries, aged and 'entitlements'.
The status quo is unthinkable, as is tinkering around the edges, as proposed.
Furthermore, unbelievably, our finance minister has signaled his intention to use inflation as a means of financing our increasing debt burden over the longer term.

My kids cannot be expected to hang around and pay for this mess. Nor do I expect yours to.
However, I am passionate - even patriotic - about New Zealand, and mourn every day we squander.

The answer to poverty certainly isn't more poverty - the path down which we are heading.

Let us just imagine, wildest dreams, that we were able to realise the concepts suggested by Mr Hubbard here.
We have the opportunity to become a genuinely prosperous nation. "The Switzerland of the Pacific."
We have abdicated far too many of our responsibilities (and money) to the Government.
The government cannot make us wealthy. They sure can make us poor.
Reduced tax means potentially more money for investment. Money is an incentive for investment, probably the main one.

All that I am are asking for is the opportunity to choose what state services I wish to access & pay for. Some means to 'untick the boxes', say for example health or education. it is my opinion that state provided services are grossly inefficient.
He is not suggesting an utopia. Clearly there is no such thing.
What he is suggesting is not unrealistic.

What he is suggesting is absolutely essential, and must be done forthwith.

Mark H and Sam_M -

Mark H and Sam_M - this retired family court judge has the best answer I've seen;

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=104...

He's been saying it for years - so why can't our politicians get their act together?

Freedom To Choose: http://miltonfriedman.blogspot.com/

Kate, government kind &amp; caring?

Kate, government kind & caring? http://lindsaymitchell.blogspot.com/
I do not expect government help for my family. I want them to leave me alone.

Gosh, so many libertarianz. So little action.

I think New Zealand is

I think New Zealand is in a perfect position to implement many of the libertarian ideas suggested by Mark Hubbard.

We are a small nation, we have a relatively open market policy. Not too many ties to international treaties that hamstring us.

I think if there is one nation in the world capable to show the way it is New Zealand. It requires guts and termination because the reduced welfare will be like cold turkey for a drug addict. I am convinced that in the end it will all be worth it as it will only take a few years before the dramatic benefits become visible.

And hopefully, other nations will follow suit and with that we might just safe the western capitalist system.