Treasury Secretary Gabriel Makhlouf says he is “disappointed” with the Housing Minister’s comments that his officials are “kids… disconnected from reality”

Gabriel Makhlouf

Treasury’s boss says he is “disappointed” by Housing Minister Phil Twyford’s comments that his officials are “kids… disconnected from reality” and is sticking by Treasury’s KiwiBuild forecast.

Speaking to Interest.co.nz, Treasury Secretary Gabriel Makhlouf says he is “very confident in the professional judgment we exercised and of the numbers we published.”

Last week, Twyford took issue with Treasury’s KiwiBuild forecasts, as he said they failed to take into account the fact that the KiwiBuild capital fund is recycled consistently over and over.

He prefers the Ministry of Business, Innovation and Employment (MBIE) advice, which shows much more money would be spent on residential property than Treasury’s forecasts.

Both Prime Minister Jacinda Ardern and Finance Minister Grant Robertson have sided with Twyford.

But Makhlouf is sticking by his numbers.

“I observe we are the best, if not one of the best forecasters of the New Zealand economy, we have a very good track record.”

Robertson was singing a similar tune on Friday.

“At the end of the day, we stand by the information we publish – we are required to, by law, to use our best professional judgment,” he says.

On Monday, Twyford was pulled into line by Ardern who said calling out Treasury officials as “kids” was going too far.

In the House on Tuesday, Twyford said he accepted the Prime Minister’s comments, but stopped short of an apology.

“I personally signed the economic and fiscal update,” Makhlouf says.

“It’s been a while since someone has called me a kid so I don’t know whether to take it as a compliment.

“But at the end of the day, we do a professional job and the people who turn up here every day to work for the Treasury are looking to improve the living standards of New Zealanders.”

This is not the first time a Government Minister has called out Treasury during Makhlouf’s tenure in the top job.

In 2016, then Prime Minister John Key called Treasury’s long-term debt forecasts “a load of nonsense.”

National’s Gerry Brownlee has also had multiple run-ins with the department, once calling a report critical of the post-Canterbury Earthquake recovery effort “the usual sort of rubbish from them.”

“It would be fantastic if people always celebrated the Treasury’s products,” Makhlouf says when asked if he ever gets frustrated by these sorts of comments from Ministers.

“If people want to take a different view, they're entitled to do so.

“But sometimes people, for a variety of reasons, are unhappy with them. We’re just professionals.”

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32 Comments

The adult in the room.

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These politicians should stop embarrassing themselves and their party by picking fights with state-owned enterprise management and public sector officials. Ministers should know better than to make personal attacks on professionals doing their job. If you don't like the financial models, question the assumptions not the credibility of the modellers.
A politician in high office making unqualified personal comments on those who disagree with them and classifying every piece of information they dislike as fake news - looks like Phil had a Trump moment here!

More than that, it attacks our international credibility as a nation of good democratic governance. The other great critic in this particular theatre was the Right Honourable Gerald Brownlee with his rant against Treasury’s prediction that EQC’s forecast of potential liabilities ex the Canterbury EQ’s were way understated. Believe Treasury have subsequently, been more than vindicated. Mind you all is not lost, I did agree with Mr Brownlee when he called the previous mayor of Christchurch a clown.

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If the government want to show Treasuries forecast flawed why don't they start with getting some shovels in the ground and building some houses? At this point it's all just speculation.

I agree wholeheartedly. No doubt there were plenty of naysayers in previous times when governments undertook big challenges - whether the last times NZ addressed a housing shortage to the ultimate benefit of today's homeowners, or a more extreme and much less likely stretch goal such as JFK's to go to the moon within the decade.

They should not bother arguing with Treasury, but should set out with concerted effort to prove them wrong.

They would do it if they were in fact capable of it.

I don't think it's a simple as them 'proving Treasury wrong' Becuase if they get going with this with the end result being they deliver more than what Treasury forecast, then it's more likely because something fundamentally changes in the 'how to' and the assumptions Treasury currently hold to be most likely become null and void. In such a case, the Treasury model isn't wrong, it just became obsolete.

That's the key thing, really. Putting significant effort into these things might involve breaking some of the easy assumptions - e.g. addressing the RUB, the monopolistic building supply situation, letting in too many unskilled migrants and not actively inviting builders a la Christchurch rebuild.

Or just magic or "inspirational" slogans ( let's do it ) - this is as far as Lab planning got to.

Oh come on, everyone knows that PR/propaganda 101 is "don't complicate the message". All political slogans are equally shallow.

I am not criticizing the slogan - it is not much worse than any other , as you say . The sad thing is all Labor got is that slogan - their thinking has not really advanced past that level.

Twyford is proving daily that he has no grasp of any numbers or anything to do with housing.
From one thing to another and none of it makes any sense.
Could someone please advise us as to why Mr Twyford got the housing portfolio as he has not shown that he is up to the role, flipping from one thing to another ?

Bring back Nick Smith.

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The real problem is the state paying children to have more children. This will eventually sink our society and our culture, right across the West. As long as we continue to pay dumb people to have more dumb people then we get to a state of too many poor people living here. Ring any bells? This is actually anti-Darwinism and is headed in the wrong direction for life. Until we have enough balls to sit down and discuss this issue sensibly - as adults - then we're all headed for the dustbin. Sooner or later? My pick is sooner.

The real problem is the state paying children to have more children. This will eventually sink our society and our culture, right across the West. As long as we continue to pay dumb people to have more dumb people then we get to a state of too many poor people living here.

Actually, look at how we're spending most of our welfare money, and the sorts of bills that are bankrupting places around the world. It's the money being handed out to the old, the money that they've mandated needs to be taken from the young and given to the old - regardless of need.

It's this that constitutes over 60% of our social welfare benefit budget - far less goes to poor people with kids.

We're actually causing our own birth rates to plunge by driving down wages and driving up costs for younger folk, and instead of making the equation better for them we're too often just deciding to import cheaper folk from less developed countries to replace this birth rate...so we can keep paying the expensive pension bill. And to attract them we're offering social benefits...e.g. until very recently, the chance to import their elderly parents and various other family members and have them looked after in various expensive ways.

Not a great equation, I agree, but we just need to be aware of where we are actually redistributing most of our benefit money.

This is spot on. A political grenade that no one will touch due to the nature of voting patterns (the people receiving these benefits are the people who actually vote). Political suicide.

I think I might take this chance to completely agree with Rick for a change. You've really nailed it with that analysis, pensions etc are a big problem that no one seems to talk about. I'm 30 and I've resigned myself to accepting I won't get a pension when I'm old but I will be paying for others most of my working life. The only politician I found actually addressing this leading up to the last election was David Semour so unfortunately I think we will be stuck with this issue for quite a while longer.

Rick you're not wrong but the candle is being burnt at several ends in NZ.
NZ pays poor dysfunctional, low IQ families to breed
NZ imports an underclass of unskilled labour which does the same as our local drop kicks. A lot of it from India.
at the same time as importing an overclass of people from China.

Crime skyrockets when you've got a bunch of poor single males in close proximity to wealthy people. We've only just begun to see the strain of these trends on our roads, justice system, housing etc.

Just take a look at the crime section of the news and you'll see who is doing all the cirme. Take a look at who is taking up 50% of the prison population.

Cash for kids is not only a waste of money, but it's paying to create problems. How stupid is that. My own labour is going towards creating a dysgenic population that will want more money and commit more crime.

For example see one Cherry Taingahue

A New Zealand mother of four is facing deportation from Australia after she pleaded guilty to picking up a woman and dropping her head-first on to a concrete floor at a Gold Coast bar.
The attack has left the young woman with damage to hearing in her right ear and suffering headaches three to four times a week, for which she undergoes regular acupuncture treatment.

She had a bleed between the brain and skull and bruising on her brain.

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12057590

The warrior gene is real.

Want to see entitlement? Join the "WINZ Advocacy and Advice" Facebook page.

One lady was getting upset because Winz wouldn't give her a "Winter Clothing allowance". A quick stalk of her Facebook page, 1 week ago she was showing off Tattoos her and her girlfriend recently had done.

*suffering headaches three to four times a week, for which she undergoes regular acupuncture treatment.*

Acupuncture? how about a real medical treatment, like homeopathy ;)

Have some empathy. Sure homeopathy is a a scam but this is really not funny. The victim did not choose to put themselves in this situation. There is probably not much medicine can do for such a serious injury and chances are the victim is not thinking straight after being thrown head first onto a concrete floor.

You try having a headache all day from some piece of human scum beating you up and see if you don't resort to any desperate measures.

I don't lack sympathy for the victim, but I hate the thought that this fake treatement industry is being funding by taxpayers/insurance premiums. I'd turn to real medicine. Paracetamol, Ibuprofen etc. and try multiple real doctors till I got one that would investigate and find a solution to the real problem.

where did they pluck the 10,000 from? what analysis? I mean why not 8k or 12k or for that matter 40k or 60k to really have houses popping up everywhere as long as its not owned by investors.

Seriously, can anyone trust Mr Twyford who is certainly living up to his middle name!
He used his phone on a plane when it is illegal to do so and he is the Transport Minister!!!!!
Offered his resignation but has had his civil aviation part of the portfolio transferred to Ms. Genter!
He should also have the Housing Portfolio transferred to someone else because he hasn’t got a damned clue about housing!!

This Minister is cracking under pressure and it shows, but he has an amazing thick skin to receive all these blows and tell offs ... it is a matter of time for the final knock down.

I reckon his stance with treasury was because they are reputable authority that could not be easily dismissed - however it seems that PT is not the only trouble maker in the House ...LoL, a complete circus

Didn’t twatford criticise Brownlee when the boot was on the other foot? Karma is a she devil :)

Minister Twyford clearly has too many balls in the air - he needs to just focus on one and get it right.

Housing is a balls up; Justice he just wants to let criminals out (wtf?!); transport, well, he kinda deliberately quit that one.

People in glass houses...

Frankly he aught to be looking to utilize his public service professionals not alienate them. Lets face it, they've been doing this stuff far longer than he has, and are far more specialized in their individual areas.

The treasury folk I have met are true geeks - they live/breath/love their work - I'd be very surprised to find out they'd made an error in calculation or similar; Work with them Phil - you might learn something.

It all adds up to the fact that the present Government is struggling.

When Ministers can't keep their cool and be rational, one knows there's something wrong.

TTP

Its very simple. If the government think the numbers are materially wrong, then put it on the public record. Then when actual data comes through supporting there assertions then ask Treasury for a "please explain". Otherwise one would be wise to remain quiet. Unless of course your name is Twatford.

Phil Twyford is sounding like a third term minister, rather than someone who has been in the job 8 months. Pride comes before a fall...

Just drive thru Glen Innes and see what progress has been made on sections already owned by Tamaki Redevelopment.

I’m guessing maybe two years just to get foundations and services in and they are making little progress with the onset of winter on many of their sites.

Kiwibuild has zero as in zero probabity of meeting their numbers this year or in the next three and is going to bite their ass come 2020.