Cam Slater: Robbo Proves Winston Was Right

Remember 28 days ago when Winston Peters claimed that there was a $20 billion hole in Government accounts and that public sector bosses were being called in for serious and secret talks about how to save money in their departments?

Former Deputy Prime Minister Winston Peters has alleged there is a $20 billion hole in the Government’s revenue as a result of the weakening economy.

Finance Minister Grant Robertson’s office said the statement was untrue. He later said in the House that “we have been driving savings in all budgets”.

“Ongoing discussions with the public sector are an integral part of being the Minister of Finance,” Robertson said.

In a press statement, Peters alleged public service chief executives had been called in by Public Service Commissioner Peter Hughes on Wednesday to “find and claw back cuts of 10 per cent of core Crown spending to the Consolidated Fund”.

A deficit of $20b is almost implausibly large. The Covid-19 deficit in 2019/20 was $23b, and the current deficit is forecast to be just $7b this year, although it is set to be about $18.2b over the next three years. The “hole” if there is one could an accumulation of deficits over multiple years. [sic]

NZ Herald

Winston was right. Not only about the $20 billion hole, which actually turned out to be $35 billion.

Westpac economists believe this will mean that instead of issuing $120b of New Zealand Government Bonds (debt) in the four years to 2026/27 (as forecast in May), Treasury will need to issue $135b.

In other words, if the Government sticks to its spending plans, and if Westpac economists’ forecasts of Treasury’s forecasts eventuate, the Government will need to borrow an extra $15b over the next four years.

This would add to a string of previous upward revisions, which would see Treasury issue $35b (or 35 per cent) more debt over the four-year period than expected in December.

NZ Herald

Of course Grant Robertson denied it all – until he couldn’t, and yesterday we saw Robertson prove that he was lying 28 days ago and that Winston Peters was dead right.

The Government is clamping down on contractor and consultant spending, trimming some programmes, and pulling back on the amount of money planned to be spent on future Budgets.

Finance Minister Grant Robertson said on Monday the exercise will result in nearly $4 billion in savings over the forecast period. But this money won’t be made available for new spending.

It comes after the Government’s most recent accounts for the eleven months to the end of May showed tax revenue falling more than $2 billion behind where Treasury had forecast.

Robertson also warned that there has been a deterioration in the global economy since May, particularly in China, and this will have a “direct impact on the New Zealand economy”.

“It is important that the Government responds to meet our balanced and responsible fiscal goals,” he said.

Newshub

If only they’d been balanced and responsible six years ago, and every budget since, when everyone including Blind Freddy could see where this was heading.

It’s almost like there is an election sometime soon and they need some good news, even though it’s really bad news.

If National did this in Government, Labour would be rushing around claiming a vote for National was a vote for spending cuts.

Labour and Grant Robertson are economic vandals. But we can’t expect much when Robertson learned everything he knows about accounting while sitting on the knee of his father while he fiddled his law firm’s books.

This Labour Government is unfit to run the accounts of the fried bread stand at a farmers’ market. They need to be sacked and destroyed so that they can never again wreak such damage.

Cam Slater is a New Zealand-based blogger, best known for his role in Dirty Politics and publishing the Whale Oil Beef Hooked blog, which operated from 2005 until it closed in 2019. This article was first published HERE