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Thursday, March 21, 2024

Point of Order: Buzz from the Beehive - 21/3/24



Willis is undeterred by GDP slowdown and IMF advice, although she is talking of “tax relief” rather than tax cuts

One minister is talking tough while a colleague – whose ministry had acted tough and drawn a barrage of flak – has shown an official softening.

Some ministers are doing what Labour was good at, which is distributing public funds to causes regarded as worthy or needy, while another has portended the prospect of a contentious Labour decision – to shut down the Marsden Point oil refinery – being reversed.

But the statement we most eagerly awaited today – from Finance Minister Nicola Willis – was her response to news that the economy is officially in recession. What does this mean for those tax cuts? Or rather, what does it means for “tax relief”?

The tough-talking minister is Associate Health Minister Casey Costello, who on a previous occasion had gone soft on one aspect of our tobacco laws.

Now she has announced the Government is taking action to crack down on youth vaping – a complete ban on disposable vapes, significant increases in fines for sales to under-18s, further restrictions on retailers and a better enforcement system to ensure vape retailers are following the rules.

The Smokefree Environments and Regulated Products Act will be amended to ban the manufacture and sale of disposable vaping products, and the maximum fine for retailers found selling vapes or other regulated products to under-18s will increase from $10,000 to $100,000. The penalty for infringement offences will rise from $500 to $1,000 for individuals and to $2,000 for businesses.”

While Costello played the heavy, Disabilities Minister Penny Simonds (better late than never) at last got around to assuring disabled people that none of them will lose funding for essential services, equipment or support, despite a forecast budget overrun in the disability support appropriation.

This addresses a ministry blunder in its communications department that landed Simmonds in political trouble yesterday. Putting a fiscal boot into the disabled is not calculated to win too many plaudits.

Mind you, much might depend on the meaning of “essential”.

Social Development and Employment Minister Louise Upston showed her benevolent side, announcing help for more homeowners impacted by severe weather in 2022 and 2023 will soon be available.

Agriculture Minister Todd McClay and Rural Communities Minister Mark Patterson announced drought support for Canterbury and Otago, expanding the medium-scale adverse event classification in place for the Marlborough, Nelson, and Tasman districts to cover the Canterbury and Otago regions.

Up to $70,000 will be provided to Rural Support Trusts in North, Mid, and South Canterbury and Otago to facilitate community and one-on-one support for affected farmers and growers. This comes on top of the $20,000 allocated to Top of the South Rural Support Trust last month to ensure early support was available.

Mental Health Minister Matt Doocey was in the good news business, too. He announced new mental health and addiction peer support services in hospital emergency departments. Or rather, some hospital emergency departments.

In its first year, this initiative will be rolled out to four large hospitals with a further four in the second year. It’s being funded using uncommitted Health NZ funds and is estimated to cost between $300,000 and $500,000 per hospital.

A $1 million workforce fund over two years has also been set up to provide Level 4 Z Certificate in Health and Wellbeing (Peer Support) training and specific training for working in emergency departments. If this is successful, “we see this initiative rolling out to all hospitals”.

Energy Minister Shane Jones relished delivering the news that he is investigating the feasibility of reopening the Marsden Point Oil Refinery.

The investigation was agreed in the New Zealand First Coalition Agreement with the National Party which includes the establishment of a fuel security plan to safeguard New Zealand’s transport, logistics and emergency services from any domestic or international disruption.

“Despite the desire we all share to see New Zealand free of its reliance on fossil fuels in the near future, that is the stuff of fairytales. New Zealand will continue to need gas and coal to keep our economy moving for decades to come,” Jones says.

The work will include planning for transitioning to low carbon fuels and consideration of the infrastructure needed to increase the use of methanol and hydrogen to ensure New Zealand has sovereign fuel resilience.

A Request for Proposals is being developed and it the study is expected to begin later this year.

Oh, and let’s not forget (just the thing for a government in a hurry). Transport Minister Simeon Brown and Regulation Minister David Seymour announced new speed limits rules will be signed off by the end of 2024.

The news from Nicola Willis, which arrived this afternoon, was that the fall in GDP reinforces the Government’s fiscal plan

Readers who associate the persistently promised tax cuts as a critical part of that plan had to wade through a few paragraphs before finding how they might be affected.

Declining GDP for the December quarter reinforces the importance of restoring fiscal discipline to public spending and driving more economic growth, Finance Minister Nicola Willis says.

“The 0.1 percent decline in GDP for the December quarter shows our economy slowed earlier and at a faster rate than previously thought. This is a deep hangover from the big spending, big taxing period under the previous government.

“High inflation is now being beaten back by high interest rates, but this has a crushing flow-on impact on growth.’


Willis said it was concerning that the economy is in recession even despite our rapidly growing population.

“This simply reinforces that our approach to strengthening and growing the economy is the right one. “

Then she noted the good news that inflation is tracking in the right direction. Last week the price of fresh fruit and produce dropped by 9.3 percent.

And at last (drum roll please):

“Kiwis can also look forward to keeping more of their own money. This year’s Budget will deliver responsible fully-funded tax relief, while ensuring new spending is prioritised towards essential frontline services.

“This Government knows a strong economy determines our standard of living, job and business opportunities, and the quality of public services.”


Until Budget Day, we can only conjecture on what weight will be given to the International Monetary Fund’s urging the Government to ensure it can pay for its tax cuts without borrowing more.

According to the New Zealand Herald:

The organisation is wary of the fact New Zealand is still battling inflation, so fears that putting more money into the economy, without taking an equivalent amount out, could exacerbate the problem.

“The planned personal income tax relief is targeted predominantly at low and middle-income earners and families with children, which have a higher propensity to spend,” the IMF said in a report prepared following a routine review of New Zealand.

“To avoid any upside pressure to inflation it is important to calibrate the funding, timing and the parameters of this tax relief to be fiscally neutral.”


The Herald also noted that questions are being raised by various commentators over whether the Government can fund its promised tax cuts without borrowing more.

Latest from the Beehive

21 MARCH 2024


Foreign Minister Winston Peters has today announced four new diplomatic appointments.


Declining GDP for the December quarter reinforces the importance of restoring fiscal discipline to public spending and driving more economic growth, Finance Minister


Thank you for inviting me here today to address you all as Minister for Auckland, Minister of Transport, and Minister of Local Government.


Cabinet has agreed on the coalition Government’s direction of travel for a new Land Transport Rule to be signed by the end of 2024.


It’s a pleasure to be back here with you at the Aotea Centre.


Temporary Accommodation Assistance will soon be available to more people who can’t live in their homes due to the severe weather events of 2022 and 2023.


Mental Health Minister Matt Doocey has today announced the implementation of a new mental health and addiction peer support service in hospital emergency departments.


The Coalition Government is expanding the medium-scale adverse event classification in place for the Marlborough, Nelson, and Tasman districts to cover the Canterbury and Otago regions.

20 MARCH 2024


Attorney-General Judith Collins today announced the appointment of the first six Family Court Associates, in a move designed to relieve pressure on the Family Court system.


The first New Zealand Emissions Trading Scheme (NZ ETS) auction of 2024 resulted in a partial clearance today, marking the first time New Zealand Units (NZUs) have been sold at auction since December 2022.


Associate Energy Minister Shane Jones is investigating the feasibility of reopening the Marsden Point Oil Refinery as part of the Coalition Government’s work on ensuring New Zealand has a secure fuel supply.


No disabled person will lose access to funding for essential services, equipment, or support, despite a forecast budget overrun in the disability support appropriation.


It’s a pleasure to be back here with you at the Aotea Centre.


Temporary Accommodation Assistance will soon be available to more people who can’t live in their homes due to the severe weather events of 2022 and 2023.


Mental Health Minister Matt Doocey has today announced the implementation of a new mental health and addiction peer support service in hospital emergency departments.


The Coalition Government is expanding the medium-scale adverse event classification in place for the Marlborough, Nelson, and Tasman districts to cover the Canterbury and Otago regions.


Attorney-General Judith Collins today announced the appointment of the first six Family Court Associates, in a move designed to relieve pressure on the Family Court system.


The first New Zealand Emissions Trading Scheme (NZ ETS) auction of 2024 resulted in a partial clearance today, marking the first time New Zealand Units (NZUs) have been sold at auction since December 2022.


Associate Energy Minister Shane Jones is investigating the feasibility of reopening the Marsden Point Oil Refinery as part of the Coalition Government’s work on ensuring New Zealand has a secure fuel supply.


No disabled person will lose access to funding for essential services, equipment, or support, despite a forecast budget overrun in the disability support appropriation.


The coalition Government is taking action to tackle youth vaping, Associate Health Minister Casey Costello announced today.

Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton

1 comment:

Tom Logan said...

I see the Australian Government made sure their refineries stayed open.

But I'm sure we know better .

It's not as though they have a better standard of living than us. Better wages ,lower housing costs, better infrastructure.

It's not as though 40,000 or so Kiwi's are leaving every year for Australaia or elsewhere is it ?

Another brilliant decision by Labour . I'm sure Chloe's doing cartwheels of joy.

No , we don't need oil refineries.

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