Sunday, May 26, 2024

Professor Robert MacCulloch: Budget 2024

What to expect in the Bill English-John Key (oops, sorry) I meant Chris Luxon-Nicola Willis budget this week.

The title of this Blog says it all. It's been a struggle to do commentary on economics under the new Coalition, since there's so little new and creative, there's not much to talk about. How come? The National Party under Chris Luxon is a photocopy of National under John Key when it comes to economics. Could the following facts be the reason why?

1. Chris Luxon's Chief Economic Adviser, Matt Burgess, was Bill English's Chief Economic Adviser. Burgess worked at the NZ Initiative for a time.

2. After graduation, Finance Minister Nicola Willis worked as a Research & Policy Advisor for Bill English and as a Senior Advisor to John Key in 2008.

3. Associate Minister of Finance, Chris Bishop, was previously an adviser to National Party Leader, John Key.

4. The NZ Initiative, which was the think tank for the National Party under John Key, supplying it with ready-made policies, is the think-tank for the National Party under Chris Luxon, supplying it with ready-made policies.

5. The NZ Initiative's Senior Fellow, Mike Johnson, was recently appointed by the Nats to Chair the Government’s newly established Ministerial Advisory Group to review the Primary School English, Maths & Statistics Curricula.

6. The Nats recently appointed their own former leader, Simon Bridges, to be Chair of the NZ Transport Agency.

7. The Nats recently appointed their own former Cabinet Minister, Steven Joyce, to be the Chair of the new Government’s “Expert Advisory Panel” on infrastructure.

8. The Nats recently appointed their own former Leader, Bill English, to be the Chair of the Review of Kāinga Ora, the government's social housing landlord.

9. The Nats recently appointed their own Former Deputy PM, Paula Bennett, to be the new Pharmac Chair.

10. Chris Luxon told OneNews' Jack Tame that he speaks to John Key every other week.

We better stop there - its too embarrassing. From transport to infrastructure, housing to health, education & more, no changes since Bill English & John Key were bosses. What is this new (?) trend for former politicians, whether National or Labour, to muscle in on big jobs, even though they have no qualifications for them, other than being adept at playing politics? (But let's not go back to Grant Robertson's new job as the Vice Chancellor of Otago University, even though he's never had any experience in that world).

So predicting this week's budget is easy. Just ask: what would Key & English do? Give some tax relief. When that duo started in power they cut the top income tax rate from 39% to 33%. As its not politically correct to do that in our harsher times, tax relief this week goes to the "squeezed middle". At the same time, Key & English would trim government spending to work toward a balanced budget - that's what they began doing upon election after the Global Financial Crisis in 2008. Is there much else? No - since though English wasn't too bad a Finance Minister, all of economics to him can be summed up as follows: governments spend, G, and tax, T .. We should try making G=T (budget balance), and make an effort to reduce G and T, since both are baddies. I wish that was all of economics - then I wouldn't have had to spend 20 years trying to understand it. Darn it.

Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.


Anonymous said...

Just one big club or crime syndicate (you choose) and you ain't in it.

The wheels on the bus go round and round.

Anonymous said...

Time for a modern version of the Athenian Option, don’cha think?

Ray S said...

Hard to get ones head around all these goings on.
I think I'll just have a G & T with ice in a long glass.
It's sure to help'