All hole, no donut
02/09/23
I have doubts about the political brilliance of Labour’s strategy. If you miraculously find $4 billion in loose change, that doesn’t suggest you’ve suddenly become careful financial managers. Voters will ask why you weren’t being Scrooge enough in the first place.
So Chris Hipkins told us last weekend that National, ACT and NZ First would be a “coalition of cuts”. Seemed like a solid line of attack until the very next day, less than 24 hours later, when Labour announced its own cuts. Have the team in charge of Sunday’s announcements never met the people in charge of Monday’s? If Labour thinks it can go from calling the other side a “Coalition of Cuts” one day, to announcing it has made swinging cuts of its own the next, I would like to introduce them to their own backbench, who were still criticising a #coalitionofcuts a day after Labour’s own cuts were announced. You can make cuts. You can criticise cuts. You can claim spending is not funded. But attempting all three at once is Blackadder-grade cunning.
Some of the bad news is not of Labour’s making. But did it have to time stinging mortgage interest rates, soaring petrol prices, inflation, a slowing economy, heart attack fiscal and current account deficits, all to coincide, exactly, to the very week, with the general election and the All Blacks going out of the World Cup?
This perennial cliché, where each party chucks fiscal holes at each other, has as much credibility as the hole in Treasury’s doughnut economics. These “cuts” and “holes” depend on a forecast that three months ago, in the May Budget, was “more than $2 billion behind where Treasury had forecast it to be”, Grant Robertson said this week. Another $2 billion worse in three months is all hole, no donut.
Josie's column on election fiscal issues is here.
So Chris Hipkins told us last weekend that National, ACT and NZ First would be a “coalition of cuts”. Seemed like a solid line of attack until the very next day, less than 24 hours later, when Labour announced its own cuts. Have the team in charge of Sunday’s announcements never met the people in charge of Monday’s? If Labour thinks it can go from calling the other side a “Coalition of Cuts” one day, to announcing it has made swinging cuts of its own the next, I would like to introduce them to their own backbench, who were still criticising a #coalitionofcuts a day after Labour’s own cuts were announced. You can make cuts. You can criticise cuts. You can claim spending is not funded. But attempting all three at once is Blackadder-grade cunning.
Some of the bad news is not of Labour’s making. But did it have to time stinging mortgage interest rates, soaring petrol prices, inflation, a slowing economy, heart attack fiscal and current account deficits, all to coincide, exactly, to the very week, with the general election and the All Blacks going out of the World Cup?
This perennial cliché, where each party chucks fiscal holes at each other, has as much credibility as the hole in Treasury’s doughnut economics. These “cuts” and “holes” depend on a forecast that three months ago, in the May Budget, was “more than $2 billion behind where Treasury had forecast it to be”, Grant Robertson said this week. Another $2 billion worse in three months is all hole, no donut.
Josie's column on election fiscal issues is here.
