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It's That Time of Year Again

Last minute pleaders clearly do not understand the time-line associated with the production of the annual budget, and try to get in their last minute bids on Morning Report and othe MSM.

But it will all be to no avail - if it hasn't already been announced, the chances of last minute largesse is pretty remote.

David Farrar on Kwi Blog has compiled a list of bids over the last year that is enough to make the hair stand on end:

"Since the Budget last year I’ve been compiling a list of spending demands made by various MPs, unions, NGOs and others. For each spending demand I’ve calculated a ballpark annual cost of the demand, once fully implemented to see how much taxes would need to increase to fund the demands.

Well as of today the spending demands in the last year have topped a massive $14 billion. That would require the top tax rate to go from 33% to 100% to fund it.

And the scary thing is I have probably missed a few of the demands. This is just something I have done in my spare time. I’m hoping the Taxpayers Union will take up this task after this year’s Budget and keep a more robust check on things.

So what are the biggest items called for:

  1. 60,000 more state houses – $1.8 billion a year
  2. Eradicate all pests from the mainland – $1.47 billion a year
  3. Abolish tertiary fees – $1.2 billion a year
  4. Increase aid to 0.7% of GDP – $1.14 billion a year
  5. Change early childhood teacher ration from 1:5 to 1:3 – $1.04 billion a year
  6. Pay a community wage – $1.04 billion a year
  7. $1 billion a year for public housing  – $1 billion a year
  8. Increase welfare spending by $1 billion a year – $1 billion a year

Now these costs are not the work of hundreds of hours of economic analysis. They are a superficial ballpark estimate. In the case of the 60,000 more state houses, presumably there would be some rental income to offset them which I’ve not yet calculated. But there would also be ongoing repairs and maintenance and rental expenses. So again this is just about showing the huge amount of spending demands made by politicians and lobby groups, and how any Government that gave into them all would bankrupt the country. I’m sure people can and will quibble over individual cost estimates.

The spreadsheet of the demands is here –Spending Costs

I’ve broken down the demands by who is making them. Again this is incomplete. I suspect most of the stuff Labour MPs has called for, the Greens support also. So this is probably under-states the level of demand each group has made:

  1. NGOs – $5.54 billion
  2. Individuals – $3.51 billion
  3. Labour MPs – $2.47 billion
  4. Media – $1.56 billion
  5. NZ First – $1.44 billion
  6. Unions – $611 million
  7. Green MPs – $406 million
  8. Govt agencies – $181 million

Now again this is based just on if I have seen it in a news story. I’ve not gone through press releases from MPs, in which case I think the totals would be even higher."

Bill English may be responding to demands for cycle-ways and freedom camping toilets, but he is not about to unleash the hounds of inflation on the community at this stage of the electoral cycle.

Housing is clearly the touchstone - just why would seem blindingly obvious, but there appears little that the Government can do except issue barely disguised threats to Len Brown, who appears ready to go out in a blaze of high rise glory.

Good luck to both of them - the Government is hog-tied by nine years of blind indifference, and conformity to the greed-need of its Auckland constiuents. Now the chickens are really coming home to roost, and all that Nick Smith can offer is more threats - only louder. And Len isn't listening.  

One way or another an explosion appears imminent!




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