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Fiscal policy

10/08/2019

An interesting post by Michael Reddell on current fiscal policy and where Labour’s rhetoric departs from reality. This post draws attention to some intriguing facts, some of which are very much at odds with Labour’s mantra of 9 long years of underfunding.

croaking cassandra

Bernard Hickey, of Newsroom, had a passionate piece out the other day lamenting the fiscal conservatism of the Prime Minister and the Minister of Finance, and calling for a  large increase in New Zealand government net indebtedness (albeit over “the next decade or two”) under the ambit of something he calls the “Re-Engineering New Zealand” project.

It was a curious article because it seemed to throw together a variety of different things that don’t necessarily belong together: the cyclical on the one hand (potential limits of monetary policy in the next recession, at least on current technologies) and long-term structural issues (climate change, skills, productivity, infrastructure, housing etc) on the other.

On the cyclical side, Hickey’s case isn’t helped by the claim that monetary policy “did little to solve…the short term…problems facing the economy”, which simply has to be not true.    Unemployment rates, which shot up sharply during the…

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