budget links

some budget links that might be of interest.

here's pinky agnew at the pre-budget protest of around 1500 people, with a poem:



here's a short clip of david do on education:



and his quick summary of the impact on student loans:

• total savings of $447 million over four years
• restricting eligibility to students overdue with payments,
• limiting students aged 55 and over to borrowing only for tuition fees
• removing part-time students to borrow for course costs.
• repayment holiday for borrowers based overseas is shortened to 1 year from 3 years
• definition of ‘income’ broadened for student loan repayment purposes

here's the council of trade unions on the zero stimulus budget:

Today’s Budget does nothing for jobs when unemployment is high and risks prompting a return to recession. It forecasts low growth continuing this year, and that even by March 2012, unemployment will still remain high at 5.7 percent.

Bill Rosenberg, CTU Economist said “Despite this gloomy outlook for the coming year, the government will be spending little more than last year. This amounts to a $2 billion cut in real terms when inflation forecast, at 3.1 percent is taken into account. Even Treasury says that this will provide zero stimulus, and the government is resting on assumptions of growth resulting from reconstruction in Christchurch. There is a real risk of continuing high unemployment or even going back into recession.”

“We do need to face up to debt but when it is the third lowest in the OECD, it should not have trumped the immediate needs of people who are struggling, and a stagnant and fragile economy. It ignores the hard times that many families are facing at present,” said Rosenberg.

here is phil goff on "the least imaginative" & "lack-lustre" budget that breaks some major elections promises from 2008:



and here is david cunliffe on radio nz's checkpoint (17.38, 19/5/11).

here's bernard hickey (and yes, i'm not a great fan, but this bit does make a lot of sense) on the government's decision to bet on growth:

[John Key & Bill English] will argue the Christchurch earthquake rebuild and an historic boom in commodity prices will power GDP growth to over 4% over the next couple of years.

This all seems sensible until you look at the track record of these forecasts in the last three years since the global financial crisis. Every economic forecast by the Treasury under-estimated the impact of an epic change in the way New Zealanders think about debt and spending since the crisis. In May 2008 Treasury forecast growth rates for the next three years of 1.5%, 2.3% and 3.2%. Instead we got -1.1%, -0.4% and -0.1%.

The inaccuracy of these forecasts isn't just Treasury's doing. All the economic forecasters have missed out on a structural shift.

New Zealanders have stopped borrowing overseas to pump money through the housing market into consumer spending, which makes up almost 70% of the economy. It has been stalled for three years and there is no indication it is picking up quickly. New Zealand households have got the message, even if the government hasn't, that they can't live beyond their means.

and keith ng is brilliant as ever, on the kiwisaver cuts and an interesting donut thingy.

hat tipped to all my facebook friends who have directed me to these links.