On Saturday the Herald's political editor stepped down to become a special correspondent. As acknowledged by her peers and politicians at the Press Gallery 150th celebration Audrey Young is a remarkable journalist who has served us readers very well. As a parting gift last week Audrey rated the present Cabinet out of 10.
How Audrey could rate obscure ministers such as Priyanca Radhakrishnan and Jan Tinetti is a mystery.
Then there is the "Yes Minister" factor. Any minister who has an able chief executive can look competent. Ministers often get a low rating because they have an incompetent, virtually impossible to sack, head of department.
With this reservation I strongly disagree with Audrey Young awarding the Finance Minister a 9 out of 10 rating. Grant Robertson is the worst Minister of Finance since Robert Muldoon. I am not alone in my opinion.
I received this email exchange between a former head of the Treasury and a former Reserve Bank Governor.
Former head of the Treasury:
"I asked the BNZ today why they have eliminated a margin over carded rates for large time deposits and private banking partners.
"The answer is that they have so much money they don't want to encourage any more, margins are squeezed and the regulations require larger capital backing for large depositors.
Former Reserve Bank Governor:
"The current huge fiscal deficit, the casualness of large increases in government spending, the extremely rapid and large increase in the public debt to GDP ratio, the ludicrously low interest rates, the massive credit creation via bond purchases by the central bank, the consequent high asset price inflation (share prices and house prices), the Government's curious and seriously misinformed apparent wish for the RBNZ to control or regulate particular types of bank lending, make for the most ill-informed and frightening policy mix in my memory since Muldoon at his worst. And no one in the official sector or the media seems concerned."
New Zealand gets flattering reviews from nations that do not know us. Our Australian cousins who know us better are far more critical. Adam Creighton, the economics editor of the Australian, last month wrote a savage review of our performance:
"New Zealand's economy is in strife. Without major change, our constitutional cousin is in decline. Its public finances are in tatters.
"New Zealand ranks fourth last in the OECD for labour productivity growth, and last for multi-factor productivity growth.
"In one year, New Zealand has blown 30 years of hard-fought fiscal rectitude. Its public debt will explode from the equivalent of 19 per cent of Gross Domestic Product last year to 54 per cent by 2022, on the Government's own figures.
"The Prime Minister and Finance Minister, who have not worked in the private sector, sprout the totems of modern left governments — renewable energy, trees, higher tax, equality — but without much to show for it. Plans for a billion trees and 100,000 houses have come close to almost naught, and a capital gains tax was dumped".
"Even Mexico, Nigeria and Venezuela are not as indebted to the rest of the world as New Zealand."
"…it wasn't outsized compassion that drove the lockdown sledgehammer but the brutal reality of an underfunded health system. With about 140 intensive care unit beds and few ventilators — far fewer than Australia per capita".
Creighton could have gone on. The low interest rate policy is transferring wealth from savers to spenders. Retirees are being forced to make risky investments because the banks give them nothing for their savings.
The Government as the biggest spender is shifting wealth and influence to Wellington.
A Wellington accountant informed me that despite Covid his Wellington hospitality clients have had their best year ever. They are selling record numbers of cappuccinos to the bureaucrats implementing Labour's solution to everything, "spend, centralise and control".
Young based her rating in part because "The economy continues to outperform almost every forecast".
The reverse is also true. Almost every government forecast has been wrong.
Is Robertson the worst Finance Minister since Muldoon because this is the worst Treasury? The Treasury is responsible for the issuing of dire economic forecasts that has led to massive over stimulation of the economy. To huge subsidies being paid to companies like large law and accounting firms who never needed the support. While a few companies have repaid their subsidies most have pocketed the taxpayer-funded windfall.
It is not clear if it is a power grab by the Treasury or the minister to regulate bank lending. How much of the woolly "Wellness Budget" that was going to transform how we measure the economy and our wellbeing was Robertson and how much the Treasury?
Both the Finance Minister and the Treasury deserve a minus 9 rating.
- Richard Prebble is a former leader of the Act Party and former member of the Labour Party.