David Farrar: Kiwiblog author and co-founder of the Taxpayers' Union on the debate between Nicola Willis and Ruth Richardson

Nicola Willis is defending her economic track record in the face of a lobby-group's satirical campaign. 

The Taxpayers' Union has sent MPs Nicola Willis-branded fudge, claiming she favours treats today and taxes tomorrow. 

It suggests Willis should cut spending more. 

Willis says the Government has reduced taxes and delivered significant cost savings while keeping frontline services. 

Kiwiblog author and co-founder of the Taxpayers' Union, David Farrar told Kerre Woodham that putting aside personalities, it’s not a bad thing for people to realise we still have a real fiscal challenge in New Zealand.  

He says that while the Government has cut spending in a number of areas, we’re still spending more than we’re bringing in in taxes.  

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Episode Transcript

Speaker 1 (00:06):
You're listening to the carry Wood of morning's podcast from
News Talks hed B.

Speaker 2 (00:11):
The Taxpayers Union, as we've been discussing, is accusing Nichola
Willis of fudging the numbers. The lobby groups targeting the
finance minister's economic track record sent out a press release
along with confectory confectionery called Nicholas Fudge. Ruth Richardson, chair
of the Taxpayers Union and a former finance minister herself,

(00:33):
has accused Nikola Willis of not keeping to her campaign promises.
Nichola Willis has invited the former finance minister to debate
the country's economy and the plan for it to go
toe to toe. Carry Blog author and former founder of
the Taxpayers Union, David Farrett joins me. Now, very good

(00:55):
morning to you.

Speaker 3 (00:57):
Good morning, Carrie.

Speaker 2 (00:58):
Must be a bit like watching the children fighting. You know,
your favorite children having a spat.

Speaker 3 (01:04):
Well, I know them both well, very fond of both
of them, etc.

Speaker 4 (01:08):
But if your personal had personalities, I actually do not
think it's that all a bad thing for people to Really,
we do still have a real fiscal challenge in New Zealand.
If you listen to the PSA at Labor you would
think this government has been slashing and burning and they
call it austerity et cetera, when in reality, like drill Low,

(01:31):
wassn't really Back in twenty seventeen, not just labor, but
the Green Party said we don't think spending should be
more than three hey percent of GDP, and I thought
that's pretty reasonable. But we're actually still spending two hey
three to three hey four percent more than the Green
Party said we should do.

Speaker 3 (01:49):
Just six or seven years ago.

Speaker 4 (01:52):
So the notion that the government is, you know, doing austerity.

Speaker 3 (01:57):
Vicious spending game.

Speaker 4 (01:58):
They certainly have cut spending a number of areas, which
from my view is good, but overall we are still
spending bluntly more than we're bringing them in taxes. And
that's why there's this debate. Is concerned because you can't
keep borrowing.

Speaker 2 (02:14):
No, you can't borrowing as a fiscal policy as a
matter of course though, but you can't keep borrowing to
that extent when your income's not keeping up. And that's
something most households would understand. I guess though, where it's
what you're spending the money on you can borrow, and
then it's what you spend it on. My grind with

(02:35):
labor was that it was just such a waste of money.
They didn't even know and a lot of fields what
they were spending the money on and whether it was
value for money.

Speaker 4 (02:43):
No, absolutely not All governments will borrow for assets.

Speaker 3 (02:49):
You build up assets, and you borrow during the bad times.

Speaker 4 (02:53):
When you have a global economic shock or absolutely fairly
COVID where employers are told closed down for two months,
you have to think. But the problem is that all
the extra spnu over COVID didn't go away. It was
meant to be temporary, but it turned permanent and we're

(03:13):
still borrowing every year. And the worry only Heaven I
think many people have is if we have another global
economic shock, our debt levels are going to be too high.
So basically borrow during the tough times, but you then
need to have some years where you're running surpluses paying
back that debt to prepare yourself for the next tough time.

Speaker 2 (03:37):
Yeah, but I totally. I mean, I think it's really
unfair of Ruth Richardson to a make it so personal.
Nichola Willis probably shouldn't have lashed out as she did,
but she was provoked, so you make it personal these
are these are decisions made by a coalition government, and
a coalition government is something Ruth Richardson didn't have to

(03:59):
deal with herself.

Speaker 4 (04:01):
I think that's an absolutely fear point to make. There
is a coalition. You also have your manifesto commitments, you
have your coalition agreements, and you have a way called
the risk appetite. And where I think things have got
is when they came into government, there was a path

(04:22):
where it was if we just restrain spending but not
cut the overall level, you know, we might get back
into surplus through booming economy. But we haven't had the
booming economy, so that path to surplus is looking really challenging.
So what my hope is, and I might be about

(04:43):
polyanderous here is actually this debate can strengthen Nicholas's position
to convince cabinet and coalition partners that yes, some of
this stuff might be unpopular, but we actually have to
do even further, you know, find more spending programs that

(05:05):
are low quality.

Speaker 3 (05:06):
And you know, the.

Speaker 4 (05:08):
One I always give the example of is you know,
the free tertiary fees. Now Labour said they would go
to do it for everyone forever and then they backed
down and said they'll do it for first year. Only
National said we'll do it for final year, which was
a better policy, encourages people to actually graduate and cost less.

(05:28):
But all the studies have shown this did not get
poor people going to university. This just helped wealthy families
have cheaper tuition for one year. So that's an example
of something like will would be popular with students if
you take away absolutely not. But you know, if you
want to get back into surplus, government does definitely need

(05:50):
to look at some of those harder decisions.

Speaker 2 (05:54):
Do you think Niicola Willis is a good finance minister?
A capable finance minister?

Speaker 3 (06:00):
Nicola is one of the most capable people I know?

Speaker 4 (06:03):
But why will say is it's the results at the
end of the day that that are critical, not not
what you think of someone personally. If you look at
her record, I think Nichol has done some very good
stuff that few other finance ministers would have done. The

(06:23):
not doing the sunk cost fallacy around the cockstraight fairies,
because when when if you have your people come to
you and say we need two billion dollars more and
you have to give it to us. Well, we've already
committed to one billion dollars and that be wasted. You
have to be pretty ballsy if I can use to
she say, no, we're going to just take the billion

(06:47):
dollar loss because that's better than spending another two billions.

Speaker 2 (06:52):
And because it's almost like blackmail, isn't it. It's like
you have to give us that money because we've already
spent this much.

Speaker 3 (06:58):
Yeah, who wants to be the person to have to front?

Speaker 4 (07:01):
And you know she's stared down the Reserve Bank governor
who is demanding huge increases. There has been a lot
of fiscal reprioritization, and in my blog post on them,
the decisions taken by the government at the time of
you know, a softer reduction and spending, I think we're
quite reasonable. What I would say is is the circumstances

(07:22):
have changed and the text take hasn't been as high
as expected.

Speaker 3 (07:28):
You know, you need to change your strategy.

Speaker 4 (07:32):
And that's that's what I'm hoping are next to his
budget is we're going to see a stronger path to
supplus because also we can all get but tied up
whether the surplus is a fifty million dollar supplus or
a fifty million dollar death so it doesn't actually matter.
What matters is are you going to have a period
of time where you're paying down the debt Because every

(07:54):
dollar we spend on that debt there is money you're
not spending on hospitals and schools. So everyone should be
in favor of lower debt.

Speaker 2 (08:03):
Yeah, absolutely, So do you do you think there is
merit and having a debate, I just say to me,
it's just pushing an energy bargie.

Speaker 4 (08:13):
I know if it was advising the government, I would
have said I can't think of the last time a
minister has challenged a lobby group to a debate.

Speaker 3 (08:23):
Lobby groups are usually desperate for relevance.

Speaker 5 (08:26):
Like they might hope to get a one line response,
so they're probably delighted because this has become an issue
for days, their issue has been talked about.

Speaker 4 (08:37):
So her government point of view having said that it's
not necessarily unhelpful because Niccola has come out with the line,
you know, jokes to the left of me, clowns so
right or something, and if it's getting across because labor
and PSA and that also out that terrible she's slashing

(08:57):
all this spending it's austerity or people to actually realize no,
that's not the case. I don't think that's necessarily unhelpful either.
So if it goes ahead, I think it will be
very interum My hope would be there is not who
was the best female finance minister was Ruth Wright in
the nineteen nineties. What I would want it to be

(09:20):
is what's the best way to get the box back
into surplus?

Speaker 2 (09:26):
Well, then hopefully you'll be moderating it, David.

Speaker 4 (09:32):
I did have someone joking that Winston could offer to Moor.

Speaker 2 (09:38):
No, thank you so much for your time. It's David
Farrah Kiwi Bloggo well. He's got the fabulous Kiwi blog
and a really good piece on Nichola Willis's performance and
looking at Ruth Richardson as well, So have a look
at that on Kiwi blog. He's made a commentator and
owner of Curier Market Research.

Speaker 1 (09:55):
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