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notices and features - Date published:
6:00 am, January 9th, 2026 - 9 comments
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Open mike is your post.
For announcements, general discussion, whatever you choose.
The usual rules of good behaviour apply (see the Policy).
Step up to the mike …
How is that slashing of the public service going Ms No-Boats?
This morning we wake to news of another bio-security incursion in the shape of a Queensland fruit fly. (The updates on the yellow legged hornet have gone worryingly quiet).
https://www.rnz.co.nz/news/national/512316/ministry-for-primary-industries-proposes-cutting-231-staff
https://www.rnz.co.nz/news/business/583506/queensland-fruit-fly-could-have-massive-impact-on-fruit-and-vegetable-crops
In the same vein, Health NZ had to lose $1.4B, and went to all sorts of dodgy lengths to achieve this.
https://newsroom.co.nz/2024/12/04/health-nz-commissioner-loses-130m-battle-with-auditor-general/
https://www.scoop.co.nz/stories/PO2601/S00008/new-data-shows-govt-axed-thousands-of-critical-health-roles-in-middle-of-crisis.htm
From the link;
"At the same time, we know from evidence the PSA secured through the Official Information Act that Health NZ is failing to recruit people fast enough to fill vacancies – from medical imaging technologists to IT experts, all adding to a system under severe pressure."
Now the penny pinching has manifested in Te Tariff Take, IRD. Stealing money from an independent news organisation.
https://www.stuff.co.nz/nz-news/360921986/appalled-ird-apologises-after-paywalled-news-articles-copied-and-shared-among-600-staff
I was talking to a right leaning buddy who had given his party vote to ACT and he acknowledged voters remorse, especially in light of the axing of Pay Equity, cuts to worker safety and school lunches.
He still has a genuine concern for the 'debt' we are in. I asked him did he know, to whom, we owed this debt? In response he offered "..the Chinese? ..the World Bank?.." He truly had no idea but his worry is real.
To any others that have a real concern about our debt levels, can you see that the approach taken by this regime isn't working? In all the cases cited, the austerity is going to cost all of us more, much more.
Apart from the debt held by the RBNZ itself, most of the govt debt is held by NZ regulated financial institutions. This includes commercial banks and insurance institutions as these are the institutions that primarily do large scale financial transactions in $NZ. They will purchase these as bonds pay a small amount of interest (compared to holding actual $NZ) and have a fairly stable secondary market value in $NZ (in case the institution needs the cash). You can think of this like such an institution putting money a savings account, rather than a deposit account. A follow on from banks holding deposits by their customers is that some of that interest earned on govt bonds by banks is passed onto customer's accounts. One way to think of this govt debt is that it's the materialized savings of the country's population (the individual act of saving is complicated/modified by bank credit). Despite this complication savings rates and govt debt are closely related for this reason. One well known example being Japan's infamously high personal savings rate (is not a social preference, it) is facilitated by the very high Japanese govt debt. NZ's low level of personal savings also corresponds with quite low govt debt.
The way I see it is that savings rates and govt debt are closely related for a different reason.
High savings rates means high government debt is due to money creation and economic growth. If everyone saves money it means there is low borrowing so less debt in the private sector. If you want economic growth then you need more money in the overall money supply to facilitate that growth. The only way to create new money is for that money to be 'borrowed' into existence via bank credit. If the private sector is decreasing it's debt then the government/public sector must increase debt to create more money to facilitate economic growth.
If the private sector is increasing debt levels (so saving less) then the government can lower it's debt levels and still have enough new money entering the economy to facilitate economic growth.
So to have economic growth,, debt must be increased either in the private sector, the public sector, or both. Private debt and public debt can't both be decreased at the same time or the economy nosedives.
Because all of our money (apart from the 3% which is notes and coins) is created as debt, then debt has to continuously increase if you want continuous economic growth. Most people I talk to think that it would be a good thing if people and the government had zero debt. It is a reasonable assumption to make considering how often we are told it is better to have no debt and debt is bad. But of course in our monetary system no debt = no money = economic collapse.
Ever increasing levels of debt are a built in feature of our modern monetary system. Money is debt.
For a short time I wrote for the positive money people so I understand these talking points quite well. They are roughly on the right track, though I would say slightly missing the point at times.
First off your comments kind of conflate spending and money, we spend money but many times that happens over and over in the economy for essentially the same money. This is one way that spending can increase without a change in the amount of money on issue (in credit) going up. Also, as you mentioned 3% (more or less) is high powered money. At least this component is not actually made up of bank credit and could (with alternative, though functionally equivalent arrangements) be issued without corresponding borrowing.
To me it makes more sense not to focus on the minutiae of monetary transactions, or ratios of different kinds of monies involved, as the system we have is basically flexible to implement what ever spending is supported by the institutions involved. PM sometimes makes alternative proposals called full reserve banking, however a more close examination of those simply shows they are equivalent functionally to the existing financial system. The implication of that being that what is being proposed by PM isn't going to make a blind bit of difference to how the financial system performs if implemented.
"Prime Minister Christopher Luxon said the government had a "big programme of work", and thanked the public service workers who helped make that happen, but he expected them to be highly productive and collaborative.
"I do not want to see working from home undermining that ambition that we have," he said. "What was introduced as a temporary measure during Covid four years ago risks putting pressure on team performance, office culture and workforce development."
"Ill-managed work from home not only threatens public sector performance today, it also puts the quality of our future leadership at risk."
https://www.rnz.co.nz/news/political/528779/watch-nicola-willis-demands-tightening-of-working-from-home-public-service-arrangements
But…
https://www.rnz.co.nz/news/political/583521/christopher-luxon-working-from-home-as-year-gets-underway
That's why we have a dearth of satire in this country, they are doing it for us.
The right wing magical efficiency tree in action
‘I don’t need international law’: Trump says power constrained only by ‘my own morality’
Not a bad summing up of the situation as it presently stands.
Oh joy….