Robertson's unrepeatable rocket for Treasury

Finance Minister Grant Robertson had some choice – but unpublishable – words for the Treasury Secretary (photo: Rob Hosking)

Finance Minister Grant Robertson had some choice but unrepeatable words for the Treasury Secretary, Gabriel Makhlouf, when it emerged the government's lead economic agency had over-estimated the impact of Labour's flagship families package replacing the previous government's tax cuts and targeting low-income families.

Legislated before Christmas, the package was billed as lifting 88,000 children out of poverty, striking an early blow for one of the new administration's primary targets reducing child poverty.

However, the Treasury announced on January 17 it had advised Robertson of a coding error that meant the benefits of the package were overstated, thanks to an error in a single line of code in a mathematical model, but that it had not yet worked out what the real number should be. Its estimate that the previous government's mix of tax cuts and low income household measures would have improved the lot of more than 50,000 children was also wrong because of the same mistake.

Asked what he said to Makhlouf when told of the error, Roberston told a press conference following a Labour caucus retreat in the Wairarapa he did "not want to say that in the company we are in now".

"I was very, very disappointed. I expressed that disappointment to the Treasury Secretary, and he undertook to redo the analysis as quickly as he could. I made clear that, for us, this was an important projection and important for him to get it right."

The error exposed the government to questions about possible fiscal pressure in the 2018 Budget because of the higher hurdle required to reduce child poverty, but Ardern said the figure of 88,000 children moving out of poverty was "never a target" and only ever a projection provided by the Treasury.

"This package will still reach more than 380,000 families. What we don't have a clear picture of is how many of those have children in poverty," she said. "But the package is still a solid package. It will not change.

"All we will know is how much further we have to go to hit some of the ambitious targets we have for child poverty. That was always the case."

Ardern is expected to release concrete targets for reducing child poverty in coming days, along with legislation intended to make the government accountable for measurable reductions and to allow public input on the government's level of ambition.

While the government would maintain the previous administration's innovation to have a set of high level Better Public Service targets, it would more explicitly target such issues as cold, damp homes and levels of absolute child poverty than the National-led government, which used proxy measures such as reductions in the incidence of rheumatic fever to signal improvements in both areas.

(BusinessDesk)


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A good tradesman doesn't blame his tools!!

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He should quickly replace one's that don't work .

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Yes I would've thought that a "Minister of Finance" would be able to do simple costing arithmetic.

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This is quite the turn around from excusing Stephen Joyce's poor arithmetic.

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And who said his arithmetic was wrong? Actually looks better than Robertson's and the Treasury maths at the mo.

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More people will be living in cars because of Labours beat up of Landlords creating a Rental Shortage Crisis.

Private Landlords are leaving in droves and the poor Tenant Family suffers.

Most Tenants unable to find a rental in Auckland and in Wellington.

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If landlords are leaving in droves where are all the properties they were renting out? I don't see reports of increases in listings so are they just sitting empty waiting for capital gain? Every January we have the same stories about rental shortages and then it goes quiet.

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On AirBNB. Capital gain without the compliance. So people can't buy, there's nothing to rent, and thousands of dwellings standing empty (most of the time). All a bit hideous.

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True. Running a business while pretending not to, so as not to face the costs hotels and motels face.

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The problem seems to be too many tools !!

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Drongo berates drongo?

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There are always shortages come end of year.,,,,this year count down claimed it was shortages that made pumpkin $20 each and kumera $8.each.
Then as soon as the xmas spend was over pumkin were $5 each and Kumera $6 a kg.....now that is usery and nothing else.
Then they have the gaul to say lower prices every day.....in short that is Bull....
Houses the same the owner can get more at xmas by tipping the tenant out and going for a new one at a new price....the petrol Companies are the same and then tell you it is because of a shortage....and on and on.
We must have the weakest COMCOM in the world and even if they decide to do something it takes a year or more.
The purchasing public are too laid back and should scream at the first sign of rackets showing up.....then perhaps the retailers will get the message.
They should them be prosecuted by COMCOM without delay.

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Agree. But, Should the public have to "scream"?
Is that not what ComCom are paid, by the public, to do?

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Would anyone have noticed had Treasury just 'buried the body' and said nowt?

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No one, its called government of the people by the bureaucrats for the bureaucrats

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Critics of the living standard framework, and of Treasury's push to hire non-economists as part of that, warned that it would be at the expense of rigorous analysis. Makhlouf responded to those unnamed critics in a December speech by asserting the importance of Treasury doing both. In a world without opportunity costs, that would be a lovely thing. In a world where you have to live within a budget constraint and hiring more non-economists means having fewer economists around, well, maybe not.

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