National claims credit for “good economic management” but facts say otherwise

Bill-English For four years at least Bill English has been promising to get the govt’s budget back into the black. However our debt has grown as each successive budget has failed to produce a surplus, and in this time I would say our interest on debt in real terms has cost the NZ economy around $30 billion.

In his pre-budget speech on Wednesday, English still stuck to the weak “we can’t cut spending because it will hurt people” line and said even though he expected tax receipts to fall by another $4.5 billion due to deflation and low milk prices, he would not be cutting spending. He talks just like Helen Clark or any other socialist-

“If this last year falls slightly short of surplus, and we’ve got smaller surpluses in the next year or two, we’re not going to let that change our plans to get on with decisions that we think are going to result in a stronger economy and a better community.”

The interesting thing about National’s claims to be good economic managers is that this will be the seventh budget in a row with a deficit, and about the fourth that was “unexpected”.

Sending the clear signal that they’re hopeless at predicting future trends, and isn’t that what good economic management is all about?



Categories: Economics, NZ Politics

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10 replies

  1. National is completely out of touch with grassroots across NZ. The productive working sector that has delivered a first world standard of living is sick & tired of being screwed by control freak grasping manipulating suffocating administration & tax collectors. And being taken for granted. This country for too long has been consuming “seed capital’, existing on debt, frustrating innovation, grinding down the middle class. The National Party is as guilty as sin. The National Party Out Labours Labour. Which is saying something. The National Party’s principles have been thrown away & forgotten for at least a generation, maybe more. How come their supporters seem to accept socialism, such mediocrity & failed policies ?

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  2. The National version of economic management is to not increase tax or spending dramatically and wait for growth to make the books look good. They don’t have the balls or conviction to make any meaningful change.
    Why increase debt when you can cut spending? Taxpayers are powerless, future generations clearly are.
    Why borrow when you can print? The rest of the world is doing it and our dollar is sky high.
    Why not focus Kiwis on buying local products? BOT needs the help..
    Is it only the hard left that really have any conviction. We all know what they want because they dont hesitate to tell us.

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    • True but I disagree with printing money. It just devalues us, the resulting inflation hits savers and only benefits and encourages borrowing.

      We really do not want to continue borrowing, no person or Nation has ever borrowed their way out of economic strife. Sooner or later it has to be repaid with interest. We are now borrowing to pay the interest on previous loans.

      Our addiction to debt will be the undoing of western economies.

      Better to live within our means.

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    • National are not just waiting for growth they were waiting for higher inflation to balance the budget! That would have to be one of the craziest things I have heard, hoping for higher inflation to balance the books. Are we living in Zimbabwe!

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  3. Say what you will about Cullen.

    But he did run 9 successive budget surpluses. Our Debt to GDP decreased over that time.

    English has run 7 successive deficits. Our Debt to GDP has increased

    Most people choose not to see this rather inconvenient fact, because of party politics, but that does not alter the reality.

    What English and Key should have done is take the knife to Government spending and cut and burn off the huge amounts of waste and fat.

    Doing the right thing sometime means making the hard decisions that are not so popular.

    Can anybody name one hard decision that the Key Government has done in the last 7 years.

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    • But he did run 9 successive budget surpluses. Our Debt to GDP decreased over that time.

      Hell yeah. To ZERO nett debt. ZERO.

      Key’s given us a rockstar economy all right: borrowing ONE BILLION DOLLARS every month, and snorting them all up their nose as benefits.

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  4. I don’t say printing lightly, especially from a conservative point of view, but look at the rest of the world, they are printing and the money is pushing up stock markets, flooding into real estate and pushing up debt. Banks are being kept solvent and Governments are delaying the hard decisions. Economic principals have been turned on their heads. With low inflation and a high dollar there is an opportunity for us to manipulate the system, also. Could we not debate the pros and cons of creating money to fund assets rather than to create or borrow to fund liabilities? This is by no means a fix or a sustainable approach but maybe an opportunity to game the system before the house of cards… you know what.

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    • What we need to do is simple economics 101: cancel the Dole, DPB & other welfare; end super (not phase out, just end it); charterize all schools as full fee-paying; ditto hospitals; seek all state houses etc etc. It’s not difficult, it’s not in any way problematic, we just have to do what is Right.

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      • That would be one hell of a transition, like cold turkey.. The economy would collapse overnight, riots, homeless, crime.. Too many people have vested interest in the government and welfare has replaced personal responsibility. Not to worry though, the system is increasing the problem that it was trying to fix and there isn’t enough money and taxpayers to keep it going forever… Will government increase its control or will it be replaced by Family and Charity.

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        • “The economy would collapse overnight, riots, homeless, crime..”

          Yes there will be some social unrest. But at some point when people realize that they have to take responsibility for themselves they will run to more productive endeavors like finding as job.

          It would not be as bad as we are told it would be.

          One thing is for sure is that the longer the Ponzie scheme runs the harder the eventual landing. Better sooner than later.

          I suspect that nothing will change and we will ride this accident all the way to the bottom of the cliff.

          Mark my words. This will all end very badly.

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