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Fairfax quotes Government cheerleader

Written By: - Date published: 2:06 pm, February 16th, 2014 - 28 comments
Categories: david cunliffe, john key, labour, Media, national - Tags: , , ,

Fairfax yesterday posted this article where business high fliers were asked what they thought political parties should be talking about this election year.  I prepared this post as a fictional interview of ordinary people and their thoughts on what the parties should be talking about as this view should also be heard but then Fairfax posted this article today where real ordinary people were interviewed.  The difference in views between the high fliers and the ordinary people is somewhat jarring although the paper could have provided real balance by talking to someone surviving on a benefit.

Rod Drury, founder of Xero and who is estimated to be worth $400 million, made some comments in the first article which disclose an interesting world view.

He was a member of the delegation that recently travelled to Australia with John Key.  According to the article his concern is that the election will turn on “stuff that’s not important”.

What I’d like to see is the Government have another term because they’ve had two terms where they got the debt sorted and Canterbury [rebuild under way].

“I think they’re very smart people and I’d love to see them get a third term to use that great platform [to] do some more exciting projects . . . the one we keep talking to them about is [an international internet cable] so we can take more control of our destiny.”

National could win the asset sales argument by demonstrating that proceeds were being used to build up exciting new 21st century assets.

Labour needs another year or so to bed itself in under David Cunliffe.

Such economic illiteracy coming from such a senior businessman is a worry.  It obviously needs to be repeated that in June 2008 Labour had paid off all crown debt and the crowns accounts showed a slight surplus.  By September 2013 net Crown debt had reached $60 billion and increases in debt are predicted for years to come.

Of course many will then trot out Key’s mantra that Labour had left the country with a decade of deficits but this statement is essentially a lie. The Global Financial Crisis was the cause of the sudden change in the country’s finances but instead of Helen Clark and Michael Cullen being blamed I can suggest many other names of those who should take responsibility.  Names such as Wall Street, Morgan Stanley, Bear Stern and my personal favourite Merryl Lynch.  Because it was a bunch of robber merchant bankers that brought the world’s economy to its knees.

As for getting the Canterbury rebuild underway Drury should go to Christchurch and ask ordinary people what they think about the speed of the rebuild.  The response will not be polite.

And the International Internet Cable?  This was a private enterprise proposal that has not got past go yet.  The Government is struggling to get its broadband initiative happening so the chances of it doing anything further are remote.  About the only infrastructure proposal by the Government that is happening, apart from roads of notional significance, is Key’s cycleway and even this is struggling to be built.

And these exciting new 21st century assets?  We have not seen any yet.  And it needs to be said again that the power company shares could have been retained and the income used to fund the construction of these assets.

Fairfax would do better to have analysis and discussion of the state of the country rather quoting cheerleaders for the Government.

28 comments on “Fairfax quotes Government cheerleader”

  1. adam 1

    What is wrong with saying the crash of 2007 was caused by capitalism and it’s inherent flaws? That the crash has still not be sorted by any government on the globe and we are still suffering for it. Admittedly the working people in this country are paying for capitalisms mistakes again, because the rich won’t – ever! But, no lets put our heads in the sand and think it’s all getting better, till the next crash.

    • Draco T Bastard 1.1

      Admittedly the working people in this country are paying for capitalisms mistakes again, because the rich won’t – ever!

      ?
      QFT

      But, no lets put our heads in the sand and think it’s all getting better, till the next crash.

      At which point the 1% will get even more and bigger government subsidies.

      • aerobubble 1.1.1

        Interest rates will rise and high dollar will harm the economy, and ChCh rebuild will eventually be over, so it follows Key’s debt bubble will eventually have to be repaid.

  2. swordfish 2

    Ahhhhhhhh Rod BLOODY Drury. How often has that highly privileged guy featured in The Listener over the last year or two ? Every couple of weeks, I’d say. Fairfax obviously can’t get enough of him.

  3. Ad 3

    I’d feel happier if they asked the same questions of union members, social workers, retired people, those recovering from injury, etc. get a little tired of commentary from business alone.

    • Draco T Bastard 3.1

      Considering that it was listening to the business people (deregulation, tax cuts for the rich, etc) that caused the crash one wonders why people are still listening to them at all.

  4. Blue 4

    Debt from 0 to 60 billion in five years. Holy shit.

    Remind me again why National has a reputation for being ‘good at managing the economy’?

    • Colonial Viper 4.1

      Recent increases in govt debt which enabled higher govt spending is a good thing for NZ. (Of course, better still would be NZ issuing its own currency instead of borrowing it at interest from foreign sources.)

      The other alternative that English had in front of him was massive slashing of social welfare spending i.e. EU style austerity.

      • Draco T Bastard 4.1.1

        The other alternative that English had in front of him was massive slashing of social welfare spending i.e. EU style austerity.

        English may be stupid (he is a RWNJ after all) but I’m sure he realised that there was essentially nothing that could be cut from the welfare budget. The only place that cutting would have made any difference was Superannuation and there was no way he was going to cut that. Instead National just put more pressure and stress on the unemployed to make it look as if they were doing something.

      • Molly 4.1.2

        Some of the other finance choices they chose to make:
        Bailing out SCF, enticing oil and mineral companies to NZ, not enacting tax cuts, dubious economic benefits of civilianisation of MoD, Roads of National significance…

        These are some fairly obvious examples of where there were alternatives – specifically not spending. And making your limited budget go further is just as effective as raising your income.

        • Colonial Viper 4.1.2.1

          Yes, the tax cuts to high incomes hurt the bottom line. SCF a little bit too. Enticing oil and mineral companies here, that’s small change. RoNs are no good obviously, but AFAIK the majority of that spending is in the future and not much would have been saved over the last couple of years.

          Bottom line is that English could have reduced borrowing by perhaps $3B to $4B by cutting all that stuff out, but the key is to understand that the debt per se is not bad, it has kept NZ running without falling into a neolib austerity track with catastrophic levels of unemployment (10% or higher).

          As I mentioned, we would be much better off by funding that spending via the issuance of currency.

          • srylands 4.1.2.1.1

            “As I mentioned, we would be much better off by funding that spending via the issuance of currency.”

            What?

            • Tracey 4.1.2.1.1.1

              Bill english… ” effectively acknowledge that Michael Cullen had done something right in his stewardship of the Government’s finances in the past nine years.

              Having condemned his predecessor for many years for paying off debt too quickly, English said: “I want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook.”

              “In New Zealand we have room to respond. This is the rainy day that Government has been saving up for,” he told reporters at the Treasury briefing on the state of the economy and forecasts.

              English pointed to a graph of the debt track since 1972 and projected five years out from today.

              The recent low was 17 per cent of GDP and the ghastly projection for 2013 is 33.1 per cent and possibly worse, under what Treasury calls a “downside scenario” – 38.6 per cent.

              Unemployment is forecast to rise to 6.4 per cent in 2010 and deficits forecast to be $2.4 billion to $3.5 billion larger over the 2010 to 2013 years than forecast just before the election.

              In the midst of the horrible outlook and depressing uncertainty about how bad it might get, English was forced to change his message about his inheritance from Labour because it was more important to inject some sense of positivity into the situation. He needed to do it for both political reasons and for real financial reasons.

              As Labour finance spokesman David Cunliffe said yesterday, too much negativity could drive confidence down even further.”

              Funny what you chose to respond to. Well, not so much funny as sad and transparent.

              Of the plan that Cunliffe demanded of English today, the Finance Minister said: “The plan in essence is quite simple, that is to maintain significant short-term stimulus in the economy, to protect people from the sharp edge of recession and secondly to get on with the job of raising our longer term growth prospects…with some urgency.”

              Tax cuts are on the way; decisions will be made in the New Year on which infrastructure projects will be brought forward and English and Prime Minister John Key will be meeting chief executives of Government departments this afternoon to give them the bad news: don’t ask for any more money in Budget 2009 because you won’t get it.

          • RedBaronCV 4.1.2.1.2

            The top end tax cuts and gst shift, going on figures I’ve seen quoted, are costing a billion a year each for 6 years =$12b. Had English put the same money into bottom end tax cuts the picture would have reversed, more funds in local economy, multiplier effect thereon, lower welfare bill. The cost of maintaining a reserve army of unemployed is large. Add to that all the crap govt spending and coporate welfare and English can pat himself on the back as a $30b liability.

    • Draco T Bastard 4.2

      From what I can make out it’s because National keep saying that they do and people believe them despite the fact that every time that National (and their little side kicks) are in power the economy gets trashed.

  5. fender 5

    The Dominion Post (Fairfax publication) has a magazine insert with it’s Saturday edition titled Your Weekend. The Feb. 8 issue had an article “Vision for Godzone” where Nikki Macdonald “asks prominent kiwis what NZ really needs”. There were six people asked and I’ll summarize the main points of their replies (I found their replies rather contrasting)

    Rod Drury (Xero boss): “We have to export more. We need a NZ owned and funded international cable. NZ is largely service driven, but the focus has been on exporting products. Having substantial international connectivity means you can really start to export services. We need to grow the pie”.

    Dame Anne Salmond (Anthropologist, NZer of the year): “How to have a prosperous future without destroying what’s best about the country. We are still making some big mistakes around our relationships with the land, sea and waterways. Sometimes we have a short-term horizon, sacrificing everything for a quick buck. We need to farm successfully without destroying the waterways; learn how to fish in such a way that the fish remain plentiful. We are heading down the radical economic and social inequalities track. We need to work together, we can’t get there knocking heads in a hostile way”.

    Oscar Kightley (Writer, Actor, Comedian): The biggest issue is the growing gap between the haves and the have-nots, there’s growing inequality. First settlers came to escape that whole class system when where you were born would dictate the kind of life you had. But now it feels like if you’re unfortunate enough to be born in the wrong circumstances over here, that’s your lot in life. One in four children living in poverty is worrying, it cost us all in the long term. I’m not sure trickle-down theory works, otherwise it would have trickled down”.

    Sir Brian Lochore (Former All Black and coach): “I get annoyed with the political system, where one side is pulling against the other; we need team-work. There are too many politicians that don’t represent people (list MP’s), and they hold sway. They’re not voted in, a return to first-past-post would be a good start. I don’t like that there are some people getting incredible wages and some getting probably not enough. I applaud the people who have got us out of the economic hole”.

    Cecilia Robinson (Businesswoman, 2013 young entrepreneur of the year): “We need to find a way to keep our young talented people in NZ. The hardest thing is the cost of living, wages haven’t gone up, we’re struggling to compete with higher wages offered in other countries. The housing market is just spiralling out of control”.

    Dame Iritana Tawhiwhirangi (Kohanga Reo pioneer): “We need to help families support themselves and other families. Leaving it to govt. or agencies or schools is no longer tenable. Despite our fix-it mentality we’ve got families that are struggling. Schools and teachers are critically important, but the people who figure most in the lives of children are actually marginalised. Here we are rushing around to feed children; well where are the families? When we take away the responsibility of people, and assume responsibility for them, we actually breed irresponsibility.” We need to build community.

    As you can see, some of these views are insightful, and others naïve/stupid.

    • greywarbler 5.1

      No-one there is completely naive except Sir All Black (and farmer?) Things aren’t working out because we made changes ie to MMP? And the idea of list people to balance the electorates is wrong because the list haven’t been personally voted for. Well we voted for the Party and they have people they think will be useful, to combine with the electorate members who have appealed perhaps on personality or local connections rather than on expertise that is outstanding. List people can be a pain but so can electorate members.

    • RedBaronCV 5.2

      No wonder the country is in a mess. The old white guys, Drury and Lohore haven’t even got their head around the national debt issues or MMP. And they think they should be running the show.

  6. Herodotus 6

    “June 2008 Labour had paid off all crown debt ” – Really is there something you know that escapes the likes of those from these links and myself, that a link to verify your statement would be appreciated not only for myself but I am sure that Treasury would appreciate where they are incorrect in their analysis.
    http://www.johnpemberton.co.nz/html/government_debt.html
    http://www.treasury.govt.nz/economy/mei/archive/pdfs/nzecp-charts-apr12.pdf
    http://www.treasury.govt.nz/budget/forecasts/befu2008/15.htm
    I am sure in this case that this is either: a poorly structured statement or an error (that will be edited to correct) has occurred.
    As there have been examples where mis truths (as opposed to errors) were made consciously e.g.
    http://www.truth-out.org/archive/item/80030:as-campaign-heats-up-untruths-can-become-facts
    As we would hate for this to be applicable ?
    John Feehery, a Republican strategist, said the campaign is entering a stage in which skirmishes over the facts are less important than the dominant themes that are forming voters’ opinions of the candidates.

    • mickysavage 6.1

      The quote from the link is “As at 30 June 2008, net core Crown debt was in a small net asset position of $19 million”. This is net core crown debt. It does not include the Cullen Fund but it includes other funds such as ACC.

      Edit: rereading the post this is not clear and I have amended it. Net Crown debt had been paid off, not all crown debt.

      • Lanthanide 6.1.1

        Er, it’s really not obvious that you amended it, micky, you just put a strikethrough of the word “all”. But because it’s such a short word, it’s very easy to miss the strikethrough, which is what I did when I read it.

        Better to just delete the word “all” completely.

      • Herodotus 6.1.2

        Thanks MS , appreciate the change. ;-)

      • ghostwhowalksnz 6.1.3

        Refer to Fig 2.12
        http://www.treasury.govt.nz/budget/forecasts/befu2008/15.htm

        Net core Crown debt equates to core Crown borrowings less core Crown financial assets (excluding the financial assets of the NZS Fund)

        The graph shows 2008 the Net Crown debt in 2008 to be about $2-3 Billion down from $25 bill in 97.
        It seems to be above $60 billion now, and English like all national governments before him , has no plans to pay it back

    • BLiP 6.2

      Which resulted in Bill English having to swallow a dead rat, or two . . .

      . . . Bill English had to swallow the proverbial dead rat this morning and effectively acknowledge that Michael Cullen had done something right in his stewardship of the Government’s finances in the past nine years.

      Having condemned his predecessor for many years for paying off debt too quickly, English said: “I want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook” . . .

      • ghostwhowalksnz 6.2.1

        English and Key neglect to mention before the GFC , they were advocates of more borrowing, like Ireland and Greece

  7. Lanthanide 7

    Someone should tell this guy that an national internet cable is apparently Green Party policy. He’s voting for last century’s dinosaurs.

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