He must resign. Surely. Here is Key, speaking to the PSA in 2008, making very specific promises about public service jobs, tax cuts, and asset sales that helped him get elected. Promises he has since broken. There’s no excuse. He wasn’t blind-sided by events. He made these promises never intending to keep them. Key is refusing to comment but if the man has any ethics he’ll resign.
Here are the quotes from the PSA speech:
“We’re not going to cut jobs, we’re just capping at 36,000″ – 2,500 jobs gone so far. For savings of $20 million, not the billion hoped for. 2,500 more jobs to go soon.
“We’re not borrowing for tax cuts” – National’s own Budget said the 2010 tax cuts would cost $1 billion over four years. They cost $1.1 billion in the first nine months.
“We’re not proposing to change the Employment Relations Act in a way that weakens unions” – and, yet, they have by allowing employers to block workers from meeting their union representatives in the workplace.
“there will be no asset sales in the first term of a National Government and there may never be asset sales in the years ahead” – National spent $6 million in Budget 2011, before the election, on preparing assets for sale. they were getting papers as early as 2010 on what assets to sell and how to spin it to the public.
“Nor am I hell-bent on selling assets, actually. I personally think that’s not the issue that the current economy faces…actually,I don’t think selling off state assets is going to make the boat go faster.” – Treasury and just about everyone else agrees. Yet National keeps claiming that asset sales are part of its growth strategy.
“The Crown’s dividend stream from the Meridians, the Mighty Rivers of the world is large.” – Funny, because for the past year Key and English have been saying the returns are below the cost of capital on owning these companies – which raises the question of why anyone else would want them. the truth is they are highly profitable. Even English’s biased numbers so the Crown losing $100m a year from asset sales.
“We don’t have a debt problem, they’re acting highly effectively as companies, and they’re making money – There is no motivation to sell assets.” – There is Key demolishing three more of what would soon become his own arguments for asset sales. And, despite the recession (which was already happening when he gave this speech) and the earthquakes, the Crown still doesn’t have a debt problem thanks to the fact that the Fifth Labour Government bequeathed zero net debt. Net debt’s going to peak at about 30%, well below the danger zone. It’s currently 27th lowest in the 34 member OECD. And, of course, selling assets rather than taking on more debt makes no difference to net wealth. In fact it makes it worse in the long-run as the government has to borrow an extra $100m a year to make up the shortfall from foregone profits.
“We’re about creating assets, actually, not about selling assets.” – This term, all they’re about is selling assets … and cutting jobs that Key promised not to cut.
“There is no agenda to sell assets.”- That promise helped him get power in 2008 with the near-certainty of a second term. It was a lie.
Don’t give me any bullshit about Key being forced to break his promises by events. He knew there was a global recession when he made these commitments – he was speaking during the campaign in October 2008, the steepest part of the recession, a year after the subprime crisis began, most of a year after the drought here, and months after the Lehman collapse. And he broke all those promises long before the earthquakes started.