web analytics
The Standard

One day older and deeper in debt

Written By: - Date published: 7:15 am, March 21st, 2013 - 103 comments
Categories: debt / deficit, exports, jobs, monetary policy, overseas investment - Tags:

There’s this almost puritan kind of myth that we’ve got so much international debt as punishment for our spendthrift ways. We ‘live beyond our means’, apparently. But it’s not true. If ‘our means’ is the money we make in exports, then most of the time, they exceed what we spend on imports. Yet, we run a $10 billion deficit as a country. Why? Because of the profit outflow.

We hear about the current account deficit all the time and most of us conflate it with the trade balance (ie exports minus imports) but the trade balance is just one part of the current account deficit – the other big part is the income balance. That’s how much overseas investors make in profits on the debt Kiwis owe them and the assets they own in New Zealand minus the profits New Zealanders’ loans and investments overseas make.

The trade balance is usually in surplus – we export more than we import (although not at the moment). It’s this second part – the income balance – that causes the current account deficit to be so massive.

Here’s the latest figures, breaking down how we racked up $10.5 billion in deficit last year:

current account balance 2012

As you can see, we exported more goods than we imported, imported more goods than we exported and ended up with a small trade deficit. But that’s dwarfed by the nearly $10 billion that was the net outflow of dividends and interest (the ‘current transfers’ is overseas aid, other donations, remittances, and people taking their money with them when they leave the country).

The irony is that to fund the deficit we have to borrow more from overseas or sell our assets to foreigners. And that just means a greater outflow of profits the next year. On and on, worse and worse each  year.

Now, let’s go right back and look from the start of the neoliberal era to the present. Remembering that for quarter of a century, the Right has blamed our international debts on us ‘living beyond our means’.

current account balance 1987 to 2012

We’ve actually exported $17 billion more worth of stuff in the last 25 years than we’ve imported. But it’s a pittance compared to the net $189 billion we’ve sent offshore in interest and dividends. That $163 billion figure at the end – allowing for currency fluctuations and asset value changes – that’s pretty much the net $150 billion that we owe the rest of the world in the form of debt and overseas ownership of New Zealand assets.

You can see the cycle, we borrow from overseas or let foreigners buy our assets, then we have to pay them interest and dividends, and we pay for those by selling more assets or taking on more debt… and so on.

Now, part of the solution is exporting more and importing less – that’s half of why we need a lower dollar, the other half is to create and protect Kiwi jobs.

Other steps to improve the trade balance include government favouring Kiwi businesses for big contracts (note National sent the rail rolling stock, Novopay, ultrafast broadband cable, and Mighty River website contracts overseas), investing in R&D, and importing less oil – the rising cost of crude means that we spend $8 billion importing the same amount of oil that cost us half as much in 2005.

But more important is reducing or at least stemming the growth of our debt pile with the rest of the world.

Start by looking at the banks. The foreign banks are the biggest owners of New Zealand debt and the biggest cause of the balance on income deficit. They make their money by inflating our housing market. Bring in rules to stop the foreign banks lending so much money into the housing market and not only will you make housing more affordable, you’ll reduce our current account deficit and international debt.

The next biggest source of international debt is foreign ownership of New Zealand assets. Although smaller than our debt via the banks, the rate of return is higher for the foreigner investors. Tackle this by preventing foreign ownership of strategic assets, by not selling our public assets, by putting in rules about overseas landlords for residential property and generally insuring that foreign investment is real investment in new capital wealth – not just buying what we already have.

(The other sector of foreign debt is the government sector – actually, we usually lend more to the rest of the world than we borrow thanks to the Reserve Banks big overseas reserves, but that’s gone negative under National, too).

If we don’t do something, if we keep on just letting foreign capital buy up more of New Zealand and pay for the pleasure by sending a larger and larger share of our GDP overseas each year, then our net international debt is forecast to grow from an eye-watering $150 billion this year to a disastrous $200 billion in four years.

Where does that road end? It ends when our debt pile gets so big that our overseas creditors fear we won’t be able to make our payments and they stampede for the exits – our businesses are suddenly left high and dry unable to get refinancing, the government has to pay much higher interest rates on its debt, and the currency suddenly plunges sending shockwaves through the economy.

Better to manage things and avoid hitting the wall like Greece did, by using the kind of policies I’ve mentioned above. Of course, those are the policies that the Greens, Labour, NZF, and Mana espouse, and which National has rejected in favour of sticking its head in the sand and letting the wealth flow out of our country at the rate of $10 billion a year.

103 comments on “One day older and deeper in debt”

  1. IrishBill 1

    Crikey. I was aware expatriated profits were big (like decent percentage of GDP big) but that’s astounding. On the other hand it’s a simpler policy fix than a massive trade deficit would be.

    • lprent 1.1

      It is freaky… Much of that is just from interest on housing mortgages – pretty unproductive for the country. And easier to contain.

      • Lanthanide 1.1.1

        Government should reduce OCR by 1% and introduce 1% tax on residential mortgages instead. Keep the money in NZ.

        • Draco T Bastard 1.1.1.1

          Nope, the government should stop the private banks from printing money and take over that function themselves. Make loans out to businesses and individuals at 0% and dump the OCR altogether.

          As soon as the government takes the privilege of printing money off of the private banks then we can do something about the economy. Leaving it as is will continue our path to debt slavery.

  2. ad 2

    So how many on this site have Kiwibank accounts?

    • Colonial Viper 2.1

      I used to have a PostBank account until some shit of a government sold it off.

      • SpaceMonkey 2.1.1

        I have my savings (minor) in wholly-owned NZ banks and my borrowing (also minor) with an Australian bank. But my real savings are in physical precious metals – gold and silver. Have been a gold and silver bug since the GFC when I first realised how much of a racket the global financial scam was.

    • every loyal Kiwi should have a kiwibank account. the government should give westpac the flick and use its own(ours actually) bank.

      • Colonial Viper 2.2.1

        Cullen could have done that.

        • Alanz 2.2.1.1

          Looking forward to Shearer doing that.

          I opened my Kiwibank account in the first week it was established. Foundation member, I am, and that is printed on my card.

        • Pete 2.2.1.2

          I imagine there were some rules under the Public Finance Act he had to stick to. Westpac probably made the better offer.

          • Colonial Viper 2.2.1.2.1

            Ah ha. But what was the better offer for the country?

            I imagine there were some rules under the Public Finance Act he had to stick to

            The Westminster powers of a sitting Government come in handy at that point.

      • aj 2.2.2

        Or a Co-operative Bank account
        Or a TSB account
        Or a SBS account
        Or a Credit Union account.

        • Ed 2.2.2.1

          There is also Heartland Bank. I don’t know which of those is wholly New Zealand owned, although I suspect Credit Unions would be. This uncertainty is a good reason to keep Kiwibank wholly owned – it is clear to everyone that it is not putting money in the hands of overseas shareholders..

    • Saccharomyces 2.3

      My home loan is with Kiwibank…… why? Because they gave me the best deal.

      • geoff 2.3.1

        Yeah they give you good deal as long as you at least 20% deposit. Good luck to the average first-home-buyer getting that much money together.

    • lprent 2.4

      Kiwibank? Me personally, this site, our household account, and I think Lyn has at least one because I send stuff there when she pays for my airflights or whatever..

      I also have an account with a ANZ (damnit) for my apartments mortgage. I originally fled to the National bank to escape the irritating and fee ridden clutches of the ANZ many years ago and now they have gobbled me up again. At some stage I will summon the time to move again when and if they irritate me again.

      • Pete 2.4.1

        They got me young. When I was five years old I had a school banking (do they still do that?) account with the post office. Which was a two minute walk from my small suburban school. And then a couple of years later someone closed down that post office and I was given a different passbook – not one with the colourful design of kids flying kites over some blocky city, but a boring grey one that simply said “Postbank”. Then they got bought out by ANZ. By that stage it was too much of a hassle to change banks.

        I do have a Kiwibank account in my name. It was originally a flat account.

      • McFlock 2.4.2

        just when you thought you were out, anz pulled you back in…

        Kiwibank myself.

    • r0b 2.5

      I’m with KiwiBank.

    • karol 2.6

      I have been looking at opening a KB account – sorted out the specific account that suited me – am planning to do it in the next week.

    • Tiresias 2.7

      I’ve banked with KiwiBank since its day one.

      As at today I have something over $150,000 on on-line call, 32-day and 90-day notice accounts there but the week-end’s events in Cyprus have made me seriously consider the wisdom of maintaining so much in one jurisdiction, let alone one bank. Indeed, given the present exchange rate this might be a good time to park some in a US$ account in New York. If it’s good enough for our Great Leader it should be good enough for me.

      • SpaceMonkey 2.7.1

        I wouldn’t go near the US dollar… it’s on a hiding to nowhere. Personally, I maintain as little fiat currency as possible, I invest what I can into gold and silver. If I was to store cash in a non-NZ currency, I’d look for a currency whose central bank is not quantitatively easing it into oblivion.

        • Tiresias 2.7.1.1

          I avoid precious metals – they need a functioning market and if the excrement really hits the fan…

          So my primary investment is a chunk of good land far from the madding crowd from which I supply my own milk, cheese, beef, mutton, lamb, veges, chooks and eggs, with my own spring above the house which was still running before last week-end’s rain, and enough solar power to keep the freezers chilled if nothing else.

          I cook and heat my home and water with wood from the forests around me in which there are deer and pigs and possoms gallore (and rabbits too, alas), gather oysters on the beach nearby and have snapper, blue cod, green-lipped mussels and salmon as short row down the bay.

          Oh yes , and I’ve a rifle for the deer and pigs and a shot-gun for the possums and rabbits, and plenty of ammunition for both.

          There’s supposed to be gold in them thar hills, too, but I’ve never bothered to look for it.

          • SpaceMonkey 2.7.1.1.1

            You are where I would want to be when the SHTF… I’ve always considered land (as opposed to real estate) as the number one investment – provided you can get it without the assistance of a bank and that’s out of reach of most people these days. I like your set up.

            I should qualify that my investment in precious metals is really a hedge, not an investment. Which is why I distinguish the physical from the paper. It is a response to loss of confidence in fiat currency and paper precious metals (especially gold and silver) are being gamed even more than other ETFs – TPTB are desperately trying to keep the illusion going that the US dollar and other QE currencies are actually worth something now.

            I will convert it back when things settle down but if that’s not in my lifetime, I’ll leave a map for my children with an ‘X’ for where I’ve buried my hoard! Lol… :)

            • Tiresias 2.7.1.1.1.1

              I must admit that, just sometimes, it would be really, really nice just to be able to send out for a pizza.

          • North 2.7.1.1.2

            Do you ever Tire’ of the Good Life ?

    • Kevin Welsh 2.8

      Yep, Kiwibank here. Joined the first day as a Foundation Member. Do all my banking through them.

    • The Al1en 2.9

      I have one. I started it when I took out my 100% first time buyer mortgage, and I’d never dream of changing banks… Until the nats privatise it.

    • infused 2.10

      Nope.

      Don’t give me the loyal crap. They need to drop their fees. It’s nice to be able to actually walk in to a bank and deal with issues there and then.

      Also, kiwibank didn’t give me a mortgage, TSB did.

  3. Dem Young Sconies 3

    I’d be happy to see the total of foreign debt & capital nationalised without compensation. The cabal of vulture capitalists shouldn’t be rewarded for their theft.

    • Colonial Viper 3.1

      There’d be an immediate capital strike against NZ. Say bye bye to fuel, pharmaceuticals, farm exports.

      • Dem Young Sconies 3.1.1

        We have plenty of our own oil for fuel.
        We can source generic pharmaceuticals.
        With the stress on the environment, and animal welfare issues, we shouldn’t even be farming ruminants in NZ anyway. We can make do with just supplying the local market, and countries that aren’t controlled the the world bankster elite.

        • tinfoilhat 3.1.1.1

          Look I’m as green as you get, but your post is just silly and delusional……… or are you a RWNJ troll doing a very poor parody post ?

        • Colonial Viper 3.1.1.2

          We can source generic pharmaceuticals.

          Yes NZ can manufacture one or to two dozen of the most commonly used drugs, several of them by violating international patents (hey in for a penny…), but that leaves pharmacy shelves 95% empty.

          • geoff 3.1.1.2.1

            Does this mean you’ve recently changed your tune a bit regarding this, CV?

          • Draco T Bastard 3.1.1.2.2

            Oh, noes, we might have to do some R&D.

            • Colonial Viper 3.1.1.2.2.1

              And what do patients who need their medications daily do for the 5-10 years before that R&D outputs?

              Any other glib solutions?

              • Draco T Bastard

                As I said below, I doubt if we’d actually lose all that you assume we would.

          • geoff 3.1.1.2.3

            No I’m getting you confused with DTB

            • Colonial Viper 3.1.1.2.3.1

              no probs mate

              I think a dramatic “Great Leap Forwards” style exercise is to be avoided for the moment, in favour of a planned, strategic import substitution programme.

      • Draco T Bastard 3.1.2

        That’s ok, we don’t need them.

        Pharmaceuticals we can, and do, make here.
        Fuel, meh – that’s what we have electricity for and we also have our own oil wells. Sure, it’s only 44000 bbl/day rather than the 150000 we use but it’d work out.
        I’m sure the farm exports wouldn’t decrease either – they’d just change destinations.

        I don’t think we’d lose as much connection to the rest of the world as you think we would.

        • geoff 3.1.2.1

          Didn’t Iceland tell the IMF to fuck off? The icelandic bloke that Kim Hill interviewed last week didn’t give the impression that Icelanders were starving in the street. It’s all scaremongering that
          the powers that be use to try and keep nations under control. There’s just no way that business, financial or otherwise, would ignore the trade potential of 4 million westernised consumers.

          Speaking of finance….it looks like the karma might finally be catching up with the likes of Jamie Dimon and J P Morgan. http://www.huffingtonpost.com/lynn-parramore/jamie-dimons-ultra-americ_b_2915429.html

          Bring on the global debt jubilee.

          • Tiresias 3.1.2.1.1

            Sorry but the Iceland-economic-miracle-sans-IMF is fiction. Educate yourself.

            http://icelandicecon.blogspot.fr/2013/01/the-economic-truth-on-iceland.html

            “So there you have it. The cosy picture drawn of the economic miracle of Iceland has serious stains on it. Despite the fact that the economy has, partially, rebounded to its pre-crisis level, the underlying foundations are so termite-infested that the slightest wind could blow the whole economy to kingdom come! That applies especially to the problem of abolishing the capital controls.”

            • Draco T Bastard 3.1.2.1.1.1

              IMF Says Bailouts Iceland-Style Hold Lessons in Crisis Times

              Iceland refused to protect creditors in its banks, which failed in 2008 after their debts bloated to 10 times the size of the economy. The island’s subsequent decision to shield itself from a capital outflow by restricting currency movements allowed the government to ward off a speculative attack, cauterizing the economy’s hemorrhaging. That helped the authorities focus on supporting households and businesses.

              “The fact that Iceland managed to preserve the social welfare system in the face of a very sizeable fiscal consolidation is one of the major achievements under the program and of the Icelandic government,” Zakharova said. The program benefited from “strong implementation, reflecting ownership on the part of the authorities,” she said.

              It seems that the IMF disagrees with, from what I can make out, is a RWNJ think tank.

              • Tiresias

                I’m not denying Iceland did much better for its people than, say, Greece or Argentina, but believing there’s an easy, pain-free way out of such a mess that only punishes the guilty is a delusion.

                • geoff

                  I never said Iceland had a pain-free transition. I was pointing out that they haven’t been shut out of the global economy in the way that say North Korea has been.

                  If anything, Iceland hasn’t gone far enough. What you appear to be advocating for is crony capitalism. It is absolutely possible to punish the guilty more effectively than has been done so dar and it is slowly beginning to occur in the US because it has become politically untenable to ignore the crimes.

                  • Tiresias

                    ” What you appear to be advocating for is crony capitalism.”

                    What on earth have I written that makes you think that?

                • Draco T Bastard

                  I never said there was a pain free way out of the mess that the banksters have left us in but I do believe that we do need to look for a way out and getting rid of foreign owners/investors and telling the banks where to get off is a good start.

                  • Colonial Viper

                    For it to be not wholly disruptive it’ll have to be a decades long project. And they’ll make sure that the government responsible doesn’t survive in power that long.

                    • Draco T Bastard

                      That’s why you put it to referendum. Governments may change, the people won’t.

      • SpaceMonkey 3.1.3

        Worse than that… I suspect the banksters would engineer a coup or a crisis to overthrow the Government. They might have tolerated our anti-nuclear stand but renationalisation of capital would send TPTB into apoplectic fits and see NZ reduced to rubble like Libya or Iraq. All in the name of democracy, of course.

        • Colonial Viper 3.1.3.1

          They got rid of Salvador Allende, Chile. TPTB then installed a neoliberal, banker friendly leader by the name of Augusto Pinochet.

          • Colonial Viper 3.1.3.1.1

            From wikipedia

            Financial conglomerates became major beneficiaries of the liberalized economy and the flood of foreign bank loans. Large foreign banks reinstated the credit cycle, as the Junta saw that the basic state obligations, such as resuming payment of principal and interest installments, were honored. International lending organizations such as the World Bank, the International Monetary Fund, and the Inter-American Development Bank lent vast sums anew.[43] Many foreign multinational corporations such as International Telephone and Telegraph (ITT), Dow Chemical, and Firestone, all expropriated by Allende, returned to Chile

    • Tiresias 3.2

      Or you could make yourself even happier by migrating to North Korea and living the experience of a citizen in an International pariah.

  4. bad12 4

    10 Billion and rising, for the last quarter the current account deficit widened from 2.5 billion to 2.7 billion so on that track it will soon be an annual 11 billion,

    Government ‘contracts out’ some 30 billion dollars of ‘work’ annually, much of this also goes to overseas company’s,

    Labour have said that they will look at all this 30 billion dollars of spending to see which of it can be spent here in New Zealand,

    Obviously we as a country are now tied into being sucked dry like the host of a leech by various international trade agreements so the Government cannot simply proclaim that all it’s spending will favor New Zealand owned and operated companies,

    Such trade agreements tho do not preclude a silent and unspoken bias by any Government toward having it’s contracted ‘work’ carried out only by New Zealand companies,

    Interestingly or not, Chinese buyers of our diary products have at the latest auction pushed the price of milk powders up from 4 thousand dollars a tonne to 5 thousand dollars a tonne thus going some way to ‘saving’ those farmers who have been hard hit from the drought losing up to 20% of production and as an incidental once contracts are settled helping to at least stabilize the current account deficit…

  5. Lan 5

    Why its annoying to hear the Gibbs, Fay, Richwhites etc (tho latter two seem quite quiet these days) making smart remarks about the New Zealand economy that they plundered in the 80s! And now with the energy “companies” government is doing it all again .. not to mention the sale of our best land and housing stock. Nuts.

    • Tim 5.1

      Yea, Messrs Fay and Richwhite are rather amusing. (As in trying to feign horror at Crafar farms potentially going offshore and doing a deal, considering their history).

  6. vto 6

    http://www.youtube.com/watch?v=jIfu2A0ezq0

    I owe my sole to the company store ….

    • Lightly 6.1

      I believe it’s ‘soul’, but in New Zealand’s case, the soles of our shoes is more accurate.

      • vto 6.1.1

        Yes of course, brain wobble… It is also “another day older” not “one day older”.

        16 tons and whadda ya get..

        another day older and deeper in debt..

        Johnny Cash does a good version too. “St Peter don’t you call me ’cause I can’t gooooo ….. I owe my soul to the company storeeeee…”

  7. DH 7

    Good commentary Anthony James but you must be joking when you say Labour have policies to fix it. I’ve yet to see one.

    For what it’s worth some $100billion or so of our overseas debt is owed by the Australian owned banks. We don’t owe it, the banks do. We just owe the banks via mortgages but that’s domestic debt, not foreign debt.

    One of the most effective means of managing away much of that overseas debt is to cut the banks adrift and force them to wind down their capital base paying back their overseas borrowing. We can do that by greatly expanding Kiwibank. It needs a large injection of capital and if the Govt is going to put an SOE on the sharemarket it should be Kiwibank. Not to sell it but to expand it; issue more shares to the NZ public.

    • bad12 7.1

      Australian owned banks??? your kidding are you not, your belief in the ‘fairy tale’ of New Zeland banks being owned by our close mates from Aussie makes me smile,

      As our bnaks are nominally owned by the Australian Banks the Australian Banks are all owned by the bigger fish in the pond namely the International Banking Cartels,

      Mostly you wont find the names of the big US banks on the share registers of those Aussie banks, such shareholdings are all held in Nominee companies and it is the name of the nominee companies which appear on the share register,

      Keeps a hell of a lot of us believing in the ‘fairy tale’…

  8. DH 8

    “Good commentary Anthony…..”

    Damn, where’s the edit function. I meant James, not Anthony…. duh!

  9. Harriet 9

    Someone who is adding to the total wealth of this country is not depriving you of anything.

    But someone who is consuming the nation’s wealth, without contributing anything to it, is.
    Yet our tax system penalizes those who are producing wealth in order to subsidize those who are only consuming it.

    Tax reform is overdue, national debt or no national debt. 😎

    • Draco T Bastard 9.2

      Someone who is adding to the total wealth of this country is not depriving you of anything.

      Foreign investors aren’t adding anything to this country.

    • Colonial Viper 9.3

      Yet our tax system penalizes those who are producing wealth in order to subsidize those who are only consuming it.

      What do you mean by wealth? Do you mean “money”?

      You do know that all wealth originates from the resources of nature, right?

      • DH 9.3.1

        “What do you mean by wealth? Do you mean “money”?”

        Money is just a medium of exchange; a convenient means of storing value that’s portable. If a nation increases it’s collective wealth then it must follow you’d need more money in circulation to cover it. We’re only in trouble because we’re not increasing wealth, rather inflating the value of assets. Money isn’t the problem, they’ve just allowed too much of it to be created.

        If the Reserve Bank had been told to include asset inflation in their low-inflation targets we probably wouldn’t be in this mess. From a monetarist perspective there’s no difference between consumer inflation and asset inflation. They’re both monetary in origin so it’s a total mystery why they’ve ignored asset inflation.

    • Colonial Viper 9.4

      Tax reform is overdue, national debt or no national debt. 😎

      Also, do you believe in the provision of a commons of goods for society? And how do you believe that commons of goods be paid for?

    • bad12 9.5

      Harriet, the pathetic ‘contributes’ argument has been round and round so often that i cannot be bothered to raise the arguments with you that show it, (the contributes/doesn’t contribute argument), is a load of bovine defecation,

      Needless to say your argument only holds the slightest bit of credibility where the individual does not contribute over the period of a life-time,(how many million of the New Zealand people do you know in that category,

      You are of course free to pack your s**t and find a country to reside in where the State contributes mostly ZERO to the individual and the individual is solely responsible for their own means of existence,

      Vanuatu springs to mind as the closest destination, Somalia if you hanker for the African sunshine…

  10. Draco T Bastard 10

    The next biggest source of international debt is foreign ownership of New Zealand assets. Although smaller than our debt via the banks, the rate of return is higher for the foreigner investors. Tackle this by preventing foreign ownership of strategic assets, by not selling our public assets, by putting in rules about overseas landlords for residential property and generally insuring that foreign investment is real investment in new capital wealth – not just buying what we already have.

    Don’t need any of that, just need to ban foreign ownership. As your figures show, we don’t need, and have never needed, foreign investment. The people who say we do are lying even if they don’t realise it as we have enough resources (both physical and human) in the country to support ourselves. This is true of every country.

    So, who benefits from investment? The rich of other countries who have so much accumulated money that they can’t invest in their own countries any more as there isn’t enough wealth in that country to absorb the money.

    If we don’t do something, if we keep on just letting foreign capital buy up more of New Zealand and pay for the pleasure by sending a larger and larger share of our GDP overseas each year, then our net international debt is forecast to grow from an eye-watering $150 billion this year to a disastrous $200 billion in four years.

    What you describe here is The Road to Serfdom and it’s the exact opposite of what Hayek said. The road to serfdom isn’t from socialism but from capitalism.

  11. AmaKiwi 11

    For the past 30 years we have NEVER had a year with a positive balance of payments. NEVER. Greece boasts precisely the same record.

    They fiddle while Rome burns (or NZ drowns). 30 years of National AND Labour governments and NONE has taken steps to keep us from serfdom.

    Since the politicians are too timid / compromised / short-sighted to sort it out, it’s time for the people to take back our government. 30 YEARS of inaction!

  12. Peter 12

    “The foreign banks are the biggest owners of New Zealand debt and the biggest cause of the balance on income deficit. They make their money by inflating our housing market.”

    Can someone please explain why they are allowed to?

    Excellent article!

    • Draco T Bastard 12.2

      Can someone please explain why they are allowed to?

      Mostly, as far as I can make out, it’s because people don’t realise that the banks are printing money at such a rate as to cause that inflation. It’s not so much that we’re allowing them to as that we just don’t know that they’re doing it and that they’re doing it only for their own benefit.

  13. ghostrider888 13

    however, according to the sage Joyce, in the Dec quarter, “New Zealanders received record returns from OFFSHORE investments (of which they re-invested locally 7%, from memory)” Well, that IS helpful…

  14. Plan B 14

    So we are left with the idea that somewher out there in the great big world, outside of New Zealand there is a great big chest filled to the brim with New Zealand dollars and that when we want to buy a house, our banks go and get some money out of the chest and lend it to us and that our interest payments have to go offshore to the people who have the chest filled to the brim with New Zealand dollars.
    The funny thing is that we as a country sell nothing in New Zealand dollars, nor can we spend New Zealand dollars outside of New Zealand. In fact there is noone in the world who actually wants New Zealand dollars except us.
    So there is no chest filled with New Zealand dollars at all is there.
    All we have is banks running a scam whereby when they type the loan into existence on a computer they pretend that the money is owed to someone in another country. It sounds so silly that no one would believe it so they don’t. Trouble is it is basically a true story

  15. infused 15

    “Bring in rules to stop the foreign banks lending so much money into the housing market and not only will you make housing more affordable, you’ll reduce our current account deficit and international debt.”

    How would housing become more affordable?

  16. prism 16

    James
    This is good stuff. But I don’t understand one part under a small table.
    “As you can see, we exported more goods than we imported, imported more goods than we exported and ended up with a small trade deficit. ”

    It appears from the table that we imported more services than we exported and…. Is this correct?

    I

    • prism 16.1

      I wonder if my question can be addressed?   Possibly there are some other confused people out there besides myself.  Or do you have to be one of the favoured to get a  response?

  17. prism 17

    Now we’re told that our banks can, if they foul up too much, take a portion of our savings and we are told that the answer to our country’s woes is to save more! Government here not content with facilitating dodgy financial businesses that in going bust have destroyed good people’s lifetime accretion of savings, the government now introduces a new tax and almost justifies the saying that “All tax is theft”.

    Our own Reserve Bank thinks it is right to take what are privately owned cash assets and give them to the business we are dealing with. And now we are told that it all underlines another verity, that there is no such thing as a safe investment. As the whole deal is man-made why isn’t there action to ensure reasonable safeguards?

    • Colonial Viper 17.1

      So if the highly paid bank CEOs and boards fuck up and lose a tonne of money in the markets, we the savers get to bail them out.

      Yeah that sounds fair.

      • Tiresias 17.1.1

        Yeah, fair like an understanding that we’ll tolerate muggers as long as they only take 10% of the money in our wallets, but if we start objecting they’ll take it all.

        • prism 17.1.1.1

          Tiresias
          Well Terry Pratchett wrote that into his Discworld story of Ankh-Morpork.  The Patrician set up a guild to control the unfortunate habits that we have. so there is one for thieves, and there is one for killings, each with their own set of proscriptions, rules and expectations.   This business with the OBR or whatever it’s called is sort of similar.   An attempt to codify the customary practices really.  Fact over-ruling fiction eh!

    • Colonial Viper 17.2

      Anat Admati’s new book “The Bankers New Clothes” focusses on these issues exactly.

  18. aerobubble 18

    We’re an export nation, ergo we would accumulate wealth unless another process was imposed to extract wealth. The question is, how do we let wealth leak out so easily? Whose in charge? Govt.

    Govt is too easily lobbied because it has no upper chamber. Loopholes, oversights, tax regimes, all pander to exporting our wealth.

    • Draco T Bastard 18.1

      Govt is too easily lobbied because it has no upper chamber.

      /facepalm

      That has got to be the most nonsensical thing I’ve seen in a long time – and I’ve been having long chats with Tribeless. The lobbyists will obviously lobby both houses.

      As I’ve told you before – having two houses only produces worse government as which ever party has dominance of one house can, and will, prevent anything that they don’t like going through and if one party dominates both houses it just becomes another rubber stamp. Just look at the US and the trouble the republicans have been causing over the budget for the last few years.

      Some people won’t learn from history and, apparently, some can’t learn from what’s going on in front of their nose.

      • Colonial Viper 18.1.1

        Exactly. Two houses and getting rid of the Queen and having a formal constitution etc. – all beside the point and all with their own potential risks and additional unseen complications.

Links to post

Recent Comments

Recent Posts

  • Rough-Shod Approach to Iwi Housing
      "The Governments rough-shod approach to social housing in Auckland has forced the Minister to clarify and uphold his Treaty Settlement obligations to Ngati Whatua and Waikato-Tainui," says Labours Maori Development Spokesperson Nanaia Mahuta.   “While it's a positive undertaking… ...
    2 hours ago
  • More housing humiliation for Nick Smith
    Nick Smith has been completely humiliated once again – this time by Ngāti Whātua who have used his blunders to their full advantage to extract an excellent deal for Aucklanders that the minister would never have developed himself, Labour’s Housing… ...
    4 hours ago
  • PM must stop making excuses for offensive MP
    John Key must stop dismissing the highly offensive behaviour of his Pakuranga MP Maurice Williamson and publically reprimand him, Labour’s spokesperson for Woman Sue Moroney says. “Maurice Williamson’s behaviour at an Eagle Technology dinner was completely unacceptable. ...
    5 hours ago
  • Charter application skew assists rich American
    The Government has skewed the latest round of charter school applications to assist an American millionaire’s goal of ‘revolutionising” New Zealand’s education system, Labour’s Education spokesperson Chris Hipkins says. ACT Leader David Seymour and Ngāi Tahu’s Sir Mark Solomon in… ...
    6 hours ago
  • Key’s refugee response at odds with Kiwi traditions
    John Key’s response to the current refugee crisis is out of step with New Zealand’s tradition of pulling its weight internationally, says Labour’s Foreign Affairs spokesperson David Shearer. “In 1999, under a National Government, New Zealand accepted more than 400… ...
    7 hours ago
  • Coromandel rallies against the TPPA
    On Wednesday, John Key visited the southern Coromandel area with local National MP Scott Simpson and was challenged by citizens who spontaneously organised protests against the Government position on the Trans Pacific Partnership Agreement (TPPA). I went down to Waihi… ...
    GreensBy Catherine Delahunty MP
    7 hours ago
  • John Key: where is your conscience?
    The Prime Minister’s refusal to raise the refugee quota in the face of an international humanitarian crisis shows a lack of empathy and moral leadership, Opposition Leader Andrew Little says. “There are times in politics when you are faced with… ...
    8 hours ago
  • Report highlights National’s poor funding decisions
    The Government’s poor coordination between its transport strategy and the needs of the regions has been highlighted in a new report by Local Government New Zealand, Labour’s Transport spokesperson Phil Twyford says. “Local Government was forced to write its Mobilising… ...
    1 day ago
  • Government wakes up to Opotiki Harbour
    John Key is expected to finally announce Government support next week for the Opotiki Harbour development, says Labour Economic Development spokesperson David Clark. "While it is astonishing that it has taken seven years for the Government to commit to this… ...
    1 day ago
  • New figures show speculators rampant
    New figures released by the Reserve Bank show there’s been an explosion in mortgage lending with most of the growth going to property investors, Labour’s Housing spokesperson Phil Twyford says. Reserve Bank data shows mortgage lending was up 6 per… ...
    2 days ago
  • Spring is here – not pollen your leg
    It’s the first day of spring, and many people will be thinking about getting stuck into the weeds in the garden ready for planting. This year September is also Bee Aware Month. While there is a lack of movement from… ...
    GreensBy Steffan Browning MP
    2 days ago
  • Government must do more to help global refugee crisis
    John Key must urgently increase our refugee quota and let New Zealand play its part in helping address the tragic humanitarian crisis unfolding around the world, Opposition Leader Andrew Little says. “The refugee crisis in countries like Lebanon and Austria… ...
    2 days ago
  • The latest equal pay case – Go the Midwives
    ...
    GreensBy Jan Logie MP
    2 days ago
  • Key’s threat to veto premature
    John Key’s threat that he might use a financial veto against the Bill that will introduce 26 weeks Paid Parental Leave is premature and based on inflated costings, says the bill’s sponsor, Labour ‘s Sue Moroney.  “The Government keeps saying… ...
    3 days ago
  • Reflections on the plastic bag tour
    After a marathon public tour around New Zealand that took me to 29 different places around New Zealand from the far north of Kaitaia to the deep south of Invercargill to talk about phasing out plastic bag use, I wanted… ...
    GreensBy Denise Roche MP
    3 days ago
  • Labour celebrates Tongan language and diversity
    Tongan Language Week is a timely reminder of the importance and beauty of our Pacific culture, identity and language in New Zealand, says our first Tongan born, Tongan speaking MP Jenny Salesa.  The theme for Tongan Language Week in 2015… ...
    3 days ago
  • Privatising CYF about ideology not care
    John Key’s suggestions today that Child Youth and Family could be privatized will be a terrifying thought for New Zealanders already dealing with the mess created in private prisons and plans to sell our state houses to Australians, Opposition Leader… ...
    3 days ago
  • Govt must make most of Jetstar competition
    Government agencies should pledge to always buy “the best fare of the day” to maximise competition between Jetstar and Air New Zealand and ensure savings for taxpayers while boosting services to regional New Zealand, Labour’s Transport Spokesperson Phil Twyford says.… ...
    3 days ago
  • Time for inquiry into petrol margins
    It’s time for an inquiry into petrol companies as margins are once again at the high levels that prompted concerns late last year, says Labour's Energy Spokesperson Stuart Nash. "Over the December January holiday period, petrol importer margins jumped to… ...
    6 days ago
  • More talk as Auckland congestion worsens
    The main impact of the Government’s agreement with Auckland Council today will be simply to delay still further decisions needed to relieve the city’s traffic congestion, says Labour’s Auckland Issues Spokesperson, Phil Goff. “Government has been aware for more than… ...
    1 week ago
  • Serco inquiry extended
    A two month delay to the Government investigation into prison fight clubs shows the extent of problems within the Serco circus, says Labour’s Corrections spokesperson Kelvin Davis. “My office received a tsunami of complaints so I’m not surprised the terms… ...
    1 week ago
  • Truck Shops ignore consumer laws
    A damning Commerce Commission report out today highlights the failure of the Government to protect poor and vulnerable families from unscrupulous truck shops, says Labour’s Consumer Affairs Spokesperson David Shearer. “The report found that 31 out of 32 firms it… ...
    1 week ago
  • Taihoa at Ihumatao says Labour
    Labour’s housing spokesperson Phil Twyford has called on the Government to rethink its controversial Special Housing Area in Māngere. Auckland Council is today meeting to discuss the development which borders the Otuataua Stonefield Historic Reserve. This project is to get… ...
    1 week ago
  • Figures suggest National deliberately excluded farming
    Figures showing the dairy industry would be categorised as high risk if there were a further five severe injuries within a year, strongly suggests National designed its flawed system to deliberately exclude farming, Labour’s spokesperson for Labour Issues Iain Lees-Galloway… ...
    1 week ago
  • Bleak report on the state of our children
    A damning conclusion by the Children’s Commissioner today that ‘we don’t know if children are better off as a result of state intervention, but the indications are not good’ should make fixing CYFs a top priority for this Government, says… ...
    1 week ago
  • Dodgy data used to justify axing KiwiSaver kickstart
    National’s agenda to run down KiwiSaver has become even clearer from a scathing critique of the Government’s justification for axing the $1000 kickstart, says Labour’s Finance spokesperson Grant Robertson. “Since National came to power they have not only continually undermined… ...
    1 week ago
  • Unsecure website risks Ashley MoBIEson hack
    Experts have raised security concerns that vulnerabilities in MoBIE’s half million-dollar website could lead to a possible Ashley Maddison-style hack, says Labour’s Economic Development spokesperson David Clark. “The real issue here is not what data is immediately available, but what… ...
    1 week ago
  • Democracy still the loser in Canterbury
    The Government has demonstrated once again how arrogant and out of touch it is in denying Cantabrians the same democratic rights as the rest of the country, says Labour’s Environment spokesperson Megan Woods.  “The Environment Canterbury Bill which has been… ...
    1 week ago
  • Waiver cost still a mystery
    The Government still has no idea what it’s going to cost community and voluntary groups to get a waiver from the fees police will charge to carry out checks on their staff and volunteers, says Labour’s Community and Voluntary spokesperson… ...
    1 week ago
  • China exports fall 27 per cent in a year
    Exports to China have fallen by 27 per cent over the last 12 months - showing that the looming economic slowdown should have been expected by the Government, says Labour’s Economic Development Spokesperson David Clark. “The Chinese economic slowdown should… ...
    1 week ago
  • National should support all families for 26 weeks
    Families with multiple babies, and those born prematurely or with disabilities, are the winners from moves to extend paid parental leave to 26 weeks but the Government must give all babies the same head start in life, Labour’s spokesperson for… ...
    1 week ago
  • National’s health and safety shambles puts school camps at risk
    Reports that schools are considering scrapping student camps and tearing out playgrounds highlights just how badly National has managed its health and safety reforms, Labour’s Education spokesperson Chris Hipkins says. “Schools have been left completely in the dark about the… ...
    1 week ago
  • National’s asset stripping agenda hits schools
    National’s fire-sale of school houses and land is short-sighted, mean-spirited, and will have huge unintended consequences that we will pay for in years to come, Labour’s Education spokesperson Chris Hipkins says. Documents obtained by Labour show the Ministry of Education… ...
    1 week ago
  • Takahe massacre supposed to get all New Zealanders involved in conservation
    The Minister’s claim that a  botched cull of one of New Zealand’s rarest birds was a way of getting all New Zealanders involved in conservation is offensive and ludicrous, Labour’s conservation spokesperson Ruth Dyson says.  “An email from Minister Maggie… ...
    1 week ago
  • Serco circus rolls on with revelations of fight club practice
    Further revelations that a Serco prison guard was coaching inmates on fight club techniques confirms a fully independent inquiry needs to take place, says Labour’s Corrections spokesperson Kelvin Davis. “The Minister’s statement today that a guard was coaching sparring techniques… ...
    1 week ago
  • Government targets put ahead of students’ education
    The Government must urgently reassess the way it sets NCEA targets after a new report found they are forcing schools to “credit farm” and are undermining the qualification, Labour’s Education spokesperson Chris Hipkins says. “A PPTA report released today says… ...
    1 week ago
  • ER patients in corridors as health cuts bite
    Patients are being forced to wait for hours on beds in corridors as cash strapped hospitals struggle to keep up with budget cuts, says Labour’s Health spokesperson Annette King. “People coming to the emergency room and being forced to wait… ...
    1 week ago
  • Not too late to fix Health and Safety for New Zealand’s workers
    The Government and its minor party supporters are showing an arrogant disregard for workers’ lives by not agreeing to a cross-party solution to the botched Health and Safety bill, Opposition leader Andrew Little says. “Yesterday I wrote to the Prime… ...
    1 week ago
  • Speech to the New Zealand Council of Infrastructure Development
    Tēnā Kotou Katoa. Thank you so much for having me along to speak today. Can I begin by acknowledging John Rae, the President, and Stephen Selwood, the chief executive of the Council for Infrastructure Development. ...
    1 week ago
  • Reserve Bank points finger at Govt inaction
    In scathing criticism of the Government’s inaction, the Reserve Bank says Auckland housing supply is growing nowhere near fast enough to make a dent the housing shortage, Labour’s Housing spokesperson Phil Twyford says. Reserve Bank deputy governor Grant Spencer today… ...
    1 week ago
  • Chickens come home to roost on climate change
    The Government’s gutting of the Emissions Trading Scheme has caused foresters to leave and emissions to rise, says Labour’s Climate Change spokesperson Megan Woods. “The release of the Environmental Protection Agency’s Facts and Figures Report for 2014 on the ETS… ...
    1 week ago
  • Website adds to long list of big spends at MBIE
    The Ministry of Business, Innovation and Employment’s $560,000 outlay on its new website is further evidence of excessive spending by Steven Joyce on his pet project super ministry, Labour’s Economic Development spokesperson David Clark says.  “Hot on the heels of… ...
    1 week ago
  • Brownlee warned over EQC repairs but ignored them
    Gerry Brownlee was warned that EQC’s underfloor repairs weren’t being done properly by industry experts, the cross party working group and in public but he arrogantly ignored them all, says Labour’s Earthquake Commission spokesperson Clayton Cosgrove.  “Today’s apology and commitment… ...
    1 week ago
  • Serco wants in on state house sell off
    The Government must keep scandal plagued outsourcing company Serco away from our state housing after their disastrous record running Mt Eden prison, Labour’s Housing spokesperson Phil Twyford says. "Today it has emerged that at the same time Serco was under… ...
    2 weeks ago
  • Come clean on Pasifika education centre
    Minister Peseta Sam Lotu-Iinga needs to come clean and tell the Pasifika communities if he’s working to save the Pasifika Education Centre or shut it down, Labour’s Pasifika spokesperson Su’a William Sio says.  “I’m gutted the Pasifika Education Centre funding… ...
    2 weeks ago
  • Time for NZTA to work on alternatives to flyover
    The High Court decision rejecting the New Zealand Transport Agency’s attempts to build the Basin Reserve flyover must now mean that NZTA finally works with the community on other options for transport solutions in Wellington, Grant Robertson and Annette King… ...
    2 weeks ago
  • Shiny new system leads to record truancy
    Record high truancy rates shows the Government’s much-vaunted new attendance system is an abysmal failure, Labour’s Education spokesperson Chris Hipkins says. “Data released today shows truancy rates have spiked more than 15 per cent in 2014 and are now at… ...
    2 weeks ago
  • Woodhouse wrong about quarries
      The Minister for Workplace Relations and Safety Michael Woodhouse was wrong yesterday when he said limestone quarries were covered by the farcical Health and Safety legislation, says Labour’s Associate Labour spokesperson Sue Moroney.  “He said he ‘understood’ limestone quarries… ...
    2 weeks ago
  • Taxpayers money spent on culling one of our rarest birds
    It beggars belief that four endangered takahe were killed by incompetent cullers contracted to the Department of Conservation and the Minister must explain this wanton destruction, says Conservation spokesperson Ruth Dyson. “It must not be forgotten that there are only… ...
    2 weeks ago
  • Housing NZ must immediately move family
    Housing New Zealand must immediately move a Glen Innes family whose son contracted serious and potentially fatal health problems from the appalling condition of their state house, Labour’s Housing spokesperson Phil Twyford says. “Te Ao Marama Wensor and community workers… ...
    2 weeks ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere