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Sovereign debt

Written By: - Date published: 10:55 am, March 10th, 2010 - 41 comments
Categories: Economy, International - Tags: , , ,

The world’s economy has not truly recovered from the recession, it has just been artificially reanimated by vast injections of Government bailout money. Capitalism has been rescued by good old fashioned Socialist Big Government, and the bill is being sent to we the taxpayers. What if we decided not to pay? The people of Iceland just said “No”.

The background is complicated (Wikipedia has a good summary). When Iceland’s economy collapsed in 2008-2009 their three main commercial banks failed. 400,000 “Icebank” customers in the UK and the Netherlands were bailed out by their governments under a deposit insurance scheme, and Iceland ended up 3.8bn euros in debt to those countries. With a population a little over 300,000 that’s about 12,000 euros (over NZD 23,000) per person.

Understandably this is a huge political issue in Iceland. The attitude of the average citizen is – why should we pay for the stupid, and often criminal mistakes of financial speculators. (“Public outrage has been brought to a peak by the fact that there are now 43 cases of alleged criminal activity under investigation in connection with the country’s scandal-hit financial institutions”). So in a referendum on March 6th, 93% percent of voters opted not to repay. This is an international bombshell:

British fury after Iceland blocks £2.3bn repayment

Iceland’s president stunned his nation yesterday by refusing to sign off on a plan to repay £2.3bn owed to the British taxpayer, reigniting a major diplomatic row with London and leaving Gordon Brown and Alistair Darling mortally embarrassed at the latest twist in the saga of Reykjavik’s banking meltdown.

Where the people of Iceland have led, will others follow?

On Saturday Icelanders became the world’s first rebels against the idea of clearing up after the mess made by a reckless private bank. This popular insurrection has been watched anxiously by the governments in Greece, Ireland, eastern Europe and even Britain concerned that this defiance could become contagious.

This highlights the fundamental weakness of the world economy. Once nations start defaulting on “sovereign debt”, the whole house of cards could come tumbling down. Most commentators pick Greece as the next crisis point:

The Greek prime minister George Papandreou is embarking on a whirlwind tour of western capitals to drum up support for his crisis-stricken country. Beginning today in Berlin, where he will meet the German chancellor Angela Merkel, before travelling on to Paris and Washington DC for talks with presidents Sarkozy and Obama, Papandreou’s diplomatic offensive will determine whether Greece can secure help from its fellow eurozone members or whether the IMF will eventually be called in. What’s at stake is no longer just Greece’s creditworthiness, but also Europe’s credibility.

Whether the inevitable is temporarily delayed by another round of bailouts or not, eventually the bill will arrive, and people will be faced with the same decisions faced by Iceland. If Greece defaults, the consequences are huge:

Greek tragedy may be dress rehearsal for bigger crisis

In December I noted that if Greece was left to default on its bonds (without a bailout) this would lead to skyrocketing interest rates on Irish, Italian, Spanish and Portuguese debt followed by a nightmare domino-effect sovereign debt collapse/national bankruptcies across the entire eurozone. Carl Heinz Daube, the head of German’s debt agency Finanzagentur told the Euromoney bond congress in London that “if one member of the eurozone were to step out for any reason, this would be a collapse of the entire system.”

What Daube failed to mention, however, is an even more serious issue: Greece, by any means, only represents the tip of the iceberg of what is a much wider sovereign debt crisis that could soon catch fire across most of mainland Europe, Britain and the United States. So, with or without a bailout of bankrupt Greece, the same fate could soon befall other too-large-to-bail nations.

Another example:

It began in Athens. It is spreading to Lisbon and Madrid. But it would be a grave mistake to assume that the sovereign debt crisis that is unfolding will remain confined to the weaker eurozone economies. For this is more than just a Mediterranean problem with a farmyard acronym. It is a fiscal crisis of the western world. Its ramifications are far more profound than most investors currently appreciate.

Will the people of Greece see Iceland as a precedent and a role model? If Greece defaults, brace yourselves for a “sovereign debt crisis that could soon catch fire across most of mainland Europe, Britain and the United States”. The next crash will make the recent recession look like child’s play.

41 comments on “Sovereign debt”

  1. SPC 1

    Debt default is to some extent dependent on the ability to finance ones continuing deficit.

    It’s hard to borrow to finance a deficit as large as that of Greece, if one has defaulted on past debt (which is why Greece is waiting for a EU rescue package, which is a precedent for Portugal and Spain and possibly Italy – which is why Germany is reluctant).

    Lenders can of course determine to charge a tariff on loans to nations that default and transfer the tariff pool into a kitty to repay those lenders whose loans were defaulted on. This only requires co-ordination and global agreement.

    If there is a global economic threat from debt default – then all the more reason to develop a global plan to prevent it, or cope with it. That said a global FTT makes a lot of sense and that has yet to occur either.

  2. tsmithfield 2

    Smaller economies like Greece, Iceland etc can probably be contained. If the worst comes to the worst, they are able to go to the IMF for help. The big worry is economies like Spain that are in a similar situation. Europe is looking at setting up its own equivalent of the IMF to help member countries that are in trouble.

    http://www.economist.com/blogs/freeexchange/2010/03/european_monetary_fund

    Sovereign nations with their own currencies can always print more of their own currency and devalue the debt. That is why the US or UK are highly unlikely to default on their debts. Of course, that has the disadvantage of being highly inflationary within their own economies.

    Euro member countries are not in this position because they trade in the Euro which is a currency they can’t print to devalue their debts. Thus, it seems likely that something like the IMF will emerge to increase financial stability in Europe.

    • prism 2.1

      Very informative ts thanks. Thinking back, in the background of the rise of Germany’s Nazis was the heavy debt burden and out of control inflation they had after WW1. The Nazi party presented a strong way out of the morass to the struggling populace. I hope that other nasties don’t arise in the wake of this crap.

      • HHK 2.1.1

        The Weimar Republic largely had inflation under control, and the economy was stabilizing and the support for the extremist parties (both left and right) was falling off. That is, until the ’29 market crash hit Germany.

        • prism 2.1.1.1

          Wow is that so. My history is hazy about post-WW1 – I’ve got to set some time aside to read up books I’ve bought about it. Didn’t know they were on top of it at that time. The knowledge of what happened after the great crash must have been a big factor in deciding to bail out some of the important financiers to prevent that sort of meltdown.

  3. vto 3

    This is the start of the second bottom of the ‘W’ depression that many saw coming.

    Buy gold and hang on tight folks… The people are revolting.

    I get pissed off too (taxpayer) when other people (politicians) get me into debt that was not requested or mandated.

    I suspect the banking bailout will be seen as a doddle when compared to trying to control this situation.

    • pollywog 3.1

      I remember when an ounce of weed cost the same as an ounce of gold. Weed price has stayed relatively the same, gold has skyrocketed. Maybe i should have bought gold instead, but then i probably wouldn’t be so enlightened 🙂

      • vto 3.1.1

        ha ha polly. Still, both are tradeable commodities which is all gold is about when paper and political currencies go soggy in the downpour …

        • Draco T Bastard 3.1.1.1

          Money: An abstract representation of perceived value.

          The rush to buy gold is to try and make that illusion of value concrete.

          • vto 3.1.1.1.1

            Draco, value is not a perception or illusion. Value is, I would have thought, a way of measuring an exchange. The illusion you talk of just manifests itself as soon as an intermediate method of transacting that exchange is brought into the picture, whether gold or paper or weed, rather than direct barter. And that is just because of the many variables that can affect that method of exchange.

            Various methods of exchange have various characteristics – national currencies can vary depending on politics, gold has characters which tend to withstand political heatwaves, weed just ends up going up in smoke, etc.

            anyways, I’m sure I aint saying anything new here

            • Draco T Bastard 3.1.1.1.1.1

              value is not a perception

              Of course it is. How much is a glass of water worth? To someone in Auckland the answer is not a hell of a lot. To that same person in the middle of the Sahara it’s priceless. The glass of water hasn’t changed – only the persons perception of that glass of water.

              It’s this changeable perception combined with the abstraction that is money that turns it into illusion. The rush to buy gold in economic downturns is an attempt to turn that illusion of wealth into solid reality.

              gold has characters which tend to withstand political heatwaves,

              Yes, it’s solid. Not of much use though which is why so much of it is locked away in vaults. Doing so keeps it scarce and it’s money price high when, in reality, it isn’t worth that much.

              • vto

                Maybe we talking past each other. By perception you mean more that value is subjective. A person’s perception of the value of a glass of water in Auckland may be different to a person’s perception in the Sahara but they are both real.

                My original point was that gold is useful for facilitating trades when paper and political currencies are being flushed down the dunny… for reasons associated with gold’s particular characteristics.

                If you had $10k in NZD under the mattress how useful will that be when a loaf of bread costs $100? Whereas, if instead you had todays equivalent of $10k in gold when you went to buy that loaf of bread how many micromilligrams of gold shavings do you think it would take to get the baker to part with his precious loaf?

                Sheesh, even potatoes would be a better trading tool than paper currency then. Bag of spuds for a loaf of bread = same ‘cost’ as today.

              • Puddleglum

                Underpinning our concept of what is real is the linked concept of stability – i.e., the real persists (the old philosophical saw had it that to be real was to be extended in space and time – i.e., to persist over space and time). Something that is one thing one moment (or one place) and something else the next undermines that criterion for reality. When value can shift so rapidly for unpredictable reasons people will increasingly feel that value itself is illusory (some of the odd objects that get traded on Trade Me for extraordinary prices come into this category).

                One of the consequences of market capitalism is the undermining of the stability of valuations (‘creative destruction’ has rather a lot more to do with destruction than creation, actually). This is why many of us have vague but increasingly potent experiences of unreality and confusion, but that’s another argument (hint: to establish and maintain personhood similarly requires stability along certain developmental dimensions. Market capitalism undermines those dimensions as well – don’t you just love it?.)

                The notion that value is subjective yet real aligns with Hayek’s repeated claim that liberalism is the only viable non-coercive political ideology because human valuation is so diverse (i.e., we all, as individuals, value different things so there is no common end-state that we are likely to agree upon – hence, collectivism is inevitably coercive. Value is ‘real’, as it were, but only within each individual. Between individuals it is negotiable – or exchangeable).

                Markets supposedly settle the problem of how to ‘regulate’ this diversity of valuation. Personally, I think Hayek was simply mistaken in this central claim. Stable valuation across and within generations is probably what human culture evolved to achieve. The evidence suggests it did so very well for many tens of millenia.

                Sadly, what market capitalism actually does is undermine the reality of value by highlighting it’s lack of stability and accentuating that instability. That’s not quite right. It’s lack of stability, as I’ve just claimed, is not inherent to value (for most of human history, cultures have been remarkable vehicles for creating stable valuation, as I’ve just said). The current instability in valuation is simply a result of the structures and processes that pass under the name of modern market capitalism (the fact that market ideology is often just cover for old-fashioned corruption and power simply compounds the instability – i.e., value can’t even be properly understood using market concepts because the ‘markets’ are often thoroughly distorted by private power).

                The problem, of course, is that humans are actual ‘real’ beings. We persist, physically and biologically. Unfortunately, our persistence ‘as persons’ (as distinct from ‘as human beings’) rests on the assumption of stable and predictable valuations (as persons, we are ‘Moral Animals’). That’s the ‘material’ out of which those things we call persons (i.e., each other) are made. Take away that stability in valuation and … but how far down the rabbit hole do you want to go?

                The more market, the less ‘humanity’. Almost the exact opposite of Hayek’s conclusion.

  4. prism 4

    Some areas in the USA have become economically depressed when their ability to keep trading in their traditional manufactures has been wrecked by international trading changes and have filed for a sort of bankruptcy. This happened some years ago, and the case has been made for the right of political entities to be able to access the same rights to cut their losses as private businesses have and use often.

    • vto 4.1

      I agree with the general idea prism. The push for this ‘bankruptcy’ though will come from the people not the politicians. The people will simply start to stop paying their taxes. Thn it gets interesting… as the only way to enforce tax payment is through physical sanction (you know, throw people in jail, take away their property) and the jack-boots of the state can only stretch so far.

      As far as I am concerned the lenders who demand repaymnt are just as complicit as the borrowers who now cannot repay.

      It is just like the finance companies in NZ. The investors got greedy for the extra 2% per annum and plied them with money unthinkingly. Then the investors all act like lemmings and charge over the cliff in fright demanding their money back while they drag the finance company with them to the rocks below.

      Then the finance companies get all hot and bothered and start demanding the impossible from their borrowers. Witness Allied Farmers Rob Alloway getting all high and mighty recently. Only thing is, the Alloway bozos had already slungshot their borrowers to the rocks below before them due to the lemmings which hed the charge.

      The investors and the finance companies and the borrowers all went into the happy-times-business together with eyes wide open. Now the financial climate has COMPLETELY CHANGED via many different routes, and due to the actions of all involved (investors, finance companies, borrowers). And also due to the swings of the world that are completely unrelated to investors, finance companies, and borrowers. The investors need to get real that the method of their repayment was premised on certain financial conditions which now no longer exist. it has all changed.

      And so it goes for the sovereign debt issue. The debt was issued and repayment expected on the premise of certain financial conditions existing. The creditors will now not be repaid in the same manner because that base premise has gone up in smoke. There gonna be some biffo over it though methinks.

      enough 2c.

  5. blinded by the right 5

    I’m confused. So are Government stimulus packages (being bailout money) good? Or bad?

    Opinions seem to differ…

    • r0b 5.1

      No time to chat right now bbtr, but in short form, in my opinion…

      Government stimulus to the real productive economy / “Main Street” (especially counter cyclical Keynsian) is good.

      Government bailout to failed financial institutions / “Wall Street” is bad. Let them fail. Yes there is plenty of short term pain but it’s probably the only way to a healthy and sustainable economy long term.

      • Bright Red 5.1.1

        oh a subtle answer… don’t you understand, r0b… either everything governments do is always good or its always bad 🙂

        • Rob 5.1.1.1

          Well there has been no subtlety to date in regards to this subject , especially with the Govt’s decision here to be restrained. Its been pretty black or white. The NZ Govt have been accused of do nothing. If you actually look at how stimulous money has been distributed in Aus and USA, it has been a completely untargeted joke. The reality of these programmes were short sighted attempts to subsidise consumer spending, for example in Wisconsin they were giving rebates on snow ploughs to keep the local manufacturers competitive. This is whatt happens when Govt officials make spending decisions with a completely unmanaged open cheque book.

          The fact is this is not the end of it by any means. Whatever previous models people are rolling out here as a case study for action is flawed thinking.

          • prism 5.1.1.1.1

            Governments can do strange things with finance completely counter to the attitude and sermons they present to citizens.
            I’m thinking of an interview I heard from the lips of the financial controller revitalising the Iraqi economy. After the Iraq war was supposed to be over the USA organised a container of banknotes, I presume Iraqi but maybe USA dollars, and handed them out to various ‘businessmen’. It was Iraqi money that had been frozen as part of sanctions I think. Goes against all the homilies about good business practice and governance.
            Is this right – that’s what I remember but it does sound fantastic.

  6. ghostwhowalksnz 6

    The referendum wasnt about not paying , merely the terms of the repayment.

    The people of Iceland seemed to think they were refusing as well

  7. Draco T Bastard 7

    When you loan someone money you’re taking the chance that you’re not going to get it back. This is what allows you to charge interest. Part of the cause of the latest bubble was the belief that governments would bail everybody out by borrowing (which they did) and that governments never default. Once governments start defaulting then the entire fiasco falls down as there suddenly isn’t any guarantees behind it.

    Under normal circumstances, loaning out money, especially on non-productive asset’s such as houses, should be a fast track to poverty but the rules got written by the people wanting to become rich the easy way and so all the rules support that position.

  8. tc 8

    Spot on r0b……the wall street mob should’ve been left to rot, they and their cohorts created the crises and all the bailout’s done is prop up a broken system for the cycle to commence again…..seen all those bonuses being paid out already again, no recession for the wealthy bankers.

    So now the inflationary impact of all that gov’t dosh is feeding through, manufacturing capacity outside China’s a shadow of it’s former self, consumerism’s created massive trade imbalances and we’re running out of oil to move the products around the globe.

    All of this and a gov’t that thinks intensive farming/mining/cycleways is the cure all but that’s what a banker would think isn’t it…..how’s that brighter future coming along eh?

    • I recall listening to an interesting ecomomist (details now forgotten sorry) who advocated the paying down of debts owed by ordinary people rather than the bailing out of the corporates. The pay down could help people get back on their feet but only enough would be paid to stop the lender from slipping into insolvency. The corporate shares would still be worthless.

      Instead backing up Wall Street has put the bsatards back on their feet ready to wreck more havoc.

      • poverty ahead 8.1.1

        mickey, you cannot be naive enough to think they did not plan it that way surely.
        i mean if they give money to the people how can they starve them again and again and again.

        no fishing rods for us folks, just stand in line and buy your mcfillet

  9. Bored 9

    Lovely to see people agreeing with one another above about what has happened. Its actually more tragic, its the inversion of the “golden rule”. That normally goes, “he who has the gold makes the rules”!

    The tragic bit is that the rule makers with the gold (Wall St etc) went bust….and somehow managed to get those in whose name gold could be created in (us, the taxpayer) to magic them up more gold. They then set off making the rules and ruling us again…..so the Icelandic revolt is really an overt uprising against giving those who have money power (the banks). Hold on to your seats ladies and gentlemen, turbulence coming up (worldwide).

  10. Rob 10

    There is also a real depth of feeling in the US about how badly the stimulous was done and how much it cost and how little improvement they have seen. They are now having to fund a massive debt as well as cope with a major economic reshuffle.

    The answer to this issue was not to throw money at everything, we are going to have naturally go through the pain and there will be more to come and there is no more money to buy the way out. All that has happened is a delay.

  11. Sounds like as good an excuse as any for a world war. Nothing distracts the punters like a bit of blood letting, not to mention it’s great for the economy and the politicians.

    How about 20/12/2012 for a start date ?

  12. Bill 12

    Big elephant under the carpet missing from the post. Le Monde Diplomatique has a short piece that drags the elephant into plain view. I still wonder if Johnny Boy and his mates have dabbled in similar dodgy shit with our money hoping for a big pay day.

    States rescued the banks in country after country, neither asking nor getting anything in return. The banks are now using their newfound strength against the state, threatening to reveal the accounting tricks the banks themselves had recommended to hide some of the debt. After all, interest rates on loans are higher when the financial reputation of the state is in question.

    So Goldman Sachs first helped Greece to borrow billions of euros in secret, and then told it how to get round the European restrictions on public debt. The bill for this groundbreaking financial advice was subsequently added to the huge Greek deficit (1). And the winners and losers? Lloyd Craig Blankfein, CEO and chairman of Goldman Sachs, received a $9m bonus; Greek civil servants will lose the equivalent of a month’s salary each year.

    http://mondediplo.com/2010/03/01banks

    • Boonly possibelred 12.1

      You are onto it Bill, its as said before the “golden rule”…..the only possible answer is to ensure that fractional banking is severely regulated, and the creation of money the affair of local sovereign government through their own Reserve Bank.

  13. poverty ahead 13

    at 2:33 approximately in this video is a very scarey number that i do not recall being announced by our leaders$9 billion USD
    and it is an interest bearing loan, god knows at what rate

    • Bill 13.1

      So…sometime in 2008, the Central Bank of NZ borrowed or entered into some sort of liquidity swap to the tune of US$3000 for every man, woman and child in this country. And they then lent that US$9 billion to banks and financial institutions within NZ because of something to do with bringing down interest rates in US$ markets?

      And we will all pay interest on the US$3000 repayments.

      That’s what Bernanke said. That’s not a swap in any way that I understand the term. That’s a swap with a purchase thrown in on top from what I can understand.

      Does somebody want to tell me this is all normal practice and not dodgy; that it isn’t essentially you and me throwing a whole heap of money at banks and their markets for no good reason other than that the banks said it would be a good idea?

      • because 13.1.1

        that is all the bail outs were. money given to banks, not money loaned for debts. the world is bankrupt people, the sooner it acknowledges that the better

        • Draco T Bastard 13.1.1.1

          the world is bankrupt people,

          Well, the banks are anyway, financially and morally, and that’s why they’re trying to get us to pay them more money even though it’s their delusional financial actions that have brought us to this point.

      • vto 13.1.2

        Hang on. hang on… Bernanke said these swaps involved money from the USA going to NZ and money from NZ going to the USA (he used Britain as an example). So, if NZ gets charged interest for the USD, then surely so too does the USA get charged interest for the NZD…

        and our interest rates are higher so we should surely come out ahead?

        I mean, that is what he said, that Bernanke fulla …

        • Bill 13.1.2.1

          But how quick or how long do you think it will take the US to repay NZ and visa versa?

          And what level of difficulty are or have been encountered in recovering the $US9 billion that the NZ reserve bank loaned to private financial institutions? Chunks of that money could have found their way to any one of a number of bottomless black pits…which will add to any tax payer burden of repayment to the US.

          It’s just a have that injects tax payer money into a banking system addicted to gambling from what I can see.

    • Draco T Bastard 13.2

      It was mentioned in the news at the time but not in that much detail. I remember thinking that there was something missing from the deal – it appears to be the interest charged for the “swap”.

      • because 13.2.1

        the rest of the videos on those hearings are chilling in the [willing] ignorance of exactly
        where USD$12 trillion dollars has gone
        this is an immense sum of money but you’d think they were talking about chump change

        captcha: scraps
        – awesome roflmfho

  14. BLiP 14

    Interesting release from Wikileaks in relation to the loan agreement.

    We think it unwise, however, to encourage the perception that this arrangement
    would, in effect, return a profit to the Governments of the United Kingdom and the
    Netherlands for the monies expended to repay depositors in those countries at the
    expense of the Icelandic taxpayer. The last communication from the British and
    Dutch negotiators proposed that Iceland pay a margin (in effect, a profit element)
    of 2.75 percentage points above the cost of the funds expended for this purpose
    for the last four years of the six-year loan.

  15. Quoth the Raven 15

    Sort of related: The Keynesian Project Is Psychotic

    What households need is less debt, not more. Only a psychotic believes Americans can afford more debt, that they need more houses (how about the 19 million we already have which are empty?), that inflation is benign (local government junk fees, tuition, medical costs, garbage collection, sales taxes, vehicle registration fees, etc., are rising at double-digit rates) and that the “solution” to the Great Recession is a massively pernicious and destructive ZIRP/QE policy.

    and a good piece on sovereign debt.: The Global Debt Crisis

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    3 days ago
  • Select committee changes Kermadec/Rangitāhua Ocean Sanctuary Bill
    Photo by Tom Hitchon Parliament’s Local Government and Environment Committee has made many changes to the Kermadec/Rangitāhua Ocean Sanctuary Bill in response to public submissions, particularly submissions from iwi authorities and Te Ohu Kaimoana.   Read the amended Bill and the ...
    GreensBy Eugenie Sage
    5 days ago
  • Housing map a hit as crisis spreads across NZ
    More than 55,000 New Zealanders have used Labour’s interactive housing map in its first week to see how the housing crisis is affecting their local community, Labour Housing spokesperson Phil Twyford says. “Our innovative map shows the housing crisis is ...
    6 days ago
  • Bridges must come clean about fraud within transport
    Hundreds of thousands of dollars of public money have gone missing and  the Minister of Transport, Simon Bridges must come clean after the Labour party revealed that a senior manager is being investigated for serious fraud, says Labour’s Transport Spokesperson ...
    1 week ago
  • Labour supports Spencer victory
    Labour congratulates Margaret Spencer for her tireless efforts in challenging the Government over family carer rights, says Labour’s Deputy Leader Annette King. ...
    1 week ago
  • US Warship visit welcomed by Labour
    Labour sees the United States warship visit as a red letter day for New Zealand’s non-nuclear status, which is core to our identity and has defined us a nation for 30 years, says Labour’s Deputy Leader Annette King. ...
    1 week ago
  • Time for honest dairy sector conversation
    ...
    1 week ago
  • What next? Dog kennels?
    Social Housing Minister Paula Bennett needs to explain why the Government thinks it is acceptable for it to refer families to live in garages and sheds, says Labour’s Housing spokesperson Phil Twyford. “This is a new low, just when you ...
    1 week ago
  • Banks bust a move, Government possum in the headlights
    Three of the big four banks have acted responsibly by bringing the shutters down on property speculators earlier than required by the Reserve Bank, says Labour’s housing spokesperson Phil Twyford. “It’s a shame the Government isn’t as motivated to act ...
    1 week ago
  • Latest OECD dairy forecast raises serious questions for economy
    The latest global dairy price forecast shows that New Zealand dairy farmers will not reach a break-even payout before 2019 at the earliest, and will not reach the dairy price factored into this year’s Budget until after 2025, Labour’s Finance spokesperson ...
    1 week ago
  • National’s reckless, out of touch approach to economy exposed
    Today’s economic assessment from the Reserve Bank highlights the danger to the New Zealand economy from a National government that is recklessly complacent in the face of a housing crisis and a struggling export sector, Labour’s Finance spokesperson Grant Robertson says. ...
    1 week ago
  • GP’s visits get more expensive
      Visiting the GP is set to become more expensive after the Government ignored warnings that people were not receiving access to affordable  healthcare, says Labour’s Health spokesperson Annette King.  “Over 400,000 New Zealanders who should be able to access ...
    1 week ago
  • Farm prices bear brunt of dairy downturn
    The slump in dairy prices that has seen farm prices drop to their lowest level since 2012 and down a third from their peak in 2014 will be of concern to farmers, banks and our overall financial stability, Labour’s Finance ...
    1 week ago
  • Reserve Bank “gets on with it”, National carries on in denial
    The proposal by the Reserve Bank to tighten loan to value ratios for investors shows they are prepared to do their bit to crack down on speculators, while National is still stuck in denial mode, Labour’s Finance spokesperson Grant Robertson says. ...
    1 week ago
  • Housing crisis holds up interest rate cuts
    The housing crisis that National still wants to deny is stifling the New Zealand economy, says Labour’s Finance Spokesperson Grant Robertson. “The latest Consumers Price Index shows that all prices excluding housing and household utilities decreased 0.5 per cent – ...
    1 week ago
  • Housing crisis holds up interest rate cuts
    The housing crisis that National still wants to deny is stifling the New Zealand economy, says Labour’s Finance Spokesperson Grant Robertson. “The latest Consumers Price Index shows that all prices excluding housing and household utilities decreased 0.5 per cent – ...
    1 week ago
  • Govt’s state house sell-off ramping up
    Government plans to ramp up the state house sell-off by selling another 1000 houses in 2016/17 will mean more families in need missing out, says Leader of the Opposition Andrew Little. “New figures show the Government plans to sell 1000 ...
    1 week ago
  • Govt’s state house sell-off ramping up
    Government plans to ramp up the state house sell-off by selling another 1000 houses in 2016/17 will mean more families in need missing out, says Leader of the Opposition Andrew Little. “New figures show the Government plans to sell 1000 ...
    1 week ago
  • National must reassure exporters on dumping case
        The National Government needs to show our key exporters that they are in control of any anti-dumping case against China before it damages some of our most important industries, Labour’s Finance spokesperson Grant Robertson says.     ...
    2 weeks ago
  • National must reassure exporters on dumping case
        The National Government needs to show our key exporters that they are in control of any anti-dumping case against China before it damages some of our most important industries, Labour’s Finance spokesperson Grant Robertson says.     ...
    2 weeks ago
  • Papers describe litany of incredulity
    Treasury documents which slate the Government’s plans for a national bowel screening programme confirm the proposal was nothing more than a political stunt to cover up underfunding of the health sector, Labour’s Health spokesperson Annette Kings says.  The papers were ...
    2 weeks ago
  • Effect of rampant house prices widens
    The latest house price figures from REINZ show the housing crisis expanding throughout the country, says Labour’s Housing spokesperson Phil Twyford. “We are seeing steep increases in median house prices in Central Otago Lakes – up 42.4% in the last ...
    2 weeks ago
  • Public invited to have say on homelessness
    People who are homeless, those who were once homeless, those working with the homeless and concerned New Zealanders are being asked to share their experiences and solutions to this growing issue with the Cross-Party Homelessness Inquiry. This inquiry was launched ...
    2 weeks ago
  • Sorry seems to be the hardest word
    An apology from Hekia Parata to the people of Christchurch is long overdue, Labour's Education spokesperson Chris Hipkins says. "As if the earthquakes weren't traumatic enough, Hekia Parata and the Ministry of Education then attacked the one thing that had ...
    2 weeks ago
  • Housing crisis affecting more than 98 per cent of NZ
    Labour’s new housing map shows the housing crisis is now affecting more than 98 per cent of New Zealand, Leader of the Opposition Andrew Little says. “Housing pressures have seen house prices rise faster than wages in all but four ...
    2 weeks ago
  • Uber might not be a taxi firm but it must pay tax
    Uber needs to explain how it paid only $9000 in tax when it earned $1m in revenue and is one of the fastest growing companies in the country, says Labour’s Finance spokesperson Grant Robertson. “Uber New Zealand appears to be ...
    2 weeks ago
  • Tax changes should have been made 3 years ago
    National could have avoided the international stain on our reputation from the Panama Papers if it had let IRD’s planned review of foreign trusts go ahead three years ago, instead of now belatedly acting because of the Shewan recommendations, says ...
    2 weeks ago
  • Government must stop state house sell-off
    The Government must immediately pull the plug on its planned sell-off of state houses in order to stop the housing crisis getting any worse, Labour’s Housing spokesperson Phil Twyford says. “While Paula Bennett is putting people into transit camps in ...
    2 weeks ago
  • Thoughts on Labour’s new housing policies
    The Labour Party launched its package of ideas to fix the housing crisis over the weekend. Their ideas match ours in many ways. This is good news, because it means that when we change the government we’ll be ready to ...
    GreensBy James Shaw
    2 weeks ago
  • Thoughts on Labour’s new housing policies
    The Labour Party launched its package of ideas to fix the housing crisis over the weekend. Their ideas match ours in many ways. This is good news, because it means that when we change the government we’ll be ready to ...
    GreensBy James Shaw
    2 weeks ago

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