Blame it on the quake

Written By: - Date published: 9:16 am, March 9th, 2011 - 11 comments
Categories: bill english, david cunliffe, disaster, Economy, john key - Tags: ,

Last week, John Key said that, due to the earthquakes, “from June to June, my guess is that we’ve lost $12 billion in GDP”. Later, he said it was $15b over 4 years due to the quakes. Now, Treasury says most of that $15b is from the recession Key and English had led us into before the quakes. The Nats are trying to use the quakes to cover up their failings.

David Cunliffe brought Treasury’s statement to public attention in the House yesterday, when he challenged English, who had been blaming the projected $15b economic shortfall and accompanying $5b reduced tax take entirely on the earthquake:

Hon David Cunliffe: Can he confirm that Treasury’s February monthly economic indicators states at page 4: “Over the 2011 to 2015 March years, nominal GDP is expected to be a cumulative $15 billion lower than in the Half Year Update … This is mostly related to the weaker outlook we were seeing prior to the February earthquake,”?

Hon BILL ENGLISH: Yes, I can confirm that. The forecasts of growth, either those by Treasury, when they are published finally in the Budget, or those by the Reserve Bank, which will be publishing forecasts this week, are likely to reflect the fact that most of the reduction in the growth outlook was occurring before the earthquake. The earthquake has certainly had a negative impact on it.

To be precise, Treasury says that $10 billion of the $15 billion shortfall in previously projected economic activity will be due to the under-performance that was happening before the quake. That suggests of the government’s $5 billion shortfall in revenue less than $2 billion will be due to the quake. The rest is due to the economy not meeting expectations under Key and English.

This isn’t as serious an instance of Key making stuff up as he goes along as was his claim that 10,000 houses will need to be demolished and whole suburbs abandoned. But it is another example of the government trying to use the earthquake as an excuse to get away with things. Whether its the controversial new foreshore and seabed bill, or the shock retirement of a senior minister, or Working for Families cuts, or the failure of their lazy economic leadership, National seems to think they can use the tragedy of the earthquake to gloss over anything they don’t want the public to notice.

We deserve better than this.

11 comments on “Blame it on the quake”

  1. Adrian 1

    There is even a case to be made for the Gummint to be able to make a profit out of the quake. If several billion is going to be released to economic activity from EQC funds already banked and a further 12 to 16 billion coming in from overseas as according to SwissRE, the worlds biggest insurer. This amounts to several Fonterras and is about 20 billion dollars of increased economic activity that will all pay tax and GST.It is like a huge EEC subsidy like Ireland used to get.

  2. Draco T Bastard 2

    And it’s even more proof that the “free-market” ideology just doesn’t work. Treasury made projections on the policies that the NACTs were implementing and those projections were wrong and the value of any theory is how well it can predict what happens within it’s scope. The neo-liberal economic theory has completely failed to predict anything whatsoever.

    • neleftie 2.1

      treasure are a product of thier own background, education and ideological bent – anyway you cant predict the global market as its too chaotic and unpredictable, that is the main issue, speculative forces on masssive and uncontrooled manner

  3. tc 3

    ‘The neo-liberal economic theory has completely failed to predict anything whatsoever.’

    I disagree as I think the predictions those at the top in control made regarding the increases in their personal net worth have been pretty much bang on…..probably exceeded expectations.

    • Bored 3.1

      Yes, On that note I would like to know who this WE who have lost the billions are? Whats my share? cant be spread out evenly (socialised) can it? Silly me,”we” (the big buggers) lose billions and get “we”(the little buggers) to pick up their loss.

  4. gobsmacked 4

    Key’s not even pretending any more … the quake is there to be used, and he’s using it:

    Very cynical.

  5. Irascible 5

    It now becomes the excuse (reason???) for Key declaring that the “great NZ fire (quake) sale will now begin” – Asset sales are, he declares, speaking to script, to save the country and rebuild Christchurch. The Republican Shock Doctrine playbook is now open and in play as the NACTs prepare to asset strip the economy to pay off those, like Mediaworks, who have funded them into power.

  6. BLiP 6

    We deserve better than this.

    Do we really? We were told about John Key before the election yet we still voted for him and still keep him at the top of the pops.

    • gobsmacked 6.1

      I half-agree with Blip. Half, because I can understand people being fooled once. But not next time.

      But if Warney and William and the World Cup and all those circus sideshows are enough to keep the people on side with the Emperor this year, then perhaps they will be getting what they deserve.

      • neleftie 6.1.1

        what choice do we have waffle man goffie or our figurehead emperor – too late for a change and the main labour leader candidate is a new intake

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