debt / deficit

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The Genesis share float – or is that share sink?

Written By: - Date published: 10:03 am, March 14th, 2014 - 24 comments

The Government is continuing with the Genesis share float.  Shares with an anticipated yield of 15% are being sold to pay off debt on which interest at 5% is being charged.  What sort of economic lunacy is this?

National – pissing debt against a wall.

Written By: - Date published: 3:41 pm, March 11th, 2014 - 77 comments

The deficit was $637 million dollars bigger than expected. In fact it was more than double the expected size. Why? Well  mostly because of much smaller tax revenues than previously estimated. So much for the mythic recovery that National’s spinners have been pushing over xmas. We just finished paying off the mountain of debt that National gave me back in the 1970’s and early 80s. Now the shifty party of crony business morons are trying to do it to another generation.

Have National’s asset sales officially cost more than they’ll earn?

Written By: - Date published: 7:00 pm, September 22nd, 2013 - 51 comments

In a previous post at The Standard I did a wee bit of math and came to the conclusion that National has already made $5.26 billion worth of spending promises out of the Future Investment Fund, the not-actually-a-fund chunk of cash they plan to make from selling taxpayer-built infrastructure to their mates. Things have developed. […]

National Party economics: make $2 billion, spend 5

Written By: - Date published: 7:00 pm, June 29th, 2013 - 89 comments

The National Party are the good economic managers, right?  So why are they spending money we don’t actually have yet?

The budget’s flawed premise

Written By: - Date published: 1:02 pm, May 15th, 2013 - 27 comments

The whole austerity driven focus of the budget and National’s economic policy is based on a premise which is in turn based on a spreadsheet error.

Nats have held us back for four years

Written By: - Date published: 7:47 am, May 8th, 2013 - 22 comments

We’re in yet another round of talk of “green shoots” of economic recovery, complete with the hype of an optimistic budget. Maybe they’re right this time, but the recovery, when it does happen, will be in spite of the National government, not because of them. All National have done is hold us back for four years.

Surplus 2014/15: an excuse for not doing what needs doing

Written By: - Date published: 7:50 am, May 6th, 2013 - 30 comments

John Key’s excuse for the planned veto of the extension of paid parental leave is that it would put the 2014/15 surplus at risk. There’s several reasons that’s bullshit, the main one being: why is going just under or just over some arbitrary line in the Crown’s books the Nats’ one aim for the economy? The truth is, Key’s using the surplus as an excuse for not doing the right thing.

It’s not us: it’s the big banks

Written By: - Date published: 10:01 am, April 29th, 2013 - 31 comments

MSM articles show the big Aussie banks are making record profits, Kiwis can save, and Adam Smith worshiping think tanks are not to be trusted. Cunliffe & Norman said it a while back – NAct policies and government spending cuts are not the answer.

One day older and deeper in debt

Written By: - Date published: 7:15 am, March 21st, 2013 - 105 comments

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.

Sunday Reading

Written By: - Date published: 11:12 am, February 3rd, 2013 - 5 comments

My regular Sunday piece of interesting, longer, deeper stories I found during the week. It’s also a chance for you to share what you found this week too. Those stimulating links you wanted to share, but just didn’t fit in anywhere.  This week: Economics, inequality, privacy-destroying drones and citizen responsibilities.

Margin of error

Written By: - Date published: 10:09 am, December 19th, 2012 - 16 comments

So, National’s still on track to surplus in 2014/15, eh? A $66m surplus. Well, don’t be counting those chickens just yet. That projected surplus is just 0.07% of projected spending and revenue that year. That makes wafer thin look fat. And it’s not exactly like Treasury has a good record predicting 2.5 years ahead. But there’s a bigger question: is any surplus worth any price?

Sell assets to avoid debt; take on debt to build motorways – huh?

Written By: - Date published: 7:05 am, August 16th, 2012 - 76 comments

So, let me get this straight. Debt is bad. So bad, in fact, that the Government is willing to sell assets that produce higher returns than its cost of borrowing to free up money and avoid taking on more debt. But this same Government is now planning to borrow to fill a $5 billion hole in its transport budget caused by its unneeded motorway projects.

Nats’ motorways going on the credit card

Written By: - Date published: 7:20 am, August 15th, 2012 - 44 comments

Transport spending has always been paid for out of road taxes. But National’s roads to nowhere cost too much. They’ve added huge top ups from general tax but it’s still not enough to meet the rising costs of the motorways. They’ve cut every other area of transport spending to the bone. Still not enough. Now, National’s going to start borrowing for their motorways.

$3 Billion

Written By: - Date published: 6:47 pm, July 31st, 2012 - 21 comments

The government have $3 billion for the Christchurch rebuild burning a hole in their pockets. But at the same time they’re claiming governmental poverty is why we need to sell our productive assets… And there’s 30,000 people nearby wanting proper houses to live in.

After Five Years: Report Card on Crisis Capitalism

Written By: - Date published: 2:48 pm, July 11th, 2012 - 27 comments

A compelling summary of the mess that capitalism has got us in to. Reprinted with permission from Truthout.org. Read it!

Wrong headed _and_ incompentent

Written By: - Date published: 5:21 pm, June 29th, 2012 - 39 comments

So here is the story that will probably summarise this government in the history books.  The whole cabinet delegated responsibility to John Key and Bill English to achieve their promised land of surplus in 2014/15.  They defined themselves as the only party that could deliver this goal, they jettisoned all other goals in pursuit of a single number, and they can’t even achieve it…

ImperatorFish: More Futile and Cynical Policy

Written By: - Date published: 1:54 pm, June 26th, 2012 - 6 comments

John Key must think the New Zealand public have the memory of a goldfish. He’s put forward bold plans before, but they usually end in failure. Closing the income gap with Australia, creating more jobs, reducing the number of people fleeing to a better life in Australia. And now the promise to get back into budget surplus, which he’s already backtracking on.

ImperatorFish: The Dog Has Eaten John Key’s Budget Surplus

Written By: - Date published: 5:34 pm, June 19th, 2012 - 4 comments

The right may talk up the virtues of self-responsibility, but when it comes to the failure of the Key government to achieve even modest targets, there’s always someone else to blame. It’s all Labour’s fault, or it’s all because of the earthquakes, or it’s all because of Europe.

Standing for nothing

Written By: - Date published: 11:47 am, June 19th, 2012 - 11 comments

National are shelving their plan to get out of deficit by 2014/15 – their only goal left, with the Brighter FutureTM shelved. No to stopping the exodus to Australia, stopping high unemployment, getting better public services, fixing our current account deficit, returning to growth, proper ECE funding (and Adult and Community Education at all), better training for teachers, keeping ACC fair, not cutting frontline staff, promises to not raise GST and more, all on the altar of surplus in 2014/15.
Now what do they stand for?

Wave goodbye to National’s last promise

Written By: - Date published: 9:20 am, June 19th, 2012 - 15 comments

The last time Treasury did an economic and fiscal update outside of its use two-per-year schedule, was December 2008, the depth of the recession. So, it’s telling that, just 4 weeks after the Budget, Treasury is looking at doing a revision of its numbers. One thing is certain, National’s last economic (actually, fiscal) promise- surplus in 2014/15 – is out the window. So, what’s National’s goal now?

No surplus for you!

Written By: - Date published: 11:17 am, June 15th, 2012 - 14 comments

National has reduced the multifaceted, extremely complex job of economy management to a simple bookkeeping goal: a surplus, whatever its size, by 2014/15. Treasury came to the party, projecting a $200m, 0.08% of GDP, surplus for 2014/15 in the Budget. Now, the Reserve Bank’s projected a 1.1%, $2.5b deficit. Oops.

The problem with Treasury’s broken crystal ball

Written By: - Date published: 6:56 am, June 7th, 2012 - 35 comments

The Budget was released on May 24th and Treasury’s numbers are already proving to be wrong. It’s not just a laughing matter. When you’ve got a government making its decisions based on a arbitrary, binary bookkeeping target: surplus by 2014/15 – yes/no, then you’re going to get problems when your chief bookkeeping agency doesn’t have a clue what’s going on.

National’s war on the deficit – 2015

Written By: - Date published: 1:38 pm, May 30th, 2012 - 7 comments

Spin v reality

Written By: - Date published: 6:45 pm, May 21st, 2012 - 13 comments

National have become a very adept PR machine. While not adept at running the country, they’ve become great at running statistics. John Key was pushing things a little too far with his lines that unemployment rising to 6.7% showed an improved economy and that Europe electing anti-austerity leaders showed their austerity policies were right, but […]

One more promise I couldn’t keep

Written By: - Date published: 9:13 am, May 21st, 2012 - 14 comments

Last Budget, National promised 36,000 jobs in the year to March 2012. We got 20,000. They promised 1.8% growth. We got 1.1%. They promised a $9.8 billion deficit. Now, it’s heading for over $12  billion. Ready for a repeat on Thursday?. English will say last year’s failures were all someone else’s fault. Key will grin and make some weak jokes, the beakbenches will hoot and holler. But will anyone outside National be smiling this time round?

Mr Key’s remarkable lack of ambition

Written By: - Date published: 7:01 am, May 21st, 2012 - 59 comments

Remember ‘ambitious for New Zealand’? Remember ‘brighter future’? National used to at least say they wanted to do something significant. At what point did all that get replaced with ‘surplus by 2014/15’? Key and National have $70 billion a year to play with to better this country, and the best thing they can come up with is making sure government operating revenue exceeds operating spending by about half a percent in three years time.

House Price Inflation

Written By: - Date published: 10:58 am, May 6th, 2012 - 59 comments

Land prices rising much faster than wages. Shares, derivatives, hedge funds or other financial instruments are designed so that banks can gamble with our money. Win or lose they always get a cut. Loss comes out of our pensions and other savings. Or, if they really stuff it up, taxpayers are expected to borrow more from them to pay for it. Banks following their own self interest and are compounding economies to oblivion. The “invisible hand” has failed..

$5 a litre petrol, here we come

Written By: - Date published: 9:00 am, May 3rd, 2012 - 94 comments

Last week, the IMF warned that oil prices will double over and above inflation in the next decade. The Greens crunched the numbers and say that means we’ll be paying $5 a litre for petrol in 2022. If it wasn’t clear before, it is now. A handful of white elephant highways is a poor use of $14 billion, especially when petrol is only getting more expensive.

Nats’ economic failures just another excuse for cuts

Written By: - Date published: 10:49 am, April 27th, 2012 - 16 comments

Didn’t take much clairvoyance to see that National would fail to meet its promise of a Budget surplus by 2014/15. You’ve never seen a Finance Minister have his forecasts cut so often and look so happy about it. His failure against his own artificial target gives him an excuse to cut. His party’s ineptness to blame but we pay. Students look to be his target this round.

Nats need better excuses on billion dollar tax cut borrowing

Written By: - Date published: 8:38 am, April 11th, 2012 - 12 comments

As the Nats try to spin us into accepting another zero budget, focus is turning to 2 big holes that their policy decisions have created. First, the $1b+ a year spend on the low to negative value Roads of National (Party) Significance. Second, the $1b+ annual cost of the 2010 tax changes. That’s $2b+ that could be spent elsewhere, avoiding spending cuts without more borrowing.

A three-legged stool

Written By: - Date published: 10:34 am, April 10th, 2012 - 4 comments

Ruth Richardson has forced every subsequent policy to be sized up for ‘fiscal responsibility’. I’d like them to be sized up for ‘social responsibility’ and ‘environmental responsibility’ as well.

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