So, who stands to gain from National borrowing $5 billion if it becomes the Government? Ultimately, the people who lend the money are ones who walk away with the profit and in a time of international uncertainty in the financial markets and collapsing finance companies at home, speculators are looking for a safe, profitable harbour to weather the storm. It doesn’t get much safer than sovereign debt: no matter what happens (short of a revolution) the Government of New Zealand will honour its debts and the lenders will pocket a nice, dependable 6% (at current bond rates) year in, year out for decades.
The big finance operations and the men who have got rich off them are core National backers and donors. Key himself got his millions as a speculator for Merrill Lynch. It’s only natural the money-men will have been lobbying National hard to increase borrowing should it win the election, so they can put more of their money in government bonds (they also happen to be the ones who will gain the most personally from the tax cuts the borrowing will fund).
That could explain why National seems to have no idea what it would actually spend the borrowed money on. Unfortunately, we can’t be sure as they seem to have kept such discussions secret. But when we ask ‘cui bono – for whose good?’ regarding National’s borrowing plan, it’s clear that it’s not the people of New Zealand, it’s National’s mates – the money men.