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Cunliffe addresses Key lies

Written By: - Date published: 4:53 pm, May 11th, 2011 - 54 comments
Categories: david cunliffe, debt / deficit, economy, john key - Tags:

David Cunliffe has addressed Key’s truly uninspiring pre-budget speech this morning.

National have no economic plan, and it shows.  Key’s tinkering to fix the massive economic gaps, and his only suggestions are a vague warning that National would reduce the member tax credit, and reverse its own earlier move to reduce the default contribution rate.

Yes: they plan to encourage savings by cutting savings.

But the speech was much more about blame-shifting on to the weather, the earthquakes, the GFC and the previous Government.  After 2.5 years, we apparently still shouldn’t blame them.

Cunliffe addresses what he politely calls Key’s ‘misleading’ claims:

Rebutting false claims on Labour’s economic record in Key’s pre-Budget speech

1. Key says: “Government spending increased markedly in the mid-2000s”

Fact: Government spending was 31.0% of GDP in 2000 and 31.2% in 2008. Under National, spending as a percentage of GDP has exploded

Source: Parliamentary Library

2. Key says: “Government spending rose 50 per cent in just five years”

Fact: Between 2003 and 2008, core Crown spending grew 42.9% but this was before inflation and population growth. In real terms per person terms, spending grew by less than 20%, which was in line with economic growth. This money went into programmes like Kiwisaver, Working for Families, and increased infrastructure spending, which National hasn’t scrapped.

Source: Parliamentary Library

3. Key says: “Since 2004 almost 60 per cent of new jobs have been in heavily government-dominated sectors”

Fact: Key is counting the extra teachers, doctors, and nurses Labour funded as if they are ‘bureaucrats’. Core public servants remained roughly 2% of the workforce under Labour.

Source: State Services Commission, Human Resource Capability Survey of Public Service Departments; Statistics New Zealand Household Labour Force Survey. Compiled by the Parliamentary Library.

4. Key says: “export volumes grew only one per cent in total between 2004 and 2008”

Fact: Key is using selective dates and the impact of the global recession to mislead. In reality export volumes grew 42.2% in Labour’s first 8 years in office before shrinking 11 per cent during the recession. Under National, export volumes have just now regained the level they were at under Labour four years ago.

Source: Statistics New Zealand, Infoshare

5. Key says: “since the end of 2004, GDP per person have fallen by an average of 0.1 per cent a year – the weakest period since the late 1980s and early 1990s

Fact: Again, Key is using the recession and his own poor economic record and trying to attribute the blame to Labour. In reality, GDP per person grew 16.8% in the first 8 years under Labour. Since the recession, GDP per person has fallen 5%. National has made no progress on growth, with GDP per capita falling for 6 of its 8 quarters in government so far.

Source: Statistics New Zealand, Infoshare

[Update: now with graphs!]


54 comments on “Cunliffe addresses Key lies”

  1. RedLogix 1

    Great work from Cunliffe and the Labour team. This kind of de-bunking may have little impact of dear old Auntie and Uncle Public… but there is an audience of media and pundits who will pay attention and will understand how Key and English are bullshitting them.

    If Labour leaves Key’s lies on the table unchallenged they gain a wholly spurious currency all of their own. This is the hard yards of politics, unspectacular and unrewarding in the short-term. But vital.

  2. Craig Glen Eden 2

    Yup we need more of this and the public need to see and hear more from Cunliffe if Labour wants to win at the next election.

    • Tangled up in blue 2.1


      Due to many National MPs having past employment in business and finance; there’s a false public perception that they are proficient in fiscal matters.

      Cunliffe is just the man to blow the lid off.

  3. Carol 3

    Excellent work. How is this not front page news in the mainstream media?

    And Key in Parliament says such stuff with a dismissive sneer.

    • todd 3.1

      How is this not front page news? Because Mediaworks received a loan of $43.6 million of public money. They didn’t need it and the Government’s official advisers told them not to. So we can consider our media mere puppets of our corrupt National Government.

      National say Labour’s arguments are irrelevant while continuing to lie in the vain hope that the public will be duped. The sad fact of the matter is that John Key is their leader because he is the best liar.

      • Vicky32 3.1.1

        Yes! Picture Clive’s surprise when his telephone poll tonight showed that 60% of respondents would be happy to give back their tax cuts if Kiwisaver, WFF and interest free student loans would be left alone.
        He was gobsmacked. Why?

  4. Lanthanide 4

    What’s his source for point #3?

    • Ben Clark 4.1

      It wasn’t on the press release document, but I’ve emailed to see if I can find out.

      In the meantime, I’ve discovered the pretty graphs that were also attached. And I’ve edited the first line for clarity as suggested by Jim – thanks!

    • Ben Clark 4.2

      Have source now – post updated.

  5. That is unfair.  Cunliffe is using those facty things against Key who tends to pull stuff out of his arse.  How can this be a fair debate?

  6. Jim Nald 6

    May I suggest the opening line of this post be re-drafted as it may lend itself to be misread …
    [Ben: Thanks for the suggestion – done!]

  7. Kea 7

    Long overdue.

  8. Colonial Viper 8

    Keep hitting them D.C., and follow up next time with a knee in the nuts.

  9. infused 9

    He was squeaking in parliament. Looked like a clown. Did you watch the next speach? Rolled over him.

  10. Sookie 10

    Nice rebuttal, but I fear it will fall on deaf ears. People have such short memories, and their rank stupidity will mean they will get the government they deserve and can watch this country sink further into the cowshit soaked mire of poverty and despair. Under Labour, we were in SURPLUS. Now we’re deep in deficit and not all of it can be blamed on natural disasters and banker-wanker induced disasters. Under Labour, I was proud of my country and though probably misguidedly, thought we were a shining example of prudent enviromentalism and social justice. I was happy to come back here and buy a house and settle down. Now I am embarrassed, and depressed, and contemptuous of my fellow Kiwis. I don’t have kids or Kiwisaver so I’m not affected by the latest clusterf*ck, but that doesn’t stop me being bloody angry. And probably out of here in a year’s time.

    • Colonial Viper 10.1

      My friends in Oz are also telling me that its time for me to get the frak out of dodge, they can see NZ turning into a little corporatist fiefdom where 95% of people are paid shit and the remaining monies all float off to overseas shareholders; it’s that obvious from across the ditch.

      Impossible for supervisors, team leads and line managers in NZ to get much more than $50K p.a., in Oz add 30%-40% to that figure easy.

      And notice how our lower pay rates arent inducing flocks of Australian corporates to relocate over here? What a crock.

      • Jim Nald 10.1.1

        Lovin’ how the rich elites are filling up their own pockets and emptying the country of good people, aye?

    • Herodotus 10.2

      The surplus were to cease no matter who won the 08 election. Simplistic views based on obersvation e.g. operating surpluses, Lab did little to lay the foundations of a substainable ecomonic development within NZ, much was short term that had reached its natural life. It really annoys me this under Lab we had surpluses and all was good view. No it wasn’t. The ability for many (some considered wealthly based on paying the top tax rate) to be unable to live within their wage (many feeble) and the cost of housing and the effect of non tradables on the household budget. Non of this was addressed by Lab (nor for that matter is it being addressed by Nat).
      The ability to understand what is happening is very disheartening, how can we improve when we don’t know what is really happening and what really matters. All it is is spin, spin and more spin. Some oldies in the form of yes MinisterYes Prime Minister and House of Cards can still be applicable viewing today.
      Perhaps in yester year things were better as we were all in ignorance of what was happening.

      • mickysavage 10.2.1

        Feckin crap.

        This is one of the most potent lies.  Labour may have run surpluses and paid off debt but they are responsible for the deficits that occur under National.  And if you try and argue with them they come out with words and phrases like “simplistic”, “did not lay the foundations of a sustainable economic development” (whatever that means), and “short term”.

        This is a load of crap and is Tea Party like in its abuse of the English language.

        • Herodotus

          Get some substance to your arguements MS. Get beneath the headline numbers and see what is contained below. Where was our growth derrived from over the years? Housing, consumerism, tourism, immigration (remember pop growth thru immigration adds initial boost to GDP above the immigration growth rate) and some fortunate commodity price increases. What about our current account??????? In accounting terms any accountant worth there association fees can make a book profit, very difficult to fudge cashflow.
          Where was the ability for industries to grow on going???
          World craps out – what happens to tourism?. We built leaky homes ,and allowed the price of homes to be beyond most people.
          There are some here who should know better to come out with this crap. As long as many esteemed persons out there continue all we will get are varying degrees of kiwis struggling to live.
          Like today soln from Helen Kelly to the budget- reverse the tax cuts. So a few pay a bit more but our overall position is the same. Govt debt is not that bad, take alook at the nat debt. Go and run your focus groups and pat each other on the back- Nothing will change in the real world people will and are suffering and frankly I cannot see Lab answering the call.
          And finally I never have said that todays position is not attributed to Nat, I hold both major parties as those responsable for our unprepardness and respones.

          • Colonial Viper

            Hate to say it but Cullen and Cunliffe both saw the private debt numbers ballooning out even as they were slicing back the public debt.

            And as the private debt ballooned out (driven by Aussie bank provided mortgages), everyone in Parliament saw the value of their homes increase by 50% over just 6 or 7 years.

            LAB didn’t do much about it that was effective.

            • Herodotus

              Agreed, since taken interest in this site, my appreciation on Nat ability to improve this country has taken a severe knock. Yet Labs ability is also of question. So unless David C is more than a political animal, with solutions and takes control then there will be an ever increasing movement accross the ditch, and our sinking will not be from the sea rising as a result of a warming climate. If he is an answer then also many have to realise what has gone before still requires reviewing and that it was a mirror image of the 1920’s of fun times to be had, but it was never to last.
              And re paying off debt – Our overseas govt debt was the same value in 99 as it was in 08 arounf $37b. So nothing here was paid off, sometimes the truth does not reflect perception held.

  11. Fat Uncle 11

    Should take out full page ads in daily papers…

    and have build boards up that are waaaaaaaaaaaaaaaay simpler. Too much writing. Kiwi/iwi very simple and easily read.

    Let’s sell up and move

    Let’s not

    or something better from the net load of options…

  12. Peter Bains 12

    Bye CV, you will be paid shit over in Oz too as people do not employ time wasters on the web.
    Definite case of raising the average IQ of both countries.
    Can’t wait for you to tell the Aussies their money is the communities.

    • Colonial Viper 12.1


      I’ve found in the past that smart managers leave me alone to work exactly how I want.

      You obviously don’t qualify, but hey.

      • Peter Bains 12.1.1

        You are right CV, I don’t qualify. I am the country manager for the company I work for and make the Key decisions. I am a free spirit if you like.

        • Deadly_NZ

          Oh wow another NAT shill why do they always log in here with 2 names???? But Peter I also was a manager, a highly paid manager with good bonuses, with the trust of the company to run a multi million dollar business without losing or stealing money . But one day the business left NZ 2009 and we were all made redundant (ten grand dont last forever when WINZ make you wait forever (and this was at the time of JKey again “If you are made redundant you would get on a benefit and not have to live on the redundancy”) Fucking bullshit that was)


          Or they could get real snarky like they did, and gave me a 13 week stand down. I was lucky they threatened 26 when i showed this article to them.

  13. chris 13

    Now how about constructing a narrative around this instead of constantly trying to make key look corrupt and attacking him personally. Yes, he’s a dickhead, but those who haven’t changed their mind aren’t going to be swayed by personal attacks on him because they like him. Why in god’s name are they spending all their media capital trying to tarnish him when they could be attacking his entire government instead?!

    It’s not a fucking presidential campaign and the only reason it is is because that suits National. Well it doesn’t suit Labour, at all. Goff is not inspiring, but if Labour can construct a decent narrative (I don’t have much hope here) about the entire govt. being useless and performing badly, then I think people will start to notice. This campaign has nothing to do with Goff and everything to do with brand Labour. Fight brand Key with brand Labour and I think you’ll start seeing results.

    Note: I’m well aware that this won’t happen and Labour will most likely lose. At this stage I’m voting green – for the first time ever, might I add.

  14. Tanz 14

    And now Kiwisaver is in wreckage. I’n of the opinion that Key definately did want ‘wages to drop’, this would be typical of ruthless, smiling assassins.

    Let’s vote National (for more of the same)

    Let’s not.

  15. Andrew 15

    Funny that something of substance comes from Cunliffe, and not Goff.

    I’ve said previously, and being a National/Act voter – replace Goff with Cunliffe and Labour would have my vote first time ever.

    • todd 15.1

      Being a National/Act voter, can we take you seriously Andrew? You admit that there is substance at least. When that substance starts to smack National in the face, what will be their argument then… It’s all Labours fault? That excuse has worn thin.

      How about we replace the entire National party with some people we can trust…

      Replace John Key with somebody who is not a consummate liar and doesn’t run away when asked the tricky questions. Replace Steven Joyce with somebody who doesn’t have conflicts of interests, replace Bill English with somebody who knows what a surplus is, replace Paula Bennett with somebody who gives a damn about the poor and replace the media who are bribed by Nationals corruption. Since you brought up the topic of replacement Andrew, that would be a good place to start.

      • Deadly_NZ 15.1.1

        I have voted labour all my life 55 years, and for one of the few times i’ll agree with a NAT, Replace Goff with Cunliffe.

        Key can run rings around Goff as he has a verrrrrryyyy lloooooooooooooooooooong history and a fine target he makes, he can’t go on about asset sales, (he is tarnished with the same asset sale brush) So all key has to do is bring that or any one of a thousand things up and he gets smashed. and yes I watch Parliament TV and I Cringe at the state of Labour. They are getting beaten at every turn.

  16. Adrian 16

    Muldoon I think it was used charts and bar graphs to very good effect years ago. Might be time for D.C to roll them out again.

  17. IrishBill 17

    It’s funny, this “big economic issue” post is running at 26 comments while the “cash for cars” post which was put up forty minutes later is at over 60 comments. I thought that all you political types were focused on the big issues.

  18. Tanz 18

    Bill English may well be the next PM at this rate.

    • todd 18.1

      Don’t make me vomit!

      • Tanz 18.1.1

        At least he is honest and more ordinary, more like everydayKiwis.

        • Lanthanide

          Yeah, the career politician from Dipton, living in a taxpayer-funded mansion in Wellington has so much in common with “everydayKiwis”.

    • Deadly_NZ 18.2

      for 5 mins until Brasula says gimme or i’ll ruin your party. Oh joy NZ politics soon will be the domain (like everything else is) of the very rich.

  19. burt 19

    Since the recession, GDP per person has fallen 5%. National has made no progress on growth, with GDP per capita falling for 6 of its 8 quarters in government so far.

    In the last 4+ quarters of the last Labour govt GDP per capita fell which delivered the economy to National in recession.

    You just don’t get this do you, the chest was empty and growth was negative and ONLY 2 years later growth is returning. All you need to do now to explain why Labour left an empty cupboard is to blame the National govt of the 90’s that mopped up after the last major Labour party failure.

  20. Frank Macskasy 20

    Excellent data!

    This Treasury graph is also interesting, as it shows where Labour spent much of the surplus: on repaying sovereign debt! http://www.treasury.govt.nz/budget/2010/bps/04.htm/bps10-03.gif

    • burt 20.1

      Yes, the balance sheet of the country get better while individuals balance sheets went backward. Apparently it’s prudent financial management when the people are poor and the govt is rich.

      • mickysavage 20.1.1

        Ha Burt
        People were splurging it up speculating spending more and more on buying the same houses off each other.
        Are you advocating that Labour should have stomped on this behaviour and *gasp* regulated the market?  There would have been a hell of a wail if they did.
        Are you becoming a socialist in your old age??

      • RobC 20.1.2

        Pure gold Burt. Individuals balance sheets went backwards? As house prices boomed in the 2000’s individuals balance sheets went backwards? Do you even know what a balance sheet is???

        • burt


          Shit here was me thinking that a balance sheet had assets and liabilities. Bloody hell, how foolish of me not to regognise that if house values were going up that people weren’t borrowing…..

          But help me out a bit of so wise one, why when property values started to fall were there so many mortgagee sales ?

          Oh and one more thing, how come NZ has one of the highest per capita personal debt problems – how can that be when balance sheets only contain free hold houses ?

      • Blighty 20.1.3

        “individual balance sheets went backwards”?

        Really, what do you base that on, burt?

        Not the Reserve Bank stats http://www.rbnz.govt.nz/statistics/monfin/HHAandL.xls

        Year Net household worth, billions
        1999 279
        2000 278
        2001 292
        2002 316
        2003 402
        2004 456
        2005 527
        2006 585
        2007 631
        2008 571
        2009 620
        2010 616

        Once again, in the eternal battle of Burt vs Reality, Burt comes in a poor second

        • zug zug


          [lprent: Not something that you can do on this site. ]

          • burt

            zug zug

            Also, do you think multiple property owners with low personal debt and aggressively managed tax entities encapsulating rental properties should be the most significant benefactors from Labour’s fiscal policy?

            Because that’s what happened.

            Families struggling bought more toys with WFF, we all chipped in for ourselves and believed the govt was giving us money for KiwiSaver, students get to save the interest on free money, which they may never bother to pay off – but piss all else fiscally changed in 9 years. Other than low income earners with no kids got further away from buying a house, borrowed more for toys and played easy credit keep up with the neighbours who were lushing up on their WFF in their rented house.

            It was popular for sure, it was a great party.

        • burt

          Net household values…. Well clearly we don’t need any social housing initiatives do we – wow, silly me I though a person’s new worth was their assets less their liabilities but no – it’s the countries net household value which of course is evenly spread and nobody borrowed more because of falling real income created by fiscal drag.

  21. RobC 21

    In addition to the post, there are other areas to attack Key. In his speech, he noted his record as:

    1. “Probably the most significant reforms we have undertaken have been in the area of tax… Importantly, we designed these tax changes so they pay for themselves over time and therefore don’t require extra government borrowing.”

    2. “We have also put the squeeze on government spending.”

    3. “We have also kept government debt under control.”

    All three are bullshit. In fact, 3. is so fucking laughable it hurts. The trouble is most people are like PeteG and believe every myth that comes out of his mouth and the opposition has no traction with the public.

  22. Good to see some data to work with thank you Ben Clark we feel frustrated by the Nats lies and their superficial jeering behavior in Parliament. They are arrogant and totally out of touch, they do not care that their tax cuts only helped the rich, the prime minister who ever he is, said they were helping the people that counted!! And who would employ workers , the trickle down theory went out with the ark , it is true they have no plan just a procees of redistribution to the most able in our society. And to hell with everyone else.

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          John Key’s talk of ‘efficiencies’ ignores the fact the Government is chronically underfunding health to the tune of $1.7 billion, says Labour’s Acting Health spokesperson Dr David Clark.       ...
    3 weeks ago
  • More than 1,300 schools to face budget cuts
    The latest Ministry of Education figures reveal thousands of schools will face cuts to funding under National’s new operations grant funding model, says Labour's Education spokesperson Chris Hipkins. ...
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  • Speculation fever spreads around country
    House prices in Wellington, Hamilton and Tauranga are going off as a result of uncontrolled property speculation spilling over from the Auckland market, says Labour’s housing spokesperson Phil Twyford.  “Speculators who have been priced out of Auckland are now fanning ...
    3 weeks ago
  • New Zealand lags on aid targets
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  • War on drugs needs more troops
    The Minister of Police must urgently address the number of officers investigating illegal drugs if she is serious about making a dent in the meth trade, says Labour’s Police spokesperson Stuart Nash.  “Answers from written questions from the Minister show ...
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  • Doctors strike symptom of health cuts
    The notice of strike action issued by the junior doctors today is the result of years of National’s cuts to the health system, says Labour’s Associate Health spokesperson Dr David Clark. ...
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  • Government starves RNZ into selling Auckland asset
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  • Government must be more than a bystander on the economy
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    3 weeks ago
  • Māori Party all hui no-doey on housing
    The Māori Party should stop tinkering and start fixing tragic Māori housing statistics in the face of a national housing crisis, says Labour’s Māori Development spokesman Kelvin Davis. ...
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  • Labour committed to eliminating child poverty
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