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John Key – Economic Miracle Maker

Written By: - Date published: 7:02 pm, July 9th, 2013 - 24 comments
Categories: david parker, Economy, john key, Politics, privatisation, uncategorized - Tags:

John Key morphing

You have to hand it to John Key and this National Party.  It appears that they are economic miracle makers, able to  make money go way further than it should do and capable of, a la loaves and fishes, making what is left more than what was initially introduced.

What makes me say this?  Their ability to stretch the Future Investment Fund to extreme limits.

I must admit that I was initially opposed to the selling of the SOE shares.  After all their return were about 15% or so and it was proposed that the proceeds would reduce debt on which the Crown only paid an interest rate of 5% or so. I thought the idea made no financial sense whatsoever.  Indeed I thought that the phrase “financial lunacy” was applicable.

But I was not aware of the miraculous powers that the Government had to make the money last and last.  Two reports suggest the Government has decided to spend or is thinking of spending the sale proceeds of the share floats on the following projects:

  • $100 million on propping up Solid Energy.
  • $426 million for the Christchurch Hospitals redevelopment.
  • $94 million for the fourth year of KiwiRail’s turnaround plan.
  • $80 million for irrigation infrastructure.
  • $10 million for the National War Memorial Park.
  • $50 million to speed up the School Network Update Project.
  • $500 million for Christchurch’s justice and emergency services precinct and to help the Canterbury Tertiary Education Institutions recover from the earthquakes.
  • $172 million for building new schools to meet the demands of a growing population.
  • $1 billion for priority health investments
  • $1 billion for the 21st century schools program
  • $5.4 million for extending Health on the Police network.
  • $7.2 million on upgrading our distress beacon systems
  • $1.4 million on rolling over the Matriach Accounting System
  • $15.7 million on rebuilding Auckland’s Refugee Centre

They are also suggesting that the Crown contribution of the Auckland Inner City Rail Loop and maybe other transport assets could also be paid out of this fund.  The Crown contribution to the inner city loop alone has been assessed at $1.4 billion.

This is a total of up to $4.9 billion of spending not including Auckland’s other transport assets and they have only earned $1.7 billion so far.  The Meridian share sale, worth possibly $2.4 billion, is looking sick on it and Solid Energy is looking positively anemic.  It was thought that the share sale could be worth a billion or so.  If you take these figures off the top end estimate of $7 billion for the sale proceeds you have only $3.6 billion.  And the Government previously promised to reduce debt by an estimated $6 billion dollars and to stave off a credit rating downgrade!  Unfortunately the credit rating downgrade occurred anyway. Those overseas Credit Assessors obviously do not appreciate the extreme skills that John Key brings to the job.

This truly is a miraculous result by this Government.  Of course there is no reason to think that they will not succeed.

And interestingly the Solid Energy $100 million appears in this Budget document

Solid Energy

Yet it has been redacted in this Budget document

Solid Energy2

Why could this be?

24 comments on “John Key – Economic Miracle Maker”

  1. Gruntie 1

    He’s just a man – he’s not the Messiah !

  2. Gruntie 2

    Correction

    He’s not the Messiah – he’s just a naughty boy !

  3. karol 3

    Is that the redacted bit that English was asked about in the House today?

    Hon David Parker: Given that Treasury documents from March 2013, recently released under the Official Information Act, state that Cabinet has already agreed to spend $616 million against the Budget 2013 Future Investment Fund’s spending profile, then list Christchurch hospitals, irrigation infrastructure, and the National War Memorial, at a total of $516 million, was the other $100 million blanked out for Solid Energy?

    Hon BILL ENGLISH: I understand that it was, but Treasury is wrong. The Government has not committed to $100 million from the Future Investment Fund, as the member asked in the first question. The Government decides what the Future Investment Fund is spent on, not Treasury accountants.

    It’s all the Treasury’s fault?

    • mickysavage 3.1

      I believe so Karol. And if “it is all the treasury’s fault” means that “none of us actually saw it or read it or we now understand it could be politically embarrassing and we want to deny all knowledge and blame someone else” then yes.

      • Colonial Viper 3.1.1

        Maybe Key and English do believe in printing money out of thin air after all?

        • Draco T Bastard 3.1.1.1

          Of course they do – they know how the banking system works and they’re quite happy about it.

    • Alanz 3.2

      “It’s all the Treasury’s fault?”

      This is tremendous improvement on National’s part in not blaming Labour.

  4. chrissy 4

    Maybe they are getting budgeting advice from Christine Rankin.

    • geoff 4.1

      Leave Christine out of it! She could feed the entire Nation of thrupence and ha’penny a week!
      “Please, Miss Rankin, may I have some more??”
      “No you may fucking not youfilthy little worm!! I’ve got to stretch a single weetbix across 200 thousand snivelling little shits!!! Now get back to sewing those fucking stuffed kiwis for the wealthy Chinese tourists!!”

      • Rosetinted 4.1.1

        geoff
        You’re getting awfully mixed up. You’re thinking of the bible story of feeding the multitudes with a few loaves and fishes. Surely you don’t think that Christ-ine is the embodiment of the divine resurrected?

    • dumrse 4.2

      Sure as fuck won’t be from your man Cullen.

  5. Yes 5

    The numbers don’t add up above! Have I missed something?

    • mickysavage 5.1

      The total of the bullet pointed expenses is $3,461.7 billion and the cost of the inner city loop is $1.4 billion. The Government did say that asset sale proceeds could be used for up to $10 billion of Auckland’s transport assets so the total could be even bigger …

  6. yeshe 6

    they must have learned maths from hekia in one of her schools … just amazing isn’t it ?

  7. Rosetinted 7

    A Radionz BBC talk on middle class entrepreneurs in Ghana tonight had people saying things that could equally be applied to NZ.

    A politician stressing that government doesn’t need to run everything and private enterprise can do it. Cost of living too high. Company taxation has been brought down. But water may be delivered only four times a week. Electricity goes off and businesses have to save to buy generators.

    Nobody thinks they are well off even those who are relatively so.
    The banks won’t lend the young people money. Furniture can be imported cheaper than the same quality made in the country.

    • Yes 7.1

      They have a left wing government too! Must be ok then

      • Draco T Bastard 7.1.1

        Sounds like they got a “left” government that’s like Labour – decidedly on the right of the political spectrum.

  8. georgecom 8

    One of the comments floating round before the last election, in regards to a CGT, was the aussie saying “a dollar earned is a dollar earned”, meaning however a dollar was earned, it should be taxed.

    With Key and his Government, a dollar earned is $3 spent.

  9. Sable 9

    This government are fundamentally dishonest. Question is with their blanket ownership of mainstream media will people see past the smoke and mirrors come election day? Personally I have my doubts.

  10. Follow-the-money 10

    I think I know how it could happen.

    The Future Fund is hauled up to Sky City & put it all on black. No, it isn’t guaranteed, and, yes, there is an element of risk, but thousands of kiwi mums & dads are taking those same risks every day. This is the biggest recession since the 1930s, and it needs visionary thinkers to create bold policy.

    Well, at least it’s an idea, and that’s better than nothing.

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