Johnny Key and the magic $500 million

Written By: - Date published: 4:11 pm, June 25th, 2008 - 12 comments
Categories: john key, slippery, tax - Tags:

Whenever John Key is asked to explain how he will fund some new spending or his still secret tax cuts, he says ‘we’ll cut waste/rein in spending’ and the only example he ever gives is ‘we’ll cap the core public service at 36,000′. This, he claims, will save ‘$500 million over 3 years’ or $166 million a year (= 0.25% of government spending) and that will pay for whatever Key happens to promise that day.

Problem is, Key has promised to fund projects with this money so many times it is now, in the words of Labour’s Wellington Central candidate Grant Robertson, ‘spread so thinly it’s transparent’.

Key has promised to spend the $166 million on:
– tax cuts ($3 billion each year minimum)
– national education standards for schools (tens of millions)
– a new prison (hundreds of millions)
– boot camps (tens of millions)
– administering a Victim Compensation Levy (at least $5 million)
– school or trade training for 16 and 17 year olds (tens of millions)

Has Key discovered a way to spend $166 million thirty times over? Or is he going to use it to invest in magic beans and golden egg laying geese?

12 comments on “Johnny Key and the magic $500 million”

  1. andy 1

    He worked for a bank, so he is going to use leverage…

    IB’s use about 30:1 leverage on some investment vehicles.

    so 166million times 30 equals 4,980million.

    ta da!

  2. Phil 2

    “Has Key discovered a way to spend $166 million thirty times over? ”

    Public-Private-Partnerships… oh, Key didn’t discover them – that was Labour and another glorious flip-flop for Helen and Mikey – so it’s still OK for you to villify him for stealing another of Labours ideas. Plus, it works well in some countries/situations, but not so well in others, so you can continue to be selective in your use and interpretation of statistics to ‘prove’ you point

  3. the average keywi 3

    I just heard Cold Play on Campbell Live.. I wasn’t aware of John Key’s great singing ability. Might go buy the album

  4. Razorlight 4

    How many times can you say the same thing before anyone begins listening?

    I will give you 10 out of 10 for persitence SP.

  5. Anthony 5

    Lovely fourth form economics lesson SP – perhaps tomorrow we could move up to a least first year uni level and have something actually balanced?

    You sound more desperate with each passing day.

  6. KenS 6

    [Tane: Putting in a smiley face doesn’t excuse slandering Lynn. Considering you’re already banned, consider yourself banned for life. Don’t try coming on as your other pseudonyms either.]

  7. outofbed 7

    What A National Government May Entail – Part Two
    Another good article

  8. Felix 8

    Anthony perhaps you could point out what you see as the flaws in the economics of the post.

    Then your remarks might have a chance of reflecting a degree of validity.

  9. Derivatives, that’s the answer.

    I think we pinko-leftie social-democratic types will have to let go of our thinking that New Zealand is a nation state, a democracy. New Zealand under that nice Mr Key would be more of a Position.

    While we citizens are asleep, Mr Key will be working hard, selling us on the global markets. When we wake, New Zealand will belong to thousands of investors, world-wide. That way, he will find the funds to pay off his backers.

    It is a whole new way of thinking. Don’t expect to understand it easily. Just vote for Mr Key and he will do the rest.

  10. Phil. PPPs to the tune of $4 billion a year in private investment?

    And wouldn’t we then be ‘borrowing for the groceries’ because we’re running cash deficits and having the private sector pay for (and then make money off) our capital investment.

    Also, if PPPs is the answer, why doesn’t Key say so? He always says the money is coming from the civil service cap.

  11. Skeptic 11

    No he doesn’t, Steve. You are showing your ignorance again. Read John Key’s speeches. He regularly talks about PPPs being part of the solution to financing infrastructure projects, and has been advocating it for some time.

    Private financing of infrastructure projects means that the government isn’t running cash deficits. Even if you are incurring debt for financing infrastructure, which isn’t what private sector financing is, then you are not “borrowing for the groceries”. You are borrowing for your house, which is what every business and individual does.

  12. Matthew Pilott 12

    You are borrowing for your house, which is what every business and individual does.

    Except you get to party and trash the place, while your kids will be forced to pay the mortgage.

    Why would you want to run a country like a private household or business in the first place? The two are not analogous.

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