web analytics

Masters of Finance?

Written By: - Date published: 11:34 am, May 20th, 2015 - 52 comments
Categories: debt / deficit, Economy, labour, national - Tags:

MastersOfFinance

Labour: Net debt goes from $22 billion to $0

National: Net debt has gone back up to over $46 billion

Source: Treasury

 

52 comments on “Masters of Finance? ”

  1. Ovid 1

    But..but…but showerheads! Lightbulbs!

  2. johnm 2

    Jesus wept? Looking at this disaster by the bean counter in chief is enough to make me weep! 🙁

  3. Enough is Enough 3

    We are a trading nation. Compare the world economies during the same period for a better analysis.

    • Draco T Bastard 3.1

      No country should set itself up as a ‘trading nation’. What we should be doing is zeroing ourselves up as being self sufficient with minimal trading.

      • Enough is Enough 3.1.1

        That’s a different point though isn’t it.

        We are what we are.

        We will never be what you want us to be in your idealistic, paradise.

        • Draco T Bastard 3.1.1.1

          Actually, the way we are is the ideology.

          • Enough is Enough 3.1.1.1.1

            Why do you think we should put up man made borders and isolate ourselves from the rest of humanity?

            Aren’t we all on this planet together, and therefore have to strive together towards some inclusive outcomes?

            Why should only those who were lucky enough to be born in Planet Draco be able to benefit from the non-trading society existing there?

            • Draco T Bastard 3.1.1.1.1.1

              Why do you think we should put up man made borders and isolate ourselves from the rest of humanity?

              Where did I say we should?

              Aren’t we all on this planet together, and therefore have to strive together towards some inclusive outcomes?

              And such outcomes need to be economic. Trading is, especially over long distances, uneconomic as it uses up more resources.

              Why should only those who were lucky enough to be born in Planet Draco be able to benefit from the non-trading society existing there?

              I didn’t say that there’d be no trading did I?

  4. Colonial Rawshark 4

    Oh FFS Bunji, this is utter bullshit.

    Cullen ran a debt swap during his years in power. He created government surpluses by allowing the private sector to fall deeper and deeper into debt. Labour 5 swapped government debt for private sector debt.

    At the end of 3 terms in power Labour left NZ as a whole deeper in foreign debt than when it started – its just that the government’s share of that debt decreased.

    Any government which runs a surplus in NZ is setting households and businesses up for a recession, due to the reality of sectorial money balances.

    Figure it out.

    • Enough is Enough 4.1

      Exactly

      Was New Zealand’s (the private and public sector) debt better off at the end of Cullen’s reign?

      • hoom 4.1.1

        Is the Private sector debt any better after 7yrs of Nats?
        I bet its worse at a higher rate.

        • Bunji 4.1.1.1

          private sector debt has not decreased for the major increase in government debt, no.

          I wouldn’t agree with the analysis that public and private debt are so strongly linked. Both need solving, and Cullen didn’t solve the Current Account Deficit, no.

          I just replied to CR in another post on much the same stuff.

    • Andrew 4.3

      +lots!

      and over those boom years from 2003 to 2008, govt spending increased by 50% in just over 5 years. Then when the ass dropped out of the economy we were left with spending promises that couldn’t be cut without disadvantaging those most in need. That is where the debt comes from.

      • Puddleglum 4.3.1

        when the ass dropped out of the economy we were left with spending promises that couldn’t be cut without disadvantaging those most in need.”

        That suggests that if ‘those most in need’ had not had the benefit of the additional spending during those 9 years then they would never have had their needs met – in good times or bad.

        Not much of a society for ‘them’ then, eh?

        If government spending didn’t increase in boom years then when would it?

        Or should it never increase? In that case, the whole notion of ‘growing the pie’ in order to afford public services (you know, the ‘gain’ that supposedly comes from the ‘pain’ – as Roger Douglas repeatedly used to say) is a bit of a deceptive crock of an argument, isn’t it?

        Put simply, how are the needs of those “most in need” ever to be met if – following your argument – in the absence of government spending the private sector/market economy cannot meet them?

        • John 4.3.1.1

          The problem was in the 2000s massive govt spending growth was on the back of the whole country, year after year, spending 115% of what it earned.

          Under Clark private debt grew 166% from $60b to $160b.

          The whole situation was totally unsustainable but nothing was done to stop what was effectively a massive and growing debt mountain, financing an economic bubble.

          And surprise surprise – it led to a financial crisis – in the same way as households would end up in financial crisis if they spend 15% more than they earned, year after year after year.

          • Puddleglum 4.3.1.1.1

            Hi john,

            Thanks for the response – though I’m not sure how it relates to the points I was making. I was not arguing in favour of large national debt.

            Are you arguing that when the private sector gets itself into debt the government should trim its – relatively less important – expenditure rather than, for example, somehow reign in private sector debt?

            I see the two as distinct policy decisions and so I wouldn’t want to see expenditure on social infrastructure reduced because the private sector has been allowed to go on a non-productive debt-fuelled spending spree.

            I don’t see why those ‘most in need’ should suffer because the middle class (and the wealthy) have racked up lots of debt – and the government has allowed them to. That’s especially so if the consequence of the spending spree is higher costs (e.g., in rent) for those ‘most in need’.

            If those ‘most in need’ require government expenditure to stay afloat then that expenditure is justified – purely on those terms.

            • John 4.3.1.1.1.1

              Puddlegum – the point was the government increased spending because it was getting more tax from the debt fueled bubble.

              You can’t spend much more than you earn, year after year, so the debt fueled spending wasn’t sustainable, therefore the tax intake and increased govt spending wasn’t sustainable either.

              It was all based on the whole country spending much more than it earned. So the govt at the time should have taken measures stop private debt going up 160% under their watch.

              That would have done more to help the less well off, because as you say, the bubble hurt them with big hikes in rent.

          • joe90 4.3.1.1.2

            2000s massive govt spending growth

            Yup, government spending was 31.0% of GDP in 2000, 31.2% in 2008 and 35% in 2011.

            //

            http://thestandard.org.nz/wp-content/uploads/2011/05/image012.png

            • John 4.3.1.1.2.1

              Spending went up around 60% from 1999-2008 ($34b to $57b).

              Did we see a 60% improvement in health outcomes? Education outcomes?

              The Clark govt were feeding off the bubble created by the additional spending from $100b of extra private debt.

              They did nothing about a whole country spending 115% of what it actually earned – year after year.

              Try doing that with your household and see how long you last.

              • Colonial Viper

                you idiot, a currency sovereign and a household have nothing in common from a budgetary perspective.

                • John

                  Yeah right.

                  So it’s not sustainable for one household to spend 15% more than they earn year after year.

                  But it’s not a problem if the whole country (2,000,000 households) do it
                  (on AVERAGE every household in the country was spending 15% more than it was earning in the mid 2000s).

                  Pretty soon the person/whole country has to pay back the debt, has to cut their spending, and realises that we all collectively own the same houses we did previously, but we owe foreign banks an additional $100m more than we did before.

                  Profits, jobs, company tax, gst and paye are all down, and the govt realises that like the whole country, it had increased it’s spending on the back of a bubble, so it’s spending like the households, was unsustainable.

        • Andrew 4.3.1.2

          No-one ever said that they should not get the benefit of additional spending, just that the level of extra spending was the issue.

  5. Ian 5

    Deficit/surplus comparisons are completely meaningless when devoid of context. The implication that governments running deficits is inherently bad is plain stupid.

    BTW, the US is currently running a deficit of about 105% of GDP, Japan 200%!

    New Zealand? About 33%…

  6. Colonial Rawshark 6

    And another thing – that net debt of $46B is money that National has put into the NZ economy, into ordinary Kiwis pockets (although the 1% got more than their fair share).

    Are we really saying that we would have been better off as a country with austerity measures, and National pulling that $46B out of Kiwi’s pockets. I mean FFS

    • Bob 6.1

      +1000

      Thank you CR! All of the talk of the budget deficit is arse about face, when the GFC hit National lower taxes and took on debt and their was an outcry, plenty saying taxes should be increased instead. Imagine if you were a couple, one of you got made redundant during the GFC, then your partners income is decreased due to higher taxes! The number of people on the street would have grown a lot more than it did!

      The other option was to reduce Welfare, Education or Health when they were most needed, FFS is right, taking on debt was the only real option, and lowering taxes was at least a way of trying to get the economy moving again!

      • Sabine 6.1.1

        but Welfare, Education, Health and many other parts were reduced.

        Heck, try being unemployed nowadays and go to Winz for a benefit.

        NZ has had its form of Austerity over the last seven years. And those of us that live in cars, eat only once a day or every other day, that can’t go to the doctors or dentist due to lack of funds know full well what austerity means.

        that lowering of taxes for the rich, well that was paid for by the GST increase for the poor.

      • One Anonymous Bloke 6.1.2

        A shit way of getting the economy moving, considering tax cuts might hurt growth.

        Yes, yes, I know you’re programmed to believe something else.

      • Richard@Down South 6.1.3

        Actually National took on debt to five the Rich tax cuts…

        All of our eggs are in one basket, namely Dairy…. but seeing as the payout is expected to be $5 Billion less than last year, that will put a huge dent in the plans of the Govt rescuing the economy…

        Even Bob Jones, who loves to make money, says there are better opportunities to make money, under a National Govt, but the economy as a whole does better under Labour

        Dairy as a whole, doesn’t actually benefit many…

  7. Enough is Enough 7

    I think the title to this post should be directed to its author

  8. peterh 8

    Why, do the Nats always print their budget in a blue cover, when it always end in the RED

  9. The Gormless Fool formerly known as Oleolebiscuitbarrell 9

    Nats spending too much? What do you favour cutting?

    • Wynston 9.1

      The $26 million expenditure on the flag change farce would be a good start!

      • Bob 9.1.1

        Do you realise, what you are suggesting is the equivalent to having a $46,000 personal loan and not buying a $26 bottle of wine would be a good start?
        Where is the rest coming from? Health, Education, Welfare, Chch rebuild? Those are the big ticket items that could actually make a difference, so your choice…

      • dv 9.1.2

        30m on tiwai
        600m? on SCF
        6m to buy a farm in saudi

        for starters

        • Bob 9.1.2.1

          So add in Tiwai and the farm in Saudi (not sure what this refers too) to the flag referendum and you are at $62M of the $46,000M of debt, keep going you are almost there! Just $45,938M left to find!

          The $600M was part of the Government Guarantee that was brought in by the previous Labour Government, and rightly so, this covered private investors, not the company itself.

    • Bunji 9.2

      2 sides to a balance sheet Gormless Fool.
      I wouldn’t have cut the top tax rate, and I’d have a CGT to take a little of the heat out of the housing market for a start…

      I’d also have an economy where jobs were a higher priority, and fewer unemployment and higher tax take does a lot for the books…

      • The Gormless Fool formerly known as Oleolebiscuitbarrell 9.2.1

        What effect would higher taxes have on employment, do you think, Bunji?

        • Colonial Rawshark 9.2.1.1

          Likely positive for employment, if those taxes were spent back on services for communities.

          • The Gormless Fool formerly known as Oleolebiscuitbarrell 9.2.1.1.1

            Yes, although if you spend it, will it tend to create a surplus?

    • Stuart Munro 9.3

      Their throats.

  10. Draco T Bastard 10

    We seem to have found the 10 years of deficits that the RWNJs warned us about – it was in National’s governance.

    • The Gormless Fool formerly known as Oleolebiscuitbarrell 10.1

      Sure can’t think of anything else that might have caused it.

      • adam 10.1.1

        liberal economics

      • Puddleglum 10.1.2

        Hi Gormless Fool formerly known as Oleolebiscuitbarrell,

        So when Treasury announced ten years of deficits that was not primarily a function of the Labour Government’s policies but of the GFC that was being factored in?

        Someone should have told the National Party during its 2008 campaign. They seem to have misunderstood the cause of the predicted deficits. They were under the impression it had something to do with the then government’s economic management.

    • Enough is Enough 10.2

      It was Treasury to be fair, but I guess you being you will consider them RWNJ.

      • Draco T Bastard 10.2.1

        It was the RWNJs that blew it all out of proportion. That said, our entire financial system is broken and it’s that way because of the teachings that those in Treasury receive.

  11. Peter 11

    …. the figures for real GDP per capita/head would be interesting

  12. John 12

    I think whoever wrote the headline should sign it, “master of ignorance”.

    Out of 200+ countries on the planet, there would be very few who wouldn’t happily swap the performance of their economy for ours over the same period.

    • Draco T Bastard 12.1

      And yet ours should have been so much better and would have been if National weren’t in charge.

Recent Comments

Recent Posts

  • Tokelau Language Week reminds us to stay united and strong
    Staying strong in the face of challenges and being true to our heritage and languages are key to preserving our cultural identity and wellbeing, is the focus of the 2020 Tokelau Language Week. Minister for Pacific Peoples, Aupito William Sio, says this year’s theme, ‘Apoapo tau foe, i nā tāfea ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Kaipara Moana restoration takes next step
    A Memorandum of Understanding has been signed today at Waihāua Marae between the Crown, local iwi and councils to protect, restore and enhance the mauri of Kaipara Moana in Northland. Environment Minister David Parker signed the document on behalf of the Crown along with representatives from Ngā Maunga Whakahī, Ngāti ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Zealand and Uruguay unite on reducing livestock production emissions
    Agriculture Minister Damien O’Connor and Uruguayan Minister of Livestock, Agriculture and Fisheries Carlos María Uriarte have welcomed the launch of a three-year project that will underpin sustainable livestock production in Uruguay, Argentina, and Costa Rica.  The project called ‘Innovation for pasture management’ is led by Uruguay’s National Institute of Agricultural ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • 3100 jobs created through marae upgrades
    Hundreds of marae throughout the country will be upgraded through investments from the Provincial Growth Fund’s refocused post COVID-19 funding to create jobs and put money into the pockets of local tradespeople and businesses, Regional Economic Development Minister Shane Jones and Māori Development Minister Nanaia Mahuta have announced. “A total ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Health volunteers recognised in annual awards
    Health Minister Chris Hipkins has announced 9 teams and 14 individuals are the recipients of this year’s Minister of Health Volunteer Awards.  “The health volunteer awards celebrate and recognise the thousands of dedicated health sector volunteers who give many hours of their time to help other New Zealanders,” Mr Hipkins ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community COVID-19 Fund supports Pacific recovery
    The Minister for Pacific Peoples, Aupito William Sio says a total of 264 groups and individuals have successfully applied for the Pacific Aotearoa Community COVID-19 Recovery Fund, that will support Pacific communities drive their own COVID-19 recovery strategies, initiatives, and actions. “I am keen to see this Fund support Pacific ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community benefits from Māori apprenticeships
    Up to 50 Māori apprentices in Wellington will receive paid training to build houses for their local communities, thanks to a $2.75 million investment from the Māori Trades and Training Fund, announced Employment Minister Willie Jackson today. “This funding will enable Ngāti Toa Rangatira Incorporated to provide its Ngā Kaimahi ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Training fund supports Māori jobseekers
    Rapidly growing sectors will benefit from a $990,000 Māori Trades and Training Fund investment which will see Wellington jobseekers supported into work, announced Employment Minister Willie Jackson today. “This funding will enable Sapphire Consultants Ltd. to help up to 45 Māori jobseekers into paid training initiatives over two years through ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Ruakura Inland Port development vital infrastructure for Waikato
    The Government is investing $40 million to develop an inland port at Ruakura which will become a freight super-hub and a future business, research and residential development for the Waikato, Urban Development and Transport Minister Phil Twyford, and Māori Development Minister Nanaia Mahuta announced today. The funding has been has ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Appointments made to Defence Expert Review Group
    Defence Minister Ron Mark announced today the establishment of an Expert Review Group to review a number of aspects of the New Zealand Defence Force’s (NZDF) structure, information management and record-keeping processes.  The Expert Review Group’s work arises out of the first recommendation from the Report of the Government’s Inquiry ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • No active community cases of COVID-19
    There are no active community cases of COVID-19 remaining in the country after the last people from the recent outbreak have recovered from the virus, Health Minister Chris Hipkins said today. “This is a big milestone. New Zealanders have once again through their collective actions squashed the virus. The systems ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Clean energy upgrade for more public buildings
    More public buildings will be supported by the Government to upgrade to run on clean energy, the Minister for Climate Change James Shaw announced today. Minister Shaw announced that Lincoln and Auckland universities will receive support through the Clean-Powered Public Service Fund to replace fossil fuel boilers. Southern, Taranaki, and ...
    BeehiveBy beehive.govt.nz
    3 weeks ago