Mr Key’s remarkable lack of ambition

Written By: - Date published: 7:01 am, May 21st, 2012 - 59 comments
Categories: budget2012, debt / deficit, economy, jobs - Tags:

Remember ‘ambitious for New Zealand’? Remember ‘brighter future’? At what point did all that get replaced with ‘surplus by 2014/15’? Key and National used to at least say they wanted to do something significant, even if they never had the policies to achieve it. Now, they’re fixed on a simple accounting goal – one that anyone could match.

Whether a government posts a surplus or not in a given year is entirely within its own control (providing it retains the confidence of Parliament). Staying on track to reach some kind of surplus in 2014/15,is a simple matter of looking at Treasury’s projections for revenue and spending, which show you’re nearly on track anyway, and tweaking – a little more tax here, less spending there – to make the OBEGAL greater than zero in 2014/15 (if you’re smart, you would leave a bit of a buffer, given Treasury’s wild over-optimism under National).

And – ta da! – you’re on track to surplus.

But what have you really achieved?

It’s worth remembering that a $250m surplus is closer to a billion dollar deficit than a $2 billion surplus – passing the zero point in and of itself is of no particular significance in the real world beyond National’s spin.

A billion either way is just a drop in the ocean of borrowing that National has undertaken in this country’s biggest ever borrowing binge, much of which the Debt Management Office has to refinance each year. So, a small surplus leaves us no more of less exposed to shocks to the international credit system than a small deficit.

Frankly, with the government borrowing at a record low 3.6% there’s never been a better time to take on some extra debt – if you have something useful to do with the money (like using it to fund worthwhile capital investment, rather than using the revenue gained from selling assets that are returning more than 6% a year in dividends).

And that’s, perhaps, the most disturbing aspect of National’s obsession with the 2014/15 surplus. Its purpose is to paper over the lack of anything useful – any policy programme for real jobs, growth, and economic rebalancing.

Sure, there’s a couple of dirty deals like the pokies for convention centre deal but there’s nothing to provide the 30,000-40,000 new jobs year on year that the economy needs to get unemployment back down to pre-National levels. National promised 36,000 new jobs last year but, with no policy to deliver them, it achieved only 20,000 (interesting how it’s all ‘we’re going to create X many jobs’ when the promise is made but when they don’t appear it’s ‘the private sector creates jobs, not the government’).

There’s also no policy that’s going to lift the country’s growth rate above the pitiful 0.1% per quarter National has averaged so far – Rob Salmond points out this is among the lowest in the non-Euro OECD and well behind Australia, the US, and Canada.

The current account deficit is getting worse while another housing bubble is forming – a clear sign that capital investment is, once again, being directed at house price speculation rather than the productive economy – caused, at least in part, by National’s tax cuts for the rich. What will be in this Budget to do anything about it? Nothing.

The Nats used to talk about ‘line by line’ reviews of the government’s revenue and spending but, the fact is, it has changed little of the big revenue and spending items and what it has changed it has changed for the worse – borrowing $2 billion for the ‘fiscally neutral’ 2010 tax package, $1.7 billion in subsidies to carbon polluters, $400 million for unsustainable irrigation, cutting R&D funding, $14 billion for highways that don’t make sense, increasing the cost of getting an education – from ECE to tertiary, and increasing class sizes.

Will any of those poor quality decisions be reviewed? You know that they won’t be.

National has $70 billion a year to play with to better this country and the best thing they can come up with is making sureoperating revenue exceeds its operating spending by about half a percent in three years time.

How’s that for ‘ambitious for New Zealand’?

59 comments on “Mr Key’s remarkable lack of ambition ”

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  1. tc 1
    21 May 2012 at 7:26 am

    The ever growing queues into Australia say it all, the hardworking skilled folk aren’t sticking around to watch sideshow John and his dealers drive this country into the dust.

    Brighter future for us wealthy at the top. Austerity, user pays, less public assets to generate govt revenue coupled with a demoralised and much reduced justice, education and health system for you kiwi suckers.

    Would we have PSA decimating our kiwi fruit industry if we hadn’t cut all those frontline MAF staff as one example of that ‘we don’t give a f’ atitude.

  2. Carol 2
    21 May 2012 at 7:35 am

    Having conned enough voters to push them over the line so they could form a 2nd government, Key’s NActs are plundering and pillaging as much of the community/tax-payer assets as they can before they get kicked out of office.

    Democracy is more than winning enough votes to form a government. It should also involve on-going consultation with the public on policies and legislation. But this government is just not listening to the public, and is pushing on with their sales of state assets, in the face of all opposition.

    http://www.stuff.co.nz/national/politics/6955858/Councils-get-nudge-on-asset-sales

    The Government has signalled local government should follow its lead and consider selling shares in publicly-owned assets to help fund other projects and control rate rises.

    Local Government Minister David Carter said yesterday that councils who moved to sell assets, such as shares in ports and airports, to maintain their funding levels or pay for other infrastructure projects would get his support.

    What a surprise that the POAL dispute could be leading to sale of the port? Who’da thought?

    Not ambitious for NewZild, but ambitious for the corporate elite, which has run out of ways to build a significant amount of businesses that will provide enough profits to feed their greed – a hunger for profits that has no relationship to building and maintaining productive businesses that will contribute tot the public good.

    They’re nothing but a bunch of pillaging and destructive pirates!

  3. mickysavage 3
    21 May 2012 at 7:57 am

    But … but …

    You did not mention the cycleway … 

    • Bored 3.1
      21 May 2012 at 8:54 am

      Woke me from my prococurantist ennui there Mickey, yes the cyclew….ay..snooze.

  4. Sam Hall 4
    21 May 2012 at 8:42 am

    While your guidelines suggest avoiding unpalatable political comparisons, I think the following would be a helpful historical reminder while conceding to hyperbolic rhetoric;

    Neo-liberal Capitalist Growth Economics-Totalitarian Ideology
    NATIONAL PARTY-NATIONAL socialist PARTY
    Key-Goebbels
    Brownlee-Goring
    Finlayson-Himmler
    Joyce-Speer
    Collins-Bormann
    Carter-Heydrich
    McCully-von Ribbentrop
    Banks-Hess
    English-Funk
    Bennett-Mengele

    Banking and Financial Traders-Schutzstaffel

    But no Fuhrer?

    • Bored 4.1
      21 May 2012 at 9:43 am

      Not helpful Sam, the Nazis had a definite agenda and meant to hurt people, Key and his rabble have …..OK you are right.

    • The Gormless Fool formerly known as Oleolebiscuitbarrell 4.2
      21 May 2012 at 5:36 pm

      Dick

  5. Richard 5
    21 May 2012 at 9:03 am

    They could put tolls on the cycleways to recover some costs. Local land owners might be interested.

    • Bored 5.1
      21 May 2012 at 9:42 am

      That’s a fine idea, promise something then make the receiving party pay twice….plus give cash to some mates en-route. Very national type ethos (note not ethics).

  6. captain hook 6
    21 May 2012 at 10:26 am

    dont forget to subtract the $120,000,000 they need to tell people how wonderful it is that they are stealing the governments assets from under their noses but they should like it anyway.
    just dont tell them that the assets need to be sold so you and I can buy leaf blowers, hardly davidsons and noisy dirty jets so we can holiday in macchu piccu.
    thats progress dude.

  7. travellerev 7
    21 May 2012 at 11:18 am

    I don’t get it? Everybody is sputtering on about a billion here and a billion there while an Associate professor Dr Sue Newberry, from the University of Sydney, told an audience at the University of Auckland’s Business School that government accounts ignore “off-balance sheet exposures” amounting to more than $112 billion in fucking derivatives!!!

    That is not me saying it that is someone who has made her marks in Accounting at a government level.
    Out of the public eye without government oversight she points out that Bill English has authorised borrowing and speculating in derivatives to the value of $112 billion. John key has been very ambitious and he has got NZ where he wants it or do you think Bill English did this on his own initiative?

    That’s were all eyes should be as the globe is collapsing under a $1.2 quadrillion in derivatives. that is 20x more than the entire global GDP. For fuck’s sake get with the program alright!

    NZ is on the hook for $112 BILLION in gambling debts based on borrowed money just like they did in Ireland, Greece, Italy, Spain and Portugal and when it all goes up in smoke you and yours will be paying in perpetuity for what that bastard Johnny “Derivatives” Key did to us for his masters.

  8. The Gormless Fool formerly known as Oleolebiscuitbarrell 8
    21 May 2012 at 11:22 am

    Their only purpose was to be popular. This is why they have simply just followed the policies of the last Labour government.

    • McFlock 8.1
      21 May 2012 at 11:42 am

      ok, spilled my coffee laughing at that one!
      Definitely outed yourself as a Sacha Baron Cohen-type satirist there 🙂

    • Akldnut 8.2
      21 May 2012 at 11:43 am

      Deano answered this one here

      Deano 2.1
      21 May 2012 at 10:17 am
      yeah, I remember how fucked it was – 4% unemployment, zero government debt, 9 years of surpluses, 440,000 jobs added in 9 years, a closing gap between rich and poor.

      What fucked policies we had then, so glad we don’t have them now – spotcha in Aussie digger.

      • The Gormless Fool formerly known as Oleolebiscuitbarrell 8.2.1
        21 May 2012 at 11:56 am

        They have changed pretty much nothing. Minor labour law tinkering, very minor WfF tinkering, minor tax tinkering. A non-existent cycleway. A conference centre. And fuck all else.

        • Lanthanide 8.2.1.1
          21 May 2012 at 12:01 pm

          “minor tax tinkering”

          I wouldn’t call a $2B deficit “minor”.

        • felix 8.2.1.2
          21 May 2012 at 12:10 pm

          Interesting Ole. What would you like them to do? What changes do you think would make a significant difference?

          Sack even more public sector workers? Abolish the minimum wage? Deregulate the drug trade?

          • The Gormless Fool formerly known as Oleolebiscuitbarrell 8.2.1.2.1
            21 May 2012 at 3:30 pm

            Before we get onto that, I sense I still have work to do to win you over to my main point. That is, that this is not a particularly right wing government.

            Given that they have not unwound the major policy initiatives of the second and third terms of the last Labour government, I think you could make a pretty good argument that they are more left wing than the 1999-2002 Labour government. We have WfF and Kiwisaver, neither of which we had in 2002. We have, by and large, the same labour law environment. Benefit levels are unchanged. Government is bigger than it was in 2002.

            It is clear that John Key is more left wing that 2002 Michael Cullen.

            • Draco T Bastard 8.2.1.2.1.1
              21 May 2012 at 3:44 pm

              That is, that this is not a particularly right wing government.

              It’s more right-wing than Labour and Labour is a right-wing party. This government also happens to be authoritarian which comes through loud and clear in the canning of ECan, the establishment of CERA and now John Key’s sneering at protesters.

              • The Gormless Fool formerly known as Oleolebiscuitbarrell …
                21 May 2012 at 3:52 pm

                From your perspective, Draco, everyone is a right wing government.

              • TheContrarian …
                21 May 2012 at 4:03 pm

                “Labour is a right-wing party”

                Bullshit.

                  • TheContrarian …
                    21 May 2012 at 4:30 pm

                    Stunning evidence that.

                    • Draco T Bastard …
                      21 May 2012 at 5:37 pm

                      Got a better measuring device and not just your hard right “feelings”?

                    • TheContrarian …
                      21 May 2012 at 5:52 pm

                      Jesus fucking Christ, man. This “hard right” paranoia of yours is almost McCarthyism in scale.

                      I’m hard right? Weird. We’ll just ignore the hilarious fact that the same metric you are using here to show Labour is right-wing puts me firmly on the left.

                  • Bored …
                    21 May 2012 at 4:31 pm

                    Nice one: I was really please to hear Cunliffe give what equated to a middle of the road Keynesian speech a week or two back. This was widely seen as a return to the old Labour “left”, proving to me how far Labour have gone to the “right”. In my mind Labours “left” should be challenging Cunliffe as a “centrist” as opposed to him being the “left”.

                  • felix …
                    21 May 2012 at 6:59 pm

                    Yeah McFlock, you should use proper evidence.

                    It looks like this.

            • felix 8.2.1.2.1.2
              21 May 2012 at 3:50 pm

              Nah, you’re just looking at isolated points without factoring in time and completely ignoring the direction of change. i.e. you’re comparing Cullen heading left with Key heading right and pretending they’re both standing still.

              Key doesn’t want WfF. He said it was commun1sm. He can’t get rid of it all at once or he’s toast but he’ll continue to weaken it bit by bit along with the rest of the welfare state. Kiwisaver isn’t a good example for you as he’s already chipped away at that.

              But regardless, I totally understand that Key isn’t as far right as you’d like. That’s why I asked the question: What do you want him to do?

      • infused 8.2.2
        21 May 2012 at 1:20 pm

        In the biggest bubble of all time, any govt would have done the same.

        • Pascal's bookie 8.2.2.1
          21 May 2012 at 4:42 pm

          I seem to recall that there were people about saying that the govt was paying back debt too fast, that funding infrastructure out of surpluses was intergenerational theft, that we should instead slash taxes and be more like Ireland.

      • mike e 8.2.3
        21 May 2012 at 6:38 pm

        Derivatives have nothing to do with global economic output they are
        future bets on the value of something commodity currency or derivatives so depending on how many layers of derivatives those figures could be correct!

      • mike e 8.2.4
        21 May 2012 at 6:48 pm

        Don’t forget free student loans working for families infrastructure catchup an entire rebuild of our run down under national of the armed services which cost $5.5 billion to renew all transport vehicles for the army new helicopters upgrading Hercules and five new navy ships.
        Nationals previous term they continually cut the armed services to shred’s only replacing the two way radios because one of our solders died because of Vietnam era radios.
        National ordered the sea sprite helicopters which have been a disaster.
        remember the lemon carrier.

    • Draco T Bastard 8.3
      21 May 2012 at 3:41 pm

      But they didn’t just follow the policies of the last Labour led government did they? The last Labour led government would have been investing in NZ rather than selling them off:

      The Berl report, commissioned by the Green Party and released today, says the Government’s partial asset sales programme to build new assets would leave the Crown accounts ”permanently worse off”.

      New Zealand’s sovereign debt, while climbing, is at around 20 per cent of GDP and among the healthiest in the developed world.

      However, private debt at 72 per cent of GDP was ”uncomfortably high,” Nana said.

      This government is purposefully making us worse off.

  9. infused 9
    21 May 2012 at 1:17 pm

    Aussie is coming down slowly too. Just wait and see.

    I’ve heard from many it’s hard finding work there now and has been for the last year.

    • Colonial Viper 9.1
      21 May 2012 at 1:22 pm

      Yes, I’ve heard that as well. If you are in one of the capital cities, you need to be in a high demand specialist area to get a permanent job. Otherwise, it is all temporary and short term contracts.

      It would pay to keep a close eye on the developing situation over there.

      • infused 9.1.1
        21 May 2012 at 1:46 pm

        Yep. I’d say a lot of people will come back. Like you said, it’s all contract work or temp work. Pay is good, but very few hours.

        Guess it’s the life style. If I went it would be for the sun.

  10. Sea Bandit 10
    21 May 2012 at 2:21 pm

    From Godzone to wankers paradise Pitiful

  11. William Joyce 11
    21 May 2012 at 2:52 pm

    This period in New Zealand history, of recession and national decline, should be entitled “The Long Winter of Excuses”.
     
    And the budget will be an onslaught of prime time excuses where every bobble-headed, slack-jawed, National party hack will use prepared sound bites (and our money) to convince us that black is white and white is black – link
    Perhaps, this week I will crawl into a sewer and watch re-runs of Gilligan’s Island……on second thought…..I live in Gilligan’s Islands and Gilligan is Prime Minister *sigh* – Time to check the homebrew – I’m gonna need it this week.

    • Bored 11.1
      21 May 2012 at 5:02 pm

      Im with you William, its very dull when everybody believes in fairy tales. Reality is very inconvenient, pollies hate it, sort of interferes with their flow.

  12. Johnm 12
    21 May 2012 at 5:44 pm

    Key doesn’t need any more ambition. He’s made his Dinero pile 50mill. And he’s currently figureheading for his classmates to ensure policies to secure their wealth positions. End of story, so eaassyy (Yawn ) Probably retire after this session. Bye!

    • mike e 12.1
      21 May 2012 at 11:28 pm

      Johnm read latest guardian on who helped Bernie Madoff investment bankers have been Money laundering for such people in the article it claims that the investment banking scene is all about fraud and scams.
      ConManKey
      How many of these investment bankers were floating round when we were unburdened of our last lot of assets.
      Goldman Sachs are mentioned in this article.
      The company setting us up for a lousy $120 million to sell something we already own.
      Is none other than a GSs subsidiary

  13. Jimmie 13
    21 May 2012 at 6:25 pm

    Key’s ambitious statements showed that his crystal ball was a bit cloudy in not forecasting 2 world wide recessions, the Christchurch Earthquake, the dodgy dealings of SCF, and various other factors that have impacted NZ.

    What he is doing with gradually scaling back government spending is sensible. The purpose of a surplus is to live within your means without having to borrow to survive (credit card syndrome)

    You can argue about the role of partial asset sales, tax increase/decreases, and reducing public spending, however I don’t think anyone in their right mind would argue with running budgetary surpluses – works at home – works in the government.

    As for Labour’s current standing on the left right scale of politics, its quite clear that with the clear and coherent thought/policy coming from Shearer, and all the rest of the Labour caucus, that they have firmly placed themselves to the left (right out) of the government benches.

    • Pascal's bookie 13.1
      21 May 2012 at 7:06 pm

      I’m not at all convinced that the govt finances are anything like a households finances, and I’m even less convinced that the govts books are like a wage earners within a household. I think the analogy hides more than it illuminates.

      Obviously a household wll prosper if it consistently earns more than it spends over time. But that doesn’t mean they should never take on debt for a time. More importantly, a govt that consistently runs surpluses is doing what? Where is that money coming from? Where is it going to? Why is that smart?

      Whether or not it is wise for a govt to be running a surplus or a deficit, depends on what is happenning in the economy. Sometimes it makes sense to do one, at another time it would be foolish to do the same.

      When a govt is running a surplus, it is simply taxing more than it is spending, it is taking money out of the economy, and cooling it, reducing demand. When it runs a deficit, it is pumping money into the economy, heating it, and providing demand.

      I don’t think it’s sensible to say that either of those policies would always be the right thing to do.

      • Jimmie 13.1.1
        21 May 2012 at 8:20 pm

        Sounds nice in theory PB but the political reality is once the government starts down the road of increasing spending, the folk they spend the money on get addicted/rely on the government handouts. Then when the government has to reduce spending for whatever reason, the same folk get seriously upset and tend to vote the same government out. (See what would happen if WFF, interest free student loans, and other niceties were scrapped)

        Doesn’t matter that society got along nicely without those handouts for many decades – once it is in place it is hard to get rid of.

        And if you take this to the extreme you end up in the situation that Greece finds itself – bankrupt and a mess.

        What the government should be doing is ensuring that the private sector isn’t strangled by bloating itself unnecessarily during times of plenty (they should be investing large surpluses to deal with long term issues such as superannuation) When times of hardship comes, the government should still run small surpluses (reduced due to tax revenue dropping) and just reduce investment in superannuation.

        The worst thing that can happen for society is to think that the government is the answer to all of its ills. Its not, it is only there to provide essential services and safety nets.
        People need to learn to be more self reliant/sufficient and be free from government oversight as much as possible.

        • felix 13.1.1.1
          21 May 2012 at 8:29 pm

          “Doesn’t matter that society got along nicely without those handouts for many decades – once it is in place it is hard to get rid of.”

          WfF is a supplement to top up the very low wages that employers are allowed to pay us. We “got along nicely without those handouts for many decades” because we were paid enough to cover the cost of living.

          Ditto student loan interest. We “got along nicely without those handouts for many decades” because we viewed education as a public good and funded it collectively.

        • Pascal's bookie 13.1.1.2
          21 May 2012 at 8:52 pm

          We seem to be talking past each other a bit, or talking about different things perhaps.

          I agree that the government cannot simply run deficits all the time for example. That’s a straw man, if it’s what you are arguing against.

          And I think Cullen proved that governments can run surpluses, and raise taxes to pay off debt during the good times.

          WFF and the like didn’t come from nowhere. These things come, essentially from market failures. You are right that cancelling wff would be political suicide. But it would also be economically bad news. At the stroke of a pen you would be reducing all that demand from the economy.

          wff is simply a subsidy on wages. Most ‘left’ wing policy of this type serves to de-radicalise the masses. Before we had the government making transfer payments, we had a much more radicalised ‘left’. That’s not a coincidence, it’s the trade off.

          To actually cut the government spending you need to reorganise the wealth distribution in other ways, or else you will see a dramitic drop in demand, and political chaos as a cherry on top.

          Social democratic redistributive policy isn’t a filthy trick to get voters addicted. It really isn’t. It’s protecting the system from the mob.

          Edit: what felix said

          • RedLogix 13.1.1.2.1
            21 May 2012 at 9:07 pm

            I can rely on your comments to be thought-provoking PB…

            Unfortunately it appears that the absurdly low wages of the ‘working poor’ are being subsidised mainly by taxes on the wages of the ‘decently paid’ upper and middle classes….while the truly well-off are able to avoid paying most of their share.

            • Pascal's bookie 13.1.1.2.1.1
              21 May 2012 at 9:19 pm

              Thanks, & Yep, & I fear it’s not sustainable.

              I’ve been thinking about Yeats; The Second Coming a fair bit lately. Mostly when reading about the U.S.

              TURNING and turning in the widening gyre
              The falcon cannot hear the falconer;
              Things fall apart; the centre cannot hold;
              Mere anarchy is loosed upon the world,
              The blood-dimmed tide is loosed, and everywhere
              The ceremony of innocence is drowned;
              The best lack all conviction, while the worst
              Are full of passionate intensity.

              Surely some revelation is at hand;
              Surely the Second Coming is at hand.
              The Second Coming! Hardly are those words out
              When a vast image out of Spiritus Mundi
              Troubles my sight: somewhere in sands of the desert
              A shape with lion body and the head of a man,
              A gaze blank and pitiless as the sun,
              Is moving its slow thighs, while all about it
              Reel shadows of the indignant desert birds.
              The darkness drops again; but now I know
              That twenty centuries of stony sleep
              Were vexed to nightmare by a rocking cradle,
              And what rough beast, its hour come round at last,
              Slouches towards Bethlehem to be born?

              that first stanza just is just just shouting from the newspapers some days, innit.

              The centre cannot hold.

        • Draco T Bastard 13.1.1.3
          21 May 2012 at 9:42 pm

          Hey, Jimmie, private surplus = government deficits. The only reason that private enterprise works at all is because of government spending. If we didn’t have that then all the wealth would accumulate in a few hands and everyone else would be impoverished – which is what we have now.

          The worst thing that can happen for society is to think that the government is the answer to all of its ills.

          Nope, the worst thing that a society can do is start believing that the government is separate from themselves.

    • joe90 13.2
      21 May 2012 at 9:56 pm

      The centre cannot hold.

      Nope, not a hope in hell.

      Barbara Ehrenreich: Looting the Lives of the Poor

      http://www.tomdispatch.com/authors/barbaraehrenreich/

    • Dv 13.3
      30 May 2012 at 2:12 pm

      Jimmie
      It was faily clear before the 2008 election that there was going to be a problem. Key was asked about this several times in and could they afford the tax cuts. He said their modelling showed they could.

      SFC they agreed to the finance co protection before the election.BUT then THEY agreed to roll over AFTER being warned a.gainst it.

      Ok give you the earthquakes.

  14. Jimmie 14
    21 May 2012 at 6:48 pm

    WJ – just curious – why do you use as your handle the real name for Lord Haw Haw?

  15. tracey 15
    22 May 2012 at 8:21 am

    Interesting to see the quick spread of aspirational… A word the pm hasnt used since early 2010

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