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National’s tooth fairy wishlist

Written By: - Date published: 5:40 pm, October 15th, 2011 - 13 comments
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National’s  election billboards focus on National’s “Brighter Future” plan. They read more like a wish-list for the tooth fairy. Bill board No 1 says “End the deficit sooner”. Sooner than what? This year’s budget projection? Not likely according to Brian Gaynor in today’s Herald story “Too optimistic government and treasury are getting it wrong.”

His comments are based on the recent release of the Crown financial statements and the Auditor-General’s report on Treasury’s management of the financial guarantee scheme. He says:

The Crown reported a Budget – or “operating balance before gains and losses” – deficit of $18.4 billion for the June year, up from a deficit of $6.3 billion for the previous year. The deficit has steadily increased over the three years of the current Administration. The previous Labour Government had nine consecutive annual Budget surpluses.

Gaynor says the National Government is popular “partly because Key and English are prepared to throw money at almost every problem.” This is not ending he deficit sooner – on the contrary:

The latest $18.4 billion deficit represents 9.2 per cent of gross national product – one of the worst amongst the 30 OECD member countries. Only Greece, Ireland, United Kingdom and United States have Budget deficit/ GDP ratios in excess of 9.2 per cent last year or this year. Deficits have to be financed through additional borrowing, and the Crown’s gross debt went from $53.6 billion to $72.4 billion in the year to June.

National’s tax cuts for the rich haven’t helped the escalating deficit.

The escalating deficit is caused by several factors, including static tax revenue, continued increases in Government spending and the Christchurch earthquakes. The individual tax take has declined from $27.5 billion in the June 2008 year to $23.1 billion in the latest year. This is mainly because of the Government’s tax cuts last year.

When it comes to forecasts, Gaynor has this to say:

Right-of-centre governments often run large Budget deficits because they overestimate the positive effect of tax cuts on the economy, and the Key Government is no exception. The Treasury also has a similar economic philosophy and made a 2011 year tax revenue forecast of $53.9 billion in last year’s Budget compared with the actual outcome of $51.6 billion.

In this year’s Budget statement, the Treasury forecast a Budget deficit of $9.7 billion for the year to next June, to be followed by a $4.1 billion deficit in 2013, a $700 million deficit in 2014 and a $1.3 billion surplus in the June 2015 year. Once again these forecasts seem to be far too optimistic but there will be another chance to assess the situation when the Treasury issues its pre-election economic and fiscal update on October 25.

The PREFU will be interesting indeed, but will it be fact or more fiction.

The fact that National has chosen to run a billboard series like this indicates that Labour’s criticism of its lack of plan may be hitting the mark. The one thing we can be sure of is that it will be poll-driven. Also that Labour’s plan for fairer tax combined with a careful approach to fiscal policy is connecting with voters.

Pollyanna John  promised a brighter future in 2008 – that hasn’t happened. Voters may well be starting to think that the same slogan is wearing very thin for a rerun in 2011, particularly when the facts don’t back it up and the future for the world economy does not look that bright.

13 comments on “National’s tooth fairy wishlist”

  1. fender 1

    It’s all part of Nationals plan to make it necessary to sell assets. No doubt they have promised their 1%er cronies the shares will be available to them soon. And when they do own them they will have us by the short and curlys more than they do at present. RISE UP VOTERS…SEE THROUGH THEIR CORRUPT PLANS…and get out there and spread the word, especially get in the ears of the elderly who seem to adore these robbers.

  2. ianmac 2

    Of course, should National win this year, they will do all those things hinted at such as sell assets because the Mandate will be claimed. Hints will be made and you will learn later that we were warned. The MANDATE is in the eyes of the conservatives.

    Reminds me a bit of the second Lange government. Softened up in the first term then Douglas Pebble MANDATE whammy from 1987 onwards.

  3. tc 3

    A debt situation architected by the nats for the nats own ends….to plunder more valuable public assets to their mates.
    ACC was another manufactured crises yet the MSM seem to forget the doom and gloom around a scheme they reported that’s now effectively giving rebates cause it’s all so rosy now…..what the !

    The nats have only ever had a few main thrusts….1. bash the bennes, oh don’t the rednecks in talkback land love it and the dog whistling value never fades. 2. nobble anything remotely socialist, KSaver, public transport, WFF, housing corp, DOC, ACC etc etc. 3.shift more wealth up the top end to your mates and backers via tax cuts and privatisation.

    Subverting due process, giving the state extra powers to watch the folk we don’t like, mucking about in local gov’t and the justice system to generally piss those civil liberatarian hippies off is a bonus.

  4. Dan1 4

    Strategic Deficit 101!!! Idealogues gone mad. The strategic deficit is needed to justify further cuts in the public service, and the sale of public assets.
    Surely the Rena disaster and Pike River are evidence enough that private enterprise does not regulate itself effectively. That is why we need a sometimes frustrating bureaucracy.
    Time to wake up NZ

    • DS 4.1

      Just wait until we get the Council sacked down here in Christchurch, and the Commissioners come in to sell off all our assets to some offshore retirement fund.

  5. Afewknowthetruth 5

    ‘Deficits have to be financed through additional borrowing, and the Crown’s gross debt went from $53.6 billion to $72.4 billion in the year to June.’

    All going according to the sabotuers plan then. Trash the economy, increase debt levels and increase the level of debt slavery, in line with the requirements of their overseas masters/accomplices.

    Keep the dumbed-down masses amused and distracted with rugby and beer in the winter and gas barbeques and beer in the summer.

    As I have said many times, the only brighter future we will witness is the one associated with the decrease in air pollution that accompanies the collapse of the industrial system [due to peak oil], and that one is particulalry scary, since it portends a surge in temperatures.

    And as I have also said on many occcasions, you’d have to be really stupid to believe a word anyone connected with National says.

    Unfortunately, anyone who corrects the lies on National billboards is likely to feel the full weight of the corrupt justice system, which permits monstrous lies to be promulgated by political parties and persecutes those who challenge them.

    Such is life in a money-lender empire.

    PS It must be time for another bailout for Greece, since Greece cannot pay the monthly interest on its debts. And best not to talk about Italy, Spain, Portugal, Ireland etc at all. Meanwhile the US has broken through its recently-negotiated $14 trillion debt ceiling and has unfunded liabilities of around $214 trillion. Not to worry: all senior bank officials around the world will get increased bonuses this year to allow for inflation.

  6. M 6

    Brighter future, my arse.

    To any NACT supporter I ask them are they feeling any richer these days given that most of them are only out for themselves and there is silence or a muted reply and ridiculous statements like “Well, he got the ball rolling on the cycle way.” Spare me. How many jobs was that again?

    Glad to say that in my neck of the woods most of the National posters are getting torn down time and again and one house has four massive Labour signs on it.

  7. Hami Shearlie 7

    When John Key said “Paint it Black” people didn’t realise he meant the economy!!!

  8. wocktu 8

    Its a wonder their not making more use of the word “Aspirational”. They seem to use it often when regurgitating party lines. Then they have a cheek to feel aggrieved when you call them damn lier’s to their face. Their policies aren’t worth the recycled loo paper they’re written on and anything they say is straight out of their little blue book of right wing dogma.

    • felix 8.1

      They didn’t want kiwis to figure out that “a brighter future” was only ever an aspirational goal.

      Too late though, Key’s bullshit is on the way out.

      It’s in the wind.

  9. Jan 9

    1 End the deficity sooner. What are the others? I’m picking More 100% Pure will cover off the environment!

  10. mik e 10

    Borrowins elections Bills English has now borrowed up to in excess of $77 billion now we are borrowing just so we can borrow more,Tax cuts for the rich $2.7billion per year times 20 years $54billion enough to pay a very substantial chunk of debt!

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