web analytics

Nats warn of credit downgrade

Written By: - Date published: 7:39 am, October 1st, 2011 - 17 comments
Categories: debt / deficit, economy, national - Tags: ,

The 2009 budget was another piece of well managed political theatre by National. Reneging on their irresponsible election bribe tax cuts, and knowing that they wouldn’t have anything much positive to sell, they set up the threat of a credit downgrade as the litmus test of success.

Before the budget Key confidently predicted that the political humiliation of a downgrade would be avoided.  Eddie started us off with a few choice quotes yesterday, here’s another from Key:

“If a downgrade were to happen, it would add 1-2% of interest on the amount the government borrows, which is around $600 million each year.

This, says Key, is to be avoided at all costs.  “That’s every homeowner, every business, everybody paying 2% more. That would be irresponsible in my view for the government not to act,” Key says. [emphasis added]

To make sure of the outcome, Bill English consulted with the ratings agencies (to the extent that even Tory commentators raised the alarm about Who’s writing the budget?).  Sure enough post budget the agencies duly held their ratings, and the government got to enjoy the mission accomplished spin.  They were still posturing (in well scripted uniformity) about avoiding a downgrade in debate on the 10th of August 2011:

STUART NASH (Labour) to the Minister of Finance: In what way is New Zealand “better placed to withstand” a financial crisis than 3 years ago given that before he came in to office the Government was running a surplus and core Crown net debt was just 1 percent of GDP and now the Government is running record deficits and net debt is 20 percent of GDP?  …

Hon BILL ENGLISH: I think it [the government’s credit rating] is on negative outlook, and that is remarkably better than the downgrade we would have faced if we had not changed the damaging and wasteful policies of the previous Labour Government. …

TIM MACINDOE (National—Hamilton West) : … Have those members not noticed what is happening in Europe, America, and elsewhere at the present time? Do the phrases “debt crisis” and “credit downgrade” mean nothing to them? …

AMY ADAMS (National—Selwyn) : … Of course, more recently we have watched the old superpower America teeter on the brink of complete collapse, and we have seen its economy not only downgraded recently, but also put on further negative watch. That tells us how important it is that we can present to the world the face of a strong economy that has its books in order, its debts under control, and, most important, is being led by a Government that knows how to run a strong economy and knows how important it is to keep the accounts in good order and keep us in good shape. We have seen over the three Budgets delivered by the John Key – led Government a story of returning this country to the strong position it deserves to be in, putting us on the front foot and putting us in a position where we are economically competitive internationally and where the world and the lending markets know we are a good bet. …

DAVID BENNETT (National—Hamilton East) : … What the Labour plan would deliver is more debt. Is more debt a good thing to have at this time? Labour should ask the Americans what more debt means. More debt means we get downgraded. When we get downgraded, what does that mean? That means we are going to be in a situation where we have higher interest rates for our people. The people in New Zealand do not want higher interest rates. …

Hon JUDITH COLLINS (Minister of Police) :… Well, we have seen this week in the United States what happens when a nation’s credit rating goes down. We have seen what happens. What happens is that interest rates go up—interest rates for the job creators, interest rates for mum and dad investors, interest rates for homeowners, interest rates for people with mortgages, and interest rates that translate through to everybody’s pocket. … There is not a word from the Opposition about how this Budget prevented a downgrade of our credit rating, which would have affected every New Zealander in some way. …

JAMI-LEE ROSS (National—Botany) : … They think that more debt will solve all those issues. Well, it will not. It will put us in a situation where we would have a credit rating downgrade if we continued along the debt projection that the last Labour Government left us with. It would be a shambles. … High debt levels would lead to a credit rating downgrade, and that would lead us back to the area of high interest rates for New Zealand homeowners. …

Fast forward to September and the Nats have suffered not one, but two separate credit downgrades.  I wonder how they’re going to explain away their boastful posturing and dire warnings now.  With a smile and a wave perhaps?

17 comments on “Nats warn of credit downgrade ”

  1. Irascible 1

    The finger puppet that is Key will, with Dipton, claim that this credit rating fail mark is not their fault but a result of being bullied by (1) economic policies outside of their collective ability, (2) fault lines in NZ geography, (3) The RWC impact on the economy, (4) the actions of insurance companies and finally (5) God. Thus, despite the posturing in earlier PR controlled “budgets” about the dire consequences of a credit rating downgrade on a policy less government this downgrade is to be seen as meaningless and an endorsement of the policy to sell off the country’s assets to appease the corporates who have contributed to the national debt but are not responsible.

  2. mik e 2

    Nats under blinglish New Zealands worst finance minister of modern times manges less than 1% growth in five years as finance minister .The double dipton managed double dip in credit ratings 1998 and 2011,now we have double dip recession from the double dipstick

  3. Afewknowthetruth 3

    Never a word of discussion about the fundamentally flawed system of fractional reserve banking and creation of money out of thin air to pay interest on the previous money created out of thin air, of course. The public debate has to be steered well away from all the fundamentals and focused firmly on the symptoms (or on the irrelevant).

    The whole bankers’ Ponzi scheme (which gave the facade of working in the past) is in the process of imploding, since the energy needed for economic activitiy is in decline due to peak oil (something else that is a taboo subject in official circles).

    Perpetual growth on a finite planet always was an absurd notion but while there were resources to be converted into waste at a profit, growth was possible. Now that particular game is very close to over.

    The role of central government is to attempt to maintian the myths that underpin the economic system for as long as possible whilst ‘shafting’ the common people. As things get generally worse, the lies we are told by politicians and mainstream economists will get bigger and bigger -that’s guaranteed! They will keep offering the false hope of ‘recovery’ for as long as the dumbed-down public believe the lies.

    One of the greatest problems for anyone telling the truth at this stage is that a large portion of the general populace wants to believe the lies

    • Ari 3.1

      The problem of peak oil is not so much that there’s not enough oil, but rather that what’s left is too expensive to fuel the economy the way it did before and will cause price shocks, even if we wanted to pollute the atmosphere with it.

  4. randal 4

    John Keys says he cant talk about it in public because the electoral commission says it is politicing. Now who the hell is running this country.Standard and Poors, the electoral commission or monnbeam the friggin cat.

  5. tc 5

    The hollow men are running da country…..obvious ain’t it !

    • side show bob 5.1

      “the hollow men are running the country”, Maybe but they beat the hell out of lunatic gay females who can’t keep their mindless musings to themselves. Mad butcher, I don’t think so, New Zealander’s know full well whose mad and what party the dropkicks belong to.

      • Draco T Bastard 5.1.1

        The lunatic females seem to be in NAct as well and the Mad Butcher does, as evidenced by his support of NAct, appear to be as mad as a hatter.

  6. Tombstone 6

    It’s about time our gutless media started to ask some serious questions of John Key because he’s running this country into the ground and getting away with it – the situation is getting dire and Key is at the helm. The excuses and deliberate attempts to avoid the hard questions has to stop and the media needs to grow a spine and start earning their keep.

  7. In interviews during the campaign, Key and English need to be asked, repeatedly, why a credit downgrade was such a dire prospect and an indication of bad economic management previously but now, presumably, was something ‘unavoidable’ (by ‘good’ economic management – i.e., their own), ‘a consequence of international economic conditions’, etc..

     

  8. Paul 8

    The Film ‘Money as Debt’ by Paul Grignon shows how the fractional-reserve banking system is not sustainable.

Links to post

Recent Comments

Recent Posts

  • Building back better
    It’s a three-week recess in Parliament – so, no bills are going through the House and no select committees are meeting. But the hard work of our ministers continues, and many of our MPs are back in their electorates, taking the opportunity to meet with local communities and businesses about ...
    6 days ago
  • Greens call for a Warrant of Fitness for rental homes
    The Green Party is launching a petition today calling on the Government’s Healthy Homes Standards to be backed up with a proper Warrant of Fitness (WoF) for rental homes. ...
    1 week ago
  • Securing our recovery: By the numbers
    Our plan to secure New Zealand’s recovery from COVID-19 is working, with the past three months seeing the second-highest number of people moved off a main benefit into work since records began. ...
    2 weeks ago
  • More Kiwis in work through recovery plan
    The latest statistics show the Government’s focus on jobs is working. The net number of people on a main benefit dropped by around 11,190 people during the past three months, with around 31,240 people moving off a benefit into work. ...
    2 weeks ago
  • Green Party appoints new Chief of Staff
    The Green Party has appointed a new Parliamentary Chief of Staff, Robin Campbell. ...
    2 weeks ago

  • Next step to protect Milford Sound Piopiotahi
    Expert group lays out plan to better protect iconic UNESCO World Heritage site Milford Sound Piopiotahi and its surrounds Funding confirmed for dedicated unit and Establishment Board to assess the recommendations and provide oversight of the process from here Milford Opportunities Project a test case for transformational change in tourism ...
    BeehiveBy beehive.govt.nz
    18 hours ago
  • Funding for projects to reduce waste from construction and demolition
    The Government has announced funding for projects in Auckland and the lower North Island to help reduce construction and demolition waste. “Construction is the main source of waste sent to landfill, and much of this could be reduced, reused and recovered,” Environment Minister David Parker said. “The Government is funding ...
    BeehiveBy beehive.govt.nz
    19 hours ago
  • Plan to eliminate hepatitis C as a major health threat by 2030
    A plan to eliminate hepatitis C in New Zealand, reducing liver cancer and the need for liver transplants, has been released today by Associate Minister of Health Dr Ayesha Verrall. “Around 45,000 New Zealanders have hepatitis C, but only around half know they have it,” said Ayesha Verrall. “Symptoms often ...
    BeehiveBy beehive.govt.nz
    20 hours ago
  • School upgrades and new classrooms for West Coast, Tasman and Canterbury
    A funding injection from Budget 2021 to complete four shovel ready projects and new classrooms at six schools and kura will provide a real boost to local communities, Minister Dr Megan Woods announced today. “This Government has committed to providing quality fit for purpose learning environments and 100,000 new student ...
    BeehiveBy beehive.govt.nz
    22 hours ago
  • Warmer Kiwi Homes smashes annual target
    The Government's highly successful insulation and heating programme, Warmer Kiwi Homes, is celebrating a key milestone with the completion of more than 38,000 insulation and efficient heater installs in the year to the end of June, smashing its target of 25,000 installs for the year. “The Warmer Kiwi Homes scheme ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Exemption granted for Wallabies to enter NZ
    Bledisloe Cup rugby will be played in New Zealand after the Australian rugby team received an economic exemption to enter New Zealand. Travel between Australia and New Zealand was suspended on Friday for at least eight weeks following the worsening of the COVID outbreak across the Tasman. New Zealanders have ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Minister of Foreign Affairs makes three diplomatic appointments
    Foreign Affairs Minister Nanaia Mahuta today announced three New Zealand Head of Mission appointments. They are: Mike Walsh as Ambassador to Iran Michael Upton as Ambassador to Ethiopia and the African Union Kevin Burnett as Ambassador to Indonesia Iran “Aotearoa New Zealand has a long-standing and constructive relationship with Iran, despite a ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Enhanced Task Force Green Approved for West Coast and Marlborough
    The Government has activated Enhanced Task Force Green (ETFG) in response to the West Coast and Marlborough floods, Social Development and Employment Minister Carmel Sepuloni announced today. “To assist with the clean-up, up to $500,000 will be made available to support the recovery in Buller and Marlborough which has experienced ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Govt support for upgrade of Eden Park players facilities
    Minister for Sport and Recreation Hon Grant Robertson has announced funding to upgrade the players facilities at Eden Park ahead of upcoming Women’s World Cup events. Eden Park is a confirmed venue for the Rugby World Cup 2021, the ICC Women’s Cricket World Cup 2022, and a proposed venue for matches of ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • More jobs and quicker public transport motoring towards West Auckland
    Work to improve public transport for West Aucklanders and support the region’s economic recovery by creating hundreds of jobs has officially kicked off, Transport Minister Michael Wood announced today. Michael Wood and Auckland Mayor Phil Goff this morning marked the start of construction on the Northwestern Bus Improvements project. It ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government backs critical health research
    Research into some of New Zealanders’ biggest health concerns including cancer, diabetes, and heart disease is getting crucial support in the latest round of health research funding, Health Minister Andrew Little announced today. The funding, awarded through the Health Research Council of New Zealand, covers 31 General Project grants ($36.64 ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Bay of Islands hospital facilities to bring services closer to home
    Prime Minister Jacinda Ardern and Health Minister Andrew Little have joined a ceremony to bless the site and workers for Phase Two of the redevelopment of the Bay of Islands Hospital in Kawakawa today. The new building will house outpatients and primary care facilities, as well as expanded renal care ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Raukokore re-imagined with ‘smart’ relocatable rent to own housing
    Iwi, Crown Partnership Relocatable, fully insulated housing, connected to a new solar plant Provides a pathway to home ownership New housing in the remote eastern Bay of Plenty community of Raukokore shows how iwi and Crown agencies can work together effectively to provide warm, dry, energy efficient homes in a ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Cabinet accepts Turkish authorities’ request for the managed return of three NZ citizens
    Cabinet has agreed to the managed return of a New Zealand citizen and her two young children from Turkey, Prime Minister Jacinda Ardern announced today. The three have been in immigration detention in Turkey since crossing the border from Syria earlier this year. Turkey has requested that New Zealand repatriate ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Govt delivers more classrooms so children can focus on learning
    Extra Government investment in classrooms and school building projects will enable students and teachers to focus on education rather than overcrowding as school rolls grow across the country, Prime Minister Jacinda Ardern and Associate Education Minister Kelvin Davis say. The pair visited Ruakākā School in Whangārei today to announce $100 ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • New station a platform for AirportLink to take off
    Every Aucklander with access to the rail network will now have a quick and convenient trip to the airport, Transport Minister Michael Wood and Auckland Mayor Phil Goff said during the official opening of the new Puhinui Interchange today. The new interchange links the rail platform with a new bus ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • 10 days sick leave for employees delivered
    Legislation doubling employees’ minimum sick leave entitlement to 10 days comes into effect today, bringing benefits to both businesses and employees, Workplace Relations and Safety Minister Michael Wood announced today. “Our Government is delivering on a key manifesto commitment to help Kiwis and workplaces stay healthy,” Michael Wood said. “COVID-19 ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Prime Minister congratulates Fiame Naomi Mata’afa on Election Win
    Prime Minister Jacinda Ardern tonight congratulated Prime Minister-elect Fiame Naomi Mata’afa on her victory in the Samoa’s general election. “New Zealand has a special relationship with Samoa, anchored in the Treaty of Friendship. We look forward to working with Samoa’s new government in the spirit of partnership that characterises this ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Quarantine Free Travel with Australia suspended
    Quarantine Free Travel from all Australian states and territories to New Zealand is being suspended as the Covid situation there worsens, Prime Minister Jacinda Ardern and COVID-19 Response Minister Chris Hipkins announced today. From 11.59pm today Australians will no longer be able to enter New Zealand quarantine-free. This will be ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Growing conservation efforts in Gisborne
    A big injection of Jobs for Nature funding will create much-needed jobs and financial security for families in TeTairāwhiti, and has exciting prospects for conservation in the region, Conservation Minister Kiri Allan says. “The projects target local communities most affected by the economic consequences of COVID 19 and are designed ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Flood recovery given further assistance
    The Government is contributing a further $1 million to help the flood battered Buller community, Acting Emergency Management Minister Kris Faafoi announced today. “Buller is a small community which has found itself suddenly facing significant and ongoing welfare costs. While many emergency welfare costs are reimbursed by Government, this money ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Funding for five projects to reduce food waste
    The Government is funding five projects to help address the growing problem of food waste, Environment Minister David Parker announced today. “New Zealand households throw away nearly 300,000 tonnes of food every year, half of which could still be eaten. By supporting these initiatives, we’re taking steps to reduce this ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Temporary Accommodation Service activated for West Coast flooding event
    The Temporary Accommodation Service (TAS) has been activated today - meaning residents on the West Coast of the South Island and in the Marlborough region hit by flooding over the weekend can now access help finding temporary accommodation, announced Associate Minister of Housing (Public Housing) Poto Williams in Westport today. ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Pause to Quarantine Free Travel from South Australia to New Zealand
    Quarantine Free Travel from South Australia to New Zealand will be paused from 11.59am (NZT) tonight, COVID-19 Response Minister Chris Hipkins has announced. However, people currently in the state who ordinarily live in New Zealand will be able to return on “managed return” flights starting with the next available flight, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand condemns malicious cyber activity by Chinese state-sponsored actors
    New Zealand has established links between Chinese state-sponsored actors known as Advanced Persistent Threat 40 (APT40) and malicious cyber activity in New Zealand. “The GCSB has worked through a robust technical attribution process in relation to this activity. New Zealand is today joining other countries in strongly condemning this malicious ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Remarks to Diplomatic Corps
    It is a pleasure to be with you all this evening. Some of you may have been surprised when you received an invitation from the Minister of Disarmament and Arms Control, and I would forgive you if you were. New Zealand is unique in having established a Ministerial portfolio ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Early Pfizer shipment boosts vaccine schedule
    The largest shipment of the Pfizer vaccine to date has arrived into New Zealand two days ahead of schedule, and doses are already being delivered to vaccination centres around the country, COVID-19 Response Minister Chris Hipkins says. “The shipment of more than 370,000 doses reached New Zealand yesterday, following a ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Backing for Bay of Islands predator free effort
    The Government is throwing its support behind an ambitious project to restore native biodiversity and build long-term conservation careers, Conservation Minister Kiri Allan says. Predator Free Bay of Islands aims to eradicate predators from the three main peninsulas in the region, and significantly reduce their impact throughout the wider 80,000-plus ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government commits $600,000 to flood recovery
    The Government is contributing $600,000 to help residents affected by the weekend’s violent weather with recovery efforts. Acting Minister for Emergency Management Kris Faafoi and Agriculture Minister Damien O’Connor have been in the Buller district this afternoon to assess flood damage and support the local response effort. They have announced ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Government assisting local responses to heavy rainfall and high wind
    Acting Minister of Emergency Management Kris Faafoi says Central Government is monitoring the severe weather across the country, and is ready to provide further support to those affected if necessary. “My thoughts are with everyone who has been affected by this latest event, particularly communities on the West Coast and ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • PM Ardern chairs APEC Leaders’ meeting on COVID-19
    New Zealand Prime Minister Jacinda Ardern has chaired a meeting of Leaders representing the 21 APEC economies overnight. “For the first time in APEC’s history Leaders have come together for an extraordinary meeting focused exclusively on COVID-19, and how our region can navigate out of the worst health and economic ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Health Minister welcomes progress on nurses’ pay
    The New Zealand Nurses Organisation’s decision to take the Government’s improved pay offer to members and to lift strike notices is a positive move towards settling district health board nurses’ pay claims, Health Minister Andrew Little said. “It’s encouraging that the discussions between NZNO and DHBs over the nurses’ employment ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Boost for Pacific regional business
    Pacific businesses will get a much-needed financial boost as they recover from the effects of the COVID-19 pandemic thanks to the new Pacific Aotearoa Regional Enterprise Fund, said Minister for Pacific Peoples Aupito William Sio.  The new $2 million fund will co-invest in Pacific business projects and initiatives to create ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • PM Ardern call with President Biden
    Prime Minister Jacinda Ardern spoke with US President Biden this morning, ahead of the APEC Informal Leaders’ Retreat on COVID-19. “President Biden and I discussed the forthcoming APEC leaders meeting and the critical importance of working together as a region to navigate out of the COVID-19 pandemic”, Jacinda Ardern said. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Renewed partnership creates jobs for New Zealand youth
    The Government has signed a new memorandum of understanding (MoU) with the Mayors Taskforce for Jobs, strengthening the partnership to get more young people into work.  The Mayors Taskforce for Jobs (MTFJ) is a nationwide network of all Mayors in New Zealand, who are committed to making sure all young ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • South Island areas prioritised in tourism fund
    Five South Island areas are prioritised in the latest round of decisions from a tourism fund that is supporting infrastructure projects from Cape Reinga to Stewart Island and the Chathams. Tourism Minister Stuart Nash has announced details of 57 nationwide projects to receive support from the Tourism Infrastructure Fund (TIF). ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New code sets clear expectations for learner safety and wellbeing in tertiary education
    A new code of practice for the pastoral care of domestic tertiary and international students will be in place from January next year, Education Minister Chris Hipkins announced today The code, which makes clear that creating an environment that supports learning and wellbeing is a shared responsibility between tertiary providers, ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • First TAB New Zealand Board appointments announced
    The members of the first TAB NZ Board come with experience in racing and sport administration, business and governance, the betting industry, broadcasting and gambling harm minimisation. “This Board will progress from the excellent work done by the interim board, put in place in August 2020,” Grant Robertson said. “The ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Northland Maori Pathways initiative introduced
    The Government has today launched Māori Pathways at Northland Region Corrections Facility, a ground-breaking series of initiatives designed in partnership with Māori to reduce re-offending and improve outcomes for whānau. A key part of the Hōkai Rangi strategy, Māori Pathways looks to achieve long-term change and involves a number of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Extended Essential Skills visas being rolled out
    Two year Essential Skills visa to provide certainty to at least 18,000 visa holders Streamlined application process to benefit at least 57,000 visa holders The Government is increasing the duration of some Essential Skills visas and streamlining the application process to provide more certainty to employers and visa holders while ...
    BeehiveBy beehive.govt.nz
    2 weeks ago