National have a rubbish plan to deal with the $38billion of net government debt they’ve built up over the last 3 years. Asset sales is a short-term plan that pays for this year’s school and hospital upgrades, but leaves us all much poorer in the future.
But at least they can claim that they have “a plan“.
An even more serious problem than government debt is our private debt. It’s a longer term problem, going back a few decades, and requires more complex solutions as the government doesn’t have direct control of it (except where it just takes it on as government debt by bailing out SCF or giving tax cuts to the wealthy so they can pay off their debts).
And National doesn’t have any plan for it.
This year’s budget was going to be ‘The Savings Budget’, but National panicked, and tried and failed to avoid credit rating agency condemnation with the ‘Double-Down’-grade Budget instead.
They tinkered with Kiwisaver, partially reversing their cut to minimum contributions – but adding tax to the employer contribution and lowering the government contribution. You were left putting in more, but not getting any more savings as a result.
And now they’re out of ideas, and their Treasury forecasts are saying that our personal savings and current account deficit – currently vastly improved with the drying up of credit of the GFC and the insurance reimbursements of Christchurch respectively – both blowing out worse than ever.
So, inevitably, they criticise when other have ideas.
Labour’s plan to make KiwiSaver compulsory for wage and salary earners and slowly increase employer contributions to 7% has been bizarrely attacked as lowering wages – Keith Ng talks sense.
Steven Joyce counts the debts but not the assets of re-investing in the Super Fund – despite the Super Fund earning more than the debt costs.
And raising the retirement age is far too much for dear old Mr Key, no matter how much the Retirement Commissioner says it’s necessary. He says Treasury says we can cope with 65 – that’d be the same Treasury that said that GST would have to rise to 19% and we’d all need to pay $30 extra in income tax each week to afford it? With its former head saying an increase was ‘inevitable’?
In reality even National’s plan for Government debt makes private debt worse. When a large chunk of our power companies and Solid Energy head overseas, so will a large chunk of the profits, worsening our current account deficit and making us all poorer. The higher power prices will make other countries wealthy, not us.
You can see why the Deloittes Business NZ conference consensus was that there was ‘no plan’ for the economy under National.
Although this post should be covered by the opinion section of electoral law and shouldn’t need authorisation, here’s mine anyway, just to be safe:
Authorised by Ben Clark, 54 Aramoana Ave, Devonport