Cullen breaks his own debt target
Michael Cullen has admitted that the opening of the books the week after next will reveal he has broken his own gross debt target of 20% of GDP. And this is after all the hysteria about the end of civilisation if this happened under National.
Dr Cullen said there was room for only “very modest” new spending commitments from Labour during the campaign.
I suspect Dr Cullen’s idea of very modest may not be what anyone else calls modest!
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Tags: government debt, Michael Cullen, PREFU
September 27th, 2008 at 8:50 am
Alistair Darling has broken Brown’s ‘Golden Rule’ on borrowing with his masters urging.
However that particular rule was in the “previous cycle of PSBR”, and now doesn’t count.
Sound a tad familiar?
Lying socialist prats. perhaps Cullen should invest in the Nigerian Stock Market, and Bourse. Will be a safer bet and better returns than the toy train set!
Lis, lies, and more lies. The best is they think that we are all stupid, and want KFC bribes!
September 27th, 2008 at 8:51 am
One of the more bizarre features of the Fifth Labour Government is that they seriously imagine that the emerging global financial crisis is a good thing for them. Our economic problems, they suggest, provide the New Zealand electorate with the evidence that Labour is the best leader for hard times. John Key worked at Merrill Lynch and therefore, Labour would have us believe, is both part of the problem that led to the global financial crisis and unable to understand what needs to be done to fix it.
We are still unsure what the impact of the still-tightening global credit crunch will be on New Zealand, where so many have become so dependent on the over-extension of credit. We know that the next government is going to face hard choices about whether to cut public spending, or raise taxes, or both, to try to keep their deficits to manageable proportions.
I think that the current economic crisis is fundamentally different to ones that have gone before, because we are seeing a different cause for the recession to what we have experienced before. Traditional recessions begin with the industrial sector stagnating for some reason, which then has repercussions in the financial sector. This time is completely the opposite.
We in New Zealand are still primarily an industrial nation- if one accepts the idea that agri-business is an industry. Unlike the USA and UK, where financial services are central to the economy, we have a productive value-creating economy which has not been replaced by finance capital. This isn’t the result of Labour’s policies [indeed, their attitude to agriculture has at times been indistinguishable from the Greens] but from the simple fact that the economy has been shaped by a diligent application of Ricardo’s law of comparative advantage: we turn grass into milk, wool [and associated products] better than anyone else in the world.
And our production is of something for which there will remain a demand- albeit one which will contract. People will not buy new houses, but they will still wear wool and drink milk- they might buy less, but they will still buy.
What is the implication of that? Our economy is susceptible to the problems of the West, but we do not share the weaker production base which typifies the advanced economies. We are fundamentally in a better position- which is why the sudden emphasis by Dr Cullen on the economy as being the issue in the election; surely nobody would want to change leaders in the middle of a crisis he thinks. Critics point to the way he allowed the civil service to blow-out in size, kept taxes high even when surpluses were being generated, and generally failed to take advantage of the good times now past; Dr Cullen hopes that people will not understand that opportunities were wasted.
Dr Cullen is now claiming that his experience as Minister of Finance over the past nine years makes Labour the party the public will trust with the economy. He seems unaware that his time in the Treasury has been spent claiming the credit for credit-fuelled economic prosperity, and that his actions are all significant contributions to the extent that New Zealand has been sucked into the maelstrom of the global crisis.
September 27th, 2008 at 8:56 am
Something else to note- Dr Cullen must be cursing Ruth Richardson for pushing through the “Fiscal Responsibility Act” (now part of the Public Finance Act), which requires the Treasury to disclose the fiscal risks facing an in-coming government prior to every election. If she hadn’t he could have hidden the truth.
September 27th, 2008 at 9:02 am
Looks like we can TRUST him, can’t we?
September 27th, 2008 at 9:13 am
It is just crocodile tears from Cullen that he is going to hand over the the Nats a destroyed economy. He could have fixed it when he was creaming all those extra billions in taxes when Labour lied on their pledge card about what percentage would pay the top tax rate.
He went out and bought us a train set which is going to kill us for decades, fully aware that we were unable to actually afford it.
Why did we ever trust a history professor with our finance portfolio? His inexperience AND his ideological slant has kept NZ way down the rankings for wealth. Why are ex communist countries getting flat tax and we are getting recession?
September 27th, 2008 at 9:18 am
Does this fucking idiot actually have any idea what he is doing?
September 27th, 2008 at 9:21 am
“petal (117) 0 -2″
Looks like I have my own personal negative feedback fans. Doesn’t matter what I say I go down -1 or -2 within minutes!
September 27th, 2008 at 9:36 am
Who Petal is the “him” in your statement “Looks like we can TRUST him, can’t we?”? Is it John Key or Dr Cullen? I trust both- Key to do the right thing, Cullen to do the wrong.
September 27th, 2008 at 9:42 am
The article is about Cullen breaking his own target. But look above -2 again. Awwww. To think there are two people who care enough to do that!
September 27th, 2008 at 10:13 am
Is “modest speeding” his code for “I’m about to piss away another billion dollars to fuck up the National government”?
September 27th, 2008 at 11:05 am
@Grant at 8:51am: Well said. The only point I’d add is that the poorly effected ETS takes on special significance during these times. I shudder to think how much damage this will do to our agri-business at a time like this.
Based on the recent actions of the Clark Government, one would almost think they want to leave New Zealand in as worse possible shape for an incoming National Government, so they can blame them for the next three years and return to power in 2011 triumphant.
The outcome of the election is not yet certain, and it may not be a bad thing if National are defeated by a coalition government – and it will take a coalition to beat them as Labour will probably see a big swing against them on total votes which will reduce their list MPs.
September 27th, 2008 at 11:48 am
No ZenTiger !!! no more of these arseholes PLEASE. Like you say the ETS will seriously screw us and National seem to think it’s a good idear, fucking no better then the socialist tossers they seek to replace. I was going to vote National but I’m not a turkey. This country has great potental but why do we always seem to end up getting shaffed by the polititicans
September 27th, 2008 at 12:57 pm
Murray. It also means he cant afford any future tax cuts & may have to claw back ‘reluctantly’ those given wef 1st October
September 27th, 2008 at 3:50 pm
Grant Michael McKenna,
John Key was the managing director of debt for Merrill Lynch in 1999.
He had a lots of people working for him who were there to develop these cute financial products in order to sell debt to ignorant suckers.
“The initial thought was that, yes, the Internet’s great for foreign exchange because it’s vanilla. But there are applications that are just as wide in many other areas: corporate bond trading, government credit, equity underwriting, credit derivatives-it’s endless,” says Key. http://findarticles.com/p/articles/mi_qa3715/is_/ai_n8869409.
This what John Key had to say about that time in the NZHerald puff piece: Key explains: “I had a whole lot of people working for me who were at the cutting edge of delivering quite complex and new and innovative products.
In the same article he says that the crisis bringing down the financial western world was not hard to predict. Funny coming from a man who was making money selling this crap to unwitting pension funds. And who was an upon invitation only advisor to the privately owned Federal Reserve of New York from 1999 until his departure March 2001 and Alan Greenspan who broke the ban on derivatives under Reagan.
Derivatives were banned after the great recession because they were largely to blame for the financial meltdown of that time.
Also funny coming from a man who had seen his previous bank Bankers Trust implode after they were successfully sued for dodgy derivatives trades. He left there saying in the NZHerald. Then it all went to shit and I said right I’m out of here.
Not when he found out that worked for a scummy bank but because they collapsed as a result of exposure of their tactics.
Find it here: http://www.businessweek.com/1995/42/b34461.htm
Lastly in the NZH “unauthorised biography John key and the Herald state twice that John Key only began to work in 1988 with Andrew Krieger, the New York Bankers trust banker who attacked the NZ$ in the autumn of 1987, almost tanking the dollar and the NZ economy to make a spectacular profit of no less than 300 million in a couple of months, after the attacks.
That’s impressive considering the fact that Andrew Krieger left the Bankers Trust in February of 1988. He only worked for Soros after that from march until June in a managing not trading position and left trading all together after that until 1990.
So John Key appears to be a man who is relatively devoid of morals and has no problem lying to the electorate about callous attacks on his own countries currency and it’s people 20 years after the fact and who knew the risks of dealing in derivatives and the total crap that they are and made $ 50 million out of them.
Together with the ease with which he lied about the amount of shares in transrail and his role in the negotiations with the American company does not make him look like a nice honest man.
I’m relatively new to the NZ political scene so I don’t have the history that most of you have with Helen Clark but I sure as hell don’t want to vote for an ex Wall street banker who has problems telling us about his career, politics and the fact that he had an office in Merrill Lynch’s headquarters in New York during the entire time he worked for ML.
http://www.johnkey.co.nz/index.php?/archives/232-SPEECH-Speech-to-the-United-StatesNew-Zealand-Partnership-Forum.html
Cullen might be at a loss right no but I can assure you most finance ministers are at this moment.
John Key is probably one of the few who is not surprised and that should worry all of us.
September 27th, 2008 at 3:53 pm
Grant Michael McKenna,
John Key was the managing director of debt for Merrill Lynch in 1999.
He had a lots of people working for him who were there to develop these cute financial products in order to sell debt to ignorant suckers.
“The initial thought was that, yes, the Internet’s great for foreign exchange because it’s vanilla. But there are applications that are just as wide in many other areas: corporate bond trading, government credit, equity underwriting, credit derivatives-it’s endless,” says Key.
This what John Key had to say about that time in the NZHerald puff piece: Key explains: “I had a whole lot of people working for me who were at the cutting edge of delivering quite complex and new and innovative products.
In the same article he says that the crisis bringing down the financial western world was not hard to predict. Funny coming from a man who was making money selling this crap to unwitting pension funds. And who was an upon invitation only advisor to the privately owned Federal Reserve of New York from 1999 until his departure March 2001 and Alan Greenspan who broke the ban on derivatives under Reagan.
Derivatives were banned after the great recession because they were largely to blame for the financial meltdown of that time.
Also funny coming from a man who had seen his previous bank Bankers Trust implode after they were successfully sued for dodgy derivatives trades. He left there saying in the NZHerald. Then it all went to shit and I said right I’m out of here.
Not when he found out that worked for a scummy bank but because they collapsed as a result of exposure of their tactics.
Lastly in the NZH “unauthorised biography John key and the Herald state twice that John Key only began to work in 1988 with Andrew Krieger, the New York Bankers trust banker who attacked the NZ$ in the autumn of 1987, almost tanking the dollar and the NZ economy to make a spectacular profit of no less than 300 million in a couple of months, after the attacks.
That’s impressive considering the fact that Andrew Krieger left the Bankers Trust in February of 1988. He only worked for Soros after that from march until June in a managing not trading position and left trading all together after that until 1990.
So John Key appears to be a man who is relatively devoid of morals and has no problem lying to the electorate about callous attacks on his own countries currency and it’s people 20 years after the fact and who knew the risks of dealing in derivatives and the total crap that they are and made $ 50 million out of them.
Together with the ease with which he lied about the amount of shares in transrail and his role in the negotiations with the American company does not make him look like a nice honest man.
I’m relatively new to the NZ political scene so I don’t have the history that most of you have with Helen Clark but I sure as hell don’t want to vote for an ex Wall street banker who has problems telling us about his career, politics and the fact that he had an office in Merrill Lynch’s headquarters in New York during the entire time he worked for ML.
Cullen might be at a loss right no but I can assure you most finance ministers are at this moment.
John Key is probably one of the few who is not surprised and that should worry all of us.
September 27th, 2008 at 4:14 pm
Well said, Grant Michael McKenna at 8.51AM
And ClintHeine at 9.13, you said it, remember why it was no politically big deal to sell the bloody train set back in the 1980′s because everyone could see what a black hole for taxpayer money it was. I think you are probably right, some of Kullensky’s recent actions are purely to poison things for the next government.
The “history professor” as finance minister, remember Michael Bassett telling us that in the Lange Cabinet it was a standing joke that this guy was the economic lightweight of the cabinet and couldn’t even balance his own cheque book?
One just hopes now, seeing this administration will do anything to buy power, that Kiwis are not so stupid as to fall for the bribes that are no doubt on their way from now to the election date. Someone needs to put costs on these things in terms of foregone economic growth, in the way that ACT’s excellent leaflet does with its 20 point plan.
September 27th, 2008 at 6:05 pm
so, all the surplus was wasted on the rail ways. Thats incedible.
Cullen is basically calling us all a bunch of tossers as he walks out the door to a retirement income.
He couldn’t care less about the next govt, labour or the country.
A traitor of the highest calibre and lets hopw we learn a hard lesson on voting for intellectuals
They’re all head and no heart or passion. We’re just a game to them that they tire of.
September 28th, 2008 at 11:41 am
Nefarious – the answer is NO!
September 29th, 2008 at 12:16 pm
travellerev, you sure are one sad, deluded moron.
You obviously think that derivatives or structured products are bad words. I doubt you even know what they are. I think you are one of those mouth breathing Luddites that thinks that something is bad just because you dont understand it.
You seem to think that big bad Merrill Lynch created bad securities and then sold them to poor pension funds and other innocent suckers! How quaint. Can you explain why Merrill Lynch is now owned by a different bank? Why did they have to write down billions of dollars in losses if they were all about ripping off OTHER PEOPLE?
You are just (unthinkingly) repeating what you have read elsewhere, which is what those authors wanted you to do. They want this sort of sloppy thinking and baseless character assassination to become the dominant meme in this country. Well done, you pathetic useful idiot.