Editorials on Labour and fiscal restraint
December 18th, 2009 at 2:00 pm by David FarrarThe Dom-Post provides a slap-down:
Finance Minister Bill English should listen carefully to his Labour opposite David Cunliffe and then do the exact opposite.
Mr Cunliffe is a clever man who proved a capable minister of health, but he is either out of his depth in the finance role or has completely abandoned principle in pursuit of popularity. There is no other explanation for his absurd criticism of the Government for refusing to loosen the purse strings in the wake of a Treasury report suggesting the recession has ended and New Zealand is in better economic shape than forecast seven months ago.
“Basically what they are saying is our books are $2 billion better off but we the Government are going to keep all of it and you the public will get none of it,” Mr Cunliffe told National Radio on Wednesday.
That is populist nonsense. The improvement in the Government’s books does not translate to money in a bank account. It is money the Government no longer needs to borrow from international financiers. The choice Mr English faces is not whether to spend or save; it is whether to borrow more or borrow less.
We’re borrowing $250 million a week. There is a slight upturn and now we are borrowing only $240 million a week, and Labour says time for a big spend up. They just do not get it.
If he were to act upon Mr Cunliffe’s urgings, he would borrow and pass the debt on to future generations – generations that will already be burdened with servicing the billions of dollars of extra debt the Government has taken on this year and will continue to take on over the next few years to stave off the worst effects of the global economic crisis.
Fiscal restraint is needed not just for a few years. First we have to reduce the deficits and get back into surplus. That may take seven years or so of fiscal restraint. But even after that, we will want to get our debt levels back down to what they were pre-recession (in case we have another one at some stage, which is likely), so we will want several years of surpluses of around 1% of GDP. So fiscal restraint is needed for at least a decade.
If Mr Cunliffe really thinks the Government should be spending more now, he should have taken a greater interest in financial matters during Labour’s last nine years in office. If the government of which he was part had spent less on middle-class welfare, overpriced train sets, hip-hop study tours and shonky tertiary courses, its successor would have more to spend now on health, education and welfare. Seedcorn eaten today cannot be turned into cornflakes tomorrow. …
Money borrowed has to be repaid with interest. Mr English should ignore Mr Cunliffe’s rantings and enforce the strict spending limits detailed in the Budget.
And the limit is a limit, not a target.
Also the ODT:
Government surpluses are expected now to return two years earlier, by 2016, but government debt will still rise to an extraordinary $64.9 billion by 2013 and the burden on the public will continue to grow.
By comparison, it is $17.1 billion this year.
This means tighter conditions are a certainty – unless the Government decides future administrations can worry about the problem of paying the higher debt burden in years to come.
Considering the future cost of superannuation and healthcare, that would be very unwise.
Tags: David Cunliffe, Dominion Post, government spending
December 18th, 2009 at 2:20 pm
lol am i the only person who sees cunliffe’s comments as purely point-scoring and thus not to be taken seriously, let alone given an editorial
Vote:December 18th, 2009 at 2:22 pm
Hey, Dom-Post, ODT, et al.
Where the fuck were you when Liarbore were pissing away the surplus on buying themselves votes by investing in their own narrow little interest groups to the detriment of the rest of us?
It happened for nine years, FFS.
Didn’t you notice?
FFS you fucking fuckity fuck fuckhead moron fucks.
December 18th, 2009 at 2:28 pm
Proud to be the first to vote up Reid’s comment.
On the basis of this, will we now get an apology from the media about how they looked the other way when this lot was practicing what they now preach, except spending taxpayer money like there was no tomorrow? To not do so seems a mighty about face.
Vote:December 18th, 2009 at 2:29 pm
Careful there, Reid. You’ll be giving fucking a bad name if you continue to associate this sublime activity with sordid journalism.
Vote:December 18th, 2009 at 2:47 pm
Cunliffe’e economic skills beggar belief. They disqualify Labour from ever holding office since they show the Socialist mind set.
For the benefit of leftists trollers let me use a metaphor that even they can understand.
Jo and Josie Kiwi were feeling good. They owned a house. Well actually the bank did but they had a mortgage. They had some money in their pocket. Times were good and their income was high. They spent all the money they earned. But they wanted more from life. They wanted to go on subsidised cookery classes. They wanted to take an interest free loan to study a Masters in the Anthropology of Lesbian sex in small furry endangered animals. They even wanted to own a model railway. Money was always available. It came from a hole in a wall machine that magically gave you as much money as you wanted.
One day the bank phoned them up and explained what an overdraft and penalty interest meant. It would take 10 years to pay off their debts.
One day the local supermarket announced that fizzy drinks were on special and would be so for a whole year. “Halleluia”. They cried.
Now we know that Coke is cheaper we can afford to buy another car and get the latest Tiger Woods manual- entitled ” The oldest game in the world. With every known move and position in full color” .
One year later they lived in a tent. They were confused and angry.
They blamed the banks. They blamed the car salesman who had the cheek to take back their wheels. The finance company still sent them bills . Wierd!They blamed the capitalist consumerist TV ads promoting the Tiger manual which came in a brown paper wrap and was actually a book about Chess!!
Repeat after me
LABOUR IS NOT FIT FOR OFFICE. NEVER. EVER.
December 18th, 2009 at 3:02 pm
How sad that after enduring years of difficulties to get the fiscal house in order between 1984 and 1994 the New Zealand people will once again be forced into indebtedness by a vote grabbing Government of spivs and liars.
Everyone’s Grandchildren get a lifetime of servitude because John Key wants millionaires to be paid pensions, Wellington civil servants to have motorways through Transmission Gully, Maoris to have handouts because they are brown and 120001 other pork barrel goodies to get a second term in Office.
How they can sleep at night is a mystery to me…
http://www.nightcitytrader.blogspot.com
December 18th, 2009 at 4:12 pm
A good article, the question I have though is this, are the Nat’s any better and why the hell have the Dom Post held back from having a crack a them?
When you look at it, National are on the whole, continuing where Labour left off.
As Reid says at 2.22, our media are gutless.
Vote:December 18th, 2009 at 4:13 pm
Ah yes superannuation. If politicians actually put the country first there would be an accord to gradually raise the age to 67 – at most. Hell, even 66 would save a bucket load – and reflect longer living trends.
Vote:December 18th, 2009 at 5:28 pm
That $250m per week really scares me (actually it’s more like $313m if we assume $17b will become $64b in three years).
Labour squandered the best economic conditions of my lifetime leaving the cupboard bare.
And National are not proving themselves up to the task of fixing the mess, action that they probably consider politically fatal. Perhaps the first step is to educate NZers about the size/shape of the hole we’re in, why we’re in it.. and then offer leadership to get us out. Or just sit tight, and dish out borrowed cash to shore up continued rule.
Vote:December 18th, 2009 at 6:42 pm
reid nails it.
DPF said;
That really is the issue here isn’t it. They are Muppet’s. Just remember, these are the same financial wizards who though building roads should be done with cash from surpluses because they couldn’t understand the concepts of either over taxation or financing long term assets. So yeah, they just do not get it.
Vote:December 18th, 2009 at 6:43 pm
“And National are not proving themselves up to the task of fixing the mess, action that they probably consider politically fatal.”
They were left with an extremely twisted electorate psychology to deal with/recover from. And they are now softening up the electorate for SOE sales and PPPs in the second term.
Key’s not a fool, let’s hope. All signs are good, on my reading, it’s just that the ship can’t be turned on a dime.
At this point, I’m prepared to give him the benefit of the doubt. I am however watchful because there are a hell of a lot of minefields around right now due to the unstable nature of the global currency/trading situation at this moment in time and Key hasn’t yet given me any confidence whatsoever that he knows what to do if things head south. Quite the contrary, in fact.
Vote:December 18th, 2009 at 6:55 pm
KK (frmly gstfd):
Re: ‘Perhaps the first step is to educate NZers about the size/shape of the hole we’re in, why we’re in it.. and then offer leadership to get us out’ .
But you can NEVER do that – the unions, still living in their own little socialist cloud-cuckoo land, are so sure that their ideology is correct that they will fight tooth and nail to retain their ‘right’ to more money.
That the country is actually totally broke because of Cullen et al is a nasty National Party lie – Michael (Cullen) would NEVER have lied to us, and as for our paragon DL? Lies from her fair lips? Never – it’s all a Nat’s conspiracy.
Unfortunately, a change of attitude and a recognition of reality is not something that the unions are exactly renowned for – the indoctrination has been very, very thorough and ‘rights’ are all, so ‘stuff the country we want what is OURS – and since Phil says we’re entitled to it deliver or else’.
So much for ‘responsible leadership’ (an oxymoron?) by the Leader of the Opposition.
Vote:December 19th, 2009 at 2:49 am
Maybe National should increase Government spending. The voting public are too stupid to see that the increased expenditure is crippling the economy and it would be a nice present for Labour when they eventually get into Government again. If that is twelve years down the line then that’s plenty of time for economic sabotage. Total economic failure would be a nice trigger event for forced union with the Australian Federation.
Vote:December 19th, 2009 at 8:35 am
I don’t think we should be fiscally restraint for seven years, the government should show fiscal restraint always.
Its funny how national supporters think that “only” increasing spending by 1.1billion dollars a year when the rest of the country is earning less on average is fiscally restrained. It just goes to show, you could put a dog in as national party leader and the national supporters will think hes the best leader always… Robert Muldoon proves that point and now we have John Key doing the same.
Vote:December 19th, 2009 at 8:45 am
There needs to be gutsie moves like lower the business taxes to keep business in New Zealand rather than go off to China. If business leave, then wouldn’t the government loose out on that business tax and employee taxes? It is a loose loose situation. I don’t think John Key has the guts. Also, the government could probably do without 50 percent of the administration costs. Patients see doctors, not administrators and children are taught by teachers, not administrators. The waste in government is too much but everyone seems to be use to it. . All John Key has done is raise taxes and they will go up more when this ETS bill goes into effect in Jan. 2010. Labour is a washout and Cunliffe is an idiot.
Vote:December 19th, 2009 at 9:49 am
Labour are following down the wrong path. With national currently left of center, Labour need to move further to the right and full the void that has opened since John Key became leader of the nats. Labour should stop being far left and move to become a slightly center right party. History shows that if any gutsy policy is to be implemented (whether it be left wing or right wing policy), the national party won’t do it (barring Ruth Richardson). The nats are terrified of change.
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