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Posts Tagged ‘credit downgrade’

If National are such prudent fiscal managers…

… why is it that Standard & Poors, Moodies, and Fitch constantly downgrade our sovereign credit rating whenever they are in power?

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new-zealands-foreign-currency-credit-rating-history2

Source: NZ Debt Management Office

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Just wondering.

This blogpost was first published on The Daily Blog on 31 December 2013.

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Journalists encouraging irresponsible government policy?

6 January 2014 3 comments

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John Armstrong - Cutting tax tempting for National

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Sorry, John, but precisely WHO is talking about tax cuts?

Because so far, all I’m hearing is a couple of journos putting the question to Dear Leader and his faithful little side-kick, Lassie Bill English. No one else is seriously contemplating cutting taxes – not when New Zealand’s sovereign debt is now $60 billion as at 9 November this year – and  increasing by $27 million every day since Key’s hopelessly  incompetent government came to power in 2008.

According to Hamish Rutherford, writing for Fairfax Media, this equates to $13,000 for every man, woman, and child in New Zealand – and expected to increase by another $10 billion by 2017.

We need to address this problem – not fuel it by increasing consumption of imported goods, thereby worsening our balance of payments.

For god sakes, stop encouraging National to engage in any further irresponsible slashing of revenue.  National’s two previous tax cuts in 2009 and 2010 did nothing to  help stem the growth in our sovereign debt. Not when revenue fell by up to $4 billion after those tax cuts.

We have other priorities.

For example, why is the Wellington City Mission short of $2 million to carry out it’s valuable work to assist the poorest in our society? It is obscene that the Mission will have to consider reducing some services, as Chief executive Michelle Branney recently suggested.

Why are New Zealand’s poorest families unable to afford basic  medicines since this government-for-the-rich increased prescription charges in January 2013? When National cut taxes, it attempted to make up for the revenue shortfall by raising GST (despite promising in 2008 not to) and increasing government charges such as for prescriptions, Court fees, etc.

Why are New Zealanders needlessly suffering from rare diseases because PHARMAC cannot afford life-giving medication?

Why are poverty-related diseases making a come-back with such a vengeance?

Children’s Commissioner Dr Russell Wills…

… report is expected to reveal a 12 per cent rise from 2007 to 2011 in hospital admissions for poverty-related illnesses such as acute bronchiolitis, gastroenteritis, asthma, acute upper respiratory infections and skin infections.

“Most New Zealanders will find the numbers of children affected by disease shocking,” Wills told the Herald on Sunday, “but for those of us working clinically with families in poverty it is not surprising.”

Wills also works as a paediatrician in Hawke’s Bay. He said hospital wards were now full of poor, sick children every month of the year – not just in winter. There was no longer a “summer lull” in diseases.

English found himself so cash-strapped after their tax cut profligacy that, by 2012, he was even reaching into the meagre pay-packets of newspaper delivery boys and girls to grab extra tax revenue.

Instead of frittering away taxes, we need to be looking at the real problems confronting us;

  • Address child poverty problems

When children go to school hungry because families cannot afford sufficient food after paying high rents, electricity bills, etc. then there is something seriously wrong with our country.

Especially when we are now seeing children eating out of rubbish bins because there is no food at home for them. I refuse to believe that most New Zealanders want this kind of society for their children.

This is not the New Zealand I grew up in.

The next Prime Minister must make this a #1 priority, and begin with taking on the role of Minister for Children and implementing a comprehensive Food In Schools programme (not the shonkey half-measures undertaken by National earlier this year).

Next on the agenda; returning welfare payments to pre-1991-slash levels (inflation indexed); reduce prescription prices for medicine;  and implement a massive job creation programme.

  • Pay down debt

From 2000 to 2008, Clark’s administration not only paid down debt, but also posted Budget surpluses,

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Government Debt

New Zealand Government Debt To GDP

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Government Budgets

New Zealand Government Budget

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To be fair, Labour’s Finance Minister, Michael Cullen did not have the Global Financial Crisis to contend with. But by exercising fiscal prudence –  instead of  tax-cut lolly-scrambles demanded by the then-National opposition – he left the country in a fit state to weather the on-coming financial storm that was about to envelope the planet.

By the time National came to power in 2008, the global financial crisis was well and truly upon us, with the collapse of Lehman Bros on 15 September 2008. The GFC had started earlier, and signs were apparent to all but the most intransigent optimist that dark storm clouds were on the horizon.

As unemployment rose and economic activity slowed, National persevered stubbornly with it’s tax-cut programme – a move that would further indebt this country and put our government’s books back into the red again. At one stage, National was  borrowing $380 million  a week to make up for the shortfall.

This despite the fact that it was common knowledge that we were facing a dire crisis, as Tracy Watkin and Vernon Small reported on 23 April 2009,

The recession was expected to blow a $50b hole in the economy during the next three years, plunging the Government further into the red as costs climb and tax revenues fall.

“That’s $50 billion we will not recover as a nation, and $50 billion that cannot be taxed by the Government,” Mr English told a business audience in Auckland.

And yet, despite his own candid admission, English went ahead with tax cuts that we could ill afford, and had to make up with massive borrowings; cuts to government services; increased user-pays; mass sackings of state sector worker, and eventual partial asset sales. Even welfare was targetted for “reforms” (read; cost cutting) to claw back government spending.

Little wonder that by September 2011, credit rating agencies Fitch and Standard & Poors had downgraded us.

  • Invest in upskilling the unemployed

Why are we importing tradespeople from overseas when we have 7.1% (153,210) unemployment in this country?

National’s response to the skills shortage was this ideological fob-off from Bill English, in June 2011,

In the first place, it is the responsibility of the companies that expect to rebuild Christchurch to ensure that they have the skills.

And to ensure that everyone understood that National was maintaining it’s long-held tradition of shirking responsibility, he added,

Of course it will be tight, because they are competing with very, very large salaries, particularly those in Western Australia where something like $250 billion worth of capital projects are in the pipeline.”

IBID

That’s the problem with a government that places it’s faith in a free market solution to everything (except corporate welfare) – nothing happens.

Wouldn’t it have made more sense to offer free skills training to every unemployed person in New Zealand, along with subsidised accomodation in Christchurch for workers moving from other towns and cities to take up work offers?

There would have been a cost, to be certain. But that would have been off-set by (a) reduced welfare payments; (b) upskilled workers who would continue to use their new training for subsequent building projects; (c) more taxes paid by more employed workers;  and (d) a flow-on effect to other businesses as income-earning workers spent their wages.

The $4 billion frittered away in tax cuts would have made a considerable dent in our unemployment and given a much needed boost to our economy. And by providing work to the unemployed, the government would have saved millions in welfare.

But by sitting on it’s hands and doing nothing, National has maintained the status quo; 160,000 unemployed wasting their time, and requiring more of our taxes to be paid for the dole.

Is this crazy or what?

Hopefully an incoming Labour-Green-Mana(-NZ First?)  will have more sensible policies than what we’ve seen thus far from National. (Which won’t be hard to achieve.)

And other areas which desperately require State intervention,

  • A fairer taxation system, including reducing (or even eliminating) GST; introducing a comprehensive Capital Gains Tax;  looking at a Financial Transactions Tax (or “Robin Hood” tax, as Mana refers to it); making the first $20,000 tax free; and increasing tax for the top 1%.
  • A sensible pricing system for electricity especially for low/fixed-income earners.
  • Increase funding for early childhood education.
  • More state housing, so our fellow New Zealanders have a decent roof  over their heads.
  • Invest in public transport, especially in Auckland, before the city grinds to a stop.

Those are the things we need to look at. Not cutting taxes for the well off (which is usually what the Nats end up doing).

These should be the priorities of a sensible government. Anything, everything,  else is grossly irresponsible.

Otherwise, what the hell are we leaving our children?

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debt-mountain-cartoon.

May I have some food, a home, parents

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Postscript

Armstrong’s article on tax cuts features a large image of a smiling David Cunliffe. Note; Cunliffe. Not English, nor John Key.

Is there a subtle sub-text being conveyed here that I’m missing? Perhaps I’m getting the wrong ‘message’ from Armstrong’s piece, especially when he finishes with this intriguing comment,

Overall, English will not want to tie himself to future tax cuts without more solid evidence they can be sustained.”

My… that almost sounds like a veiled warning, doesn’t it?

This blogpost was first published on The Daily Blog on 30 December 2013.

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References

Bill English: Dr Cullen maintains tradition of tax-cut denial

Wikipedia: Bankruptcy of Lehman Brothers

NZ Herald: Govt borrowing $380m a week

Fairfax media: $50b hole in economy

TV3 News: Double credit downgrade a double blow for NZ economy

Fairfax media: Key ‘no GST rise’ video emerges

NZ Herald: Food parcel families made poor choices, says Key

The Press: Irish rush for quake jobs

NBR: Chch rebuild companies will have to find skilled workers – English

TV1 News: Rise in prescription charges ‘not fair’ – Labour

NZ Herald: Tax cuts: High earners set to benefit most

NZ Herald: Budget 2012: ‘Paper boy tax’ on small earnings stuns Labour

Fairfax media: $4b in tax cuts coming

Dominion Post: Bennett expects welfare reform to save $1.6b

Fairfax media: Public debt climbs by $27m a day

Radio NZ: Pharmacies ‘carry cost’ of increases

NZ Herald: Child poverty ills rising

Fairfax media: Hungry kids scavenge pig slops

Fairfax media: Mum Not Prepared To Wait And Die

Radio NZ: PM defends record of helping poor families

Radio NZ: 5th year in deficit at City Mission

Radio NZ: Funding declined for housing project

NZ Herald: John Armstrong: Cutting tax tempting for National

The Atlantic: Tax Cuts Don’t Lead to Economic Growth, a New 65-Year Study Finds

Sources

Trading Economics:  New Zealand Government Debt To GDP

Trading Economics: New Zealand Government Budget

Statistics NZ: Household Labour Force Survey: September 2013 quarter (6 Nov 2013)

Roy Morgan: New Zealand real unemployment down 0.3% to 8.5% and a further 8.6% (down 1%) of workforce are under-employed (5 Dec 2013)

Statistics NZ: 2006 Census

Statistics NZ: 2013 Census

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Nick Smith

21 March 2012 10 comments

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I take no satisfaction from Nick Smith’s resignation.  Dear Leader will simply appoint another National MP to take Smith’s portfolios. Nothing has changed.

In the scheme of things, his letter to ACC on behalf of former National Party activist and friend, Bronwyn Pullar, appears to be one of those gaffes that all politicians of species Homo Sapiens are capable of.

What I find unjust is that Dr Smith fell on his own sword – whilst John Key  got away with something even more questionable, last year, when on 4 October, John Key made this statement in the Debating Chamber,

When Standard & Poor’s were giving a meeting in New Zealand about a month ago, what they did say was there was about a 30% chance we would be downgraded – that’s what happens when you’re on negative outlook. They did go on to say though, if there was a change of government, that downgrade would be much more likely.”

That statement was the beginning of a political furore that, for the first time, attacked Key’s credibility.

Less than a week later, on 10 October, Standard & Poors issued a firm rejection of John Key’s assertion that Standard & Poors stated “if there was a change of government, that downgrade would be much more likely“. In fact, S&P was quite adamant,

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Key’s staff eventually released the so-called “email” that Key claimed had been sent to him by a friend (un-named), which made the S&P claim. The email was (supposedly)  sent on 6 September 2011 at 11:24 am,

Hi John

I was part of a session with a range of economists yesterday morning – every year they do this session – with economists from Aus plus all the main NZ banks, and this year two from Standard and Poors, including the guy who obviously has a lot to do with the NZ grading.

Anyway, the S&P guys were very complimentary about how the NZ Govt is managing fiscally and their trust that what you say will happen happens, and your unwavering commitment to getting NZ’s balance sheet sorted for the long term.

But there was a key one-liner that I thought you could well use. S&P said that there was a 1/3 chance that NZ would get downgraded and a 2/3 change it would not, and the inference was clear that it would be the other way around if Labour were in power. They discussed the impact on interest rates if NZ got downgraded and how that would quickly impact on the home owner mortgage market, so net net there is a much higher risk to NZers that they will face higher interest rates under a Labour Government.

Don’t know how you use it but they were quite serious.

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So, who was telling the truth?

In an effort to uncover the truth, Key fronted to a media conference,

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To this day, the identity of the mysterious  author of that “email” has never been disclosed and we have no clue as to the veracity of who-said-what.

Perhaps the wrong person resigned.

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Labour: the Economic Record 2000 – 2008

16 November 2011 49 comments

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There has been considerable commentary made by Labour’s critics and political opponents that Labour was an incompetant economic manager, during their nine year term in office. The reality, though, is somewhat different. There are many things that Labour did well and some not-so-well.

But the records speaks for itself.

The following is data, in the form of easily understandable graphs, from Trading Economics, an American website. They collect data from the IMF, World Bank, Statistics NZ,  the Reserve Bank of NZ, etc,  (the usual motley crew of subversive, left wing organisations) to compile their finished presentations.

Each category will be presented via two graphs. Eg,

“New Zealand GDP Growth Rate”

Graph 1: 2000 – 2011

Graph 2: 1990 – 2011

National was in power from 1990 to the end of 1999.

Labour governed from the beginning of 2000 to the end of 2008.

National took office After November 2008.

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New Zealand Population 1960 - 2011

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New Zealand Unemployment Rate

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New Zealand Unemployment Rate 2000 - 2011

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New Zealand Unemployment Rate 1990 - 2011

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Long-term unemployment (% of total unemployment) in New Zealand

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Some politicians use long-term unemployed as an election weapon, to win electoral support. However, despite their mis-use of the facts and figures, long-term unemployment was dropping in the last ten years. Not that certain politicians would admit it, though.

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Long Term Unemployment (% of Total Unemployment) in NZ 2000 - 2008

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Note how long-term unemployment rose in the late 1980s and spiked in the early to mid 1990s. Can we remember what happened to New Zealand in that time? The terms “Rogernomics” and “Ruthanasia” might jog our memories.

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Long Term Unemployment (% of Total Unemployment) in NZ 1990 - 2008

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New Zealand Employment

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New Zealand Employment 2000 - 2010

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New Zealand Employment 1990 - 2010

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New Zealand Government Debt To GDP

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Despite claims that Labour “spent up large” during their nine year term, the truth is completely different.  As the IMF data shows with crystal clarity, Labour paid down debt. It was not until National came to office that debt levels took of again.

It could be said, with considerable truth, that Finance Minister Michael Cullen ran the government accounts with a fiscal discipline that would make Scrooge sit up and take notice.

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New Zealand Government Debt To GDP 2000 - 2011

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The IMF data shows fairly well why Labour had such massive debt kevels to pay down. It was an inheritance from the previous Bolger-led National Government of the 1990s. (Though National were addressing that debt, the reduction slowed from 1997 onward.)

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New Zealand Government Debt To GDP 1990 - 2011

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New Zealand GDP

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One of the many “charges” made by neo-liberals against the Labour Party is that centre-left governments are poor stewards of the economy and are anti-business. Yet, the World Bank data below shows quite dramatically how well New Zealand’s economy fared in the 2000s. Our growth was such that a common complaint from business was a lack of skilled, experienced staff.

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New Zealand GDP 2000 - 2010

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The early 1990s were marked by “Ruthanasia” – a continuance of Roger Douglas’s extremist neo-liberal, free market policies. All socio-economic indicators worsened during Ruth Richardson’s tenure as Minister of Finance. The World Bank data below shows how New Zealand’s economy was practically crippled under the tender mercies of the New Right.

It was not till 2003, under Labour’s governance, that the economy began to grow.

As an aside, there were took tax cuts during the 1990s. Result: minimal benefit for the economy.

Labour increased taxes for top income earners in the early 2000s. Except for a short-term ‘dip’, the tax rise doesn’t seem to have impacted on the economy.

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New Zealand GDP 1990 - 2010

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New Zealand GDP per capita

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New Zealand GDP per capita 2000 - 2009

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New Zealand GDP per capita 1990 - 2009

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New Zealand Interest Rates

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New Zealand Interest Rates 2000 - 2011

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New Zealand Interest Rates 1990 - 2011

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New Zealand Inflation Rates

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New Zealand Inflation Rate 2000 - 2011

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New Zealand Inflation Rate 1990 - 2011

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New Zealand Current Account

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This is the bit which shows how much we sell overseas (export), compared to what we buy (import). Exports can be wool, timber,  fish, dairy products, company profits, etc. Imports can be fuel, consumer products, vehicles, raw materials, heavy machinary, etc. The shaded gray should be above the ‘O’ line, instead of below it.

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NZ Current Account 2000 - 2011

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NZ Current Account 1990 - 2011

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New Zealand Government Budget

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This graph is an interesting bit. When John Key and Bill English refer to the previous Labour government expanding State expenditure, this is what they are referring to. And they are correct – but only half correct. As per usual, they are telling you only half the truth – and leaving out the  next, important bit.

Look at the next graph below, 1990 – 2000.

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New Zealand Government Budget 2000 - 2011

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In the graph below, it is clear that the National government from the early to mid 1990s (commonly referred to as “Ruthanasia”) and in the late 1990s, consistantly cut back on expenditure. Some of you may recall horror stories of those times; ex psych patients living rough, in toilets, with no State-community support; market housing rentals; and hospital waiting lists far longer than anything we have today.

On 3 April 1998, Southland dairy farmer Colin Morrison (42) died on a waiting list, awaiting a triple heart bypass surgery. In death, Mr Morrison symbolised everything that was terribly wrong with the health system in the late 1990s.  Public anger mounted as an unpopular government seemed unable to respond to concerns that our public services were being run down in the name of “efficiency”.

Little wonder that there was a 11.55% swing toward Labour in the 1999 General election – the electorate had had a gutsful of neoliberal policies resulting in growing inequality and social problems that seemingly went unheeded.  Contrasts

That is the reason why Labour spent so much during it’s term: to make up for the lack of social spending in the 1990s, and to meet growing public clamour for social services to be better resourced.

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New Zealand Government Budget 1990 - 2011

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Cash surplus/deficit (% of GDP) in New Zealand

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Contrary to the fantasies of some history-revisionists, trying to paint the previous Labour Government as “bankrupting the country”, Cullen actually posted some fairly respectable surpluses.

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Cash surplus-deficit (percent of GDP) in New Zealand

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New Zealand Sovereign Credit Ratings

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The following data-sheet shows New Zealand’s credit downgrades from 1977, when Rob Muldoon was Prime Minister, to the present.

Note that three credit downgrades happened duting three National governments; 1991, 1998, and this year. And if you include the Rogernomics period – that makes FOUR neo-liberal governments that were downgraded.

Do credit ratings agencies  seem “risk averse” to new right governments? Do they prefer centre-left governments?

First, look at 10 September 1998 (National government) – AA+ (negative outlook)

But when Labour came to power – 7 March 2001 – AA+ (stable outlook)

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Source

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New Zealand Prison Population trend since 1980

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The prison sentenced population demonstrates continuous and steady growth since 1986. The seasonal pattern of reduced numbers toward the end of each year is well established, and reflects the influence of the prisoner Christmas release policy 1 , as well as cycles of activity involving Police and the Courts. Notable is the sharp upturn in numbers which commenced in mid-2003, continuing through to June 2007.

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A closer look at the period 1962 to 1996. Note the huge ‘spike’ in the prison population from 1986 onwards. Except for occassional dips, the prison population has continued to rise steadily since the mid-1980s.

It cannot be a coincidence that New Zealand’s entire socio-economic fabric was unravelled and “reformed” in a process commonly referred to as “Rogernomics”. The process of “economic reform” continued  into the 1990s, referred to as “Ruthanasia”, up until 1996.

The prison population, though, continued to rise.

The ongoing effects of “Rogernomics/Ruthansia” are ongoing to the present day.

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Total prison population 1962 to 1996

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[This page still under construction – more data to follow. Keep checking back for more info.]

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Of Polls, Politics, & Pollution

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“Do as I say, Not as I Do”, is not a particularly savvy way to relate to an important electorate such as Epsom,

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It beggars belief that a Party leader could ask voters in a given electorate to vote for the candidate of another Party – whilst he himself supports his own Party’s candidate.  John Key has stated categorically,

“‘I’m going to vote for Goldsmith. I am the National Party leader and I am going to vote for the National Party candidate and give my party vote to National.Source

One wonders how National supporters in Epsom must be feeling.

The leader of their Party hints that they should vote for ACT’s John Banks, whilst Key himself votes for the National candidate, Paul Goldsmith?

And if Paul Goldsmith is the “sacificial lamb” – why is he standing as an electorate candidate anyway?  National could just as easily – and more honestly – simply not stand a candidate and mount a publicity campaign for the Party Vote only,

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In effect, National’s  electorate candidate is not really campaigning to win. And if he doesn’t want to win, why is he standing? To give  Epsom National supporters a “wink and a nod” to Electorate Vote ACT and Party Vote National?

And if such is the case – what possible legitimacy does that give ACT when they can’t attract electorate support on their own merits?

So much for ACT being a Party that encourages success through merit. Especially when they apply the merit-based principle to Maori:  Maori Must Earn Auckland Seats On Merit .

As the ACT statement sez;  “Let our bright boys and girls EARN their seats.

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ACT and National’s  machinations in Epsom are, of course, due to ACT’s low poll ratings. Practically every single poll has them around the 1.5-3.5% mark. Under MMPs rules, if they cannot cross the magical 5% Party Vote threshold – or – win an Electorate Seat, they will end up like  The Alliance and NZ First: out of Parliament.

(Despite what critics of proportional representation would have us believe, MMP is not a very ‘forgiving’ system to small Parties.)

The latest Horizon Poll makes for very interesting reading. Horizon is the only polling company that prompts Undecideds to state a preference. Under this system, the results appear to give a far more realistic result of Voter’s intentions, rather than the ‘fantasmagorical‘ results that have National at 53-55%-plus,

Horizon is the only polling company publishing results for don’t know voters.

Horizon’s results are for

  • Decided voters
  • Undecided voters with a preference

who are

  • Registered to vote and who
  • Intend to vote.

The poll finds

  • National has 36.8% of registered voters (down 2.7% since September 22)
  • Labour 25.7% (-1.1%)
  • Green Party 11.6% (up 0.9%)
  • New Zealand First 6.2% (- 1.1%)
  • Mana Party 2.3% (+ 0.3%)
  • Act 3.4%  (down 1.4% from September and down from a high of 5.3% in May shortly after Don Brash became leader)
  • Maori Party 1.7% (+0.7%)
  • United Future 0.4% ( 0% in September)
  • Conservative Party of New Zealand 2.2% (new party, first time measured)
  • New Citizens 0%
  • Other parties 1.2%

National has highest voter loyalty:  76.2% of its 2008 voters still support it. It has picked up 19.9% of Act voters and 9.1% of Labour voters (while Labour has picked up 7.6% of National’s).

The Greens have 68.7% voter loyalty and are gaining 2008 voters from the Maori Party (23.1%) and Labour (14.6%).

Labour has 63% voter loyalty, losing 14.3% to the Greens, 9.1% to National and 3.7% to New Zealand First.

The Maori Party has 30.8% voter loyalty, losing 23.1% of its 2008 voters to the Greens and 19.1% to Mana.

Assuming John Banks wins the Epsom electorate seat for Act, Peter Dunne retains Ohariu-Belmont, the Maori Party retains its four electorate seats and Hone Harawira retains Te Tai Tokerau, a 122 seat Parliament  would result, with a two Maori Party seat overhang, comprising:

National 50

Act 5

Maori party 4

United Future 1

Current governing coalition: 60 seats

Labour 35

Green 16

NZ First 8

Total: 59 seats

Mana 3

Horizon Research says a great deal depends on the support New Zealand First attracts at November 26.

Horizon polls have had the party at 6% or higher since November 2010. (Note the poll’s margin of error is +/- 2.2%).

Source

If correct, National is in trouble.  Their chances of a second term are not guaranteed, and judging by the public’s low opinion of National’s performance of the grounding of the m.v. Rena; the double credit-rating downgrades; the questionable veracity of the so-called Standard & Poors  “email”; and various promises made that have not been kept, John Key’s “teflon” image is definitely beginning to show signs of wear and tear.

And with the RWC behind us, and the public “partyed-out”, a return to politicking may be a welcomed diversion for many. Especially as people begin to focus on issues such as asset sales and the sales of farmland – both contentious and highly unpopular with the public.  In a way, the RWC may even strengthen opposition to asset/farm sales to foreigners.

After all, if we’re good enough to beat the world in rugby, then  why the dickens aren’t we good enough to hold on to our taongas?! Explain that, Dear Leader!!

On the other hand, though Labour leader Phil Goff has consistently polled lower than Key, his dogged determination to persevere and not fold under media scrutiny may actually earn him “brownie points” with the public.

Goff can wear the label of  “underdog” with real credibility. If Labour can play on this in a subtle manner, and show that Goff does not cave under pressure; that he keeps on like the proverbial ‘Energizer Bunny’ when all seems lost; and that he doesn’t rely on shallow charisma and meaningless smiles and utterances – he is in with a fighting chance.

God knows that lesser mortals would’ve probably chucked it in long before now, and call for a replacement from the “benches”.

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Another Horizon Poll has shown what many suspected would be the reaction from New Zealanders over the grounding of the m.v. Rena: that the government was slow of the mark and wasted precious time in delaying action,

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Source: Horizon Polls

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Taken in isolation, the grounding and response from government and statutory bodies would probably have raised no more than slight annoyance from the public.

But the grounding of the Rena is now the third major disaster this country has experienced; on top of the Pike River Mine explosions and the Christchurch earthquakes.

In both instances, central government made promises to locals that – in hindsight – may have been unrealistic at best, and irresponsible at worst. Public patience with the ever-smiling, waving, John Key may be wearing just a bit thin.

Then on top of all that, was the near-disaster of the Rugby World Cup’s opening night. The government had well and truly taken their collective eyes of the ball that night, and it is pure good luck that no one was seriously injured or killed in the mayhem.

Unrealistic promises and slow responses were only the beginning.

We also have the government intending to bring deep-sea oil drilling to our coastal waters. More than half the country by now must be asking themselves,

Just hang on a mo’, Mr Prime Minister! If we can barely cope with a single stranded freighter, sitting on the surface of the sea – how the heck are we going to cope with a major oil disaster that might be two or three times the depth of the Gulf of Mexico disaster?! Aside from hoping for good luck that nothing goes wrong, we’re not really prepared are we, Mr Key?

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To make things worse, is the disquieting suspicion that our de-regulated safety regime; lax building codes; and continual cutbacks to government workers are  contributing to a systematic running-down of essential services. Especially when even  emergency services are now starting to feel the blades of National’s  savage cuts,

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When the aspirational middle class Baby Boomers start to feel that their comfort zones are threatened, government politicians should take heed. That’s when we throw out governments. We don’t like our “comfort zones” upset. (It upsets our delicate tummies.)

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Now let’s really stir the political pot of discontent;   our youth seem to have re-discovered their own political power and realised that leaving matters to the Older Generation (us) may not achieve the outcomes they desire. God knows our generation has succeeded in wrecking the global economy; threatening the stability of the Eurozone; and bringing the once great super power that is the United States, to it’s knees.

Young folk have woken up to the world around them – and they are not very happy at what they find,

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The recent government interference in Student Union affairs (forcing voluntary unionism upon people who may not necessarily wish for it) should be a stark wake-up call to young people that National governments – far from being “hands off” and opposed to “nanny statish” behaviour – can be just as controlling as their counterparts allegedly were.

In fact, more so. After all, this “hands off” government did force almalgation on Aucklanders without any democratic referendum being conducted. National had no hesitation in passing legislation to ban cellphone usage whilst driving (but not banning  applying makeup or eating whilst driving). Then they lifted the driving age. And have begun liquor law reforms. And John Key is even now contemplating the ungodly “Nanny Statish” policy of making Kiwisaver compulsory!! Oh dear gods – whatever next?!

Oh, that’s right – National wanted to  extend Police powers to allow greater video surveillance in the community. (Which even ACT decided was a step too far.)

All in all, the gloss has worn away from this government, and it’s track record of the last three years cannot be dismissed with a smile and a wave, with a hollow promise chucked in for good measure.

And young New Zealanders are starting to flex their political muscle.

Not too bad, on top of winning the rugby world cup, eh?

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Tui Time!

Sent in by an astute reader,

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The irony of this billboard is that it is not a parody.  It’s a real billboard spotted on someone’s front lawn.

Obviously this particular hoarding-facing was designed before news that  government  borrowings have increased from $16.7 billion to June this year, to $18.4 billion to October this year.

Or that interest rates will most likely rise, due to credit downgrades by Fitch and Standard & Poors. And with an imminent announcement Moody’s – also likely to be a down-grade – expect your mortgage repayments to rise soon.

I suspect these particular billboards may come down very shortly. The embarresment factor may be somewhat irritating for the encumbent government.

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Acknowledgement

Thanks to ‘Sandman’  for sharing this image with us.

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John Key’s foot-in-mouth syndrome

16 October 2011 3 comments

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In Parliament last week (4 October), John Key quoted a mysterious, anonymous, “email” which he daid  “inferred”  that, “when Standard and Poor’s was giving a meeting in New Zealand about a month ago, what it did say was that there was about a 30 percent chance that we would be downgraded. That is what happens when one is on a negative outlook. It did go on to say, though, that if there was a change of Government, that downgrade would be much more likely.”

However, a quick glance at the official government website, the NZ Debt Management Office not only doesn’t support that claim – but actually shows the reverse: Labour  actually RATES BETTER than National/Rogernomics governments.

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[Click on image for full size version]

Source

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Note that three credit downgrades happened duting three National governments; 1991, 1998, and this year. And if you include the Rogernomics period – that makes FOUR neo-liberal governments that were downgraded.

Do credit ratings agencies  seem “risk averse” to new right governments? Do they prefer centre-left governments?

First, look at 10 September 1998 (National government) – AA+ (negative outlook)

But when Labour came to power – 7 March 2001 – AA+ (stable outlook)

Stable outlook?!

Nah, must be a mistake. Let’s have another look at a following period…

6 August 2008  (Labour Government) – AA+ (stable outlook) re-affirmed

“Reaffirmed”?!

Well, bugger me! It  rather does seem that credit agencies look favourably upon  centre-left government policies rather than centre-right administrations.

Whoda thunk?!

John Key – wrong again. It’s rather getting to be a habit with the ‘infallible’ Dear Leader.

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Reference Sources

Hansards – 1. Credit Rating Downgrade—Effect on New Zealand Economy

NZDMO – New Zealand Sovereign Credit Ratings

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