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Posts Tagged ‘Rob Muldoon’

Regret at dumping compulsory super – only 37 years too late

21 January 2013 22 comments

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It started with the 1975 election campaign,

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It’s consequences, 37 years later were,

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private sector debt 1988 - 2009 (% of GDP)

Source: Private-sector debt and factors affecting it

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Private debt shot up like an unguided missile, into stratospheric heights. There were no limitations on our private borrowings.

By comparison, up until 2008 (Global Financial Crisis), Crown debt has been falling,

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Treasury - government debt to gdp ration - june years

Source: NZ Economic Chart Pack – April 2012

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In the 1975 general elections, 763,136 voters decided the course of New Zealand’s social and economic history.

By electing Muldoon, under the manifestly unpredictable and unfair First Past the Post electoral system, Labour’s compulsory superannuation scheme was ditched the following year.

As a young lad in his first job, this blogger vividly recalls receiving a cheque from my then-employer, as a reimbursement of my previous super-contributions. I recall looking at the cheque and the pitifully tiny amount it was made out for.

I recall a feeling of disquiet…

Even as a teenager, barely politically conscious, I was uneasy that the scheme was being canned by Muldoon and wondering how we were going to pay for superannuation in the future. I was also  aware that bank mortgages were extremely hard to come by, as New Zealand had a low savings record. Businesses and industries competed with people seeking home-mortgages from banks.

A year later, I bought my first house and the experience was one I shan’t forget.  By 1978 mortgages were nigh-on impossible to obtain; vendors’ Second Mortgages were a necessity (where the house seller left part of the sale price as a Second Mortgage to the Purchaser); and interest rates were high.

New Zealanders simply weren’t saving enough.

Which is why, when the incoming (secretly right-wing Rogernomics-controlled) Labour government was elected into power, they de-regulated  New Zealand’s exchange rate and allowed overseas investment to flood into the country.

As a temporary, short-term “fix”, home ownership became easier. Second mortgages all but vanished. Interest rates dropped, as availability of finance met local demand.

On a long-term basis, the consequences created a rod for our economic backs.

Private borrowings from overseas skyrocketed, leading to ever spiralling-upward housing prices,

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total household liabilities 1978 - 2007

3.1 Trends in household liabilities
Total household liabilities have increased in both real and nominal terms. However, until 1990 the growth was moderate (Figure 1). Following the deregulation of financial markets, the growth of liabilities accelerated, and in the past five years has been driven by lower real interest rates and rising house prices.

Source: Debt in the aggregate balance sheet of households

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With no limit on the amount we could borrow from offshore lenders, there was no natural ‘cap’ on prices. That meant we could demand more for our properties and the banks would happily comply, and borrow more from China, Japan, America, or where-ever. The banks “clipped the ticket along the way, amassing billions in profits in the process (see:  ANZ profits up 17pc to $1.26b).

As the National Business Review reported in August 2010,

Last Wednesday Mr English bemoaned New Zealand’s debt problem, saying that in 2000 the country’s debt to the rest of the world was about $100 billion but now it was close to $180b, and forecast to hit $250b by 2014.

See: Key cautious over compulsory super

Essentially, we’re now chasing our own tails, borrowing more to buy more expensive houses; then on-selling at a “profit”; and borrowing more to buy higher-priced housing.

Gareth Morgan pointed out in May 2012, when he criticised the futility and destructiveness of property speculation,

“ So lubricated with the credit availability we all pile into the asset in unison and drive up its price. Hardly rocket science.”

See: House prices a cancer for the economy

Which led to the inevitable,

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Home-ownership falls dramatically

Full story

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And,

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Frustrated home buyers want investors to be discouraged

Full story

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It’s interesting to note that the above Herald story had an associated poll that yielded a rather telling result,

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Do you support a Capital Gains Tax on the sale of residential investment properties

See: IBID

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The 39% who responded with ‘No’ corresponds roughly with National’s core support.

The 15% who responded with “Yes, as long as it’s not too high” are those who will vote for whichever political Party best meets the needs of their wallets – and the long-term repercussions for the country be damned. They still want to profit from property speculation, so long as said speculation doesn’t push property prices beyond their own reach.

Those 44% who voted “Yes” indicate a growing maturity and understanding that everything has a consequence – including property speculation. These voters perhaps  understand that,

  1. The money has to come from somewhere – and it is coming from overseas lenders,
  2. High levels of borrowing are ultimately damaging to our sovereign credit rating
  3. Housing speculation is not just a giant legal pyramid scheme – but is harming the future of our own children, who then have to escape to Australia to be able to afford a home of their own

See: IBID

Again, as Gareth Morgan said last year,

This is the legacy of the last 30 years. And it has become so entrenched in our psyche that our ability to build businesses and create wealth and employment has been numbed.

A bit like growing your own veges or preserving the summer harvest, it’s a lost craft. The cost to incomes is high, the consequence being our GDP per capita continues to slip down the OECD charts.

As we contemplate economic recovery some thought at least should be given to the quality of the recovery we’d prefer – do we want it to be a housing-led one again where we all seek riches through a speculative race for property; do we want it to be a business-led type where jobs and incomes take priority; or do we really not care? Is it all too much to think about?

The sense one gets is that politicians at least couldn’t care less, just bring recovery on, any recovery.”

See: House prices a cancer for the economy

A further comparison;  Australia’s  superannuation scheme (also referred to as the Superannuation Guarantee) –  made compulsory in 1992 – has amassed savings of over $1 trillion dollars. In September 2010,

After more than a decade of compulsory contributions, Australian workers have over $1.28 trillion in superannuation assets. Australians now have more money invested in managed funds per capita than any other economy.”-  Source

Two years later, by September 2012,

Total estimated superannuation assets increased to $1.46 trillion in the September 2012 quarter. Over the 12 months to September 2012 there was a 13.0 per cent increase in total estimated superannuation assets.” – Source

No talk of  “nanny statism” here. Our Aussie cuzzies knuckled down; made hard decisions; and did the hard work. In 2006, the Sydney Morning Herald proudly proclaimed,

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Australia 'tops' in managed funds

Full story

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The Aussies have  earned the benefits.

By comparison the NZ superannuation Fund – begun in 2003 – made this announcement in October 2012,

New Zealand Super Fund breaks $20 billion mark; releases 2011/12 Annual Report

Posted On: Wednesday, 17 October 2012

The New Zealand Superannuation Fund reached an end-of-month record high of $20.08 billion in September.
The Fund, which commenced investing in 2003, was set up by the New Zealand Government to help pay for the increasing cost of universal superannuation. It is managed by the Guardians of New Zealand Superannuation.

See: New Zealand Super Fund breaks $20 billion mark; releases 2011/12 Annual Report

As for Kiwisaver, in the five years to June 2012, Kiwisaver has amassed  $12.9 billion in contributions.

See: IRD – KiwiSaver Annual Report 5

That’s around NZ$33 billion saved here in New Zealand – compared to A$1.46 trillion saved by our Aussie cuzzies.

By contrast, investment strategist and analyst, Brian Gaynor estimates that had New Zealand kept the Labour superannuation schemem it would be world approximately $240 billion dollars (See:  Brian Gaynor: How Muldoon threw away NZ’s wealth). As Gaynor explain,

Without this decision we would now be called “The Antipodean Tiger” and be the envy of the rest of the world. We would have a current account surplus, one of the lowest interest-rate structures in the world and would probably rank as one of the top five OECD economies.

We would still own ASB Bank, Bank of New Zealand and most of the other major companies now overseas-owned. Our entrepreneurs would have a plentiful supply of risk capital and would probably own a large number of Australian companies.

Most New Zealanders would face a comfortable retirement and would be the envy of their Australian peers. The Government would have a substantial Budget surplus and we would have one of the best educational and healthcare systems in the world.

See: IBID’

Never underestimate the capacity for some people to vote stupidly.

Meanwhile, here in New Zealand, we are only just waking up to the mistakes we made 37 years ago,

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Strong support for universal KiwiSaver

Full story

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Oh well, 37 years… rather late than never.

Which rather paints this current ‘government’ as a thing of the past; unwilling to learn from our historic mistakes; unwilling to learn from the Australian experience;  but willing to take the easy road; and playing Muldoon-style politics with our country’s future economic stability,

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John Key - We cannot afford KiwiSaver

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The question now is – have New Zealanders learnt enough history from 1975 to get rid of this inept, inward-looking government? Or will it be John Key – Muldoonism v.2 ?

As always, the choice is ours; a future of debt and under foreign ownership or “Antipodean Tiger” ?

National Party supporters – take note.

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bromheadhouse

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Previous related blogposts

Nanny State, Daddy State, poor state?

References

Horizon Poll: Strong support for universal KiwiSaver

Fairfax: Compulsory Super regret for most Kiwis

NZ Herald: Foreign ownership shortchanging locals

Reserve Bank: Dealing with debt

Treasury: NZ Economic Chart Pack – April 2012

Treasury: Private-sector debt and factors affecting it

Wikipedia: 1975 General Election

NZ Herald: Govt eyes blind to housing crisis

NZ Herald: House prices a cancer for the economy

National Business Review: Key cautious over compulsory super

Bay of Plenty Times: John Key: We cannot afford KiwiSaver

NZ Herald: Brian Gaynor: How Muldoon threw away NZ’s wealth

Update

Radio NZ: NZ housing ‘seriously unaffordable’

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David Parker has nailed it 100%

14 March 2012 1 comment

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This media report is worth reprinting in it’s entirety. Because, quite simply, David Parker is 100% on the nail on this issue,

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National’s neglectful attitude to lifting our savings rate is something New Zealand can ill afford, Labour’s Finance spokesperson David Parker says.

“Bill English might believe Kiwis have been ‘scared’ into saving by the global recession and won’t return to borrowing as the economy grows, but he’s obviously got blinkers on.

“The economic settings that led to excessive borrowing are still in place – speculation in housing and farmland for capital gain still attracts a tax advantage and National’s policies have made Kiwisaver less attractive,” David Parker said.

“Unless real policy changes are made New Zealand will just go back to borrowing too much and saving too little when the economy eventually recovers.

“The Australians, who already have a universal workplace savings scheme, are increasing the savings rate to 12 per cent, up from nine per cen. The government there knows that once the recession is over behaviour will return to type unless it makes the changes that are needed.

“Treasury forecasts show Mr English’s blind faith is misguided. It projects that every year, under National’s policies, the country will run a current account deficit and increase its international debt.

“By 2016, New Zealand will owe nearly $200 billion in net overseas debt, up $50 billion from today.

“And the main driver of that debt spiral is a lack of domestic savings, with banks and businesses borrowing from offshore or selling assets to foreign investors.

“This leads to some $10 billion a year flowing offshore in profits, the main contributor to our current account deficit, which is then funded by further borrowing and asset sales.

“The government needs to break the cycle with policies that ensure New Zealand permanently lifts its savings level. By not doing so it shows once again its unwillingness to deal with the structural problems in the economy,” David Parker said.

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Our Aussie cuzzies have approximately A$1.31 trillion saved in their compulsory super fund.,

Industry Overview

Total estimated superannuation assets increased to $1.31 trillion in the December 2011 quarter. Over the 12 months to December 2011 there was a 1.2 per cent increase in total estimated superannuation assets.” – Source

The clever buggers realised back in 1992 that a nation cannot be sovereign and self-sufficient if it has no savings, and has to rely on overseas borrowings.

We had our opportunity for a compulsory super fund in the 1970s, with a programme that was introduced by the Norman Kirk-led Labour government.

Unfortunately, Rob Muldoon promised to can the Fund and return the money to each contributor – if we voted for National in 1975. Well, we took the bait; voted National; Muldoon fulfilled his “promise”; and now New Zealand’s  “private-sector debt at 30 June 2010 was $315 billion and 166% of GDP“.

New Zealand First and Labour’s policy of a compulsory super fund makes good economic and social common-sense.

Unfortunately,  New Zealanders aren’t terribly good at making good economic and social common-sense decisions.

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Additional

Key: Private sector debt NZ’s biggest concern

Government debt rises to $71.6 billion

Treasury:  Private-sector debt and factors affecting it

Who says the Govt doesn’t have a plan?

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Nanny State, Daddy State, poor state?

20 October 2011 1 comment

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Full Story

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National intends to sign up all workers?

Isn’t that… compulsion?

Isn’t that… “Nanny Statism“?

Isn’t that what National complained so bitterly about in 2008, promising to undo the dreaded tentacles of Nanny State?!

Well, let’s see…

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Source

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Source

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Perhaps I’m being unfair on National.  Calling them hypocrites on “Nanny Statism” may be unwarranted.  After all, National voted against the Repeal of Section 59 (“anti-smacking legislation), right? They voted against the Green Party initiative, right?

The legislation also carries an amendment agreed earlier by Prime Minister Helen Clark and National leader John Key that says the police have the discretion not to prosecute complaints against a parent where the offence is considered to be inconsequential.”  Source

Oh, no! National did vote for the Repeal of Section 59!!

It seems apparent that the term “Nanny State” was nothing more than a very clever election “bogey”, designed to paint Labour as some kind of authoritarian Party that loves to do nothing but micro-manage our lives.  It was a clever ploy, and it certainly played it’s part in helping to defeat Labour in 2008.

But as with the banning of using cellphones whilst driving or launching a “Food in Schools” programme, National is not averse to legislation to enforce “social-engineering” policy.

Their change-of-heart in regards to Kiwisaver may be viewed as  a further step into so-called “Nanny State” heartland. But, like other changes to the way in which we organise our society and manage our economy, it is a necessity which we cannot do without.

Some folk may jump up and down and whinge till the cows come home, that compulsory enrollment is a violation of their right to exercise choice; that it is not necessary; etc, etc.

Well, newsflash, my dear fellow Kiwis – it is necessary, and it is long overdue. The spend-up we’ve been having has been financed through massive borrowings from overseas – and the credit agencies have taken notice of our borrow & spend habits.

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Source

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Much of our debt is private debt – fuelling our housing bubble – and based on other peoples’  savings. Very little of it goes into the productive sector. In effect, the property speculation is based on borrowed money.

And the party, people, is rapidly coming to an end.

Kiwisaver will do for New Zealand what Australia’s compulsory super-scheme did for that country:  save.

Australia has amassed savings of over $1 trillion dollars,

After more than a decade of compulsory contributions, Australian workers have over $1.28 trillion in superannuation assets. Australians now have more money invested in managed funds per capita than any other economy.” Source

It is little wonder that Australia is a wealthier society than New Zealand. Their superannuation savings scheme – compulsory since 1992 – has meant that Australians do not rely on foreign capital to the same extent that we do, here in NZ.

By contrast, New Zealanders voted away a compulsory savings scheme in 1975, when we voted for Robert Muldoon and his National Government. His (in)famous “Dancing Cossacks” election ad was sufficient to “spook”  us – as was a certain measure of self-interest. We simply didn’t want to save for our future if we could get away with it. And Muldoon was only too happy to be elected into power and oblige us.

The current National Government – a different creature from the one in the 1970s – understands the sheer necessity to wean us off foreign borrowings. That is why they  belatedly support Kiwisaver after initially condemning it when they were in Opposition.

However,  it seems that Key and English haven’t quite got the stomach and cojones to make Kiwisaver compulsory, as in Australia. They will be offering an “opt out” clause to voters.

I guess they don’t want to be devoured by that mythical beast they created, the dreaded Nanny State.

Daddy State will have to do.

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Additional information

Dancing Cossacks anti Labour party political TV ad

Superannuation in Australia

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Evidently it’s a “balancing act”?

19 October 2011 2 comments

The latest “vacant optimism” from John Key,

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Full Story

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Answering queries about offshore drilling, Key said it was a “balancing act” between business and the environment.”

“Balancing act”? Jeez, has this man learnt nothing from the last couple of weeks???

Is this man for real?

New Zealand  is hit with the worst environmental disaster since Whenever, and John Key maintains an equanity stating that “we need to protect the environment as much as we can but not to the point where we do absolutely nothing. This is a tragedy that’s occurred of no fault of any New Zealander –  this is a boat that’s run aground and accidents do happen whether they’re on land or on sea or on the air.”

Well, excuse me, Mr Kiey – but the explosion that blew apart the Deepwater Horizon rig in the Gulf of Mexico in April last year, killing 11 men, and spewing 4.9 million barrels (780,000 m3) of crude oil into thre Gulf Of Mexico – was also no doubt an accident.

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Of course accidents happen. Only a fool denies that. But it takes a wise person to weigh the risks and arrive at a sensible conclusion. In this case, it seems blatantly obvious that (a) New Zealand could not handle the grounding of one single freighter, the “Rena”  (b) cannot extract 1700 tonnes of oil and 200 tonnes of diesel  (c) has had 300+ tonnes of oil leak into the sea, and (d) more may end up in the sea, as the ship eventually breaks up.

So the multi-billion dollar disaster of the Gulf of Mexico should serve as a very loud warning to us all: we have no way of dealing with a really bad oil spill.

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The “Rena”  was one ship; on the surface; run aground; with a (relatively) small quantity of oil aboard.

Now imagine an oil rig blowing apart, as the Deepwater Horizon did last year, spewing millions of tonnes of oil into our coastal waters, as happened in the Gulf of Mexico.

Now let’s re-read John Key’s statement; “we need to protect the environment as much as we can but not to the point where we do absolutely nothing. This is a tragedy that’s occurred of no fault of any New Zealander –  this is a boat that’s run aground and accidents do happen whether they’re on land or on sea or on the air.”

Is the man clueless or what?!

Just to remind us all what is at stake,

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Containers from the 47,230 tonne Liberian-flagged Rena float next to it after falling from the deck, about 12 nautical miles (22 km) from Tauranga, on the east coast of New Zealand's North Island October 12, 2011, a week after hitting the Astrolabe Reef. The captain of the Rena has appeared this morning in the Tauranga District Court over the incident and has been remanded on bail, and about 70 containers fell from the vessel amid heavy seas last night, according to Maritime New Zealand.

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A volunteer removes thick fuel-oil from the stricken container ship Rena washed up on beaches at Papamoa, near Tauranga October 12, 2011. The 47,230-tonne Liberian-flagged Rena has been stranded on a reef 12 nautical miles off Tauranga on the east coast of New Zealand's North Island since running aground a week ago and authorities estimated 300 tonnes of oil have escaped from the ship, causing the country's worst environmental disaster in decades.

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Volunteers remove thick fuel-oil from the stricken container ship Rena washed up on beaches at Papamoa, near Tauranga October 12, 2011. The 47,230-tonne Liberian-flagged Rena has been stranded on a reef 12 nautical miles off Tauranga on the east coast of New Zealand's North Island since running aground a week ago and authorities estimated 300 tonnes of oil have escaped from the ship, causing the country's worst environmental disaster in decades.

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Conservation officials remove dead seabirds as thick fuel-oil from the stricken container ship Rena fouls beaches at Papamoa, near Tauranga October 12, 2011. The 47,230-tonne Liberian-flagged Rena has been stranded on a reef 12 nautical miles off Tauranga on the east coast of New Zealand's North Island since running aground a week ago and authorities estimated 300 tonnes of oil have escaped from the ship, causing the country's worst environmental disaster in decades.

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A volunteer looks at dead seabirds on the shore as thick fuel-oil from the stricken container ship Rena fouls beaches at Papamoa, near Tauranga October 12, 2011. The 47,230-tonne Liberian-flagged Rena has been stranded on a reef 12 nautical miles off Tauranga on the east coast of New Zealand's North Island since running aground a week ago and authorities estimated 300 tonnes of oil have escaped from the ship, causing the country's worst environmental disaster in decades.

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Conservation officials remove dead seabirds as thick fuel-oil from the stricken container ship Rena fouls beaches at Papamoa, near Tauranga October 12, 2011. The 47,230-tonne Liberian-flagged Rena has been stranded on a reef 12 nautical miles off Tauranga on the east coast of New Zealand's North Island since running aground a week ago and authorities estimated 300 tonnes of oil have escaped from the ship, causing the country's worst environmental disaster in decades.

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A volunteer removes fuel oil from the stricken container ship Rena that washed up on beaches at Papamoa, near Tauranga October 12, 2011. The 47,230-tonne Liberian-flagged Rena has been stranded on a reef 12 nautical miles off Tauranga on the east coast of New Zealand's North Island since running aground last week. Authorities said up to 300 tonnes of the ship's 1,700 tonnes of heavy fuel oil had already escaped, causing the country's worst environmental disaster in decades.

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Conservation officials search for dead and injured seabirds as thick fuel-oil from the stricken container ship Rena fouls beaches at Papamoa, near Tauranga October 12, 2011. The 47,230-tonne Liberian-flagged Rena has been stranded on a reef 12 nautical miles off Tauranga on the east coast of New Zealand's North Island since running aground a week ago and authorities estimated 300 tonnes of oil have escaped from the ship, causing the country's worst environmental disaster in decades.

Source

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The unfortunate aspect to National’s plans to allow deep sea oil drilling is that governments come-and-go.  But the effects of their actions live on for years and decades.  Rob Muldoon’s canning of  Labour’s superannuation scheme n 1975 and the ‘Think Big’ projects, and Roger Douglas’s so-called “reforms” are but a few well-known examples.

Long after John Key has vacated Parliament, deep sea drilling rigs will pose an ongoing risk to our coastal waters and environment. This is simply not acceptable.

It is up to New Zealanders to call a halt to such madness when they enter the Ballot Booth on 26 November.

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Additional information

The Gulf of Mexico Oil Spill by the Numbers

Wikipedia List of oil spills

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It’s official – National is a poor manager of the Economy.

4 October 2011 1 comment

It’s official – National (and Labour under Rogernomics) was, and remains,  a poor manager of the economy. Treasury and international credit agencies back this up with their data.

Firstly, Treasury data of recent New Zealand history reaching back to Rob Muldoon’s administration show that credit agencies inevitably downgrade our sovereign credit rating whenever National is in office. The only exception to this is when Labour was in power – during it’s Rogernomics era.

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Source

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New Zealand’s sovereign credit rating is important because it affects the interest rate at which we borrow money from overseas. The lower the credit rating, the higher the interest we pay as we pose a higher degree of risk to lenders. (Although,  as has been pointed out by one commentator on Radio NZ, New Zealand has never defaulted on a loan repayment yet.)

The money that government borrows (sovereign debt) or that bank’s borrow (private sector debt) is all taken into consideration by overseas lenders.

It is worth noting the critical importance that governments place on sovereign credit ratings. Two years ago, John Key and Bill  English reminded us as to the significance of New Zealand’s credit rating,

Our primary focus for this Budget is to avoid a credit rating downgrade because we think that would add about 1.5% to mortgages for New Zealand homeowners.” – John Key,  May 2009. Source.

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 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. ”  – John Key,  May 2009. Source.

The No. 1 way to see New Zealanders down the road from their jobs is if their businesses cannot be funded. That is what happens when we have a credit downgrade, and that is what we would have had under a Labour Government.”  – John Key, June 2009. Source.

And as early as March this year, Finance Minister Bill English said,

There is no doubt that a credit downgrade would generally lead to somewhat higher interest rates.” – Bill English, March 2011. Source.

When a credit downgrade was averted in 2009, John Key was very quick to take the credit,

If I just look at our debt track and I compare that to the OECD debt track for other countries for 2012/2013 year, we have got a substantially lower debt exposure than most other countries.” – John Key, May 2009. Source.

Yet, on Radio NZ today he stated,

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Source

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Note the Prime Ministers comments,

“”With the greatest respect, I’m not responsible for what happens in Europe and the United States, nor technically was I in government when there was the enormous build-up in private sector debt.”

Instead, Mr Key says an increase in private sector debt when Labour was government has helped contribute to the downgrade. ” – John Key, 4 October 2011.

So in 2009 we “have got a substantially lower debt exposure than most other countries” – but only two years later we have “an increase in private sector debt when Labour was government “.

It seems that Mr Key is confused about our debt levels?

As for refusing to take responsibility for our credit down-grade – we might overlook that once. But how many times has New Zealand been downgraded when National was in office?

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New Zealand's foreign currency credit rating history - National's track record in downgrades.

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Standard & Poors have downgraded New Zealand’s credit rating three times during National governments; 1991, 1998, and this year.

Moody’s downgraded NZ in 1998 (National government).

Fitch, once, five days ago.

As an aside, both Moody’s and Standard & Poors downgraded NZ  during the neo-liberal reforms of Roger Douglas, in the mid-late 1980s.

It seems that credit agencies view neo-liberal economic policies as risky.

By contrast, Labour’s tenure of government was positively rated or upgraded by the three agencies.

All this makes a mockery of  National’s claims as being a “prudent fiscal manager” of the country’s economy. They are nothing of the sort. The verdict of credit agencies is clear: National is a poor manager of the economy.

This, of course, many of us new already.

There is a high degree of irony in this whole affair. National clearly refuses to accept any degree of responsibility for New Zealand’s credit downgrade. Yet, they are the government. They are the ones in charge. They pass laws and make policies that affect every single New Zealander.

Refusing to accept responsibility is poor form. Especially when, on February 17th, John Key made this observation about welfare recipients,

“”But it is also true that anyone on a benefit actually has a lifestyle choice. If one budgets properly, one can pay one’s bills.

“And that is true because the bulk of New Zealanders on a benefit do actually pay for food, their rent and other things. Now some make poor choices and they don’t have money left.“” Source

So welfare recipients are expected to be responsible for their actions.

But National Governments are not.

Is that how things work in John Key Land?

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Additional Reading

Reserve Bank – Household Debt

Treasury – Private-sector debt and factors affecting it

Moody’s credit rating definitions

Standard & Poors definitions

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