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Govt operating deficit NZ$10.5 bln in June year; NZ$800 mln provision made for deposit guarantee (Update 3)
October 14th, 2009
Reduced revenue, increased expenses, and losses recorded in the year to June 30, 2009 have resulted in an operating deficit of $10.5 billion for the New Zealand government, Treasury said today. (Update 3 with more on guarantee provisions.)
The NZ$10.5 billion deficit was the largest ever recorded by the Crown. It compared to a forecast deficit of NZ$9.3 billion at the time of the 2009 budget in May and a surplus of NZ$2.4 billion recorded last year.
The government’s accounts for the year included a provision of NZ$816 million for further defaults under the deposit guarantee scheme by institutions that hold less than NZ$5 billion in deposits. Defaults up until now have been covered by revenue earned through the scheme’s fees.
Finance Minister Bill English said tax revenue was down NZ$2 billion from last year as profits declined and tax cuts took effect. The tax take was down by approximately NZ$3 billion, but this was offset by the ’structured finance transaction’ cases the IRD was fighting with the major banks in the High court.
“Based on a High Court ruling for one structured finance case, all similar structured finance assessments have been recognised as revenue in the 2009 financial year (NZ$1.4 billion),” Treasury said. The one case involved BNZ, which is appealing the ruling. The High court also ruled in favour of the IRD in a similar case against Westpac earlier this month.
“At the same time, core government expenses have increased sharply, by NZ$7 billion in the past year,” English said.
“This is in part due to the greater costs of providing welfare benefits and health and education services. It also reflects a recognition that future repayments of taxes and student loans will be later and, in some cases, less than originally estimated,” he said.
“The value of our large investment portfolios held in the New Zealand Superannuation Fund and the Accident Compensation Corporation has declined while our borrowings and long term liabilities have increased.”
The superannuation fund (or Cullen fund as it is widely known) reported an operating deficit of NZ$2.8 billion for the year.
English said the accounts included a provisions for further default actions under the government’s deposit guarantee scheme of just over NZ$800 million.
“The deposit guarantee schemes, a direct result of the emerging international financial crisis, were introduced to retain confidence in New Zealand’s financial sector. While these schemes have been successful in meeting that objective, they have come with some cost,” he said.
“To date the expected losses from entities in default have been covered by the revenue generated by the schemes. However, risk assessments carried out at 30 June estimated the likelihood of further default actions at just over $800 million, which has been provided for in these accounts.”
Here are further comments from Treasury on the large provision (note 30, pg 118 in the accounts below). The provision has been made entirely for institutions that hold less than NZ$5 billion in deposits. A provision has been made both when guarantees have been triggered and to provide for losses that are more likely than not to occur, Treasury said.
The provision was made on the basis of the scheme ending on October 12, 2010 (which it would have done at June 30, 2009). However, Treasury said the decision to extend the scheme until the end of 2011 would be unlikely to significantly impact the amount of the provision:
As at 30 June 2009, 73 financial institutions had joined the scheme and deposits totalling $124.2 billion had been guaranteed. This is the maximum exposure and does not include any offset resulting from the recovery of the remaining assets of the financial institution in the event the guarantee is called upon.
The Crown assesses the potential loss to be associated with the entities that hold significant deposits (ie, greater than $5 billion) as being remote. It is recognising the revenue received from these institutions over the guarantee period and has made no provision for any loss associated with these entities.
For other entities within the scheme (ie, entities that hold deposits less than $5 billion) a provision has been made both when guarantees have been triggered and to provide for losses that are more likely than not to occur. Guarantees have been triggered for two entities and the estimated cost of $34 million associated with these guarantees has been included in the statement of financial performance.
The Crown also continually updates the likelihood of further default actions triggering the guarantee and assesses the expected loss given default. Based on these assessments, the Crown has provided for $816 million as at 30 June 2009 for future payments under this scheme.
The provision has been made applying the assumption that the Retail Deposit Guarantee Scheme will finish in October 2010, the policy position as at 30 June 2009. The policy decision to extend and amend the Retail Deposit Guarantee Scheme announced on Tuesday 25 August 2009 represents a change in conditions that arose after the reporting period, it has not led to an adjustment of the provision. This decision would however be unlikely to significantly impact the amount of the provision.
While the provision represents a best estimate of likely loss, a significant range of outcomes are possible under the scheme in terms of which entities may default and the eventual loss to the Crown following an event of default. This reflects the significant uncertainty as to the value that can be realised from an entity’s assets following an event of default. Except as provided on the Treasury web site, further information on the Retail Deposit Guarantee Scheme cannot be provided due to commercial sensitivity.
Treasury said that for the first time since 1999 the net worth of the Crown declined.
Here are Treasury’s comments on the government’s financial year:
Both the recession and past policy decisions have had a significant effect on the Crown’s fiscal position …
The recent recession has resulted in both decreases in revenue and increases in expenses. In comparison to the previous year, the major impacts are as follows:
• declining corporate and individual profits and interest rates have reduced tax revenue
• the introduction of the retail guarantee scheme in relation to financial institution deposits has resulted in an estimated cost to the Crown of $0.8 billion in the current year
• the value of the Crown’s tax receivable and student loan assets have declined as future recovery of monies is predicted to be less or later than previously estimated
• significant losses have been sustained in a number of the Crown’s investment portfolios. In particular the New Zealand Superannuation Fund (NZS Fund) reported an operating deficit of $2.8 billion for the year, and
• unemployment benefit expenses increased by $0.1 billion from $0.5 billion last year to $0.6 billion this year.
A number of current policies have also had an impact on the result when compared to the previous year:
• personal and corporate tax cuts, along with the introduction of measures to help small and medium-sized enterprises, have reduced tax revenue by approximately $3 billion
• additional spending announced in the 2008 Budget Economic and Fiscal Update (particularly in the areas of health and education) have contributed to an increase in expenses
• the annual inflation-indexation of welfare benefit payments, along with beneficiary growth in areas such as New Zealand superannuation, were contributing factors to an increase in social security and welfare expenses of approximately $1.4 billion (excluding unemployment benefits)
• the purchase of KiwiRail (in July 2008) resulted in a write-down of $0.3 billion, and
• the value of the Accident Compensation Corporation (ACC) claims liability increased by $5.8 billion since last year1. A large portion of this increase resulted from the 30 June 2009 actuarial valuation (an actuarial loss of $4.5 billion was recorded). Significant factors in this actuarial loss were increases in predicted medical and rehabilitation costs along with a decrease in the discount rate used to calculate the present value of expected payments.
… however, this has been partially offset by some one-off revenue …
The decline in tax revenue was partially offset by recognition of tax revenue in relation to the tax treatment of certain structured finance transactions. Based on a High Court ruling for one structured finance case, all similar structured finance assessments have been recognised as revenue in the 2009 financial year ($1.4 billion).
… resulting in an operating deficit …
Reduced revenue, increased expenses, and losses recorded this year have resulted in an operating deficit of $10.5 billion. This compares to a 2009 Budget forecast deficit of $9.3 billion and a surplus of $2.4 billion last year.
… and cash deficits which must be funded by an increase in debt…
The lower revenue and higher expenses have resulted in a residual cash deficit of $8.6 billion. This deficit has been funded by an increase in net debt. As a result net debt rose during the year by $6.9 billion to $17.1 billion (9.5% of GDP).
… and a reduction in the Crown’s net worth.
The operating deficit is the main contributor to a decline in net worth from $105.5 billion last year to $99.5 billion as at 30 June 2009.
Here are the government accounts for the year ended June 30 2009. We welcome readers’ insights and comments on them.
Tags: bill english, Treasury
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October 14th, 2009 at 3:06 pm
The cash deficit is only 5% of GDP. Not so long ago, that was normal.
October 14th, 2009 at 3:49 pm
Um..10 billion..not great.
I wondered how this compared to the US deficit (in nominal not in GDP terms).
On the basis of a deficit of between 1,600 and 1,800 billion the US federal fiscal deficit is between 160 and 180 times bigger (in US$ terms not GDP). I think people find the US deficit so scary because they can’t see any prospect of it closing much at all for as far as the eye can see.
October 14th, 2009 at 3:58 pm
Here comes the raises in income tax and GST rates!
October 14th, 2009 at 3:59 pm
@Marky – Is it necessary to compare how bad others perform while we are unable to clean our own backyard? Why can’t we compare how well others perform instead?
October 14th, 2009 at 4:08 pm
The Govt guarantee of finance companies is very unfair on the taxpayer. It encourages people to invest back in Finance companies who promise unrealistic returns then when the company goes belly up the tax payer has to bail them out!
October 14th, 2009 at 5:04 pm
It’s all ok folks, we can borrow the $40B, overseas are still ok with lending to us, nothing to see here – yeah right.
Think of borrowing overseas as asset sales to overseas that will inevitably follow. Anyone remember the early eighties after Muldoom. Anyone cast an eye at England in the last week.
October 14th, 2009 at 5:12 pm
@Grandy,
I know what you mean – it’s no excuse to say that others are worse. But I suppose its just that as they say “comparisons are odious”. Although there may be more utility in comparing ourselves to those performing better it’s more depressing also.
We always compare ourselves to Australia and come off second best every time. Given that Australia really does seem to be “the Lucky country” I think it can be a bit misleading.
October 14th, 2009 at 5:46 pm
@Marky,
Thanks for being understanding. No offence at all. It am just too tired about some who would quote those performing worse than us, and perhaps to make us feel better or what? So, it goes that we are not as bad as…etc …? Why is that so, really?
But, many a time, not many would quote those doing better than us so that we could learn from them. Instead, it is common to argue that they are better because they are different in this and that etc… Do you agree? How to change for the better?
October 14th, 2009 at 6:26 pm
It makes no sense borrowing money to cut taxes, also how can govt expenses go up by 7 Billion in one year, a lot of over paid consultants are creaming it I think, time for some slashing and burning.
October 14th, 2009 at 7:14 pm
Page 14
Expenses 2008 to 2009
Social Security 1,505 8%
Health 1,071 9%
Education 1,904 20%
Core services 1,922 57%
Other Core 603 4%
SOE’s etc 974 5%
Total 7,979 11%
October 14th, 2009 at 7:23 pm
Doesn’t post tables very well.
Above is increase in Billions and % increase from 2008 to 2009
October 14th, 2009 at 9:51 pm
Anyone thought about slashing government spending?
Come on…really….
October 14th, 2009 at 10:14 pm
Browsing through some of the comments on this site tonight leaves one really with a bad feeling. But apparently its ok because we are better than most other countries.It sort of looks like a crisis which Bill English says we’ll take 20 years to recover from. This statement must be scary for us when coming from a man in this postion. Naturally I immediately thought wow how old will I be when things come right.Do you think he’s
just joking. We must be on a slippery bannana skin though if the taxpayers possibly
yet have to bail out badly managed finance companies. I ask myself so do we borrow to do this? And I ask myself why do we need finance companies?I think the answer is they are a sort of 2nd teir lending facility lending to operations that the parent bank find too risky! I’m sorry but where’s the light at the of the tunnel please?
October 14th, 2009 at 10:20 pm
In every post I make, Kate. But we are a nation of slaves, who only know the freedom of the slave, apparently. Nanny rules … God I’m sick and tired of it.
October 14th, 2009 at 10:23 pm
Cactus Kate:
Of course. But total government expenses (excluding losses) are only $84 billion annually, or up $15 billion over two years.
And there is only $18 billion of personnel costs – up $2.8 billion over two years.
Total liabilities are a concern though at $118 billion, and how property, plant and equipment have gone up in value so much in the last year confounds me.
Just a wee problem in that total revenue is under $80 billion and dropping.
October 14th, 2009 at 10:28 pm
No Peter, the problem is there are 1.8 people in the private sector working, and having tax extorted from them to pay the wages of public servants, or benefits, of 1.7 people.
Ludicrous and sick. The ultimate ignoble theft state. And Bill English is ‘the’ example of it.
October 14th, 2009 at 10:38 pm
Didn’t we hear about cutting government spending by the Nats before the election.
They are riding so high in the polls and have become totally self-centered. Very conveniently they have forgotten what their principles are. I think it was GK Chesterton who wrote:
“The whole modern world has divided itself into Conservatives and Progressives.
The business of Progressives is to go on making mistakes.
The business of the Conservatives is to prevent the mistakes from being corrected.” – ILN, 4/19/24
October 14th, 2009 at 10:48 pm
National’s principles Sally. Yes, limited government wasn’t it?
English’s first budget where he increased the size of the State, didn’t even tinker with the rort that is Working for Families, and proclaimed to all and non working sundry that their ‘entitlements’ to my money was sacrosanct showed what this National Government is all about: socialism.
And where is ACT. Disappeared on the dance floor.
Libertarianz conference this weekend, I reckon they’re the best place for a vote.
October 14th, 2009 at 10:48 pm
PeterR, Mark is absolutely correct. The quote I picked up today says it all.
“[No society can survive the socialist] fallacy that there is an absolutely unlimited number of inspired officials and an absolutely unlimited amount of money to pay them.” – The Debate with Bertrand Russell, BBC Magazine, 11/27/35
October 14th, 2009 at 10:49 pm
I think the govt is doing the classic ploy all new management do, write off everything you can and blame it on the previous managers.
The 10.5 has
6.5 of devaluations of investments (super fund, ACC, Govt pensions)
0.8 provision for finance firms
0.3 write off of rail.
The first 2 could easily reverse next year.
Most Government accounts dont include these unrealised loses. The 3.5 billion is what you compare with the USA deficit.
October 14th, 2009 at 11:02 pm
@paul –
you ask a good question, where’s the light at the end of the tunnel please?
Maybe, the light and green shoots are in the news reported every now and then. Retail is doing better than expected, house sales and prices are rising (net migration is higher with low interest rate), confidence level is gaining ground, jobless claims have dropped, people are more confident, and with high Kiwi dollars – imported goods, petrol are getting cheaper and travelling overseas become cheaper with strong Kiwi dollar and the list goes on…..
But, I am with you over the same question still.
October 15th, 2009 at 8:37 am
Being a baby boomer we have been thru several resessions, as children and working adults with a family…
We are not high income, just ordinary kiwis…
Yet every time when the country has been in bad shape, it has had little or no effect…
(other than “this yrs holiday way will be a bit more modest”)
We have had good work ethics, work hard, have a modest lifestyle, pay cash for things, always have had over a 30% equity in what we own..
Once again we see very little or no decline in our lifestyle…
So from a personal level, what is the big deal???
October 15th, 2009 at 9:09 am
Well Steps, you can argue that at the personal level, things are pretty much the same but I see it differently. Do you encourage your children to become real estate agents, property valuers and bank staff fodder, or scientists and engineers? The pathway the govt is tar sealing for them, is certainly not in the science and engineering direction. Our currency is one of the ‘blackjack’ options on the world gambling table which would please Key no end. The economy is no better than a property gambling option in the same casino. That is where our stupid govts have managed to place us. A population that really does believe wealth is derived from repetitive property deals in the same neighbourhood.
October 15th, 2009 at 9:17 am
Would I be wrong to observe that government actually looks quite prudent in comparison with NZ household (i.e. private sector debt) when it comes to balance sheet accounting?
October 15th, 2009 at 9:26 am
the company i work for is in bad finanical shape, i told my boss “But we are not in as bad shape as some of the others out there”, he told me “lit might be best for all if you look for another job”.
October 15th, 2009 at 9:30 am
That was then Kate, this is now and English is covering the pages with red ink. Actually red ink might be a growth industry. The govt ‘balance sheet’ is set to get progressively sicker until it matches the household corpse in the debtors morgue.
October 15th, 2009 at 9:50 am
@G – “But we are not in as bad shape as some of the others out there”, he told me…..
Hi G – That saying is too common. Do you agree?
October 15th, 2009 at 10:00 am
@ Steptoe – You are absolutely right. For those of us who are hard working typical Kiwis, there is no big deal at all. The ones who feel it are the ones leveraged to the hill and make crappy financial decisions. Those of us who have good work ethics and work hard don’t have issues finding work.
@G Says: lit might be best for all if you look for another job” – LOL what does that tell you?
The govt deficit this year is not really a big deal. If you look at the debt statistics on the RBNZ website, you will see that official govt debt has not actually changed much in the last 9 years. The corporate sector debt has been stealily increasing from $100bl in 2000 to $235bl in 2009, however it has dropped by 13bl from Mar to Jun this year!
October 15th, 2009 at 10:10 am
Top line is an issue – Will the government admit that they milked our productive cows completely dry. Over the last 10 years we have grossly over-taxed our productive sector (particularly our companies and individuals in the $70k to $120k range) to the extent that they have voted with their feet and moved to the sand pit across the ditch, leaving an unsustainable level of govt employees and beneficiaries gouging themselves on a ever dwindling dish of milk. This trend is self-perpetuating and will continue as the gap with Aussie continues to widen and the exodus of our productive sector continues.
Looking at the balance sheet of the NZ government and the NZ private sector (particularly households and farms) I think the time is ripe for a bit of M&A activity. We arn’t yet comletely in terminal decline so while we still have an ounce of bargining power, should we turn to the Aussies and ask them to take us over (i.e. become of state of Aussie). Or should we wait until the Chinese pick us up at bargin basement prices?
October 15th, 2009 at 10:21 am
Wally, oh for the good ‘ol days of Michael and his surpluses, eh? But, as he kept telling everyone – they weren’t ‘real’ surpluses, just balance sheet entries for unrealised capital gains. And the general population screamed “rubbish – give us our tax cuts you miserly so and so”.
Now that we have ‘real’ deficits, largely due to balance sheet entries for unrealised capital losses, the general population still screams “rubbish – we want more tax cuts you over-spending so and so”.
Government spending doesn’t worry me anywhere near as much as government policy – and I am in full agreement with you that (so far) that policy isn’t painting a good picture with respect to our productive (i.e. the productivity improvements that will be realised due to science and engineering) sectors.
I am firmly of the opinion that if we want to reverse the trend of increasing welfare dependency within the post-boomer generation, then we need to re-introduce subsidised apprenticeship schemes – we need to give the productive sector the incentive to take on and train staff.
The ‘fools gold’ of the neo-liberal ideology envisioned the provision of such new learning to be taken over by the privatisation of education. But the reality served to transfer the service provision from private employers to a burgeoning subsidised education sector accompanied by a massive student debt. And that debt has produced a great swag of new learning that the private sector employers didn’t need or want in many cases.
Although an exaggeration, we have ended up with an over-qualified hotelier class… I mean how much student debt for example, was spent on the travel, tourism, hospitality, adventure tourism, and other such attractively dressed-up qualifications? Was anything other than on-the-job training needed in terms of this employment sector?
October 15th, 2009 at 10:31 am
NZ and its two govts 07/09 has come through all this surprisingly well.
The US may have dropped us all in it, but it sure as hell is going to suffer for dragging us all out of it. The forward numbers for the US are scary, but no worse than WW2. And look what happened after that! 20 years of unprecedented growth.
Really the NZ political scrapping is just that. Cullen handled things prudently, and fortunately resisted calls for tax cuts when the economy was booming. English has erred on the conservative side with the Super Fund cuts, but again policy could have been much worse.
The sort of cuts in govt spending called for by the rabid right are adrift from reality.
NZ scores highly on a whole raft of business measures. Lack of performance and productivity are not a result of over-regulation. The recent bank tax cases, and the Crafar fiasco, both demonstrate that regulation is too lax if anything.
What is really lacking is some sort of encouragement for the ‘knowledge economy’. This applies especially in agriculture. Instead of just dumping in ETS subsidies to keep the cockies happy, and annoy the US and EU accordingly, real effort should be going into reducing ag emissions and developing technology around this for sale.
October 15th, 2009 at 11:06 am
@ Tussock. In terms of the global picture, a couple of key differences between now and WW2, is that the Western world is up to its eye-balls in debt, both at a private level and at a public level, we have a time-bomb of a aging population (unlike after WW2 when we have a young population) and we have some serious environmental contraints coming up. However, it is not all doom and gloom as we do have the prospect of new green technology which offer great opportunities. We also have the rising wealth of the developing countries.
From NZ’s perpective, the US did not drop us in it. NZ was well into recession before the GFS, driven 9 years of destroying our productive sector and excessive borrowing to buy houses. Lets be very clear, under the CCCP (Clarke and Cullum Communist Party) there was no productive growth. The growth of our non-productive sector exploded. Cullum was able to run surpluses because he was taxing unsustainable and false growth in consumer spending and credit growth. We are now paying the price for this. NZ needs to make some hard decisions and soon. The sooner that John Key spellls this out to the population, the better. You say that the rabid right-wingers are adrift from reality. The reality that the productive sector pays for the schools, hospitals and welfare for those less fortunate. Unless, we do face reality, it is those less fortunate that will suffer the most.
October 15th, 2009 at 11:09 am
The direction Labour took was the vote winning splurging speculative bubble play and they knew dam well the private sector was building itself a coffin load of debt. So it matters not a fig that Cullen reduced govt debt and refused tax cuts. The current fiasco is a reflection of their foolishness. Way back in 05 Cullen and Clark ought to have had the guts to front the voters with a policy that throttled the madness. They chose the easy option. They also packed the state sector with every Labour flunky capable of counting to ten. That binge must now be paid for. National’s decision to go with the voting flow will return to kick them in the bum. Only fools and socialists believe the economy can pay its way on the current path. Every day National delay in busting open the bubble, makes it less likely Noddyland will remain on the OECD ladder. There isn’t a hope in hell of climbing it. The final act of idiocy by Cullen was to give Toll a $500oooooo present for a clapped out trainset.
October 15th, 2009 at 11:29 am
Tussock, the development of NZ as a world leader in research centering round agricultural emissions, is the precise aim of our present stance. Nick Smith and Tim Groser have positioned NZ right in this sweet spot and are getting support from e.g. India. The quid pro quo is that we have to rig up some carbon indulgences accounting.
October 15th, 2009 at 12:18 pm
Yes , I don’t won’t to turn this into a political blog but I think Labour has a bit of Explaining to do on how they helped maufacture this result in their governance?
Q. What is the answer to this question (10 marks)
250,000,000 x 52 x 4 = + 7% interest
A. _________________________________X X__________________________
_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_X X_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/
October 15th, 2009 at 12:29 pm
Sorry, Correct Answer Should look like this if you get my drift.
_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/ X X _/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/
4 those that still don’t know answer this is a railway track with an uncontrolled level crossing.
October 15th, 2009 at 12:31 pm
Anyone ever thought of increasing government revenue streams (other than tax increases)?
October 15th, 2009 at 12:42 pm
Well put Wally. The party is over! Spend, Spend and Spend like there is no tomorrow by the Labour Party now has to be paid for. I will always have in my memory the photo pose of Clark and Cullen grinning like a cheshire cats as Clark pulled the covers from the Kiwi Rail train and showed us it was for all ” Kiwis” as she liked to call us. There should be a law to stop imbeciles wasting our money on vote buying.
October 15th, 2009 at 12:53 pm
Now that is unfair on IMBECILES….I hope we never see her LIKE again. We just CANNOT afford to.
The UN is welcome to her…if you get my TRAIN of thought.
CULL-EN AND HELL-EN should both be truly ashamed. No wonder she left NZ.
(But they could see no wrong. Snouts still in the trough…still..miss-managing…eh… JOBS for the BOYS)….
Maybe we should all work for GUMMERMINT…..
Many businesses failing around here, so we will need a lot more UN_CIVIL-SERVANTS.
October 15th, 2009 at 1:18 pm
Mr English said that on his recent tour of financial capitals he had stressed the Government had a strategy to slow the growth in state spending and “bend the debt line down”.
http://tinyurl.com/ykmzvft
“Our pitch to them simply was that we are coming out of recession better than most, we need to borrow $40 billion over the next three to four years, we have got a high credit rating and we are willing to adapt to the market needs (note: conditions that appeal to lenders) to make the debt attractive.”
http://tinyurl.com/yzbv8zh
However, there was no mention of any comprehensive repayment plan.
Borrow and hope?
What happens in the next three to four years? Asset fire sale?
October 15th, 2009 at 2:37 pm
increasing govt revenue streams ,thats a joke revenue can only continue to decrease due to free trade and competition from countries using cheap labor, polluting the planet,no scruples while taking the major share of the pie, this can only cause further closures unemployment and heartache , id suggest this is just the start, guess taxes could be raised,knowledge industry may save us “dont hold ya breath”
October 15th, 2009 at 4:17 pm
mhpub – It’s not about competing with countries that have cheap labour. That’s merely a race to the bottom. It’s about utilising our resources to best meet global needs.
In a predominantly corporate dominant world, an astute government working in the national interest is the best chance this little nation has of survival.
October 15th, 2009 at 4:23 pm
A blogger ask:
“Do we really think that building widgets here in New Zealand at a higher price than we can import them is the solution?”
Yes – AS A NATION WE MUST – with clever planning form the private sector, other international companies and the government.
WE MUST ADD NEW SEGMENTS TO OUR ECONOMY
Here only 10 important advantage points:
1) It creates jobs.
2) It lifts the quality level/ selection of jobs/ education.
3) It allows us to keep skilled/ educated people in NZ.
4) It encourages/ supports academic Research & Tech. Developments.
5) It makes us more in depended from other countries/ companies.
6) It makes existence easier for other companies/ businesses.
7) Manufacturing becomes more competitive.
Of security reasons.
9) It creates wealth & prosperity.
10) It makes us proud.
Cheers Walter
October 15th, 2009 at 5:24 pm
Is $800mln provision made for deposit guarantee going to be enough?
October 15th, 2009 at 5:55 pm
Walter – you are so slack today, which blogger, who, where, when, why? Do tell….
Cheers, Les.
October 15th, 2009 at 10:52 pm
I must admit, although I am no fan of Labour at all, they set us up for this huge deficit, I am fast losing patience with the way National are seeming happy to sit there borrowing 200 mil a week to pay the bills.
Instead of facing up to things are getting costs under control.
Like it or not, I think another Ruth Richardson style “mother of all budgets” is inevitable and necessary, the longer they wait before making the painful choices the worst things will eventually be.
October 15th, 2009 at 11:52 pm
Like it or not, I think another Ruth Richardson style “mother of all budgets” is inevitable and necessary, the longer they wait before making the painful choices the worst things will eventually be.
But the recession is over, and people are back out buying houses. It is almost like the credit crunch never happened, and people haven’t learnt anything, spending more than they earn. But seriously, National are simply conditioning us for diminishing services, and privatisation of ACC. ACC is actually in good shape according to Brian Gaynor, it is just that they are wanting us to pay more now, so we pay much less later, which doesn’t really make much sense.
October 16th, 2009 at 12:11 am
If we got rid of all useless Politicos, Pubic Servants, Consultants, Quangos, Hangers on and
Social Welfare cheats, LAC’s, (You finish the list)……we could actually all afford to stop working… FULL STOP.
I just get fed up of paying my 3.75 share…don’t you…hence why I am a sore-loser.
As I always say….I don’t mind being screwed, but I hate to be raped.
Anyone got the KY…
October 16th, 2009 at 11:24 am
Despite the massive deficit and borrowing, the NZ$ has soared to a record high against the UK£. Is the dollar overvalued, or is it just that the UK is in even worse shape?
October 16th, 2009 at 11:51 am
UK is a basket case economy . NZ didn’t deflate it’s currency . And $NZ is tagged along with $OZ , overseas currency traders view us as one and the same ………. Lordy , if only we were !