By Russel Norman
If the New Zealand economy was a business, the board of directors would be sacked and be lawyering up in preparation for court action. The CEO would be looking for a new job and not getting interviews. The Serious Fraud Office would be sharpening its pencils and getting a team together.
New Zealand Inc is currently running at a $10 billion a year loss. That’s our current account deficit. Under the budget plan released by CEO John Key yesterday, the losses at NZ Inc will increase to $17 billion a year.
CEO Key plans to cover this massive loss by borrowing more and selling more assets. The net debt position of NZ Inc is projected to increase to over $200 billion in the next few years.
If the New Zealand economy was a business; the management team that has a business plan to increase losses to $17 billion a year while selling some of our best earning assets would be treated as rogue traders.
And yet that is what the National Government is doing to the New Zealand economy.
Through the efforts of its highly paid spin doctors and friends with vested interests, it manages to portray itself as “sound economic managers”.
But the facts just don’t back that up.
This fiction that the National Government is a sensible, risk-adverse economic manager does not stand up to scrutiny.
The current account deficit is the key economic measure of the success or failure of the broader economy yet Treasury has forecast this deficit to rise to 6.5 percent by 2017. NZ Inc will be the second worst performing company in the developed world.
This is a debt time bomb that a return to Government surplus alone will not address.
Finance Minister Bill English is depicted as predictable and safe. Yet the CFO of NZ Inc has been recklessly borrowing money. He started borrowing the minute he took on the job and hasn’t stopped since.
On top of this National gave pay rises (tax cuts) to the wealthy. NZ Inc couldn’t afford this dividend to wealthy investors at this time. It was seriously bad management.
National are behaving like corporate raiders by taking over NZ Inc and stripping its assets. Under National NZ Inc’s valuable power companies and national airline are under the hammer. They will be sold for less than their value and the public, who are its shareholders now, will be deprived of dividends. National will then leave the mess for receivers to clean up.
The National Government management has run NZ Inc down yet they keep up the illusion of sound economic management. Bill English and John Key reject Green Party ideas out of hand, the way a corporate raider dismisses criticisms that its actions are wrong.
We, in contrast, have a credible, sound plan that would actually turn the economy around.
We would implement a capital gains tax (excluding the family home) to stop property speculation and take the heat of the housing market. We would reform monetary policy to reduce the official cash rate and take the pressure off exporters. We would implement capital market reform to make our banking sector more competitive.
Time for a takeover I think.
Russel Norman is co-leader of the Green Party
source: data archive