If National are such prudent fiscal managers…

By   /   December 31, 2013  /   15 Comments

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

… 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.

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= fs =

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15 Comments

  1. Suz R says:

    …And why hasn’t this question been asked so clearly, with such good back-up, by our MSM? Whenever they announce something negative about our credit rating, JK or BE simply get to fudge it by (falsely) claiming that they “inherited” a dreadful mess and it’s all the fault of the big-spending and bribery of the electorate by Helen Clarke, Michael Cullen and co. Bullshit.

  2. Gosman says:

    What you fail to account for is that National took power at the beginning of the turn down in the Global economy. Rating agencies were down grading all countries and due to our fiscal situation, (which was predicted before National got in to power in 2008), we were downgraded as well.

    I hesitate to mention this as people on the Right would love it if you persist but the next election will not be won on economic matters. The left would be better suited to sticking with their strengths which is in social policy.

    • What you fail to account for is that National took power at the beginning of the turn down in the Global economy….

      No. You are only partially correct, Gosman.

      National’s books “blew out” because of two unsustainable tax cuts in 2009 and 2010, which cost an estimated $1.6 to $2.2 billion (net of increased GST) in lost revenue. (http://www.infonews.co.nz/news.cfm?id=89527)

      That demanded that National make up the shortfall elsewhere by massive borrowings (“Govt borrowing $380m a week” – http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10724665).

      Couple to that that the tax cuts went to the top income earners; no stimulus by job creation; wasteful spending on corporate welfare; and you have a calamitous, toxic brew in the making.

      Part of National’s fiscal problems was of their own making.

      …which was predicted before National got in to power in 2008…

      And still they persisted with tax cuts?

      Not very responsible, was it?

      The Christchurch re-build shows what can be achieved when the State invests in job creation.

      In fact, it’s blindingly obvious that if a government invests in jobs, there’s a net flow-on gain for the economy and less expenditure in welfare and other related costs.

      Not very prudent fiscal management, eh?

      By the way, in case you’re still in doubt – have a look at the credit ratings from Muldoon’s term to Rogernomics Labour. Notice anything?

      • Gosman says:

        You are quite wrong once again.

        The first tax cut was actually set in place by the Labour led government. All National did was not cancel it.

        The second tax cut was actually designed to be fiscally neutral (i.e. there was an associated rise in revenue via the increase in GST). The fact that this wasn’t had more to do with the depth of the recession than anything planned. However the increased economic activity recently has more than likely made up the original shortfall.

        But again, if you think the left are going to win the next election on economic issues then be my guest and push this particular viewpoint. You won’t see many objections from right leaning people like me.

  3. I promise – hand on heart! – that I did not author this,

    It is true that the John Key-Bill English minority government has overseen a strong fiscal consolidation. But to place this in context, the Labour government they replaced in 2008 had delivered a surplus budget every year from 2000 to 2008 and had paid off government debt, resulting in the government accounts showing a net asset position from 2006 onwards. Despite Hewitt’s comment about growth under former NZ prime minister Helen Clark’s government, for the period 2000 to 2008 New Zealand recorded the longest economic expansion since the end of World War II.

    Like most similar economies, the New Zealand budget position deteriorated dramatically during the GFC. This resulted in the 2008 Pre-Election Fiscal and Economic Update (PREFU, functionally equivalent to the Pre-election Economic and Fiscal Outlook) showing deficits across the forward estimates. Fortunately the prudence of the previous Labour government in paying off debt and building up assets ameliorated the impact of this.

    Source: http://www.chifley.org.au/stop-cheering-the-nz-government-for-good-economic-management/

    Well, well, well…

    Nice to know that the truth is finally getting out there. 🙂

    • Gosman says:

      “Marcus Ganley was a senior adviser to former NZ Deputy Prime Minister and Finance Minister Sir Michael Cullen.”

      Wow ! A left wing person closely associated with a left leaning government praises the decisions of the left leaning government he advised. Whatever next? Will the Papacy declare itself for the Roman Catholic faith?

  4. Countryboy says:

    @ Gosman … ?
    Are you saying that social policy and economics are unrelated then ?
    You are a self confessed money fiddler so I can understand why you might think that but if you do truly think that social policy has no baring on ‘economic matters’ then you must take LSD immediately to help you change gear up a notch to improve the validity of your thinking .
    Do you not think ( Ha ! ) that poor worker morale is a serious problem for any economy . Much less OUR economy which manages to limp along despite the parasitization of our workers by your fat and fancy right wing stassi storm trooper leather queens , spank me later , rich men types . You’ll remember them ? They’ve expertly exported 182 thousand good NZ people to Australia because those same good people got sick to death of the bull shit pooped out by your right wing fucktard friends .
    Jonky has no policy for us . His policy is for his mates . ” Aloha and Sieg Heil ! “

    • Gosman says:

      I am quite open to any policies that might led to better economic outcomes. If you are correct then firms that treat workers better will have increased productivity and likely higher profits than those that don’t. The question then is why should the Government mandate these conditions if they are already so beneficial to the businesses in question?

      • I am quite open to any policies that might led to better economic outcomes.

        The hell you are.

        You’re not in the slightest bit interested in policies or ideas that conflict with your own simplistic, black and white worldview; your dodgy libertarian ideology which borders on quasi-religious faith; and your own ego.

        Your nit-picking; lack of attention to details; and constant asking of questions, which are motivated by some bizarre ulterior game-playing, rather than actual desire for insight, is well known.

        You’re as open to other policies as I am to joining some crackpot religious ufo cult awaiting the arrival of the Mothership.

        Though I give more chance of the alien Mothership arriving any day now, before you take on board some simple truths about the society you and I live in.

      • But to address the point you raised,

        The question then is why should the Government mandate these conditions if they are already so beneficial to the businesses in question?

        I refer you to this pierce I wrote recently, and which answers your question; https://thedailyblog.co.nz/2013/12/24/confirmed-national-welcomes-low-wage-economy/

        The admission of the “benefits” of a low-wage society come from the mouths of National’s Finance Minister, Bill English and backbench MP, John Hayes.

        • Gosman says:

          It really is quite simple Frank. If these ideas work set up some collective left wing business and pay your workers better and reap the benefits in higher productivity and higher profits. You don’t need Government to help you achieve this goal, just sympathetic business people. There are business people sympathetic to these ideas aren’t there?

          BTW I replied to your comment on Josie Pagani’s article on Pundit where you used me as an example. Very poor form there Frank.

  5. Richard Christie says:

    The first act of the 2008 incoming NAct Govt was to axe industry tax incentives for Research & Development.

    Just about says it all.

  6. It really is quite simple Frank. If these ideas work set up some collective left wing business and pay your workers better and reap the benefits in higher productivity and higher profits.

    You’re not paying attention, Gosman. Lower wages are encouraged by this hopeless government. Hence my reference to English’s and Haye’s comments.

    https://thedailyblog.co.nz/2013/12/24/confirmed-national-welcomes-low-wage-economy/#sthash.CUT75kWc.dpuf

    Which you’ve ignored, as per form.

    The policy of this government is to drive down wages. That is clear to everyone (except you?).

    BTW I replied to your comment on Josie Pagani’s article on Pundit where you used me as an example. Very poor form there Frank.

    What, are you following me around the blogosphere?! A bit stalkerish there, mate…

    Nice to know I have your attention (fixation?)… But really, stop being so fucking precious. You’re no compunction about deriding me or other bloggers on other websites, so suck it up. *pffft!*