Michael Cullen wasn't kidding. The cupboard is indeed bare. Having sat on record surpluses for the last seven or so years, Cullen is now telling us that "The rainy day has now arrived". There's just one problem - he's spent everything he was saving for the rainy day!!Stuff carries the first story from the lock-up.
Government debt will rise to 24.3% of GDP by 2013. Budget deficits are forecast for the next 10 years. A cash surplus of $2 billion in the year to June will be falling to a projected cash deficit of $5.9 billion in 2008/2009 and further deficits over the next four years rising to $7.3 billion by 2012.
And that's not all. The NZ$ is tipped to lose 22% by 2013, unemployment is headed back over 5%, and inflation is headed for 4.5% next year.
Overall, it's a pretty gloomy picture. Cullen can blame global economic conditions all he likes, but the fact remains that he has presided over eight pretty prosperous years, and left the economy in a state where it is now basket-case-like. If he can't manage the economy in the good times, why would New Zealanders TRUST him to manage it in times of adversity? And after all, as Helen Clark said - "This is an election about trust".
UPDATE: Courtesy of Lindsay Addie via Kiwiblog, here's the link to the Treasury PREFU report
3 comments:
The cupboard's not only bare, he's torn off the door and burnt it.
Shoot we are going to need some very good fiscal management from the incoming Govt.
Politically this is the death knell to an administration who have failed NZ badly.
It's all about trust and you cannot trust Labour.
Even the treasury has no fucking idea what's about to hit NZ. Roger Douglas is the only candidate from any party with the skill and experience to bring is through this next mess as an independent country.
The NZ$ is tipped to lose 22% by 2013, unemployment is headed back over 5%, and inflation is headed for 4.5% next year.
All crap. I think the NZ$ will lose 20% by the end of the year, and will be back to USD0.30 my the middle of next year. Unemployment up to 10% before we can blink (lots of them ex-civil servants, thank Key!) - inflation up around 6-7% and interest rates having to go back to 10% to keep things in check.
Basically only now do we see how much Cullen has fucked over NZ. Really it is most likely that we just have to join Aussie and be done with it - on some of the worst terms we could imagine to buy us out (e.g. not even being a state, but being a territory with no local government for 15 years).
At that point, well issues of trains, airlines, any luxuries like universities or cancer treatment - well if you want any of that: fly to Sydney
Think I'm kidding. We go and read the left fucking guardian here: http://www.guardian.co.uk/world/2008/oct/05/iceland.creditcrunch
Why is this important.
Well the icelandic Krona is the smallest OECD currency (by value and by population of the economy behind it)
The NZ dollar is the second smallest. That's because the rest of the OECD small countries are on the Euro, or the Scandinavian arrangements.
When they come for us, with this economy, we're fucked
Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country's three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won't send any more money and supplies of foreign currency are running out.
People talk about whether a new emergency unity government is needed and if the EU would fast-track the country to membership. On Friday the queues at the banks were huge, as people moved savings into the most secure accounts. Yesterday people were buying up supplies of olive oil and pasta after a supermarket spokesman announced on Friday night that they had no means of paying the foreign currency advances needed to import more foodstuffs.
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