Books Not a Pretty Picture
DR Cullen - there is “quite significant deterioration” in the books compared with the Budget in May.
A weak Economy and a higher then expected take up on the likes of Kiwi saver and the governments commitment to provide 20 hours a week of free early child-hood education, While treaty of wiatangi will bring even more anticipated expenditure “The debt track is not a pretty picture, I think one would say,” Doctor Cullen said.
Now the Books are deteriorating Doctor Cullen appears to be uncomfortable with knowing that his government has conceded that the debt target of under 20% will be exceeded indicating tight times for any ruling political party in power over the next three year term
The Balance of Payments statements set out a country’s transactions with the rest of the world. The current account balance is the sum of the balances of trade in goods and services, current transfers, and investment income. More simply, the current account measures what a country saves minus what it spends or invests. The graph shows that since 1990, New Zealand has been a net borrower. Thus, the current account deficit has reflected the amounts of other countries’ savings that New Zealand has had to borrow, in order to finance spending. The last time that New Zealand was a net saver – that is, had a current account surplus – was 1973.
Data from 1970 is available in Excel by selecting the download data
The red ink in the Current account books is going to spark further debate as to wether National can still offer its promised taxs cuts under this new deteriorating global economy, Labour has been accusing National of preparing to loan monies to pay for tax cuts, But the way things have panned out will probably mean labour also will have to borrow monies to effect their own tax cuts promised ( Labours growing list of broken promises ) Although in typical cullenl style he has to try to take pressure from him self by passing comments such as ‘National is doing its best to sound as if it were fully prepered for this down turn in global economy.”
Leader John Key said yesterday it had been factored into the National parties long tem strategy ( it has to be said that this was not that sudden and could be seen on the horizon for years) Asked if he was worried with about extending the current account deficiet by another 2 % he said no as this was part of a long term growth stratergy
“New Zealand Has a growth problem, We need to address that and one of the ways out of that growth problem is to have an ifrastructure which will allow us to grow”