Faith in the Economy? Stupid.
Here’s a transcript from yesterday in Parliament. I’ve deleted Trevor Mallard’s comments about the need for Bill English to think about how to pay for his housing needs. It’s full of contradiction and false hope.
Hon BILL ENGLISH (Minister of Finance): Today’s data shows
that the balance of payments deficit for the year to June narrowed
to $10.6 billion, or 5.9 percent of GDP, in the June quarter.
This represents a narrowing of the deficit from the recent range
of 8 to 9 percent, the record high levels that it has held since
2005. The decline would have been greater than it has been but
for the 9 percent decline in the terms of trade in June, the
largest quarterly fall since 1975 and the largest quarterly fall
in export prices since 1951.
Hon BILL ENGLISH: Today’s adjustment is what one would expect during a recession. The falls in imports, interest rates, and profits are all to some extent temporary, and as the economy improves, each of them will tend to reverse. The need to rebalance the economy towards investment and exports remains as important as ever. That rebalancing is critical to creating sustainable
jobs.
Bill English seems to have a curious set of assumptions here. There is a premise that the economy will improve which will lead to the well being of all once again. But the reality is that we are highly unlikely to ever see the same cycles occurring again in the future that we saw in the past. Failure to acknowledge this and deal with it is real negligence. It’s as though politicians aren’t taking things seriously. The kind of faith that seems to be placed here in past economic conditions as determining our future is simply stupidity..
Dr Russel Norman: Will the Minister join the Greens, Treasury,
the Reserve Bank, manufacturers, and exporters in admitting
that we need to change the taxation treatment of (uncorrected
transcript—subject to correction and further editing) investment
properties if we are to rebalance the New Zealand economy away
from debt-fuelled consumption towards productive enterprise?
Hon BILL ENGLISH: Treasury and the Tax Working Group are working
through those issues and will provide advice to the Government
at some stage.
Let’s hope they don’t take too long about it. Russel Norman’s vision here provides the one glimmer of light in the debate…
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