NZ Labour and budget surpluses
J.Bendien at wolmail.nl
Sat Sep 28 04:43:11 MDT 2002
As I said before, Rogernomics was justified by saying that selling off state
assets would pay off the public debt. Of course if you sell off state
enterprises operating at a loss, you no longer have to account for the debt
involved, plus you have the benefit of extra cash.
The point however is that debts have nevertheless gone up all round, the
whole argument was a swindle. Gross public debt today would I imagine be
somewhere in the region of 40 billion NZ dollars. (I cannot really find the
figures I am looking for, and besides that the accounting techniques used
nowadays are much more deceptive than they already were).
Alliance's economic advisers estimated in 1995 that New Zealand's net
external liabilities had increased by 45% to NZ$65 billion since 1990,
despite low wages and low employment rates. This trend has continued.
Donald Brash, Governor of the Reserve Bank, also reported in 1998 that "at
6.4 per cent of GDP in the year to September 1997, New Zealand's current
account deficit is already one of the highest in the world. The Reserve
Bank's latest projections have that deficit increasing further to nearly 8
per cent of GDP in the year to March 1998, a level comparable with that in
the crisis year of 1984, and closely similar to the deficit in Thailand's
balance of payments before its mid-1997 difficulties. Moreover, our current
account deficit is adding to a net stock of external liabilities which, at
some 80 per cent of GDP, is already probably the highest of any developed
So anyway the fact is that the country is in the hock up to the eyeballs.
The real question is, who pays for this, while Helen Clark is flaunting
herself with the artsy elites ? You guessed it, the working class. If I were
to estimate the increase in the rate of surplus-value in New Zealand for the
1990s, I wager I would find an enormous increase. As Phil says, the only
"redistribution" occurring is the shift of income from the poor to the rich.
That is the "material basis".
When I talked with Ernest Mandel about Labourism in the 1980s, he said "if
what you say is true, then you would have to conclude that an historic
regression of class consciousness has occurred". And that is exactly what I
The main function of the NZ government nowadays is to maintain social
stability in a populist manner, regardless of any ideological principles. If
for any reason that social stability disappears due to internal causes, the
economy would in all probability cave in because of instant capital flight.
The effect of a major recession in New Zealand's main trading partners
(Australia, Japan, North America, Britain... ) would similarly generate a
pretty explosive situation in New Zealand I would imagine, precisely because
the country has no way of shielding itself from such an event left at all.
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