Robson-on-Politics - August 8 2007
Hiroshima Day and Nagasaki Day
The government of the United States is the only government in the world that has ever exploded atomic weapons of mass
destruction over primarily civilian centres - two Japanese cities.
So what is the present government in the U.S. doing to substantially reduce its stockpile of these weapons of mass
destruction, and to reduce the proliferation of atomic weapons around the world?
While we can all be happy that North Korea, like South Africa and Kazakhstan before her, has moved in the right
direction, the overall picture is that we are in the middle of a global arms race that includes the US and its
nuclear-armed allies in the U.K., France, Israel and Pakistan.
Keeping New Zealand nuclear-free and promoting a nuclear weapons-free world is a progressive ambition worth recommitting
to each year as we remember the civilian victims of those nuclear bombs that fell in Japan in August 1945.
Dominion's update on upcoming tax cuts
The Dominion had a beauty of a news report on Thursday when I was in Wellington. It was about the controversy of
whether (1) a National government would deliver across-the-board income tax rate cuts in its first budget or (2) in its
second budget.
But how would they be funded, Mr. Editor?
The real story, of course, is how would National fund tax cuts - an issue for some reason not raised once by the
Dominion.
The last time National got elected in this country, 11 years ago in 1996, it cut taxes and a ratings agency cut our
credit rating as a nation.
Why?
The National-led government's tax cuts meant that the Crown carried more debt than it would have, had it not cut taxes.
Credit rating agencies give you a black mark for that sort or risky behaviour - because of the inevitable and periodic
international trading shocks that hit our economy from time to time - be they oil price shocks, major terrorist shocks,
pandemics, droughts and floods or whatever.
The Treasury estimates the government will be running a cash deficit of about $1.5 billion in each of the next three
years.
National explained over the weekend that a National-led government would, in particular, issue more long-term bonds;
debt that would invariably be funded by offshore lenders in Asia, the Middle East and Europe - because households and
businesses in New Zealand are themselves in no position to lend money to the government.
This is how Mr. English explained National's Think Big 2008 Idea:
"National will be an unashamed investor in New Zealand's future potential. We will match long-term investment with
long-term financing".
In plain English it means Borrow, Borrow, Borrow Overseas.
The effect of a ratings' cut ?
So what effect would a credit ratings cut have?
It would mean businesses' and home-owners' borrowing costs will be higher than they would have been without National's
debt-financed tax cuts.
National says it won't cut government spending and the Treasury says the Crown is on course to be running a deficit of
$1.5 billion a year over the next few years - add in a National-led government wanting to fund across-the-board income
tax rate cuts that, let's say, would cost about $2 billion a year.
We are talking about a National-NZ First-United government that would risk getting out the begging bowl overseas for an
additional $3.5 billion of borrowing, a year, for three or four years (perhaps a little less depending how much they cut
back public services).
It is an extremely risky stance to take in a country where households and businesses are already carrying high debt
loads. National proposes that the State join the credit card bandwagon and it is a very dangerous strategy not attempted
since Rob Muldoon and Bill Birch ran the 1975-1984 National Government.
Why risk so much?
Is it worth taking the risk?
I mean risks can be worth taking if the potential rewards are high.
But consider the cumulative effects of Labour's tax cuts of the 1980s plus National's 1990s tax cuts (all delivered by
governments running high debt burdens): The bottom 30% of income earners in 2004 were worse off financially than the
bottom 30% when the tax-cutting began in 1984.
So National proposes high risk debt expansion policies for a programme that in the first instance won't lift New Zealand
up but if anything just widens the gap between rich and poor.
And in the longer term it just impoverishes the Treasury of the Government itself.
That's what the National Party's mates in the Republican Party have done in America. - delivered policies that at first
made some already rich people very much wealthier at first, only to leave the overall economy, health and education
systems much poorer, indebted and weaker over time.
National doesn't make sense
New Zealand cannot afford a return to that type of politics and that type of government.
CONFERENCE TIME - PROGRESSIVES IN THE 2008 ELECTION
Progressive people have a role to contribute to protecting New Zealanders from the strife that National represents. I
hope to see you all on Saturday August 18 at 2pm at 76 Woburn Road Lower Hutt-04 970 1732- for Wellington and at the
Auckland Regional Progressive Party Conference -Buddhist Centre, 40 Eaglehurst Road, Saturday August 25 9.30 A.M TO 4
P.M - in what will be the start of our efforts to contribute to an historic 4th term Labour-Progressive coalition
government. We have to do our all for a progressive government. If you wish to unsubscribe from robson-on-politics reply
to this email with Unsubscribe in the subject line18/08/06
ENDS