Labour gains in wake of referendum

Labour leader David Cunliffe.
Labour leader David Cunliffe.
The Government has resolutely vowed to push on with the sale of shares in state-owned Genesis Energy, even as a new survey reveals angry voters are turning their backs on the National Party and its asset sales programme.

A Herald on Sunday-Key Research poll shows Labour's vote soaring from 31 per cent, a year ago, to 40 per cent this week.

That is Labour's best result since 2007, and will be a welcome Christmas present for new leader David Cunliffe.

Asked how the asset sales would affect their vote, 37 per cent of the 500 respondents said they would be much less likely to vote for National.

It won't keep John Key awake at night: his party is still polling at a very healthy 48 per cent, and support for him as prime minister (45 per cent) is more than double that of Cunliffe (18 per cent).

Preliminary results of a citizens-initiated referendum, published on Friday, showed two out of three voters opposed asset sales. But only 44 per cent of the public voted, enabling Prime Minister John Key to dismiss the referendum as a "political stunt".

"Three in four New Zealanders said no, we don't agree with Labour and the Greens," Key told media yesterday at Hobsonville Airbase in Auckland.

"I genuinely think Labour and the Greens will be very disappointed ... I think it will be a dismal failure from their point of view."

The Young Nats went one step further, posting a photo of John Key drinking a beer at a barbecue with the caption: "The provisional results for the asset sales referendum are ... who cares, it's Friday. Have a good one."

Deputy Prime Minister Bill English said the Herald on Sunday poll confirmed that, for most people, the share sales programme would either not change their voting intentions or would reinforce their support for National.

He reiterated National's intention to sell part of Genesis Energy early next year. "As we have said previously, the Government plans to sell a minority stake in Genesis in the first half of next year, subject to market conditions."

Labour MP Clayton Cosgrove accused him of disregarding democracy and the 1.3 million people who voted in the postal referendum. "What I find outrageous is that National will ignore this referendum completely. They are telling New Zealanders that National doesn't care what they want.

"This is more about John Key and Bill English's political vanity and pride."

When asked whether Labour would buy back the assets if it gained the Treasury benches, he refused to answer directly, insisting only that Labour "reserved the right to act in the public interest".

Greens co-leader Russel Norman said asset sales had become an albatross around the neck of the National Party. "They can say what they like but the fact is asset sales have always been unpopular - even with National voters," he said. "This has really dented voter confidence in the party."

The Herald on Sunday poll's worst news is for the Greens, whose vote share drops from 13 per cent to 8 per cent, and for the smaller parties, none of whom break 1 per cent.

However, with National and a Labour-Greens coalition tied on 48 per cent, this poll would nonetheless put the future of the country in the hands of small party power-brokers. Peter Dunne is likely to return and support National; Hone Harawira is likely to return and support Labour - leaving the Maori Party as the most likely broker.

Co-leader Te Ururoa Flavell would seek to persuade members to stick with National for another term - but would likely demand weighty government concessions on issues such as oil-drilling.

Actually, no

 point those stats make is in the time national has been in govt the have increased national debt by approx 400% (1$8b to $80b in 5 years ), This is a historical high and about to get worse over the next 5 years. Source
Yet their own web page states "Less debt, more jobs, strong stable Government" which would be well and good if true but they are rapidly increasing debt. So they are stating one thing but doing another.
In the context of this debt increase it makes no sense to sell assets paying 8% pa to the Government in order not to borrow a fraction of the total amount of debt they racking up at approx 2.5%, they would have been better to borrow an additional $4b (total from asset sales) ring-fence 50% of the dividends for repayment of that $4b and repay it at the higher rate of 4%, then still have that income when then debt is repaid, the asset sales will not pay the interest for a year on the debt the national govt has racked up, or cover the cost tax break for the top 10% to date let alone the future, and the money has been spent on things like:
Only $90m of the $2.1b of Future Investment Fund cash has been allocated to health sector projects, while schools have so far got around $84m of their promised $1b.
More than $900m of the $2.1b cash stash has been allocated to the rebuilding of Christchurch. That includes $426m for the redevelopment of Christchurch and Burwood Hospitals. (surely insurance should cover this or is this a hidden bailout) full article   [Abridged]


Mixed message

Those links each say conflicting things. As you pointed out the statistics vary depending on how they are calculated. What the Govt will be judged on is whether it has delivered what it said it would, and in the economic sense you would have to say it has. You need to have a surplus to pay down debt and I think you are conveniently forgetting about the recession which the Labour Govt economic settings were not prepared for. Bill English has achieved his stated goals by making cuts here and there and selling parts of assets but at the end of the day they did what they said they would do.

The proof

While there is some variation depending on the source and just how its calculated, here's the proof 

• NZ Government Debt 1990-2011 
• NZ Government debt to GDP 
• NZ debt clock 
• Government debt: more or less the same 

Whichever way you look at it, this Government has massively increased long term debt in order to balance the short term books; previous governments had actually been paying down debt. The first two links show this emphatically. [Abridged]


Lynden: There hasn't been a Govt in recent history that didn't rack up debt - including Helen's. Don't forget that recession either.

Filling the gaps

Lynden: that's exactly it - National needs the asset sales to pay for their tax cuts for the rich. If they hadn't cut the taxes they wouldn't need to sell the assets. Problem of course is that selling some stuff off to try and plug the budget deficit is a temporary solution, now they've sold the income earning properties next year they still have to fill the gap from the missing taxes plus the missing income from the sold assets.

John Key's rich mates are running all the way to the bank thanks to this silly plan. Long term we'll have to buy our way of this National hole - do you think they'll do it by increasing just the taxes on the rich to make up for what they've not been paying? Probably not. Sadly the world never works that way. 


sv3nn0: Actually it was Labour who had reduced debt to $18b. It's National who have broken out the credit card by increasing debt to $80b during their time in government. The income from assets sales doesnt even cover the lost revenue to date from their tax cuts for the top 10% (which equals about $1b lost a year) or cover the interest on the $62b in extra debtm let alone do both. On top of that, only a small amount has been actually spent on the items that it was supposedly to be used for.

We will now as a country lose that percentage of the income from those assets each and every year. Surely it would have better to retain the assets and ring fence 49% of the income for schools and hospitals. Then at least it would be ongoing and not a one-off.


Alternatives then?

Still no alternatives to asset sales then, Clayton? Or will Labour be getting the credit card out again? 

Lies, damned lies, and statistics

"Three in four New Zealanders said no, we don't agree with Labour and the Greens," Key told media yesterday at Hobsonville Airbase in Auckland." Using the same accounting method and assuming Key was right in his recent claim that he had the mandate to sell assets from the previous election, then 65% of New Zealanders had already voted against asset sales in the last election (eligible voters who did not vote for National). Funnily enough, this is almost exactly the same percentage of the population that voted against the asset sales in the referendum (67%). The figure of 75% support for the policy is, at best, his own private fantasy.

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