PREFU will show choice is clear

If you’ve been on the Herald or Stuff websites you might have noticed National’s ads showing the choice is clear.

On the left is a bloke in a red hat with a stop sign, on the right is a bloke in a blue hat with a go sign.

Arrows point left to stop and right to go forward.

The clarity of the choice will be confirmed when Finance Minister Bill English delivers the PREFU – Pre-election fiscal update – this afternoon.

When Labour Finance Minister Michael Cullen delivered the 2008 PREFU it forecast 10 years of deficits. Under their stewardship, New Zealand was already in recession and Labour didn’t have a workable plan to change that.

In spite of the financial and natural disasters which have beset us since then, National is forecasting a return to surplus earlier than that with policies which rebalance the economy away from  taxing and spending towards savings, investment and export-led growth.

That is a significant achievement and a reminder that the choice is clear – going backwards under Labour or forwards with National.


We have Ruth Richardson to thank for the opening of the books. Until National, at her urging, changed the law which requires governments to open  the books before the election, opposition parties had no idea about the state of the national accounts until after the election.


10 Responses to PREFU will show choice is clear

  1. Ross says:

    It is also worth noting that last election Labour cheated with the PREFU by not disclosing the $4 billion hole in the ACC accounts.

    My understanding was that there was serious discussion at the highest levels as to whether charges should be laid.

    Yet another reason not to vote for Labour – they lie, they cheat and they are generally nasty in the way they treat people.

    I like the NZ that National is encouraging – honesty, hard work encouraged, praised and rewarded, openness and admission of mistakes, a positive outlook on life and the future, and a sense that NZ is a great little country that offers a lot. A lack of negativity.

    Mind you, just having won the Rugby World Cup is definitely helping the positive vibe. Credit to Helen Clark for putting in a lot of effort to get the hosting rights for NZ.

  2. Mike Johnson says:

    Gosh, Ele, Tracy Watkins of the ComPost must be reading a different PREFU to the one Bill gave you.

    After Treasury opened the books on yet another gloomy forecast, it is tempting to ask whether things could get any worse.

    Well, yes, is the short answer.

    In a case study presented by Treasury in today’s Pre-election Fiscal Update (prefu) as one extreme scenario, we are caught in a downward spiral that ultimately results in the Government being so bust it can’t pay its bills.

    But even under less extreme scenarios, Treasury acknowledges that New Zealand’s credit downgrade by international ratings agencies Fitch and Standard & Poor’s – with potentially a third, Moody’s, tipped to follow suit – has exacerbated some of the downside risks faced by the New Zealand economy.

  3. robertguyton says:

    “On the left is a bloke in a red hat with a stop sign, on the right is a bloke in a blue hat with a go sign.”

    I saw this at Keeping Stock, Ele:

    “Stop National, stop asset sales. Go National, go overseas. This year it’s a clear choice.”

    It doesn’t really support your post here at all, but I thought you’d enjoy another pov.

  4. jabba says:

    what asset sales do you mean bOb?

  5. Ross says:

    Mike Johnson,

    I have just spent the last hour skimming the actual PREFU (not reporters interpretations with associated spin) from cover to cover.

    Yes, Treasury as they should have presented a downside scenario, especially given the current issues in the Euro and US economies. Like all downside scenarios it presents a range of potential trouble.

    Even with that, I didn’t think it was too bad, and there are plenty of positives in there. NZ isn’t in too bad shape right now, which is pretty good given the events of the past year.

    What is clear is that if we have a another major earthquake we are in trouble, but baring that or a major melt down (1930’s style) of the world economy then NZ should get through ok.

    Perhaps the interesting forecasts for me were slow but steady economic growth over the next 5 years.

    Like most business owners I have regular decisions to make on investment, business growth and employing additional staff. The PREFU outlook and projections helps with those decisions.

    I read a largely positive PREFU especially in relation to other economies, and as a result I think there is plenty of steady growth potential in the NZ economy. This assists me in remaining positive in my investment decisions.

  6. Mike Johnson says:

    Ross, I’m very positive about New Zealand.

    I was just gently chuckling at Ele’s enthusiasm for spin 🙂

  7. Inventory2 says:

    Unfortunately Mike, you’ve fed Robert Guyton’s appetite for yet another attack on National…an unintended consequence, I’m sure 🙂

  8. homepaddock says:

    Mike – Bill didn’t give me the PREFU, it’s kept under wraps until it’s publicly released.

    I wrote the post before I’d seen any reports on it – you didn’t have to see it to know the outlook would require less taxing and spending and more savings, investment and export-led growth.

  9. JC says:

    Tracey Watkins presented the Treasury’s downside of a downside.. a 1 in 5 chance that the EU or US basically tip over. Now, whilst I accept Key can walk on (somewhat oily) water I doubt he can be held to account for world events.

    OTOH, the Herald reports it straight:

    It looks OK but I think we will have a trade contraction shortly that will last some weeks.. what happens in the New Year probably depends on Europe.. which is busy trying to interpret Margaret Thatcher’s words:

    “They (socialists) always run out of other people’s money”.


  10. mort says:

    $18,600,000,000,000 over spent by the Blenglish last year!

    Yep there was 2 EQs and a rather large hole in the CHC market.
    But $18.6B… thats $357,000,000 a week, $51000000 a day.

    Perhaps all ‘Moody’ Smith’s global warming claptrap and Keyster’s desire for NZ to become the equivalent of a Mediterranean type nation, only Blenglish misinterpreted the conversation and spent like one instead of burning more carbon to have a climate like one . Buying votes and enslaving grandchildren.
    What hasn’t been factored into PREFU is what if China has a wee credit meltdown of its own? What if the recent massive infrastructural and housing boom there suddenly stops and the export sector drops by 20% because the US and Europe aren’t buying more junk?
    20% chance of a Euro collapse is a fair underestimation. Greece is toast., They will default. It is only a matter of time. This will then domino through Portugal, Spain, Belgium, Italy with possibly Germany being the last man standing.

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