NZ only one to get it right

One of US President Barack Obama’s top financial advisors has given New Zealand a ringing endorsement for the way the National Government is handling the deepening world debt crisis,  State Owned Enterprises and Health Minister Tony Ryall said.

‘This week, in a major international BBC debate on rescuing the world economy, Peter Orszag, Obama’s Director of the Office of Management and Budget until 2010, opposed the austerity only position taken by the IMF’s Chairman Christine Lagarde, and Wolfgang Schauble, German Minister of Finance,’ Mr Ryall said.

‘Mrs Lagarde and Mr Schauble said cutting spending was difficult but necessary.  But Mr Orszag said it was better to take a mixed approach – with stimulus for the economy combined with deficit reduction that is put in place now but which takes effect over time.

‘President Obama’s former senior aide singled out New Zealand alone as the model for its balanced approach to the deepening international debt crisis,’ Mr Ryall said.

‘Mr Orszag said: … “for most countries it’s better to combine deficit reduction that you put in place now but that takes effect over time, with if anything, additional support, and that means stimulus, for the economy, effective immediately. And what’s interesting about the fiscal monitor the IMF published also as part of these meetings, is if you look across all the developed countries, there is only one country… which has actually done that, which is New Zealand- who have coupled additional stimulus with medium-term fiscal consolidation. That’s the right policy combination.”(BBC ‘World Debate – Rescuing the Global Economy – What Next?’)

‘This statement by one of President Obama’s top advisors acknowledged the balanced approach taken by the Key led Government over the last four years. The National government has borrowed to take the sharp edges off recession, at the same time maintaining strong fiscal discipline,’ said Mr Ryall.

‘Around $2 billion of borrowings over the last four years have been to protect and grow public health services.  This has contributed to the improved health services New Zealanders are seeing every day, including free doctors’ visits for children under 6, and 35,000 more patients getting elective surgery a year than four years ago.  

‘It is also important the Government completes its government share offer programme, so that we can control our debt, and build the hospitals and schools and broadband we need , but would otherwise have to borrow to complete.

In spite of what the doom merchants are saying, New Zealand is weathering tough global economic times well.

The debate is here.

4 Responses to NZ only one to get it right

  1. Bulaman says:

    We still have to balance the books. Tax revenue must equal or be more than government spending. We either do it now under our own sovereignty or later (like Greece) under “supervision”. The fiscal cliff will not be a pretty place!!


  2. Ross says:

    Ele, I was interested to see this article yesterday. It confirmed to me that the steady-as-you-go approach of the National government is fundamentally the approach needed for NZ. The country is doing relatively well in recovery from the GFC.

    I hope that they stick to this approach. Unfortunately it is a ‘boring’ approach and leaves room for the screamers, shouters and alarmists on the left and in the media.

    You would never know listening to the media that NZ is actually doing relatively well in its recovery from the GFC.

    I can remember the late 80’s / early 90’s recession where we had 12% unemployment in this country and massively high interest rates. This one for us as a country has been nothing like it – almost easy by comparison.

    The trouble is balancing the books and debt reduction take time and patience, and aren’t particularly exciting – but we must stick to it.


  3. homepaddock says:

    Quite right – that’s why it is so important to get back to surplus asap.


  4. homepaddock says:

    I agree – it might be “boring” but there is no quick fix.


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