Overseas Investment Review
FLOGGING OFF STATE ASSETS DOES NOTHING TO HELP NZ'S FOREIGN DEBT PROBLEM
Don't take our word for it. Sir Roger Douglas is nothing if not brutally honest and he said, in a book praising the 1980s' and 90s' State forest sales: "I am not sure we were right to use the argument that we should privatise to quit debt. We knew it was a poor argument but we probably felt it was the easiest to use politically" ("Out Of The Woods"; Reg Birchfield and Ian Grant; 1993). So the reason for flogging off State assets was and is ideological, not economic. The latter is just a smokescreen for PR reasons.
Bill English is softening up public opinion for bad news in the Budget and spokespeople for business are calling for the sale of State assets “to help with reducing our foreign debt”. But the facts speak for themselves.
In 1984, when Rogernomics started, NZ's total private and public foreign debt was $16 billion. By December 2008, it was $248 billion, the vast majority of that held by the corporate sector, not the Government, and totaling 137% of GDP. So, despite all those numerous State asset sales, the foreign debt has just kept on soaring.
Rather than slashing, selling and privatising (those 1980s and 90s' policies that failed so spectacularly in NZ and around the world), the Government needs to be following the lead of the major capitalist countries, and asserting control and ownership of those very sectors whose greed and stupidity got us all into this mess. In America , Britain and Europe , for example, the State has taken both control and outright nationalisation of some banks and financial institutions in return for bailing them out with taxpayers' money. These are the leading countries of the very same OECD that is telling us to do just the opposite – very much a case of do as I say, not as I do.
To give just one example, NZ taxpayers are now the guarantors of the deposits of the banks, finance companies, etc. Yet we get no say in their running, let alone ownership. The Australian-owned banks go on their merry way piling up profits as if the crash has never happened, while at the same time turning off credit for their NZ customers. It's time for the Government to remind the foreign banks of that old saying most favoured by moneymen: “He who pays the piper calls the tune”, and to translate that into action.
Campaign Against Foreign
Control of Aotearoa,