Labour backs dodgy finance company lending

Digging deeper into Labour's deposit guarantees for banks and other financial institutions we see that they have also backed dodgy finance companies, their free and easy lending practices and interrelated party lending-Doug Somers Edgar and his Money Managers crew must be running around in pure ecstasy right now.

This exposes the New Zealand taxpayer to billions of dollars of cost because more finance companies will collapse, no doubt about it.

The deposit insurance paid by the major banks will not be paid by finance companies because their deposits as a whole total less than NZ5 billion per institution, so the extra fees passed onto the major banks customers as a result of this deposit guarantee will be in effect subsidising those investors in finance companies who are getting more interest on their deposits.

The government backing of solid banks was definitely a good if not belated move by Labour but the bailouts that the Kiwi taxpayers are exposed to within the finance company sector make for dire consequences for the back pockets of every New Zealand taxpayer.

Related reading

Don't forget Money Managers
Money Managers First Step gives investors the middle finger
Money Managers First Step saga: 3 Story wrap

c Political Animal 2008

Making Allowances for more votes

The cupboard is bare, the nations books revealed that when they were released last week. Labour and Michael Cullen has spent it all and we are in a recession with a global financial disaster a distinct possibility.

But hey presto, today another vote grab by Labour means $220 million per annum was found for universal student allowances, a conservative figure by Labour because it has been costed at far more than that by more reliable sources.

Last week it was $40 million for a farm purchase so Helen and her fellow travellers can go walking across private farms in the South Island, billions more for a raft of recent treaty claims "settled" and the week before that another $120 million more for KiwiRail.

Oh but when does it all end? I am betting November the 7th.

The big question is in the face of massive deficits where is all this extra money coming from?

Well, it could be borrowing and there is likely to be more of that but it definitely means higher taxes for the middle classes, the same people who will be sending their kids to University and the very same parents of those children getting the universal student allowance.

Cynical, greed based vote buying.

It isnt the end of it either.

c Political Animal 2008

Is that it?

So Labours response to an economy in possible meltdown?

"Guarantee" deposits.

It is voluntary for institutions and will cost banks. It is free in Australia.

And they announced it at their election kick off making it a political rather than an economic decision.

John key pleaded for a similar scheme last week, while Labour has dithered in the face of economic disaster.

The second arrow to their emergency response is to bring forward infrastructure spending. A good idea but something National will do as well. 

No mention from Michael Cullen about cutting back on wasteful Government spending, including the economy destroying global warming taxes that they have and will introduce.

Cullen is likely to step up such unproductive spending in the hope by him that it needs to go higher to "look after the vulnerable" but all that will do is put growth at risk.

Labours two moves have impact on the economy sometime in the future but there is nothing immediate from Labour to address current problems and there clearly needs to be.

It really is more of the same from the last nine years, an approach to the economy that managed New Zealand into its current recession.

It ain't enough.

c Political Animal 2008

National Party kick off election campaign

The kick-off to Nationals election campaign in Auckland today. Slick, full of detail and with a message of aspiration rather than the politics of envy:

It's time for a change of Government. It's time for a fresh start.

I stand before you today full of confidence about New Zealand's future and full of the determination needed to lead that future.

Because I know you are looking for fresh leadership at this election and I am ready to step up and make sure you get it.

You are all rightly sick of political sideshows, bossy government, and yesterday's fights. You're sick to death of hearing about Winston Peters, and you're sick of being told what to do.

Full article

National's message sits opposed to Labours usual message in their campaign opening today: more taxes, more regulation and more meddling in our lives.

c Political Animal 2008