Saturday, March 07, 2009

New Zealand PM says: "You Can't Spend Your Way Out of the Crisis"

Picked THIS up via ConservativeHome. My eldest son lives in New Zealand and helped out on John Key's election campaign last year and has told me that he is typical of the "No. 8 wire"* attitude that characterises the Kiwis as a nation.

"We don't tell New Zealanders we can stop the global recession, because we can't...what we do tell them is we can use this time to transform the economy to make us stronger so that when the world starts growing again we can be running faster than other countries we compete with."

That idea - growing a nation out of recession by improving productivity - puts Mr. Key and his conservative National Party at odds with Washington, Tokyo and Canberra (and I would add London, too). Those capitals are rolling out billions of dollars in stimulus packages - with taxpayers' money - to try to prop up growth. That's "risky.... you've saddled future generations with an enormous amount of debt that then they have to repay....there is actually a limit to what governments can do."

"...while the U.S. and Australia broadly continued their economic liberalization programs under both right- and left-wing governments, New Zealand didn't -- until now. Over the past nine years, Helen Clark's left-wing Labour government rode the global economic expansion and used the revenue surge to expand government welfare programs...and embrace causes like global warming. As a result, the economy stagnated....".

New Zealand is a relatively small country so direct comparisons with the UK are not always relevant but the general thrust of John Key's approach is not a bad model for our Conservative Party to follow. Read the whole article and see what you think.

*The old settlers always seemed to be able to fix any bit of broken machinery with a piece of No. 8 fencing wire!