Friday, March 03, 2006

Maybe Cullen is right - the surplus IS illusionary

Its not like Labour havent lied about the state of the accounts before...
(and the current administrations disdain for fraud and electoral law hardly give weight that the Public Finance Act would stop them lying again!)


"What I was told in the next few minutes stunned me.

The Bank of New Zealand (BNZ), our oldest financial institution, majority owned by the New Zealand Government and then the dominant bank, was technically bankrupt.

And the strong advice was that the incoming Government must take steps to save it.

The BNZ was about to go belly-up something that the Labour Government had known for many weeks - right through the 1990 campaign - and had hidden the information from the public.

It was worse, much worse than that, because Labour, in the lead up to the 1990 election, had claimed up to the last day that the Government accounts were in surplus.

The truth was starkly different.

Not only did the BNZ require a rescue package of some hundreds of millions of dollars, but the true state of the accounts was that the Government had a massive deficit of billions of dollars, with worse to come if policies were not changed.

When we opened the books after the 1990 election the Treasury's forecasts were a $3.7 billion deficit in 1991/92, growing to a $5.2 billion deficit in 1993/94"

No comments: