<>Keywords: Macroeconomics & Money; Political Economy & History;
In the Saturday 17 May 2014 issue of “The Dominion Post Weekend” Vernon small wrote an article. “English emerges smiling from global meltdown: Finance minister one of a string of highly competent money men, New Zealand has been ‘lucky to have’.” In it he quoted me. Here is what he wrote.
The final judgments aren’t yet in on Bill English’s sixth Budget, but he is already eyeing another three – and will start planning his seventh in a few weeks.
Wellington economist Brian Easton, who like Curtin has observed decades of Budgets, also stressed how lucky New Zealand had been with recent finance ministers. But while he described English as “perfectly competent”, he is also strongly critical of some aspects of his stewardship.
In particular, the 2009 personal tax cuts were put in place under pressure from within National and were too big. English had been trying to pull the accounts back into balance for the following five years, Easton said.
Easton also believed the squeeze on the public sector and deregulation had created stresses that would only emerge when something went wrong – “and goes wrong big”.
He pointed to past examples such as the Cave Creek platform collapse, safety failures at the Pike River Mine, leaky homes, design faults with the CTV building, recent deaths in the forestry sector and the collapse of finance companies.
Easton said a close relationship between the prime minister and the finance minister was crucial at the heart of a good government.
Helen Clark and Cullen, and Jim Bolger and Birch worked very well together. Sir Robert Muldoon, who was prime minister and finance minister, “worked shoulder to shoulder with himself”‘.
But problems blew up when splits opened up between David Lange and Douglas, and Bolger and Richardson.
English was probably getting the same advice as Cullen did from officials to run a big surplus, Easton said, and Key seemed to wrongfoot him by talking about a tax cut ahead of the Budget.
To Easton’s mind, Key is “one of the flakier prime ministers” and “is not quite as solidly behind Bill English”.
I wanted to make it clear is that while Vernon Small quotes me correctly, I was calling Key ‘flaky’ only in reference to his attitude to the government surplus. I do not have any particular competence to judge him publically on other political matters.