New Zealand deeply in debt; Can they shrug globalism again?

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“Future Governments will face two basic options. They can either lift economic growth above current assumptions or they can cut spending and reduce public services,” Mr English said.

New Zealand is an interesting case study because of its changes throughout the years and its experiments with globalization. In the early 1980s as the Pacific nation approved and implemented the gospel of internationalism in their economy and government. “Privatization” was quietly introduced. The tax burden shifted smoothly from the high wage earners down to the poor. During the years of social programs were dismantled, resources were drained by foreigners and led to crumbling infrastructure under foreign ownership (what renter takes care of someones’ land, anyway?).

Dissatisfaction at several levels have led to a change in government. New Zealand eventually shrugged and disapproved of many levels of globalization, but it seems it could not escape the worldwide slump that crushed its budgets last year and is continuing to ravage this small island nation-state.

In 1999 its electors voted to change direction, endorsing a strong interventionist government devoted to a mix of national social policies, enforceable economic regulations and a stable private sector. Why? Its national industries had been sold off, its economy was in decline and its standard of living had been stagnant for all 15 years of its Globalisation experiment. Its young were emigrating at alarming rates (JRS, 2005).

New Zealand faces deepening debt with little way out: Treasury
By New Zealand Herald

The economic crash has seen Treasury dramatically revising its long term outlook for the economy, questioning Government spending in virtually every area, including the eligibility of the pension for 65-year-olds.

Treasury says if spending follows historic trends, the books will remain in the red beyond 2050 and debt will rise to 220 per cent of the country’s wealth.

It points to other countries raising the eligibility age for the pension, with Treasury Secretary John Whitehead saying decisions made now can prevent economic disaster later.

Mr Whitehead says making early incremental change reduces the risk around the quality of decision making and gives people time to adjust.

The Government has been adamant it won’t change the eligibility age.

Today Finance Minister Bill English said the Government had a plan to tackle the report’s findings.

“Future Governments will face two basic options. They can either lift economic growth above current assumptions or they can cut spending and reduce public services,” Mr English said.

“This Government is focused on lifting our economic growth and we have a clear plan to do that.

“I remain confident about New Zealand’s long-term future. We are coming out of the recession in a relatively strong position compared with many other countries.

“The task now is to unleash our real growth potential and ensure New Zealanders who lose jobs can find a new one as soon as possible.”

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