Sunday, November 27, 2011

We can learn from HM NZ PM John Key

I am a fan of John Key, leader of the National Party. He has secured an absolute majority with support from ACt and United Future Party. He will continue the sale of state assets, started under labour, but now opposed by labour. He seeks a balanced budget by 2014-2015. He wants welfare reform and a smaller nanny state. Sounds good to me!

As the European debt crisis threatens global growth, New Zealand’s new government faces the challenge of shoring up confidence in an economy where unemployment exceeds 6 percent and employment rose 0.2 percent from the previous three months in the last quarter.

Key, who came to power three years ago pledging state support to help end the nation’s worst recession in three decades, has promised to create 150,000 jobs over the next term. To boost employment in the country of more than 4 million, he pledged to introduce a “starting-out” wage for young workers and will limit increases in the minimum wage.

The multimillionaire and former foreign-exchange head at Merrill Lynch & Co. plans to overhaul welfare to help erase a record NZ$18.4 billion deficit. He said after the election he was confident of pursuing his asset-sale policy, which was opposed by 68 percent of 1,006 voters in a One News Colmar Brunton poll in late October.

State Assets

The sale of New Zealand’s state assets began in 1988 under a Labour Party-led government and progressed under National from 1990 to 1999, when companies such as Telecom Corp. and power company Contact Energy Ltd. were created and sold.

Labour, which remains the main opposition even as its support fell to 27 percent from 34 percent in 2008, slowed the free-market policy push during its 1999-2008 rule. In campaigning for this month’s election, it had offered the alternative of a capital gains tax and income tax increases for the highest earners as the means to cut the budget deficit.

In contrast, National intends to raise at least NZ$5 billion by selling shares in electricity generators Meridian Energy Ltd., Mighty River Power Ltd. and Genesis Power Ltd., coal miner Solid Energy New Zealand Ltd. and Air New Zealand Ltd., which is now 75 percent state-owned. The government will retain at least a 51 percent stake and prioritize sales to local investors and pension funds, while limiting the size of individual holdings in the companies, the party has said.

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