Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Ukrainian crisis proves need for fiscal discipline

Ukrainian crisis proves need for fiscal discipline

The crisis in the Ukraine is a perfect example of what people in my former profession, risk management, warn their clients about. As they say, you need to expect the unexpected. That means making sure your business (or country) will be resilient in the face of unforeseen shocks.

Many politicians and commentators nowadays are unjustifiably sceptical about the possibility of major conflicts and attendant economic crises. The Russian occupation of Crimea is an aggressive act which risks provoking a military response from the West or the new government in Ukraine.

The Russians under President Putin seized a good portion of Georgia and got away with it. But that was significantly different. The Georgians started the fighting. Georgia is a long way from Europe and not strategically significant. And Georgia had no treaties with anyone. None of that is true of Ukraine.

When the USSR broke up, Ukraine posed two military problems. The Russian Black Sea fleet was based in Ukraine and so were many nuclear weapons. The nuclear states did not want another nuclear-armed country and persuaded the Ukrainian government to give up its nuclear weapons. In return Russia, the USA and the UK pledged that Ukraine's borders would be respected.

If Russia can simply seize Crimea (perhaps by setting up a puppet regime) then why should any state, such as Iran, accept assurances from the nuclear powers? American and British credibility are on the line.

President Putin surely wants to avoid either war or civil war in the Ukraine A deal will probably be done. But we should not take it for granted. Twice last century Europe brought war to the entire world.

What does this risk mean for New Zealand? We cannot influence the direction of events in Ukraine but we can be affected by them. If the European economy is seriously affected, the knock-on effects will be felt around the world.

Resilience in the face of shocks requires capital (savings) – either your own or those of your insurer. The more indebted you are, the more vulnerable you are to shocks.

The New Zealand government’s debt has grown substantially in recent years. It is now projecting surpluses in the coming years. These should not be used to fund government spending on election bribes. They should be returned to taxpayers, either directly through tax cuts or by paying off government debt. Now is not the right time for tax and spend. Our government must be prudent.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

More Evidence - Scoop Press Conference Recordings:
PM's Post-Cab Presser 8/8/11
"at that point [Tucker] told me he'd release it ..."

Hager Revelations: Inquiry Into NZSIS Release Of Goff Docs

The Inspector-General of Intelligence and Security (IGIS), Cheryl Gwyn, announced she would be instituting an inquiry concerning allegations that the New Zealand Security Intelligence Service (NZSIS) might have released official information to Mr Cameron Slater, regarding briefings provided to the then Leader of the Opposition, for political purposes...

“I am satisfied there is a sufficient public interest justifying the commencement of an own-motion inquiry into the substance of the issues raised with my Office,” said Ms Gwyn. More>>

Goff: Director’s Letter Contradicts Key’s Claims

At yesterday’s media standup, when asked on the topic John Key said ‘I wasn’t told’...
“In a letter dated November 2011 former SIS director Warren Tucker states three times that ‘in accordance with the usual practice of keeping the minister informed’ the Prime Minister had been told. More>>


 

Parliament Today:

Schools, PPTA Sign Up: Primary Teachers And Principals Vote Down Govt Plan

Teachers and principals have voted overwhelmingly against the Government’s controversial “Investing in Educational Success” policy, including proposed highly-paid principal and teacher roles. More>>

ALSO:

Gordon Campbell: On The Usual Round Of Mud Slinging And Name-Calling

This week gave an interesting example of how hard it is to untangle the reality from the slanging matches. The issue that emerged early this week could hardly be more important. Does the government intend to cut spending in health, education and on the environment if re-elected, or not? More>>

Earlier:

Electionresults.co.nz: National and NZ First Rise in Roy Morgan Poll

National has bounced back in the latest Roy Morgan Poll but the big winner has been New Zealand First who rise to their highest level of support since September 2013. More>>

ALSO:

Fish Pun Warning: By Hoki! It’s Labour’s Fisheries Policy

A Labour Government will protect the iconic Kiwi tradition of fishing by improving access to the coast, protecting the rights of recreational fishers and reviewing snapper restrictions, Labour’s Fisheries spokesperson Damien O’Connor says. More>>

ALSO:

It's Official: Governor General Gives Direction To Conduct Election

The Governor General has signed the writ directing the Electoral Commission to conduct the General Election on 20 September 2014. This is the formal authority to run the 2014 election, and enables candidate nominations to open tomorrow Thursday 21 August 2014. More>>

Gordon Campbell: No More Mr Nice Guy

When future historians seek to identify the exact moment when the prime ministerial career of John Key hit the downward slope, they may well point to Key’s interview yesterday with Guyon Espiner on RNZ’s Morning Report. More>>

ALSO:

Dirty (Politics) Weekend: Collins’ Admission Reason For Key To Act

"Despite claiming that the evidence about her in Nicky Hager's book was ‘false’ Judith Collins has now been forced to admit that she did send information about a Ministerial Services staff member to Cameron Slater for him to use in a baseless smear campaign. More>>

ALSO:

Potential Disasters: Underground Coal Fire On Denniston Plateau

Forest & Bird says one or more coal fires have broken out beneath the Denniston Plateau, and that the Department of Conservation (DOC) must stop Bathurst Resources’ preparatory mining work going on there until the fire or fires are extinguished. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news