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

 

Two Years With New Methods: Crime Stats Show Increase Led By Burglary

The two years of data show an increase in the total victimisation rate of 3.1 per cent, with 12,060 more victimisations in the 2015/16 year when compared to 2014/15 year. From this increase, 72 per cent is attributable to burglaries. More>>

ALSO:

Auckland Relocation Grants: 12 Grants Paid So Far

Since the policy took effect one month ago, 12 applicants have received the non-recoverable grant, supporting 32 people. $54,508 has been paid out, covering things like moving costs, bond, rent in advance and letting fees. More>>

ALSO:

Vaccine Funding Change: HPV Vaccines For All Children

PHARMAC has today announced changes to funded vaccines, which will benefit an extra 100,000 people... The human papillomavirus (HPV) vaccine will be available for all children and adults up to the age of 26 years, and boys will now be included in the HPV school vaccination programme. More>>

ALSO:

Gordon Campbell: On Why The Opinion Polls For Key And Trump Defy Gravity

What is going on? Donald Trump got confirmed as the Republican presidential candidate at a bizarrely chaotic political convention… and promptly received an upwards bump in the polls to where he’s now rating ahead of Hillary Clinton, for only the second time this year. More>>

Sugar: Auckland Leisure Centres Axe Unhealthy Drinks

Auckland Council is to stop selling drinks that are sweetened by sugar from vending machines at its leisure centres in a bid to try to reduce obesity and type 2 diabetes... More>>

ALSO:

Gordon Campbell: On Todd McClay’s Faulty Memory

Time and again, whenever an issue arises the initial response by government is to deny or diminish the problem – nothing to worry about here, everything’s OK, move on. Then, hang on. In line with the usual pattern, as embarrassing details emerged into daylight, the story changed. More>>

ALSO:

Labour's 'Future Of Work': Major Reform Of Careers And Apprenticeships

The next Labour Government will transform careers advice in high schools to ensure every student has a personalised career plan, Leader of the Opposition Andrew Little says. More>>

ALSO:

State Investments Management: Treasury Likes IRD, Not Education Or Corrections

The Inland Revenue Department has scored an 'A' in the first tranche of the Treasury's investor confidence rating for state agencies that manage significant Crown investments and assets, gaining greater autonomy as a result, while the Corrections and Education ministries gained a 'C' rating. More>>

ALSO:

Govt Goal: NZ To Be "Predator Free" By 2050

Prime Minister John Key has today announced the Government has adopted the goal of New Zealand becoming Predator Free by 2050... “That’s why we have adopted this goal. Our ambition is that by 2050 every single part of New Zealand will be completely free of rats, stoats and possums." More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news