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

 

PARLIAMENT TODAY:

Gordon Campbell: The PM’s Hair-Pulling Power Trip

There have been striking differences between (a) the account of the waitress involved in the hair-pulling incidents, and (b) the account being given by Prime Minister John Key. The version by the waitress is available here and is recommended to anyone yet to read it. By her account, there were multiple instances of hair-pulling and these persisted and persisted long after she had made her annoyance clear to Key – who had also been advised by his wife, and by other café staff that the behavior was evidently not being welcomed. More>>

ALSO:

War: What’s To Commemorate?

Gordon Campbell in Werewolf: Is there anything that can be validly commemorated on this 100th anniversary of Gallipoli? Beyond, that is, a fleeting sense of empathy with the thousands of soldiers killed or wounded on April 25 1915 and in the months thereafter, until the whole thing was finally called off in December 1915. More>>

MORE IN WEREWOLF:

ALSO:

Peter Ellis Case: Minister Declines Request For Commission Of Inquiry

Justice Minister Amy Adams has declined a request from supporters of Peter Ellis for a Commission of Inquiry on the basis that an inquiry cannot be used to determine the liability of any person. More>>

Quakes: New Process For Red Zone Crown Offers

Canterbury Earthquake Recovery Minister Gerry Brownlee has announced a process to give everyone a say on the Crown offers to owners of vacant, commercial/industrial and uninsured properties in the Residential Red Zone. More>>

ALSO:

Gordon Campbell: On The Battle Obama Is Waging Over The TPP

For the past two and a half years, this column has been arguing that the fate of the Trans Pacific Partnership (TPP) deal will hinge on whether US President Barack Obama can win Trade Promotion Authority (TPA) from Congress... Last week, the White House finally, finally unveiled a draft TPA Bill. More>>

ALSO:

Greens: Govt Breaks Free Doctors Visit Promise To Kids

Documents obtained by the Green Party show that the Government decided to fund only 90 percent of doctors’ visits for children suffering from an injury in an attempt trim the cost of the so-called “free” visits. More>>

ALSO:

Other Wars: Extension Of NZDF Commitment In Afghanistan

The New Zealand Defence Force’s commitment of mentors and support staff to the Afghan National Army Officer Academy in Afghanistan has been extended out to December 2016, Defence Minister Gerry Brownlee says. More>>

PM's Press Conference: Auckland Property Prices Increasing "Too Rapidly"

John Key accepted that Auckland property prices 'are going up too rapidly” in a press conference held today in Wellington, however he said that this is not anything new. More>>

ALSO:

Press Conference: ANZAC PMs Concerned About ISIL Bringing The War Home

Prime Minister Key and Prime Minister Abbott spoke of the bond formed between Australia and New Zealand in the “baptism of fire” of Gallipoli. Abbott stated that New Zealand and Australia’s values and interests are linked, and this is reflected in the joint operation in Iraq which will begin shortly. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news