Debt

Guest Post: Some facts to dispel the alarmism over the “Debt Armageddon”

by Michael Littlewood

Two recent pieces in the Herald on New Zealanders? apparently terrible borrowing habits caught my attention in the last couple of days.

1. Debt armageddon:?In?NZ?s Half Trillion Dollar Debt Bomb, 7 June, the Herald?painted an apparently worrying picture of households overburdened with debt but there is actually another side to that story.

The latest Reserve Bank data on total household balance sheets showed that all households had borrowed a total of just 12.4% of total gross assets ($163 billion of debt on $1,286 billion of gross assets). ?Perhaps not all debt was included (though that seems unlikely); certainly, not all assets were included as the Reserve Bank acknowledges.

The recent growth in debt and the sustainability of house prices are actually less concerning than the ability of New Zealanders to service what are relatively modest borrowings. ?So income levels are more important than the total borrowed. ?Some may have borrowed too much and will pay the price for that. ?But across the whole country, there seems less to worry about than the Herald’s article suggested. ? Read more »

Scumbag teachers holding on to Novopay overpayments facing debt collectors

Call in?the?debt collectors.

These ratbag teachers have had two years to pay back their over-pay. They are essentially stealing from their employer.

The Government is preparing to again call in debt collectors to chase school staff who were overpaid during the Novopay crisis.

The minister responsible for the system, Steven Joyce, says $1.8 million is still owed by 1960 people who haven’t made any arrangements to pay it back.

The use of debt collectors was suspended in March 2013 and Mr Joyce says the vast majority of those who had been overpaid were happy to work out repayment arrangements. ?? Read more »

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Live in Auckland? Your household’s share of Len Brown’s debt is $20,000

" Our Debt is this big "

“Auckland Council’s Debt is this big “

The Auckland Ratepayers’ Alliance has been crunching the numbers and revealed that the?Auckland Council?s liabilities, if equally divided between every Auckland household, work out to $20k per household.

Last week it launched the first of its Ratepayer Briefings where it examines the Council?s debt since amalgamation. If you would like to read it in full you can click here.?

Auckland Council's ticking timbomb

Auckland Council’s ticking timbomb

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Poor old Chris Trotter, he is back on his Greek delusions

Dear old Chris Trotter, he is back making up wistful stories about the demise of the socialist ratbags in Greece, who seem to believe they can have a free ride paid for by other hard working people like the Krauts.

He thinks there are three groups commenting?on the Greek crisis, the first group is the largest and are those who simply don’t care.

Then there are people like me, and most readers of this site who he describes like this:

Then there?s the group that regards the unfolding Greek crisis as a simple morality tale. According to this view, the Greeks awarded themselves a lifestyle they had not earned and paid for it with other people?s money. When the music stopped and their creditors came a-calling, the Greeks were required to discover just how unpleasant life can become when excessive debt falls due. As far as this group is concerned, the Greeks are in the process of being taught some very valuable lessons. On no account, therefore, should the EU be encouraged to remove its knife from Greece?s throat.

Read more »

Taxpayers’ Union slams Joyce for his expanded corporate welfare programme

Since the opposition is asleep at the wheel the job of holding a spendthrift government to account falls upon the shoulders of the Taxpayers’ Union.

They are holding Steven Joyce to account for his expanded corporate welfare programme.

Responding to Economic Development Minister Steven Joyce?s defence of corporate welfare, Jim Rose, the author of Monopoly Money, a Taxpayers Union report on corporate welfare since 2008, says:

“Mr Joyce defends over $3 billion in subsidies to KiwiRail and Solid Energy under his watch by saying that they are state owned. Bailouts are not the role of ministers as shareholders. Since 1986, state-owned enterprises have had a statutory duty to operate as a successful business and to be as profitable and efficient as comparable businesses not owned by the Crown. The whole idea of the State Owned Enterprises Act 1986 was to bring an end to bailouts and permanent deficits.?

?Instead of putting a failed business in the hands of receivers, Mr Joyce defends throwing good money after bad by blaming the previous government for buying KiwiRail. That was three elections ago. Elections are supposed to count for something. $3 billion in taxpayers? money cannot be handed out in subsidies with ministers bobbing and weaving about responsibility for the amount and wisdom involved. The Treasury Benches come with a full ministerial responsibility for every single dollar of taxpayers? money spent under your watch.? ?? Read more »

Oram justifies borrow and spend from Brown

One of the left’s biggest apologists, Rod Oram, has penned?an article which basically forgives and encourages Len to borrow and spend and particularly for his train set and then at the end of the articles we find Oram is on the payroll.

So he gets hired by the ratepayers and the coincidently uses his weekly column to write nice things about his paymaster.

Ratepayers should be asking what this guy is paid and Fairfax should never have accepted the column and asked him to write about something else, in fact Fairfax should get a proper business columnist who actually knows something about business.

The fight is on for the future of Auckland. The choice is: a healthy one driven by ambition, or a dysfunctional one dragged down by a penny-pinching mentality.

The issue has come starkly to a head with the deliberations over the council’s 10-year budget. The decisions the council will make over coming months, guided by public opinion, will set Auckland’s course for years to come.

So far the pessimists have dominated the debate with their wildly inaccurate and irresponsible claims that the council’s finances are shambolic. Only savage budget cuts can save it, they say.

To set the record straight:

The council runs a budget surplus on operating expenses. In 2012/13 it was $246m.

Rates provide only half the revenues for the council’s $3 billion annual budget. The rest come from a variety of sources.? Read more »

Auckland Council debt at the limit, time to sack the Treasurer

brownhonest

The rot at Auckland Council continues unabated with more news about just how perilously close to trouble the Council is in financially.

Council is already tapping the lit of it’s borrowing capacity. Currently net debt sits at or close to 14.9% of revenue. The limit is 15%.

Which means Len Brown (as treasurer) has spent so loosely in the last two years that Council cannot borrow any more money.

The only way that Council can borrow more – is to increase it’s rates. Raising the rates by 2.5% as noted on this table will increase borrowing capacity by 3%.

Mayor Brown is talking up closure of services – libraries, inorganic rubbish and so on to trick ratepayers into believing things are tough and, to justify breaking his election promises with a significant rates increase. He is already signalling that he is likely to break that promise. ? Read more »

So, Labour launches a policy to solve Kiwis money fears…only problem is Kiwis don’t have that problem

Labour launched their much vaunted new “Big Tool” to solve some problems they say are worrying Kiwis. Like rising interests, that are still miles off where interest rates were the last time they were in government…and protecting borrowers from money issues.

The only problem is for Labour is that the problem doesn’t actually exist in voters minds.

Kiwi’s money worries are at the lowest level in two years and are expected to continue improving this year, according to a report by a credit agency.

Dun & Bradstreet’s Consumer Financial Stress Index hit -5.6 points in March down from 7.5 points the same time last year.

Anything below zero shows lower financial stress.

stress Read more »

Labour Party tweet acknowledges National’s tight control on economy

mil

$52 mil since 2008? ?That doesn’t sound that bad.

fp

Another giant social media own goal (SMOG)

To be honest, the idea of Russel Norman as finance minister may end up being a brilliant solution to a Labour Party that just can’t get the numbers right.

What’s more, ?is that by attacking debt (fueled by the GFC and quakes) they seem to be suggesting that National should have cut more spending – which is at odds with their opposition to every cut that National has made.

National inherited forecasts of ever increasing debt and never ending deficits – it’s incredible that it has turned around so quickly.

So the question to Labour is if they think debt is too high – what would they cut – the Christchurch rebuild – the investment in infrastructure, ?working for families, benefits, health, education… what?

More double speak from the party of tricky Dave

Don’t panic, and always have a towel

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