New Zealand’s Prime Minister John Key has resigned. I’m surprised at the timing – just after the Kaikoura earthquakes, and on the same day that Italy’s prime minister resigned.
It reminds me of that scene in Jurassic Park where the kids got left with T-Rex. But let’s hold that uneasy thought for the time being.
Key should have resigned like he promised when it was proven that the GCSB is carrying out mass surveillance of us New Zealanders. But when the Snowden revelations did indeed show that in 2015, nothing happened. At least he would have had some credibility if he’d kept his word.
But he hasn’t kept his word.
For instance, he wasn’t going to raise the GST tax. John Key’s changing opinion on GST rise.
On gay marriage – before his government passed it into law in 2013, he previously said “he did not believe there was a big demand for gay marriage in NZ and that civil unions were enough.”
Has John Key left big shoes to fill? No, those big shoes look more like flip flops.
His comments were flip and his neo-liberal financial leadership was a flop.
So what has John Key done in the three terms he’s been in?
He raised GST to 15%, turned NZ into a tax haven for the one percent, sold NZ land to overseas investors thereby pricing our children out of the domestic housing market, signed NZ up to the TPP, sold state houses – which forced vulnerable NZ families into living in cars, and under his watch New Zealand’s gross debt has soared to a whopping half trillion dollars.
That’s what we know he’s done. So what’s happening behind the scenes that we don’t know about?
How about New Zealand’s exposure to derivatives?
Former Canterbury University accountancy lecturer Dr Susan Newberry, now professor of accounting at Sydney University’s business school, still keeps a fascinated eye on the “New Zealand experiment”. And some of what she sees she finds a little alarming.
Does the average Kiwi know the country’s balance sheet now has a derivatives exposure of $180b, she asks? That is rather a lot of those “financial weapons of mass destruction”.
It means the NZ tax-payer is on the hook if it all goes wrong and there is the international equivalent of a bank-imposed mortgagee sale. (Think Greece, Iceland and Ireland.)
But hey, what could go wrong? It’s like 2008 never happened!
John Key was directly involved in the development of derivatives – the financial contracts and credit default swaps that no-one understands, which led to the toxic sub-prime housing loans, which led to the Global Financial Crisis. The likes of Merrill Lynch and the Bankers Trust profited from foreign exchange trades and derivatives speculation at the expense of national economies.
In transforming NZ into a tax haven and creating the speculative housing bubble, he’s done the same thing to NZ that he did to Ireland, when as head of global foreign exchange for investment giant Merrill Lynch he shifted a considerable amount of his business to Ireland in the mid-1990s to take advantage of a 10% tax rate for foreign investors.
That’s what you get when you elect a banker for Prime Minister. He’s done really well for the one percent.
Meanwhile, have we in NZ been left with a financial T-Rex?
The great big list of John Key’s big fat lies