Dear Sir
I see Key has done another flip-flop this time on working for families. Where is he going to find the money to keep all the good stuff that Labour has done and implement generous tax cuts?
And Oh no, they won't borrow to give tax cuts - they may borrow to invest in infrastructure. Tell me what is the effective difference PLEASE!I won't borrow any money for my overseas holiday instead I'll use the money I saved for the new kitchen and then I'll borrow some money for the kitchen oh yes much better why didn't I think of that sooner!Must remember to ask John Key to help me balance my cheque book!
1 comment:
If you think that's clever chequebook balancing have alook at the funding arrangements for the electrification of Auckland's commuter railways.
Total cost $1200m. Even if it takes 6 years to complete the project that is $200m each year. The government has agreed to pay half the cost. The ARC doesn't have a spare $600m so it needs a new revenue source. The government has kindly allowed the ARC to use a regional petrol tax to raise the money but only if the government gets half the money, to recover it's half of the $1200m. The ARC will raise $40m a year from it's share of the 10 cent tax so it will take 15 years to save up it's $600m share and it doesn't want to wait 15 years to get the lines electrified. It's solution is to borrow the $600m at 5% p.a., and pay off $40m each year for thirty years. Thus it's half share of the project will end up costing $1200m.
Why electrify in the first place. Because of high oil prices. The same high oil prices that are reducing traffic on Auckland's motorways. Add in the probable effects of peak oil and this source of funding to repay the loans starts looking very dodgy.
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