Funny how things work out, isn't it? These incoming Gods of Finance retained the more excessive spending of their predecessors (interest-free student loans and Working For Families) because doing otherwise would make them less popular (note - not "lose the next election," because after all they're going up against Labour led by Phil Goff in the next election, but "less popular"), and have now decided to sell public assets to reduce debt.
There's a fairly obvious flaw with that plan that even I, not only not the Smartest Man in the Room, but completely untrained in finance and economics, noticed immediately: one receives a payment for the assets, but then forgoes the future earnings of said assets. Bernard Hickey explains it this morning:
But Mr Hickey, from financial website interest.co.nz, said that based on last year's earnings the four state-owned enterprises paid a dividend of 7.6 per cent, against the 5.5 per cent cost of new borrowing. "On the face of it the Government is a net loser by selling half of these state assets."
He's almost right - actually, on the face of it, we the New Zealand taxpayers are net losers by Key selling half these public assets.
So why is he doing it? He's throwing right-wingers a bone in the hopes of retaining at least some shred of credibility with them in an election year. He'll be well rewarded, and we'll get to pay for it. Funny, but that's often how ordinary people's relationships with Gods of Finance work out...