Finding The Goldilocks Point: Fiscal Choices and Asset Sales

Monday, 21 May 2012, 1:43 pm
Article: Mark P. Williams

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Today the Green Party outlined their critique of the current Government policy on its asset sales programme.

Dr Norman outlined the Green Party’s position on the Government’s proposals for economic rebalancing. He explained why the Greens believe that current fiscal choices are poor in terms of manufacturing, he criticised the 2010 tax changes, and the quality of Government spending on infrastructure such as Roads of National Significance. He proposed alternative approaches to these areas and further investment in alternative energy and Green growth sectors.
Dr Norman then introduced BERL chief economist DrGanesh Nana who had been commissioned by the Greens to investigate the Government asset sales programme.

In his presentation, Dr Nana was keen to clarify a number of points which can become muddied in discussions of the relative benefits of the asset sales programme. He drew careful attention to the differences between the ‘government deficit’ and ‘government debt’, and the economic distinctions between ‘government deficit’ and ‘external deficit’, and between ‘government debt’ and the ‘external debt’. Dr Nana stated that while government debt can have positive or negative outcomes, “External debt is the loan shark.”

After the two presentations, both Dr Norman and Dr Nana took questions from the media. Dr Norman concluded that the important aspect of any future economic direction must look at a combination of spending cuts and increasing revenue gains from assets. Dr Norman said that the Government is applying the wrong prescription; he added that although nobody knows the “exact Goldilocks point between spending and revenue…it can’t just be one sided and the Government currently is very much focused on one side”.

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