24 December 2010

Chief Reporter

TRANSNATIONALS' PROFITS DOWN, SO MONEY ACTUALLY STAYS IN NZ

The news just keeps getting better. Not only did the Overseas Investment Office and the Government refuse the application by Natural Dairy to buy the Crafar Farms but taxpayers got another Christmas present this week with the announcement that the quarterly current account is in surplus for only the third time since 1987 (after decades of an increasingly dire current account deficit). Why? Partly because the profits of transnational corporations fell by $551 million and therefore less money is being sucked out of the country in the form of repatriated profits.

In the upside down world of neo-liberal economics this is seen as being a bad thing and "the experts" fervently wish for the normal scenario of tens of billions of dollars leaving NZ and a soaring current account deficit to resume as the economy "improves" (for whom?). But this unusual state of affairs, just in time for Christmas, has given New Zealand workers and taxpayers a tantalising glimpse of what this country could actually be like if it wasn't run as a branch office of the transnationals and bled dry in the process - money would actually stay in the country, where it could be used in the national interest. What a thought.

Actually the single biggest reason why the current account is in surplus is because of an estimated $1.7 billion of reinsurance claims from the Canterbury earthquake (that is the amount that NZ insurers expect to claim from the overseas reinsurers). If it wasn't for that the current account would have a $1.8 billion deficit for the September quarter, instead of a $35 million surplus. So, speaking as one of the 160,000 earthquake claimants, I'm delighted that we're doing our bit to help out the economy. I'm just sorry that I couldn't have made a bigger claim and helped it out even more. Oh wait, that would have meant that my house would have been destroyed instead of just suffering moderate damage. Because in the upside down world of conventional economics, a natural disaster is great for business and GDP. Perhaps we should really go to town and have a war. That's always good for business.

Murray Horton
Secretary/Organiser