Budget 09 - Time to be honest with how bad it will get
Unemployment will swell - Treasury
The main forecast assumed some growth would begin to flow through in the 2009 December quarter, but Treasury warned if New Zealand's trading partners showed ongoing weaker growth, New Zealand's economy could continue to decline through 2010 and push unemployment up to 10 percent.
"Higher unemployment would lead to more mortgagee sales and lower demand for houses with housing prices falling further than in the main forecast," Treasury said.
Under the mid-range forecast house prices would fall by 20.4 percent in real terms from their peak in 2007.
The meteor strike of greedy fraud spawned in the clusterfuck of the American sub-prime mortgage meltdown has just had its first shock wave hit our far flung Isles and the reality seems to suggest that things are going to get much worse. Bernard Hickey, a man much derided as a 'permabear' by those who have vested interests in the happy happy joy joy industrialized media consumer pharmaceutically induced optimism needed to fluff the global pyramid scheme using corporate financial weapons of mass destruction, has predicted that the House prices would fall a further 10% on top of where Treasury currently predict. What our franticly optimistic friends with vested interests in the sunshine spin seem in total denial about is that the unregulated corporate greed has to unwind violently, that this is capitalism working in it’s most primal way and that the coming depression demands much, much, much better leadership than this Government has shown to date.
Mortgagee sale explosion, unemployment to 10% and a planet in economic depression all demand a response with vision well beyond the means of this budget.