Two a penny

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One of the worst yearly economic turnarounds in New Zealand’s history will take 20 years to recover from, Finance Minister Bill English said.

The final government accounts for the year ended June showed a dramatic $12.9 billion annual decline in the headline operating balance – to a $10.3 billion surplus in 2008.5 billion deficit at the end of 2009 compared to $2.

Treasury said it was the worst budget turnaround since comparable statistics began in the 1990s with the move to accrual accounting.

This was due both to the recession and decisions by both the former Labour government and the incoming National Government.

The books showed two rounds of tax cuts reduced revenue by $3 billion with extra spending announced in the 2008 budget on health and education added $2 billion to expenditure, while the lengthening dole queue and indexation of benefit increased welfare spending by $1.

Revenue would have been a lot lower except that Treasury booked $1.5 billion.

These are still open to further appeal.4 billion in back taxes due from major banks after Inland Re venue favourably challenged their structured finance deals in the courts.3 billion with investment losses and asset impairments costing another $4. .1 billion.1 billion.7 percent of GDP in 2008 to 9.6 billion compared to the $2 billion surplus in the previous financial year, which led to a dramatic rise in net debt from 5.

Around July last year was still predicting an operating surplus of $2.5 percent at the end of 2009.

The signs of gaping holes in the Government books were beginning to appear in July 2008 with Treasury predicting cash surpluses would be a thing of the past for the foreseeable future.56 billion would be revealed in today’s accounts, this was already down from the $7 billion forecast in December 2007.

This rubbed salt in the wounds of the New Zealand economy which had already been shrinking since the beginning of 2008.

Then the world was hit by the credit crisis and the collapse of many major international financial institutions which brought on a global recession.

Government debt could increase to around $70 billion meaning the cost of servicing the debt would rise from around $2.

Finance Minister Bill English said the gaps in the books would have to be met by borrowing and this combined with the harm to the economy meant it could be 20 years before the Government books regained the ground lost in the last 20 months.

Net debt would rise from below 10 percent of GDP to more than 30 percent over the next 10 years even if the economy grew at fairly robust levels in the coming years.

Net debt would rise from below 10 percent of GDP to more than 30 percent over the next 10 years even if the economy grew at fairly robust levels in the coming years.

.French culture minister Frederic Mitterrand has won the backing of fellow politicians amid calls for his resignation for having written about having sex with young male prostitutes in Thailand.
Government spokesperson Luc Chatel, immigration minister Eric Besson and Left Party founder Jean-Luc Melenchon spoke out in support of the nephew of former president Francois Mitterrand, who has threatened legal action to protect his reputation..
“Enough of this man-hunt. The private life of Frederic Mitterrand is none of my business,” Mr Chatel told BFM TV..
Mr Mitterrand was compelled to defend himself on television last week, saying he had only been with consenting adults and had committed no crime.
Revelations that Mr Mitterrand made in a 2005 book re-surfaced when he strongly defended Roman Polanski, who was arrested in Switzerland the previous month and faces extradition to the United States for having had sex with a 13-year-old girl in 1977.
The row was further stoked on Friday when the Quotidien de la Reunion newspaper published a letter sent by Mr Mitterrand, when he was director of the French Academy in Rome, in support of the family of two boys accused, and later convicted, of rape. He added that he condemned both sex tourism and paedophilia. It’s vile.
“I no longer tolerate these attacks.
“I bore witness to the morality of a family, that of my former make-up artist on France 2 [TV]. It’s a simple thing that I can very easily explain,” Mr Mitterrand told Le Journal du Dimanche newspaper in response.”
Mr Melenchon told Europe 1 that the continuing attacks on Mr Mitterrand were “unacceptable” and criticised those who would “cast stones” at the minister. .
“In no way is it an apology of sex tourism.
In the television interview, Mr Mitterrand described the book as “not totally autobiographical” and was evasive about the precise nature of his experiences in Thailand…
Throughout the TF1 interview, he referred to his partners as ‘boys’. even if one of the chapters is a journey through that hell, with the fascination that hell can provoke,” said Mr Mitterrand.
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The affair appears to have provoked a split in the government, with Labour Minister Xavier Darcos saying Mr Mitterrand needed to explain his behaviour, and Mr Sarkozy’s adviser Henri Guaino defending him

.Adelaide 18-year-old Sam Willoughby has been crowned this year’s overall season winner in BMX Supercross racing.
Willoughby became the youngest ever person, and the first Australian, to win a BMX Supercross World Cup series overnight in France.
“I don’t know what to say, I’m over the moon,” he said.
He said the win left him speechless.”
He lauded his competition and said it was a tough ride for the finish.
“It was a bit of a rough start to the day but I dug deep and I learnt a lot about myself today, to come back and get that.
“I learnt a lot today.
“The pressure was on but I managed to pull my head back in and refocus on the job at hand,” he said.
“For the final I wanted the inside lane and used that to my advantage. Our approach for this year was to focus on the World Cup events and the World Championships and that worked out.
“It is a privilege to race against such formidable competition. I fought it out on the first straight and it was a drag race to the finish.”
Willoughby’s father Colin says his son fought valiantly for the title. [It was] great to win here and to be the 2009 overall season winner.
“To the point that it’s determination that if something goes wrong, he just grits his teeth and fights back to make sure he atones for it.
“He’s just got that bit of attitude but it’s a good attitude,” he said. .”
Fellow Australian Khalen Young finished seventh.

.Italy scraped a draw against the Republic of Ireland to join Germany, Denmark and Serbia as the latest teams to secure 2010 World Cup places in a drama-laden penultimate batch of qualifiers earlier today (Australian time).
This quartet join already-qualified England, Spain and the Netherlands, leaving two automatic berths from the continent still up for grabs heading into Wednesday’s last throw of the South Africa dice.
Russia, beaten 1-0 by ten-man Germany in Moscow, and the Republic of Ireland, is among the teams assured of places in November’s two-leg play-offs.
The Irish came desperately close to pulling off a major upset in Dublin as Sean St Ledger headed them into a 2-1 lead with only three minutes to go, only for Alberto Gilardino to level on the whistle.
France, beaten on penalties in the 2006 final by Italy, are also in the play-offs after routing part-timers the Faroe Islands 5-0 to book second place in Group Seven behind Serbia, who trounced Romania by the same scoreline.
Italy coach Marcello Lippi praised the Azzurri’s “great performance”.
That put the world champions into an unassailable lead in Group Eight with Ireland as runners-up.
“If we had lost it would have been a big injustice because we played with passion, character and enthusiasm,” he added.
“We struggled but the result is even better for that.
Gilardino predicted Italy could go all the way again in 2010.
“We can hope to go all the way, the basis of this squad is the same as the one that won in 2006 but we’ve added some young players and some good players. At the end we deserved the draw,” the Fiorentina striker said.”
– Germany through –
Earlier, three-time world champion Germany ensured its participation in next year’s World Cup with a game to spare after a gritty defeat of Guus Hiddink’s Russia.
“Now we’ll go to South Africa in good spirits and with hope to win it again.
Miroslav Klose’s first-half goal booked Germany’s ticket with Joachim Loew’s team reduced to 10 men when Jerome Boateng was sent packing after receiving a second yellow card with 20 minutes remaining.
Miroslav Klose’s first-half goal booked Germany’s ticket with Joachim Loew’s team reduced to 10 men when Jerome Boateng was sent packing after receiving a second yellow card with 20 minutes remaining. We needed a bit of luck, but we have made sure of qualifying for the World Cup and you can’t ask for more,” Loew reflected.
“The team did well.”
Hiddink said his team can not be happy with the result. .
“We were not good enough at finishing our chances or on the counter-attack.
“But the team showed character in the second half,” he said.”
Denmark got the better of neighbour Sweden 1-0 to book its ticket as winners of Group One.
“But we still have a chance to qualify for the finals in November’s play-off.
Fabio Capello’s Group Six winners were reduced to ten men in the first quarter of an hour when goalkeeper Robert Green was sent off for a professional foul following a mistake by Rio Ferdinand.
– England’s streak ended –
Already-qualified England’s run of eight straight qualifying wins came to a sticky end in Dnipropetrovsk with Serhiy Nazarenko earning Ukraine a 1-0 win.
Spain, which had already guaranteed its place in South Africa as winners of Group Five, came through their trip to Armenia with a 2-1 win to extend their unbeaten run to nine from nine qualifiers.
Spain, which had already guaranteed its place in South Africa as winners of Group Five, came through their trip to Armenia with a 2-1 win to extend their unbeaten run to nine from nine qualifiers.
Bosnia-Herzegovina secured a play-off berth with a 2-0 win in Estonia to make sure of their position as runners-up to the Euro 2008 champions.
In other action, Switzerland boosted its prospects of making it to the finals with a 3-0 defeat of Luxembourg.
Ottmar Hitzfeld’s side are in pole position to qualify as Group Two winners, going into Wednesday three points clear of former European champions Greece.
Group Three is too close to call with Slovakia on 19 points, two ahead of Slovenia, with the same gap back to the Czech Republic.
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AFP – French agents have arrested an engineer working at the CERN nuclear research lab on suspicion of being in contact with the Al-Qaeda militant network and planning attacks, officials said Friday.

Perhaps we have avoided the worst, Interior Minister Brice Hortefeux told journalists, adding that investigators were trying to establish which targets in France or elsewhere the suspect was hoping to strike. .

Security sources in Paris said the suspected Islamist, one of a pair of brothers detained on Thursday, worked at the European Organisation for Nuclear Research on the Franco-Swiss border just outside Geneva.

He had expressed a desire to carry out attacks, but had not got to the stage of carrying out material acts of preparation, one said.

According to officials, the engineer had made contact over the Internet with Al-Qaeda in the Islamic Maghreb, a North African offshoot of Osama bin Laden’s loosely organised global Islamist militant movement.

He was not a CERN employee and performed his research under a contract with an outside institute.

CERN confirmed a physicist working at the site had been arrested under suspicion of links to terrorist organisations, and said it was helping the French police with their investigation.

According to a report on the newspaper Le Figaro’s website, the suspects are a 32-year-old Frenchman of Algerian origin who has been the subject of a police inquiry for a year-and-a-half and his 25-year-old brother. His work did not bring him into contact with anything that could be used for terrorism, it added in a statement.

Judicial sources told that investigators had come upon the pair while monitoring the Internet as part of a separate inquiry into the recruitment of would-be jihadists to send to Afghanistan as guerrillas.

The report, citing sources close to the inquiry, said the elder brother had had several Internet exchanges with figures considered close to Al-Qaeda and had provided a list of suggested French targets for attack. Two laptops, three hard drives and several USD memory sticks were seized from their home, they said.

Intelligence agents recorded several incriminating exchanges between the brothers and suspected Al-Qaeda contacts. We follow statements made by the leaders of certain organisations day by day.

We are in a situation of permanent alert. The danger is permanent, Hortefeux said. We never let our guard down.

Intelligence officials consider it one of the most serious threats to France, which has a large North African diaspora population.

Al-Qaeda in the Islamic Maghreb was born in 2007 when a largely-Algerian militant group, the Salafist Group for Preaching and Combat, swore allegiance to Bin Laden and rebranded itself as his organisation’s local franchise. It operates particle accelerators to study the behaviour of atoms at high speed and learn about the basic laws of nature.

CERN is Europe’s leading laboratory for the study of the fundamentals of sub-atomic physics.

The lab said the suspect had been working on the LHCb experiment which its website says will help us to understand why we live in a universe that appears to be composed almost entirely of matter, but no antimatter.

It is a civilian organisation, backed by 20 member states, and is not connected to nuclear weapons technology.

al Qaeda – France – terrorism

.Britain’s The Independent newspaper says Gulf Arab states are in secret talks with Russia, China, Japan and France to replace the US dollar with a basket of currencies in the trading of oil.
The US dollar eased after the report, written by veteran Middle East correspondent Robert Fisk and posted on The Independent’s website. It cited unidentified sources in Gulf Arab states and Chinese banking sources in Hong Kong.
“Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars,” said the report. .
The article said the plans may help to explain the sudden rise in the price of gold, which is commonly seen as a safe haven in troubled economic times. It added that France had also been involved in the talks.
The Independent said US authorities were aware that the meetings had taken place but had not discovered the details and were “sure to fight this international cabal”.
“I don’t think we will see much concrete actions coming out of such discussions because even when the dollar is weak, it doesn’t mean that commodities are undervalued,” said David Moore, commodities analyst at the Commonwealth Bank.
The issue of shifting oil trade away from the US dollar has been raised occasionally in recent years, but analysts and experts say it is unlikely to occur any time soon.”
Iran began settling most of its crude oil exports in non-dollar currencies – primarily the euro – several years ago, but the actual price for its oil is still set in dollar terms.
“In fact, when the dollar weakens, commodities prices tend to increase by a higher ratio.
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Labour says the Government is paying 39 of its Beehive staff more than $100,000 per year – close toly a quarter of the total 161 on the payroll.

Internal affairs spokesman Chris Hipkins said figures obtained under the Official Information Act showed that in June this year, annual salaries totalled $13,008,803. “In addition, over $165,000 has also been spent on temporary communications staff since November 2008. .”When you factor in the extra money the Government has spent on purchase advisors and communications consultants, it becomes quite clear they are spending more on staffing the Beehive than Labour did,” he said.”Mr Hipkins said the previous Labour government had 162 Beehive staff in June last year, for an annual cost of $13,319,768, but only 16 earned more than $100,000.”

.”This is yet another example of the National Party looking for loopholes to feather its own nest at the taxpayers’ expense

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AFP – US President Barack Obama and his French counterpart discussed Tuesday ways to bring Iran into compliance with UN resolutions on its nuclear program ahead of diplomatic talks, the White House said.

The two leaders discussed the status of diplomatic efforts to bring Iran into compliance with its international obligations on its nuclear program, a statement said after Obama spoke by telephone with French President Nicolas Sarkozy.

Iran maintains the program aims to develop nuclear energy for peaceful purposes.

The call came ahead of an October 1 meeting between Iran and the United States, Russia, China, Britain, France and Germany set to test Tehran’s readiness to discuss concerns over its nuclear program, which Western governments and Israel suspect is a cover to build an atomic bomb. And Washington has threatened to push for new sanctions if engagement with Iran fails.

The UN Security Council has imposed three sets of sanctions against Iran over its refusal to freeze its uranium enrichment activities.

Washington expressed disappointment with the package, saying it was not really responsive to our greatest concern — the nuclear issue — but Moscow said it offered something to dig into.

The six powers — which represent the five veto-wielding permanent members of the UN Security Council plus Germany — had called for urgent talks with Iran after it handed over proposals for talks last week. .

The upcoming meeting represents a fulfillment of Obama’s pledge to engage with the Islamic Republic despite three decades of hostility between Washington and Tehran, US Secretary of State Hillary Clinton said.

Sarkozy and Obama also discussed efforts to breathe life back into the stalled Middle East peace talks and agreed to continue working with key players in the Middle East region on setting the conditions necessary to restart Israeli-Arab peace negotiations, the White House said. It cannot be ignored, even though Tehran has so far ignored such appeals, she added.

The presidents agreed to work closely to make the Pittsburgh meeting a success and allow new decisions to be taken which ensure lasting and balanced growth, it said.

During their 30-minute telephone conversation, the two heads of state pledged to work together to ensure next week’s G20 summit in Pittsburgh is a success and prepared groundwork for the banking and finance meeting, according to Sarkozy’s office at the Elysee Palace.

The pair also discussed the need to address a broad range of regulatory reform issues, including capital and executive compensation, as well as ways to reform international institutions to make them more inclusive and effective, the White House said.

Obama has said he is opposed to a cap on bankers’ bonuses, while Sarkozy and other European leaders have backed the idea of tying bankers’ payouts to financial performance.

Barack Obama – Nicolas Sarkozy – nuclear Iran

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The estimated number of flu cases — including swine flu — in France has reached epidemic proportions, according to preliminary data released Wednesday.

Last week the number of visits to doctors for flu in mainland France was estimated at 52,300, which is to say 83 cases per 100,000 inhabitants, said the National Institute for Health and Medical Research (Inserm).

The threshold for declaring an epidemic is 80 cases per 100,000.

Not all the cases have been confirmed as flu, and not all are the new A(H1N1) virus, a global pandemic which the World Health Organisation says has killed 2,837 people around the world since it emerged in April.

We will have to see the same figures for a second week to confirm that the threshold has been passed and confirm the start of an epidemic in France, Dr Thierry Blanchon told AFP.

If confirmed, an official health warning could be issued next week.

Inserm said it was hard to be sure to what extent the extra consultations — there were 45,500 more visits to the doctor last week than in the same period last year — were linked to swine flu panic rather than actual cases.

On Monday a 26-year-old man without any underlying health condition died in a hospital in the southern city of Saint-Etienne, becoming the first person in mainland France to have died solely as a result of the flu.

There have also been school and class closures in the Paris region and in the southern Aude and Lot regions and in Ariege, in the south-west.

Paris authorities for the first time shut down for seven days a primary school in the French capital after three suspected swine flu cases were reported in one class on Wednesday. There have been seven confirmed deaths from swine flu in New Caledonia, six in Polynesia and three in the Indian Ocean island of Reunion.

In all, 19 people have died in France from the H1N1 virus but only three on the mainland.

.The top prize at the 35th Deauville American Film Festival in France has been awarded to The Messenger, a movie directed by Oren Moverman about a soldier back from the Iraq war. .
The film revolves around the difficult relationship between Montgomery and the officer who is in charge of training him.
The festival aims to boost the fortunes of independent American cinema and most of the films shortlisted fell into this category.
This year’s festival in the Channel resort closed on Sunday (local time) with an awards ceremony where the jury, chaired by Amelie director Jean-Pierre Jeunet, selected The Messenger from 11 feature length films.
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The Messenger – the first film directed by Moverman, who was previously known as a screenwriter – also won the international critics’ prize at Deauville