This is so funny.
Click on image for full zoom.
The Pre-election Fiscal Update projects that gross debt will rise from 17.4% today to 24.3% of GDP in five years. Fortunately, we are facing these tough economic times starting from a solid position due the the Government’s policy of running surpluses and paying down debt, rather than slashing taxes. 24.3% debt is right at the upper edge of even National’s comfort zone but it won’t be disastrous. We shouldn’t choose to increase our debt to such a level but we can deal with it when economic conditions force it on us.
The same goes for unemployment. It is projected to rise to 5% but the rise is coming of a very low base and, because low unemployment is self-reinforcing, the rise will not be as bad as it has been during other economic crises.
These are the rainy days. Fortunately, we’ve acted wisely during the good times. We face the storm in much better condition than countries like Australia who allowed their banks to become exposed to risk on the international credit market, run higher unemployment policies, and undercut their tax base.
With the economic situation deteriorating the surpluses the Government has run for the first eight years have turned to a deficit. National’s line now is that the Government ’suquendered’ these surpluses when it could have been cutting taxes. As if when the Government runs a surplus it takes the extra money out and burns it.
What actually happened? The Government used those surpluses. The $2 billion a year for the Superannuation Fund comes out of the operating surplus, as does other capital investment. The Government reduced net debt from $22 billion in 1999 to $2 billion in 2008. The fact that there were structural operating surpluses allowed the Government to fund the Working for Families tax credits, Kiwisaver, other new spending and the $10.6 billion tax cuts package that started to take effect last Wednesday. National now supports all of those spending programmes.
If we had done what Key is saying we should have done (he doesn’t really believe it, of course) and used all the operating surpluses on tax cuts then there would be no WfF, no Kiwisaver, none of the other spending increases, no Superannuation Fund, no additional capital investment like the extra billion Labour put into transport in 2006. And we would still be holding all that extra debt. National doesn’t want to acknowledge it but there’s always a trade-off with tax-cuts, something else has to be given up.
Hypocritically, National both supports the policies that have been paid for by the surpluses and says we should have had tax cuts instead. They just hope the voters won’t consider that. Once again, their argument depends on their audience’s ignorance.
Fearing a PR disaster over their tax-cut package announcement later this week, National has reverted to type, shedding the moderate facade and proposing a good old fashioned ‘get tough’ crime policy.
National would abolish parole for people convicted of murder who have previously been convicted of a serious violent crime. In the last six years, that would have applied to ten people, five of whom are currently on parole, none of whom, it seems, have reoffended. Under current law, the worst murderers receive non-parole periods that would only see them released in their old age and violent offenders with a strong likelihood of reoffending can be imprisoned permanently on preventative detention. So, hardly earth-shattering stuff from National but a typically unsophisticated, heavy-handed policy. Rather than crafting the best punishment and rehabilitation for individuals, they just want to lock them up and throw away the key.
There would also be no parole for other repeat violent offenders. The increased prison population resulting from that would cost $43 million a year and require another $315 million prison to be built. (forget the ‘cap on bureaucrats too, corrections staff fall under National’s definition of bureaucrats and hundreds more would be needed).
One can understand why National has gone with a policy like this. With the media whipping itself into a grotesque frenzy over violent crimes, abolishing parole for violent offenders is an easy populist policy to run. But if we actually want to reduce the amount of crime in our communities, we need to remove the conditions that create crime. That means getting young men into work and training, giving them a sense of belonging and self-worth - Labour has made exemplary progress on that front and crime has come down 15%. It means nipping substance dependence in the bud - something ike 80% of crimes are committed by people under the influence of alcohol or other drugs. It means better earlier care for people with mental issues. We need prisons to be about redemption and rehabilitation, not the criminal training grounds they are now - like Johnny Cash says, ‘San Quentin, what good do you think you do?’.
Labour has made some progress in this regard but gone backwards too in trying to out tough National. National clearly has no new ideas; it just wants to put more people in more San Quentins for longer. It seems, once again, that the change we need is Green.
I see National has released a knee-jerk reactionary crime policy this morning, and it’s been reported largely uncritically by a news media that’s made a fortune fostering public fear of crime at a time when crime rates are falling and resolution rates are on the rise.
It’s frankly depressing that our level of public debate has got to this. Hopefully we’ll get something up later today with some proper analysis, but for now I’ll leave it to Johnny Cash. This one goes out to you, Mr Key:
After a lot of work both by a few e-mails from people here and by the good services of some people on nz.comp (google seems to be a little behind on the messages) I finally found the link to the malware site that was attached itself to the site footer.
The material that it was trying to introduce to people reading the site may include various forms of backdoors. It would be adviseable to run a good virus scan on your system if you have read the site in the last couple of weeks. Corporate systems shouldn’t have had an issue because the site it was linking to has been a well known chinese malware site for a long time.
The anti-virus/malware scans missed it at the server because it was a new variant of an old problem (the same one I had in march), targeted specifically at wordpress sites using what is evidently is still a open vunerability. My own checking of the site missed it because it had managed to leave all of the file attributes of the file (size, times, etc) exactly the same as the origionals. My attempts to see what people were reporting had failed because it only emitted the malware link out periodically. A dump of the web page at the client side by Stephen Worthington allowed me to see exactly what it was doing.
The vunerability it was exploiting was meant to have been fixed in wordpress 2.5, however they seem to have found another vunerability. The downside of having open source software is that it is possible to read the code looking for holes. I’ve done some things to reduce possible problems, but I now have MD5 hash check of the files running periodically which will fix the problem if it happens again. I’ve also reported the details to wordpress and a couple of other sites.
But there are some very creative people out there writing this stuff, and evidently this site is popular with them.
Lynn
Tomorrow the government’s books will be opened up. It is not expected to be a pretty picture. Oil prices and the credit crunch have forced the economy into recession. The debt to GDP ratio will be higher than was modelled in the Budget for three reasons (at this point, I just want to remind our excitable righties that fiscal modelling is not carried out by Micheal Cullen but by Treasury officials):
1) GDP is lower than expected: the Budget expected the GDP to be $180 billion in the year to June. In fact, it was $179 billion. It may have shrunk by another billion since, whereas the model had it growing by a billion. Even a constant level of debt increases as a % of GDP when GDP shrinks.
2) Tax revenue will be lower than expected: a recession hits corporate tax revenue hard. Employment, while not down, has not grown as modelled, so income tax revenue will also be lower than expected. Lower than expected consumer spending means lower GST revenue. All of which means that even if government spending was at expected levels, more money would need to be borrowed to make up the difference.
3) Spending will be higher than expected: So far, the number of people on the unemployment benefit has not increased so benefit payments have stayed low. However, other government spending has been higher than expected - high oil prices have driven higher than expected inflation, increasing government costs. Add to that the sign-up rate for Kiwisaver has been much higher than modelled. Treasury thought there would be 270,000 members by July 1, today there are over 800,000 - each costs the Government $1000 on sign-up and around $40 a week more. That adds up to around a billion more spent than expected this year. More expenditure means more borrowing.
Add in losses from the Government’s financial assets (the Cullen Fund, the ACC Fund etc) and we are looking at net government debt worsening by several % of GDP more than expected. So, tough times. What should we do? Well, we shouldn’t cut government spending, that would just deepen the recession. Measured increases in government spending (as Australia is undertaking) can prime the economy’s pumps, getting us out of recession quicker. We certainly should not increase debt any more than necessary, especially while international credit markets are in such turmoil; if there was ever a time for borrowing for tax cuts, now is not it.
How the parties react to all this will be an important test of their readiness to govern. Will they react prudentially or will they carry on as if nothing has happened and attempt to win the election at any cost?
There are two core strains to left-wing thought. Both of them can be seen as rooted in the evolution of the scientific method during the 18th and 19th centuries, although the essential ideas, of course, existed long before. The first is liberalism. Liberalism holds that we must always keep an element of self-doubt and criticism at the heart of our philosophy; that no-one has a monopoly on truth, so we must allow everyone into the social decision-making process, regardless of class, race, gender, sexuality, or other trait. The second is socialism. Socialism holds that there is an essential sameness, an essential equality amongst all people. There is no scientific reason and, therefore, no moral reason why any class, race, gender, sexuality or other group should be advantaged by the social order or subjected by another.
Now, on the Left we tend to hold both strains inside our philosophies, and they are largely compatible. The problem arises that liberalism taken to its extreme loses the ability to criticise or moralise. We’re all aware of moral relativism, where a blind adherence to liberal ideals prevents us from criticising behaviour in other cultures that would be viewed as abhorrent in our own culture or from a socialist perspective. You hear people defending brutal dictatorships by claiming this is just the way other cultures operate. But liberalism can also hog-tie us into not fighting illiberal forces within our own society. After all, ‘they might be right’ is something we can never discount. The problem is this prevents us from putting any moral force behind our beliefs. It is a constraint that socialism does not face – it is free to argue any system that subjugates one group to another is immoral and can be attacked as such.
It is letting our liberalism make us weak kneed that has prevented us from making a moral argument for left-wing government. Instead, ridiculously, the moral high ground is associated with the Right. The Right fights for the established order against the forces of liberalism and socialism – they fight against free universal health care, education, and basic income, against full employment and a whole suite of other policies. The result of them having power is that power and resources stay concentrated with the ruling (capitalist) elite and the rest living less healthy, more crime-ridden, poorer, shorter lives than need be the case. Yet overly liberal sentiments have prevented us from saying that the Right’s policies and methods are immoral. By failing to do so, we come to rule only by default; only when the people are utterly disgusted by the Right’s policies and manage to find a political alternative*. All the surveys and studies show that people overwhelming favour more socialist policies, the redistribution of wealth to moderate the unjust, unequal outcomes inherent in capitalism. Yet, we do not say that the Right stands against those value; we do not call the Right’s principles immoral. The Right should never win because they don’t stand for what most people want; as long as we continue to fail to show the immorality of their policies, they will continue to win.
*[in the 50s and 60s, the left-wing vote was split between Labour, Social Democrats, and Values, in 1978 and 1981, left-wing Labour won more votes than National but lost under FPP, in 1990, voters deserted right-wing Labour for any alternative – NewLabour and National, in 1993 and 1996, the Left won more votes but failed to establish Parliamentary majorities]
Malcolm Evans, award-winning former Herald cartoonist, is bloody good at what he does - insightful, well-drawn, concerned with the big issues, and always on the side of the underdog. His leftwing views made for a difficult relationship with the Herald’s editors. In 2005, they ‘accidentally’ published a cartoon in which he criticised the Israeli occupation of Palestine. The resulting uproar from David Zwartz et al gave Herald the excuse to get rid of him. Here’s a youube video about his work, featuring many cartoons the Herald refused to publish:
If you’ve ever got a cartoon you want to give to The Standard, Malcolm, flick us an email.
So, there’s no articles on Key in this edition of the Standard Week. I know! Hardly believable. But there’s a reason for that. After his dodgy Tranzrail dealings came to light last week, Key has been trying to keep himself out of the media except for the most soft-news photo ops (item: ‘Key feels sorry for sick child’, item: ‘Key cooks breakfast’). In fact, pretty much the entire National frontbench is lying as low as possible these days - every time they show up people are reminded of damaging revelations. Crime continues to fall - the only increase was reported family violence due to increased public recognition that it really isn’t OK. The first round of tax cuts came in. Now, the attention turns to National’s tax package announcement next week. Word is, they’ve brought it forward because they fear it will be a PR disaster. Fingers crossed. Here are our favourite posts of the week:
Attack on democracy
…I’d also like to know what kind of electoral law they envisage replacing the EFA because I have a bad feeling it won’t involve transparency and the removal of anonymous donations…[more]
Nats’ ‘NZ sucks’ campaign vs the facts
National knows that its claims are untrue. The Tories lie to you because they hope people will vote against the Government if they can create dissatisfaction with the state of the country, albeit based on falsehoods …[more]
Crime falls, again
it makes sense that crime would be falling. When unemployment is low, people who might otherwise commit crimes have a constructive way to occupy their time and make a living. High unemployment leads to poverty and alienation - a recipe for crime …[more]
Trivialising the electoral process
… the Herald’s latest election gimmick, which begins today by asking readers “Which of these politicians would be most likely to help an old lady across the road?” FFS. I guess “How will these politicians’ policies affect you and your family?” is too much to hope for in election year…[more]
Great expectations
National has spent 9 years building expectations of the tax cuts it will offer. Next week, they will finally have to deliver…[more]
If you want to receive this weekly post by email, just flick us an email at thestandardnz@gmail.com to go on the Standardista list. On becoming a Standardista, you will receive your Standardista cloth cap, ‘how-to’ guide for living a PC life, class consciousness, and Notional Party yo-yo that swings from the right to the centre and back again every three years.*
*you won’t actually get these things, except the class consciousness
The Council of Trade Unions has done a lot of work on why wages are low for many workers in New Zealand and how they can be increased to close the wage gap with Australia. They offer six proposals:
Increase the minimum wage to at least $15 per/hour
We know from the painful experience of hundreds of thousands of Kiwis during the 1990s that if the minimum wage doesn’t go up, wages for low-paid jobs (not just those on the minimum wage but also those close to it) don’t go up. If we want wages to go up at the lower end, we need minimum wage rises. Higher minimum wages encourage more people into the workforce.
Improved collective bargaining
Collective bargaining redresses the inherent power imbalance between employer and employee. When workers are divided and forced to compete against each other a race to the bottom occurs and wages drop. When workers are permitted to stand united, wages rise. While New Zealanders lost work rights in the 1990s, Australians didn’t. That’s when the wage gap opened up.
Build union capacity
The end of industry-wide bargaining means that each union has to bargain individually with each business in which members are employed. This situation was created on purpose to undermine workers’ ability to bargain for better wages. To counter this support for unions could include more research, expanded mediation services, funding for bargaining initiatives, and advocacy training.
Good employer and responsible contractor policies
A lot of work is contracted out by the public service. Workers don’t have the same protections working for these contractors that they do working directly for the government. The public service should refuse to work for contractors that don’t meet acceptable benchmarks.
Increased Productivity
The two biggest things that are needed to help this happen is for workers to get their fair share of increased productivity (labour productivity is up 42% since 1988 but wages have not gone up anywhere near that much) and more capital investment.
Close gender gap
If women earned as much on average as men, the wage gap would be much smaller. Many women work in industries with low rates of unionisation, which prevents them getting effective wage increases.
Good stuff. Looks a lot like the Greens’ work rights policy and the EPMU’s Work Rights Checklist. It’s good to see the Left thinking along similar lines. We’re still waiting on Labour’s policy but word around the traps is it will be good. Hopefully, they’ll have the sense to run hard on it.
I don’t have a lot of time for Winston Peters’ politics or his dodgy electoral practices, but sometimes the man just hits the nail on the head:
Rt Hon Winston Peters has accused a number of media outlets of trivialising general election coverage to the point of mindless banality.
This follows a request from a Sunday newspaper for Mr Peters to discuss whether he owns an iPod and the type of music he likes to listen to on it.
Earlier Mr Peters had been asked about his pets and whether he would be interviewed cooking dinner for radio pensioner Paul Holmes.
“While the Western world lurches into economic meltdown, while tens of thousands of jobs are threatened, while a New Zealand company is embroiled in an international scandal, the media airheads are wandering off into cuckoo-land.
“If anyone ever thought for one nanosecond that the newspaper industry was into thoughtful and serious analysis of the issues facing New Zealand, my suggestion is that they should think again.
Sure makes you think about the Herald’s latest election gimmick, which begins today by asking readers “Which of these politicians would be most likely to help an old lady across the road?” FFS.
I guess “How will these politicians’ policies affect you and your family?” is too much to hope for in election year.
We’ve seen the work of Declare Yourself before. Their message is aimed at voters in the US but the call to engage and get involved resonates just as strongly for us here. This time some big names are promoting the message to get involved including Leonardo DiCaprio, Jennifer Aniston and Ellen DeGeneres (others whose faces I know but not their names!)
Some comments really stood out:
Halle Berry: “Don’t vote unless you care about healthcare”
Forrest Whitaker (corrected) “You could vote if you care about welfare, minimum wage”
Dustin Hoffman: ” …the economy, gay rights, abortion rights”..
Toby Maguire: “or your future, or the world”
The video goes on to tell people that they must be enrolled to vote. You can do that here.
Leonardo DiCaprio: “I mean, seriously, after this whole video - if you’re not going to vote, I don’t even know what to say. You know you have to vote.”
As The Standard first reported on April 1 and Radio New Zealand picked up today, Treasury figures show that the wage gap between Australia and New Zealand increased 50% under National in the 1990s and has decreased moderately under Labour since then.
Now, a lot of our readers simply won’t want to believe that is true, just like they don’t want to believe that crime is going down, because it goes against their premises (’NZ is going to hell in a hand basket because of this socialist dykocracy’). So let’s ask: ‘does this data make sense, given what we know about wages during these two periods?’
Well, we know that in the 1990s National weakened the unions, ran a high unemployment policy, and refused to raise the minimum wage (expect one time with NZF forced them to). We know that real wages fell for many workers and incomes fell after inflation for over 40% of Kiwis during that period. We know that in Australia during that period work rights and wages were not undercut by government policy. We also know that Australia grew faster than NZ during that period, even as wages as a % of NZ GDP fell.
We know that under the left-wing governments since 1999 the minimum wage has been increased by $5 an hour; something like 40% in real terms (I don’t have the number on me). We know that workers’ collective bargaining power was strengthened by the introduction of the ERA and a full employment policy. We know that New Zealand grew faster on average than Australia during this period and wages rose as a % of NZ GDP. We know that incomes at every level have risen under these policies. At the same time, we know that Australia’s right-wing government was weakening work rights.
If we were asked to construct a hypothesis on the relative change in wages between Australia and NZ given these facts, what would that hypothesis be? Surely, we would expect the wage gap to have opened under National and at least stopped growing under Labour (remember, once you’re behind, you need to grow much faster just to stop the gap growing). And that is exactly what the Treasury figures show.
[the CTU has a list of policies to help close the wage gap further. I'll write more on that later]
Yesterday, I printed and cut 6500 A6 leaflets from the designs on the Campaign Hub and took them along to Drinking Liberally. They were all gone in minutes.
The Right wins and keeps power by dis-empowering and disenfranchising, by taking away our voice. So, it was great to see so many people take it on themselves to grab a bundle of leaflets for delivering around their neighbourhoods to help spread the message.
It’s inspiring. Good on ya.
The first round of the tax cuts that National derided as the ‘block of cheese’ tax cuts kicked in on Wednesday. Next week, National will show us how they would do better.
How much on top of Labour’s cuts do you expect National to offer?
Given National has guaranteed all major areas of spending except the Cullen Fund and Kiwisaver, and insists that its infrastructure borrowing won’t fund tax cuts, how would you see those cuts funded?
With expectations about National’s tax cuts justifably very high (thanks to National talking them up for nine years), National is suddenly trying to change course. John Key, who has promoted tax cuts as the solution to doctors’ strikes, the wage gap, and petrol prices along with every other issue facing this country, is now saying tax cuts will be just a part of a bold economic package that would lift us out of recession.
So, what is this economic package? Well, there’s tax cuts, of course and.. um… oh and minor modifications to the RMA.. and and minor modifications to the ETS… no more civil servants, well, maybe a few more… and, yeah, borrowing for a couple of roads (which the industry doesn’t have the capacity to build any faster than they are already).. oh and don’t forget more fossil fuel power plants. Hardly visionary. Hardly actions that will have large immediate impact.
Even National’s most fervent allies, like the Independent, are tiring of National’s inability to match its rhetoric with real policy. They, of course, want National to outline a bold right-wing economic agenda. And that is the direction National would head in government; the Independent reports National MPs are promising to announce more right-wing policies after the election. That doesn’t placate business who want guarantees of a rightward shift now but National can’t make such promises in public yet. First, it has to secure a blank cheque from the voters.
[In fact, the only significant changes to the economy that National has announced are in work rights. Under National, your work rights wouldl be weaker. With the balance shifted in favour of the employer, wage increases would be smaller. National would also let the minimum wage to be eaten by inflation as they have every other time they've been in power. In economic terms, that would mean a bigger share for business owners but lower consumer demand.]
Just a wee reminder for anyone in Wellington. Scoop.co.nz political editor and former Listener journo Gordon Campbell is at Drinking Liberally tonight to talk about ‘Covering the issues - how to escape from the who’s winning, who’s losing style of election coverage’.
Gordon Campbell is one of the best journalists in the country and has a reputation for covering the issues rather than the game so it should be an interesting discussion.
His recent article ‘Horse race political journalism‘ might give you a taste of what to expect.
I’ll see youse there.
What: Drinking Liberally, Wellington
Where: Southern Cross
When: 5:30pm, Thurs, Oct 2
Who: Gordon Campbell, good jokers and jokeresses
When a commentator like Jenni McManus raises questions over Key’s leadership ability in troubled global economic times you know National should be getting worried. In today’s Independent Financial Review she writes:
Just as the United States House of Representatives this week rightly refused give a US$700 billion (NZ$1.04 trillion) blank cheque to Treasury Secretary Henry “Hank” Paulson, Kiwi voters should think twice about handing power to John Key….
Much has been written about Key’s failure to release policy detail — or even policy frameworks — in critical areas and his lack of a coherent economic vision to lead the country through the next three years.
Five weeks out from the election is simply too late for voters to absorb complex policy platforms. Is this actually what National wants?
Where, for example, are the detailed and decisive policies to combat the recession? Where was National’s strategy midway through last year when the US sub-prime market began to unravel? Where were Key and Bill English when the Kiwi property market tanked in March? How would they have handled the economy as increasingly desperate householders struggled with sudden increases in petrol, food and mortgage interest rates?
The simple answer is we don’t know. And the electorate needs to know these things before people can cast an informed vote…
Key might try to convince people that his five slogans are a plan, but voters are looking for more than rhetoric when deciding how to use their vote.
Continue reading ‘Key’s leadership questioned again’
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