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The Standard

Darkhorse: The Reserve Bank Act; Or why we are broke

Written By: - Date published: 9:20 am, July 9th, 2012 - 47 comments
Categories: monetary policy - Tags:

Darkhorse writes amazingly insightful economic pieces on his ‘How Daft’ blog (the title gives you a clue as to what he thinks of the current state of affairs). The neoliberal experiment has been an abject failure by any rational measure. And there are alternatives. Darkhorse has given us permission to syndicate his posts, the originals are here.

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The Reserve Bank Act; Or why we are broke.

The Reserve Bank Act defies the most basic logic in economics – the law of supply and demand.  It is also most profoundly contradictory that the most essential component of the market, the price of debt has to be determined by regulatory fiat – surely the market should be able to sort that out.
 
At a conceptual level the Reserve Bank Act and the mediaeval practice of bloodletting have the same basic premise, that draining the essential life fluids from the fevered body will make the patient well.    All it achieves is to weaken the body further.  Deathly pallor is mistaken for a fever cured.
 
The most basic failure is that when some element of the economy is over-heating the cost of debt is increased indiscriminately draining economic energy from the innocent and the guilty.  The RBA slows the economy by transferring wealth from the productive sector of the economy to the banking sector.
 
Unfortunately it drains money from the productive sector and from households far more effectively than it drains money from the speculative sector.  The speculative sector of the economy is driven by higher returns and higher risk and often the risk is displaced onto the lender through default when things go wrong.  The mortgaged businessman or householder cannot escape so easily.
 
Fundamentally the Governor of the Reserve Bank raises the cost of borrowing to reduce demand for new debt to reduce inflationary pressure in the economy.  This is perverse for while it is targeted at reducing the creation of additional debt it also punishes those who already are in debt.  The indebted cannot immediately reduce their indebtedness so must pay the imposed cost of borrowing.  Their demand for debt is highly inelastic.
 
This is where the true perversity of the Reserve Bank becomes apparent.  At the same time that the Governor increases the cost of debt to existing and new borrowers he also increases the rewards to lenders.  It is at this point that the basic illogicality of the Reserve Bank Act becomes clearly apparent, the Reserve Bank Act incentivizes the introduction of additional debt into the economy.
 
The higher interest rates draw in new lenders with a higher resistance to risk, along with the careless and the greedy.  These new lenders draw in their equivalents among the borrowers.  So putting the price of money up makes the problem much worse by increasing the riskiness of all debt funded activity.  It also drains resources from productive activity by increasing the cost of debt while fuelling speculative activity by increasing the supply of less risk averse lending.  The past decade is testimony to that.
 
A deeper fact is that this whole artifice is a substitute for the fact that the government has relinquished its right to issue currency to the banks and uses the Reserve Bank Act to moderate the rate at which the banks create it.  This doesn’t work.
 
The foreign banks have also abused the process to inflate parts of our economy, principally property and shares, so that they can push more debt into our economy and in doing so expropriate our Nation’s wealth creating ability.  We have been stupid enough to think that this is a good thing.

The difference between the overnight cash rate in Australia and New Zealand over the past decade meant that Banks could borrow in Australia at a low interest rate and lend in New Zealand at a higher rate.  They would be stupid not to.  We are stupid to encourage them to.

 
In the past several decades it has only been a limited range of economic activity that has been inflationary.  To illustrate this, the decade 2000 to 2010 saw property values treble yet government figures indicated that the Consumer Price Index was never above 3%.  So interest rates stayed relatively low while the returns on speculative investment soared.  The real rate of interest on debt against property was in the order of -10% annually.  This meant that anyone with a mortgage was getting 10% growth in asset value after the cost of debt.  Everyone else was paying interest at about 2-3% more than the underlying economic activity warranted.
 
We are now in a position as a result of the Reserve Bank Act that the entire gross export earnings of the dairy industry is consumed by paying the interest on all of the debt this country has accumulated over the past two decades.And we wonder why we are selling our land and our national assets to pay the bills.  It is because we are governed by the stupid and the greedy and the doctrinaire.
 
The Answer is simple
The simple fact is that if the Governor wants to increase the cost of money but not increase the price of money then the Governor should be able to impose a tax on borrowing.  If the governor wants interest rates to provide a 4% return to the lender but impose a 6% cost to the borrower to dampen both supply and demand for debt then the only logical way to do it is to impose a tax equivalent to an annual interest of 2% to establish the difference between price and cost.
 
That resulting tax income could be put to all sorts of good uses within the economy and it would achieve exactly what the government intends to achieve.
 
To be really subtle the tax would need to be variable according to the target sector of the economy.  This might sound complex but it isn’t.  Banks achieve this level of differentiation simply through the nature of the security against which the loan is raised.
 
But again it is not that simple.It is not that simple because the Reserve Bank Act is not the only fundamental flaw in our monetary and fiscal world.  But more on that some other time!

47 comments on “Darkhorse: The Reserve Bank Act; Or why we are broke”

  1. ad 1

    Are there examples of this kind of solution operating successfully around the world?

    Not entirely happy with some entity other than parliament having the right to tax.

    • McFlock 1.1

      I dunno – there’s not a major difference between the OCR and simply taxing debt, “other than govt” issue-wise. And the tax idea sounds like a more targeted tool than the OCR blunt-instrument. 
             
      Don’t know enough about the issue at the moment, but on the face of it the idea seems as reasonable, and possibly more elegant, than the quarterly “will he won’t he and if so by how much” media econowanks we have now. And frankly, there’s no reason the tax can’t be tweaked daily, just as exchange rates are.

    • Draco T Bastard 1.2

      Not entirely happy with some entity other than parliament having the right to tax.

      Two points:
      1.) The RBNZ is an extension of the government.
      2.) Government would still set the taxes, the RBNZ would set the tax rates.

      In fact, considering the idea of the government printing money at 0% interest, I’ve been thinking that the RBNZ would be the perfect arm of government to set the tax rates. The government spends and the RBNZ sets the tax rates to balance that spending. Yes, I’m talking about dynamic tax rates.

      • ad 1.2.1

        Sounds horrible, sorry. Direct Ministerial control of the Reserve Bank would need a serious rewrite of the RBA. And get rid of that big Board of Governors filter, which makes Ministerial control oblique at best even without the RBA.

        If someone is going to tax me, I want the right to help fire them at the next election. Taxation with representation. It would be better to do away with the Reserve Bank altogether and simply make it a trading arm of Treasury. Direct Ministerial control.

        Variable rates would make my head swim looking at a GST form.

        • Draco T Bastard 1.2.1.1

          Sounds horrible, sorry.

          Why? You wrote all that and yet didn’t actually say.

          If someone is going to tax me

          You still don’t get it, the RBNZ wouldn’t be taxing you.

          It would be better to do away with the Reserve Bank altogether and simply make it a trading arm of Treasury.

          Possibly but, IMO, Treasury already has too much power.

          Variable rates would make my head swim looking at a GST form.

          That’s what computers are for.

          • ad 1.2.1.1.1

            I’m not sure from this statement who is actually doing the taxing:

            “If the governor wants interest rates to provide a 4% return to the lender but impose a 6% cost to the borrower to dampen both supply and demand for debt then the only logical way to do it is to impose a tax equivalent to an annual interest of 2% to establish the difference between price and cost.”

            Happy to be clarified. Perhaps the writer could expand on how it would be done, and upon whom.

            The extra idea in the proposed solution was that the extra income would be put to “achieve exactly what the government wanted to achieve.”

            I would be interested to see where a country has done something like this before. It was helpful of the columnist to point out at the end that the Reserve Bank is only one instrument. But in terms of reforming the Reserve Bank, it might be helpful to the Greens or Labour MPs reading this if a part of the Act was pulled out and some ideas were drafted on how it could be re-written.

            • Draco T Bastard 1.2.1.1.1.1

              I’m not sure from this statement who is actually doing the taxing:

              The government is doing the taxing, the RBNZ is setting the rates and in a very specific area, specifically, finance.

              The extra idea in the proposed solution was that the extra income would be put to “achieve exactly what the government wanted to achieve.”

              He wasn’t talking about extra income in that part, he was talking about what the OCR is supposed to achieve but doesn’t. He’s saying that the tax will. As it is a tax it will generate extra income for the government as well which he says can be used to benefit the country.

    • darkhorse 1.3

      Why not think it out rather than look for some one else doing it already – and no offence intended but this comment is a classic illustration of the kiwi problem – we are so pathetically self effacing and self doubting which is why we are conned so consistently by the parasite class. – we are at our heart honest and trusting – or in their eyes mugs ripe for the picking – seen John Key in action lately- he treats us with contempt.

      And nowhere in this comment did I suggest anyone other government would put the tax in place or gather the income stream from it.  It is essential that the state garner the income from the tax – it may be that an entity such as the reserve bank be able to manage the tax on behalf of the State 

  2. Instead of a tax put an adjustable levy on debt that is paid back to individual super funds.

    ie –

    Compulsory Super, high inflation risk = higher levy on debt, lower inflation risk lower levy. All paid back into kiwi saver accounts. Simple.

    Singapore does something like this

    Ditch the OCR it for the banks and the rich.

  3. Adrian 3

    Grab your guns, it’s time to have a Dark Horse as president.

  4. DH 4

    It’s good to see that more & more people are questioning the RBA, tragic it’s taken so long too much damage has already been done. The problem has always been that so very few people understand it. Ask anyone what the OCR is and they’ll have heard of it but you’ll struggle to find anyone who can tell you what it’s about or how it all works. Even the average economist is vague on it.

    Something I think is needed is a basic primer on the OCR that everyday people can follow so they can understand it. What the OCR is, how it works, why it’s meant to control inflation and what the consequences are; how the banks react to OCR changes and what options they have for gaming the system etc. It’s a hugely important part of our economy and we don’t even get to vote on it since no-one knows enough about it.

    I’ve studied the cause & effect side of economics for years and I haven’t managed to put all the pieces together on the banking system, Darkhorse hasn’t got it all correct there IMO but his conclusions are pretty much spot on.

    • Bored 4.1

      Back when Roger Round-table pushed through the RBA I was a Labour Party rank and file committee man. At the time we objected and got in response the dry “economic rationalist” arguments Roger was so beloved of (sort of like aping Friedman and Hayek). It was like watching a Trotskyite in action, just push things through, utter the mantra and do it fast…no thinking required. As a subtext some Trots I knew of got “converted” to the new “rational” dogma, one ended up editing NBR.

      I am unsure that Roger actually understood the implications of what he was proposing: he merely seemed like a parrot quoting a theory, like any revolutionary, all dogma and no questioning and no comparing theory to practice. Those of us who knew why banks were regulated prior to this “reform” asked the question. I am not sure Roger ever did, or ever will.

      In comparison to the foolish ingenue that is Roger, the Round Table and Parnell cowboys knew exactly what Roger was signing us up for. They have been the local beneficiaries, preferring to line their own pockets whilst our sovereignty and wealth has disappeared offshore bundled into securitized “debt”.

      • DH 4.1.1

        That sounds familiar, most economists are just parrots. I’d wager that a good 95% of our politicians don’t really understand the OCR either.

        I’d challenge anyone to try and figure out just exactly why & how the OCR is supposed to control inflation. The theory on which it’s based is actually pretty simple but you won’t find (m)any simple answers or explanations on how it all goes together, it’s a confusing morass. You get led down so many dead-end paths trying to work it out.

    • darkhorse 4.2

      Thanks DH

      I could do a book on this – can’t cover everything in just one page – but maybe encouraged to wrote a few more in response to the comments here 

      • DH 4.2.1

        It’s a toughie. We both agree that the RBA has been enormously destructive to the fabric of this country but we differ a bit on how we think it’s happened and what the damage is. That, I think, is because neither of us have put all the pieces together fully and I’d wager you’ve spent as much time as me trying to work it all out.

        Economics has a lot of theory in its makeup but banking is more mechanical in that it runs a bit like an engine. If we don’t have all the information on the banking system, RBNZ, OCR, CPI etc we’re in a weak position because the supporters of the status quo can easily punch holes in our argument. They don’t have to prove us wrong, just show that we don’t know, or missed, something. Get shown up as uninformed & we’d struggle to gain ascendancy or credibility outside our own circle.

        The need I think is for the processes to be broken down into simple constructs that anyone can understand. Presently it’s all too confusing. We all need solid foundations that we can launch our arguments from. The political left would struggle to win any votes on a promise to change the RBA because very few people realise how much damage the RBA has done us. It keeps inflation down and that’s good, right?

  5. He’s no slouch, this dark horse. Are his talents being put to good use? Is a blog post big enough for him? Has he been introduced to Mr Shearer, Mr Cunliffe et al?

    • ropata 5.1

      I assume by his nickname that he likes to remain anonymous

    • mike e 5.2

      robertguyton your well off the mark to radical these ideas for mainstream politicians

      • darkhorse 5.2.1

        I suspect they are slowly getting there – David Cunliffe in particular has made comments that appear to be looking in such new directions.  David Shearer appears to have the personality type and life experiences that would allow him to think adaptively.  The real problem with Labour is its rump that is stuck in a 1930’s dialectic.

        The anonymity is only to allow freedom to comment in ways that the daily realities of life constrain. 

    • darkhorse 5.3

      I would be happy to help the cause RG

  6. mikesh 6

    Imposing a tax on borrowing would presumably also affect those borrowing real (non-fiat) money. A better idea would be to stop the banks lending money they don’t have, with the proviso that if they need more money than they can obtain from the general public they can borrow it from the Reserve Bank. The Reserve Bank could then control interest rates by manipulating the rates at which they lend such money.

    • darkhorse 6.1

      This could work too Mikesh – in many respects it is the same idea and is the logical next step – it is a different way of saying that government should take back the power to issue money from the banks – you identify the logical mechanism.

      Taxes are deflationary.  A tax could actually be used to withdraw money from circulation when things got over heated.  This is the mechanism that is lacking.  At present we have the accelerator but no brake. 

      It may seem counter intuitive but just because a government takes a tax it isn’t necessary that it spends it.

      We need to take the next step to treating money as a relational function not a value function –  we need enough money in the system to enable all of the nation’s resources and opportunities to be exercised within the productive limits of the economy – soem times that will require more and at otehrt imes less.

    • Draco T Bastard 6.2

      That’s how it works already. The OCR is the rate that the RBNZ charges banks for money that they don’t have making the government the lender of last resort.

      • darkhorse 6.2.1

        The OCR is, as I understand it, for funding the liquidity component of the banking system and is a minuscule element of the whole banking/money system,  The OCR is meant to influence lending rates but is become less effective even at that.  At its worst all it does is justify higher costs of borrowing than the market would otherwise require.
         

  7. Rusty Shackleford 7

    It would be waaaay simpler to just abolish the Reserve Bank.

    • Colonial Viper 7.1

      I’d abolish Treasury first.

      • darkhorse 7.1.1

        Odd that the Treasury is the only bunch of bureaucrats who have never been the object of governments desire to contract everything out – if they truly believed their own mantra in the market providing the best answers surely they would be out among the self employed proffering their advice to government on a value for money basis – I am sure that they would starve rapidly if exposed to the market place. 

  8. Herodotus 8

    Why not reduce bank ratios ? The banks need to require greater reserves to underpin their lending practices.
    http://www.rbnz.govt.nz/statistics/monfin/c1/data.html
    http://positivemoney.org.nz/
    A graph of the growth of the various guises that money takes in out economy. Real notes & coins $3.5b = Mo total “money” in NZ $219b = M3
    http://www.interest.co.nz/charts/credit/money-supply
    Cannot find a link 101 to explain just how much money there is but the wiki is as good as i could find and take note of NZ rise in M3
    http://en.wikipedia.org/wiki/Money_supply
    And B Hickey with the answer to our debt problem. Let inflation fix our debt. Pity it will screw the Kiwisaver and others with workings savings
    http://www.nzherald.co.nz/economy/news/article.cfm?c_id=34&objectid=10818052
    Just as well we have a banker leading our country with the skills and knowledge to do what is best for the country he least !!!!! 😉

    • RedLogix 8.1

      Unfortunately with a Debt to GDP ratio in the order of 200% it means that in order to use inflation to get the Debt to GDP ratio back to historic norm of about 30% means unwinding 170% of GDP. Which amounts to about $370b

      In order to allow inflation alone to achieve this with inflation alone this means that the Reserve Bank would have to issue about that much more credit.

      Given that M3 is about $250b this means that the current dollar would be worth (250/250 +370) = 0.37 of it’s present value relative to other currencies. At the same time every other indebted nation would be trying the same trick which would constantly shift the goalposts. It an old game called ‘beggar thy neighbour’ and it always ends badly.

      The correct answer is the one Steven Keen has put forward. If the Reserve Bank used that $370b and gave every adult New Zealander (3 million people) 370,000m/3m= $120,000 with the proviso that if you have debt it must be repaid… then the debt problem would totally dissapear without being inflationary. The remaining cash not spent on debt would stimulate the economy enormously and get cash flow and tax revenues back on track. The government could then pay down it’s own debt and the nation would be back on it’s feet without utterly shredding the $NZ.

      (OK so there are some very rough aproximations here, the numbers are only ‘back of envelope’ stuff but you get the idea.)

      • Rusty Shackleford 8.1.1

        erm… printing money out of thin air is inherently inflationary. If we printed and distributed the money on the 10th of July, that $120,000 would probably be worth about $12 in July 10 terms on July the 20th. More money chasing the same amount of goods.

        • RedLogix 8.1.1.1

          Printing money is only inflationary when the economy does not have the capacity to absorb the extra cash. At present the econony has two ways to absorb this extra cash:

          1. There is an enormous amount of debt that can be repaid with zero inflationary effect. In this case the money ‘printed’ by the Reserve Bank simply cancels out the debt ‘printed’ by the private banks.

          2. There is a substantial amount of labour, assets and capital that are grossly underutilised at present that could easily absorb the extra cash. In this case the extra money printed by the Reserve Bank ramps up economic production to match…again not inflationary.

          • Colonial Viper 8.1.1.1.1

            +1

            Also there is nothing bad about a bit of extra inflation in a debt laden society, as long as incomes are allowed to keep pace with it.

          • mike e 8.1.1.1.2

            RL it would be an ideal method to deal with the Canterbury quake Leaky homes cold houses and overpriced homes.Unemployment as well.
            By Fixing all the houses including uninsured houses.
            Building lots of new homes would deal to the property boom over supply rather than at present under supply which is doing a lot of damage to our economy.
            The big banks are going to do every thing they can to stop this happening.
            The big banks are gouging NZ with the status QUO.
            Land lords who are making an income out of a house are not a liability.
            Families buying their own house are a liability.
            For NZ the equation has to be the other way round.

            • mike e 8.1.1.1.2.1

              By oversupplying the housing market it would be deflationary which would allow the RBNZ to print more for our exporters and manufacturers.

            • Herodotus 8.1.1.1.2.2

              I was responding to Rusty regarding the effects of printing money, and my example was to illustrate that previously money had been printed without NZ experiencing the ramifications that R was referring to. Just used those dates as that was when there was a property boom and the internet has greater info over the last 10 years. Don’t be so protective over the 99-08 years. The 90-99 years also had the residual effects of the recession 87-90 and the 98 asian crises to complicate matters. the 00-08 was i consider a “clean” period without internal or external forces.

          • darkhorse 8.1.1.1.3

            good points and if done properly RL it would result in a  capital outflow that would cause our exchange rate to drop, the cost of imports to rise the domestic value of exports to increase and a return to a more broadly based economy where manufacturing things for ourselves rather than borrowing to import them would be the usual way of doing things.  basically balance would be restored. 

        • Herodotus 8.1.1.2

          we did create an additional $100b (M3) dollars from 2000-08 and what destruction of value did we experience? Oh yes all that money went into housing 2002 household debt $71b 2006 $157b., perhaps expanding a bubble to busting point ? For me we have not yet experienced any property correction and the bubble has recommenced its growth. e.g. property in Ohama being priced 10% above CV. Perhaps this is the premium of holidaying with the PM !!!!
          http://www.treasury.govt.nz/publications/research-policy/wp/2009/09-03/twp09-03.pdf
          http://www.parliament.nz/en-NZ/PB/Business/QOA/1/0/7/48HansQ_20080311_00000259-5-Debt-Household-Levels-Changes-since-2000.htm
          http://en.wikipedia.org/wiki/File:New_zealand_money_supply_1988-2008.jpg

          • mike e 8.1.1.2.1

            Heredotus like I said before debt doubled from 1990 to 1999.
            $46 billion to $100 billion to say that one govt was worse than another is
            misleading.

            • Herodotus 8.1.1.2.1.1

              I was responding to Rusty regarding the effects of printing money, and my example was to illustrate that previously money had been printed without NZ experiencing the ramifications that R was referring to. Just used those dates as that was when there was a property boom and the internet has greater info over the last 10 years. Don’t be so protective over the 99-08 years. The 90-99 years also had the residual effects of the recession 87-90 and the 98 asian crises to complicate matters. the 00-08 was i consider a “clean” period without internal or external forces.

              • mike e

                Herodotus what clean period are you talking about 9/11 Afghanistan war Iraq war.
                Sars birdv flue get your facts right.
                Rates of borrowing increase haven’t changed since Norman Kirk was prime minister.

        • mike e 8.1.1.3

          Rusty it depends on what you spend that money on .
          Spending it on building more houses would be deflationary as we have an under supply of housing.

      • Herodotus 8.1.2

        Interesting option you put. I have heard of this before. Are you the originator or building from others ?
        But the printing of money in isolation is not as I can see it that damaging as it only marginally increase the supply (Mo), which can be negated by destroying some of the magically made money by the banks (M3)
        Pity we cannot be protected like the USA is with US monetary easing (QE i,ii & iii)has reduced the value of the greenback, and their debt. The only difference is who the US gave all the printed money to. RL wants to give it to the people the US gifted it to the banks.

        • RedLogix 8.1.2.1

          Are you the originator or building from others ?

          Mostly from Steven Keen.

          • Colonial Viper 8.1.2.1.1

            In Steve Keen’s own words – its high time to bail out the debtors, not the big bank creditors.

  9. Huginn 9

    from the Arabian Gulf:

    Debts to be cleared for 6,830 Emiratis

    The President, Sheikh Khalifa, has ordered that thousands of Emiratis should have their debts cleared. Those in jail for owing money or detained pending a court ruling will be freed.

    About Dh2 billion has been set aside for the initiative, which will affect 6,830 debtors.
    They will have to take a 25 per cent salary cut and vow not to get back into debt until they have paid back the debt clearance sum.
    The decree follows a recommendation by a higher committee charged with tackling the debts of low-income Emiratis

    Abu Dhabi, Jan 26, 2012 

    http://www.thenational.ae/news/uae-news/debts-to-be-cleared-for-6-830-emiratis

  10. RedFred 10

    A lot of work has gone into Interest Linked Saving Scheme (ILSS) for New Zealand.

    http://www.erosgroup.co.nz/monetarypolicy.asp

    I had a look at this a couple of year ago from memory their is a good summary of how the economy and us gets screwed by the banks the OCR and the Reserve Bank.

    This is what we need, I did point David Cunniliffe at it a while ago

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    Further revelations that a Serco prison guard was coaching inmates on fight club techniques confirms a fully independent inquiry needs to take place, says Labour’s Corrections spokesperson Kelvin Davis. “The Minister’s statement today that a guard was coaching sparring techniques… ...
    3 days ago
  • Government targets put ahead of students’ education
    The Government must urgently reassess the way it sets NCEA targets after a new report found they are forcing schools to “credit farm” and are undermining the qualification, Labour’s Education spokesperson Chris Hipkins says. “A PPTA report released today says… ...
    3 days ago
  • ER patients in corridors as health cuts bite
    Patients are being forced to wait for hours on beds in corridors as cash strapped hospitals struggle to keep up with budget cuts, says Labour’s Health spokesperson Annette King. “People coming to the emergency room and being forced to wait… ...
    3 days ago
  • Not too late to fix Health and Safety for New Zealand’s workers
    The Government and its minor party supporters are showing an arrogant disregard for workers’ lives by not agreeing to a cross-party solution to the botched Health and Safety bill, Opposition leader Andrew Little says. “Yesterday I wrote to the Prime… ...
    3 days ago
  • Speech to the New Zealand Council of Infrastructure Development
    Tēnā Kotou Katoa. Thank you so much for having me along to speak today. Can I begin by acknowledging John Rae, the President, and Stephen Selwood, the chief executive of the Council for Infrastructure Development. ...
    4 days ago
  • Reserve Bank points finger at Govt inaction
    In scathing criticism of the Government’s inaction, the Reserve Bank says Auckland housing supply is growing nowhere near fast enough to make a dent the housing shortage, Labour’s Housing spokesperson Phil Twyford says. Reserve Bank deputy governor Grant Spencer today… ...
    4 days ago
  • Chickens come home to roost on climate change
    The Government’s gutting of the Emissions Trading Scheme has caused foresters to leave and emissions to rise, says Labour’s Climate Change spokesperson Megan Woods. “The release of the Environmental Protection Agency’s Facts and Figures Report for 2014 on the ETS… ...
    4 days ago
  • Website adds to long list of big spends at MBIE
    The Ministry of Business, Innovation and Employment’s $560,000 outlay on its new website is further evidence of excessive spending by Steven Joyce on his pet project super ministry, Labour’s Economic Development spokesperson David Clark says.  “Hot on the heels of… ...
    4 days ago
  • Brownlee warned over EQC repairs but ignored them
    Gerry Brownlee was warned that EQC’s underfloor repairs weren’t being done properly by industry experts, the cross party working group and in public but he arrogantly ignored them all, says Labour’s Earthquake Commission spokesperson Clayton Cosgrove.  “Today’s apology and commitment… ...
    4 days ago
  • Serco wants in on state house sell off
    The Government must keep scandal plagued outsourcing company Serco away from our state housing after their disastrous record running Mt Eden prison, Labour’s Housing spokesperson Phil Twyford says. "Today it has emerged that at the same time Serco was under… ...
    6 days ago
  • Come clean on Pasifika education centre
    Minister Peseta Sam Lotu-Iinga needs to come clean and tell the Pasifika communities if he’s working to save the Pasifika Education Centre or shut it down, Labour’s Pasifika spokesperson Su’a William Sio says.  “I’m gutted the Pasifika Education Centre funding… ...
    7 days ago
  • Time for NZTA to work on alternatives to flyover
    The High Court decision rejecting the New Zealand Transport Agency’s attempts to build the Basin Reserve flyover must now mean that NZTA finally works with the community on other options for transport solutions in Wellington, Grant Robertson and Annette King… ...
    7 days ago
  • Shiny new system leads to record truancy
    Record high truancy rates shows the Government’s much-vaunted new attendance system is an abysmal failure, Labour’s Education spokesperson Chris Hipkins says. “Data released today shows truancy rates have spiked more than 15 per cent in 2014 and are now at… ...
    7 days ago
  • Woodhouse wrong about quarries
      The Minister for Workplace Relations and Safety Michael Woodhouse was wrong yesterday when he said limestone quarries were covered by the farcical Health and Safety legislation, says Labour’s Associate Labour spokesperson Sue Moroney.  “He said he ‘understood’ limestone quarries… ...
    7 days ago
  • Taxpayers money spent on culling one of our rarest birds
    It beggars belief that four endangered takahe were killed by incompetent cullers contracted to the Department of Conservation and the Minister must explain this wanton destruction, says Conservation spokesperson Ruth Dyson. “It must not be forgotten that there are only… ...
    7 days ago
  • Housing NZ must immediately move family
    Housing New Zealand must immediately move a Glen Innes family whose son contracted serious and potentially fatal health problems from the appalling condition of their state house, Labour’s Housing spokesperson Phil Twyford says. “Te Ao Marama Wensor and community workers… ...
    7 days ago
  • No understanding of the value of overseas investment
     The Government has now admitted it has absolutely no idea of the actual value of foreign investment in New Zealand, says Labour’s Land Information spokesperson Stuart Nash.  “It is crucial that the Government starts to understand just what this overseas… ...
    1 week ago
  • Another bridges bribe from Simon Bridges
    Simon Bridges is embroiled in another bridges-for-votes controversy after admitting funding for a replacement bridge in Queenstown is “very much about… the 2017 election”, Labour’s Transport spokesperson Phil Twyford says. “The Transport Minister is today reported as telling Queenstown locals… ...
    1 week ago
  • Saudi tender process reeks of SkyCity approach
    The tender process for the $6m investment in a Saudi sheep farm reeks like the SkyCity convention centre deal and once again contravenes the government’s own procurement rules, says Labour’s Export Growth and Trade spokesperson David Parker. “The $6m contract… ...
    1 week ago
  • Maori Party should stand up for workers
    The Government’s proposed Health and Safety Reform Bill does not go far enough to protect those in specific industries with the highest rates of workplace deaths, says Maori Development Spokesperson Nanaia Mahuta. “We are told that Maori workers are more… ...
    1 week ago
  • Minister must explain budget blowout
    Māori Development Minister Te Ururoa Flavell must explain a budget blow out at Te Puni Kokiri, after the organisation spent more than 2.5 million dollars over their budget for contractors, says Labour’s Associate Māori Development spokesperson Peeni Henare.  “For the… ...
    1 week ago
  • Successful effort to raise the issue of GE trees in proposed standard
    Many thousands of people submitted on the proposed National Environmental Standard –  Plantation Forestry (NES-PF).  A vast majority of the public submissions were particularly focussed on the NES having included GE trees in its mandate. People want these provisions removed,… ...
    GreensBy Steffan Browning MP
    1 week ago
  • Fair Share Friday – Thoughts and Reflections
    As part of our Fair Share  campaign, Green MPs have been doing a series of visits to community groups across the country to have conversations about inequality in New Zealand and what communities are experiencing on the ground. I visited… ...
    GreensBy Denise Roche MP
    1 week ago
  • Crucial Auditor General investigation welcomed
    The Auditor General’s decision to investigate the Saudi sheep scandal is important, necessary and welcome, Labour’s Trade and Export Growth spokesperson David Parker says. “The independent functions of the Auditor General are a cornerstone of the New Zealand system of… ...
    1 week ago
  • KiwiSaver sign-ups continue to fall
    New KiwiSaver sign-ups in July were 45 per cent below the monthly average, despite John Key saying axing the kickstart “will not make a blind bit of difference to the number of people who join KiwiSaver”, says Labour’s Finance spokesperson… ...
    1 week ago
  • Contact bows to pressure
    Contact Energy’s decision to cut its pre-pay rates to be in line with its customers who pay monthly is good news and the company deserves credit for responding so quickly, says Labour’s Consumer Affairs Spokesperson David Shearer.  “Two months ago… ...
    1 week ago
  • I’m pushing for a ‘fair go’ for solar
    My Fair Go For Solar Bill was pulled from the Members’ Ballot last week and is set for a vote in Parliament. In this blog post I explain some of the background to the bill and how it aims to… ...
    GreensBy Gareth Hughes MP
    1 week ago
  • Key must explain why Health and Safety Bill pulled
    John Key must explain why his Government is delaying the Health and Safety Bill when Pike River families have travelled to Wellington specifically to register their opposition, Opposition Leader Andrew Little says. “Yesterday afternoon John Key suggested the bill may… ...
    1 week ago
  • Diving for sustainable scallops
    Last week, there were calls for scallop dredging to be banned in the Marlborough Sounds, following scientific report saying that 70% of the Sounds had been lost from dredging, trawling, and sedimentation from forestry. At the same time we see… ...
    GreensBy Steffan Browning MP
    2 weeks ago
  • Backdown whiff in state house leasing option
    Bill English’s admission that the Government is looking at leasing large numbers of state houses to non-government providers has the whiff of a backdown, Labour’s Housing spokesperson Phil Twyford says. “This is an acknowledgement by Bill English that he has… ...
    2 weeks ago
  • Housing crisis downgrade threatening banking sector
    The out of control Auckland housing market is now threatening the banking sector, with Standard and Poor’s downgrading the credit rating of our banks out of fear of the bubble bursting, Labour’s Finance spokesperson Grant Robertson says. “Today we have… ...
    2 weeks ago
  • Good money after bad for failed experiment
    The National government are throwing good money after bad with their decision to pump even more funding into their failed charter school experiment, Labour’s Education spokesperson Chris Hipkins says.  “There are already major problems with several of the first charter… ...
    2 weeks ago
  • National borrows Labour’s idea on urban development
    Labour's Associate Environment spokesperson Phil Twyford says he welcomes the Government's adoption of Labour's policy for a National Policy Statement on urban development, and has called on the Government to take up Labour's offer to work together on these issues.… ...
    2 weeks ago
  • Toothless OIO never refused a single farmland sale
    The Overseas Investment Office has approved more than 290 consents from foreign investors to buy sensitive land in New Zealand, but has not turned down a single application says Labour’s Land Information spokesperson Stuart Nash  “The Minister of Land information,… ...
    2 weeks ago
  • Secret meetings to sell-off state houses
    The Government is having secret meetings with groups interested in buying state houses and refuses to release the names of these organisations, Labour’s Housing spokesperson Phil Twyford says. “Bill English has admitted meeting with 10 organisations who want to get… ...
    2 weeks ago

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