web analytics
The Standard
Advertising

Exchange rates, Kiwisaver, breaking promises, & the art of doing nothing

Written By: - Date published: 2:35 pm, October 31st, 2009 - 7 comments
Categories: economy, kiwisaver, national/act government, superannuation, unemployment - Tags: , , , , ,

A range of interesting political/economic comment today in the Herald:

Fran O’Sullivan joins the left-wing and groups like Federated Farmers in calling on the Key Government to sort out monetary policy. At the moment, the Reserve Bank is tasked solely with controlling inflation with interest rates as its only real tool, while the exchange is free and no-one has a job of keeping it in a stable range to assist exporters. The result is massive currency fluctations as hot money from overseas comes in to take advnatage of our higher interest rates then flees at the slightest sign of trouble. Something does need to be done but I think O’Sullivan’s barking up the wrong tree if she expects a former currency trader and a former Treasury official Dipton-based farmer to do anything about it.

Brian Gaynor writes about the success of Kiwisaver, which will compete with the Cullen Fund, Working for Families, minimum wage increases, improved work rights, restored public services, and interest-free student loans as the greatest legacy of the Fifth Labour Government. He reveals that, despite National’s claims that reducing the minimum contributions from employers and Kiwisavers to 2% would help more people join, in fact most new members since the change are contributing 4% (350,000 more members since November – 850,000 to 1.2 million – 150,000, 12%, on contributing 2%). Like The Standard‘s writers were saying at the time, the Kiwisaver clawbacks were all about National looking after business, reducing the cost to them, not getting more people in Kiwisaver.

The Herald editorial calls on Key to “rescind” his promise to resign from Parliament before changing superannuation entitlements. That’s basically the Herald saying ‘if you do it, John, we’ll give you a free-ride, nudge, nudge’.

Well, I don’t know about you but where I come from, you can’t just “rescind” a promise, especially when people have voted in good faith based on that promise. The promise not to muck around with super, like the promise not to privatise public assets, was important in shoring up National’s support when it had been plunging following Bill English’s drunken comments about selling Kiwibank. New Zealanders elected Key after he made his empathatic promise that super was safe. They won’t forgive him if he breaks his word on that one.

Brian Fallow skewers Key’s ‘do-nothing’ approach to running the economy:

the measures the Government undertook to “take the sharp edges off the recession” have been useful but pretty marginal in the overall scheme of things.

The ReStart package of assistance for people made redundant has benefited just over 5000 people since its inception in December. But there are 138,000 people officially unemployed and 60,000 drawing the unemployment benefit.

The Job Support scheme, supporting firms which shift to a nine-day fortnight, has just 39 businesses taking part. There have been tax changes to ease cashflow pressures on smaller businesses, though they do not reduce their final tax bills. The “rolling maul” and the Jobs Summit have not left deep footprints.

What then of progress towards addressing the economy’s deep-seated structural weaknesses and achieving the “step change” in economic performance the Prime Minister likes to speak of?

Brian says things will need to change next year and the government will start to take more action. But with a PM whose priority is being popular and a finance minister who, as others have noted, seems to think of him as a mere observer of events, I’m not sure.

7 comments on “Exchange rates, Kiwisaver, breaking promises, & the art of doing nothing”

  1. Pascal's bookie 1

    I think they spelt ‘renege’ wrong.

    And yeah, it’s next year that we’ll find out how well the economy is holding up. If it’s a w shape recession, with this being a dead cat bounce, then they’ll have to respond. Though I suspect it makes more sense to have everything in place first.

  2. Ianmac 2

    That nice Mr Key can smile and point out since the Labour lead Government made such a hash of things and since this has forced us to rethink Super entitlements, (he smiles again) and says ” The circumstances have changed and I’m relaxed about it, so we will reconsider the raising of the entry level for Super and………….”
    “Yay! cries Mr 45 year old. “Good on yer John!”

  3. bobo 3

    P.S what happened to the Foreshore & Seabed policy announcement that Turia was saying 2 weeks ago was going to be announced about now?? Is National going to delay till Parliament resumes next year and avoid a summer of discontent.?

  4. Finally you are learning. Two years at Treasury before running back to be a Dipton farmer does not make you a former treasury official.

  5. George.com 5

    Key has had a lot of luck run his way thus far. Seems 60+ % of kiwis think he did a average or better job of dealing with the recession. Whilst Key bounced from cloud to cloud the truth is that Key and his govt did remarkably little. A bit of tinkering and some crossing of fingers that things would be ok. NZ benefited from action taken overseas by other leaders and Key benefited from actions put in place by Labour.

    Cullen put a huge swag of dough into the economy in October last year. National followed on with its April tax cut. Key inherited an economy with very sound books and low unemployment. The books afforded him some room to take on debt. The low unemployment has meant the unemployment peak will likely round out somewhere near 7% rather than closer to a reputation killing 10% had the pre slump rate been higher.

    The Nats ‘brought forward’ infrastructure plans Labour already had on the books. It made it look like he was doing something whilst really doing little more than what had already been put in place for him. Key tinkered with his 9 day fortnight that has saved some jobs, maybe a couple of thousand or so, perhaps. His cycle way has created in new jobs to my knowledge. Any bad stuff that didn’t come right he could of course blame on Labour.

    That said, if the world plunges back into a cold bath, Key & his govt may have to start doing some work themselves.

    In the meantime some big economic fundamentals need fixing. There is the national fixation with housing as an investment and how we manage our exchage rate. Cullen took a major step forward toward fixing our savings habit with Kiwisaver. He tinkered with the exchange rate and housing but backed off quickly when National started politiking. So now it is Keys turn to addres the problems Labour didn’t. There are enough ideas around for his government to utilise. Sooner or later luck has to change to substance. *Waits*.

Links to post

Important links

Recent Comments

Recent Posts

1 2 3 7

  • Time for NZ to prohibit the killing of great apes
    That ban was widely hailed, and spurred efforts in other countries to get similar bans. However, apes are still being exploited, abused and killed, both in captivity and in the wild. Examples of cruelty, neglect and abuse abound. Apes are… ...
    GreensBy Mojo Mathers MP
    3 hours ago
  • Auckland building consents: Tragic
    The only word to describe the latest building consent figures for Auckland is ‘tragic’, Labour’s Housing spokesperson Phil Twyford says. “Whatever the Government is doing to address the Auckland housing crisis, it is clearly not working. ...
    4 hours ago
  • A whiff of a new biosecurity scandal?
    A pest which could create havoc for New Zealand’s horticulture and agriculture sector must be as much a focus for the Government as hunting out fruit flies, Labour’s Biosecurity spokesperson Damien O’Connor says. “While the Ministry for Primary Industries is… ...
    7 hours ago
  • Government shrugs off health sector crisis
    Despite new evidence showing that cuts to health spending are costing lives the Government continues to deny the sector is struggling, Labour’s Health spokesperson Annette King says. “Health services in New Zealand are in crisis. ...
    1 day ago
  • Parata lowered the bar for failing charter school
    When Hekia Parata became aware that the Whangaruru charter school was experiencing major problems her first action was to drop standards by reducing the number of qualified teachers they had to employ, Labour’s Education spokesperson Chris Hipkins has revealed. “Hekia… ...
    1 day ago
  • National not being straight about the economy
    John Key and Bill English need to be straight with New Zealanders about the damage their failure to diversify the economy is doing, after new figures show export growth plunged due to a collapse in dairy exports, says Grant Robertson.… ...
    1 day ago
  • Mind the Gap
    This week the International Monetary Fund released a report on the wider economic value in closing the gender pay gap. When even the bastions of free-market economics start to raise concerns about gender pay gaps, we have to realise how… ...
    GreensBy Jan Logie MP
    1 day ago
  • Labour will hold National to parental leave promise
    Labour will hold National to its promise to increase the support given to new parents of premature, multiple birth and babies born with disabilities, Labour’s paid parental leave campaigner Sue Moroney says. "I am naturally disappointed that after battling for… ...
    2 days ago
  • It was all just pillar talk
    Steven Joyce’s confession that he can no longer guarantee a pillar-free design for the New Zealand International Convention Centre shows the Government has abandoned its dream of creating an ‘iconic’ ‘world-class’ structure, says Labour Economic Development spokesperson David Clark. “Steven… ...
    2 days ago
  • Australians move on offshore speculators
    John Key might want to have a quiet word with Australian Prime Minister Tony Abbott about Canberra's just-announced crack down on offshore speculators when he visits New Zealand this week, Labour's Housing spokesperson Phil Twyford says."Tony Abbott's centre right government… ...
    2 days ago
  • Government at odds on overseas driver crashes
    National backbencher Jacqui Dean has spoken out about overseas driver crashes, putting herself at odds with Prime Minister John Key who is on record as saying it’s not a big issue, Labour’s Transport spokesperson Phil Twyford says. “I’m not surprised… ...
    2 days ago
  • Human Rights and the Palestine Crisis
    Last week I heard two Palestinians speak at Wellington events about the ongoing crisis in their country. Samar Sabawi spoke to a full house about the history of Palestine and gave us a lucid and disturbing account of the situation… ...
    GreensBy Catherine Delahunty MP
    2 days ago
  • Time to take real care of our kids
    An Amnesty International report has once again criticised New Zealand’s track record on looking after our kids, Labour’s Children’s spokesperson Jacinda Ardern says. The annual report, which looks at global human rights abuses highlights not only the fact that high… ...
    2 days ago
  • John Key wrong about Labour’s war vote
    John Key’s desperate claims that the former Labour Government didn’t put combat troop deployment to a Parliamentary vote are simply wrong, Labour’s Defence spokesperson Phil Goff says. “It was disgraceful that the Prime Minister ran rough shod over democracy and… ...
    2 days ago
  • Māori language bill needs work
     It is clear that the first draft of the Māori Language Bill was about structures and funding rather than the survival of te reo Māori, Labour’s Māori Development Spokesperson Nanaia Mahuta says.  “Labour is pleased that the Minister of Māori… ...
    2 days ago
  • Report proves troubled school shouldn’t have opened
    The long-awaited release of an Education Review Office report into Northland’s troubled Whangaruru charter school proves it should never have been approved in the first place, Labour’s Education spokesperson Chris Hipkins says. “This report identifies problems with absenteeism and disengaged… ...
    3 days ago
  • Reply to PM’s statement on deploying troops to Iraq
    “The decision of any Government to send troops to a conflict zone is a very serious one, and it is right that this House takes time to consider it, to debate it, and, ideally, to vote on it, but we… ...
    3 days ago
  • Minister must take action on death trap slides
    Workplace Relations Safety Minister Michael Woodhouse must take urgent action to ensure inflatable amusement rides don’t become death traps for children, Labour’s spokesperson on Labour Relations Iain Lees-Galloway says. “No one wants to stop kids having fun, but horror stories… ...
    3 days ago
  • Manus Island and the New Zealand Government
    This week the Greens have participated in awareness activity about Manus Island, the refugee camp on an island in Papua New Guinea where Australia dumps asylum seekers. John Key says that he has every confidence in the Australian Government’s claim… ...
    GreensBy Catherine Delahunty MP
    1 week ago
  • Election Inquiry – Getting accessible voting on the agenda
    James Shaw has been doing a series of blogs on the Election Inquiry into last year’s general election.  I thought this was a great opportunity to raise an issue very dear to me – accessible voting. Last year’s general election… ...
    GreensBy Mojo Mathers MP
    1 week ago
  • RMA changes no solution to Christchurch housing
    Housing will continue to be a big issue in 2015. The latest Consumer Price Index, released last month, shows both good news and bad news on the housing front. After years of being the most expensive place to build a… ...
    GreensBy Eugenie Sage MP
    1 week ago
  • Saving kokako in South Auckland’s Hunua Ranges
    It is amazing that you can hear the song of the endangered North Island kokako in South Auckland’s Hunua Ranges, less than 50 kms from the central city. A heavy schedule of policy workshops at the Green Party’s Policy… ...
    GreensBy Eugenie Sage MP
    2 weeks ago
  • Let’s not turn a blind eye to human rights
    The Cricket World Cup has just opened in New Zealand, and it’s an opportunity for us to shine on the world stage. International sport can be a chance for us to build relationships with other countries, and examine what it… ...
    GreensBy Catherine Delahunty MP
    2 weeks ago
  • Its Just Not Cricket
    This week it was my privilege to work with Sri Lankan Tamil communities in this country and host Australian journalist and human rights advocate Trevor Grant. I knew a bit about Trevor from his biography but I didn’t know just… ...
    GreensBy Catherine Delahunty MP
    2 weeks ago
  • Time for NZ to #BeCrueltyFree
    The Government is about to progress the final stages of the Animal Welfare Amendment bill. This will be our last opportunity to get changes made to improve the bill to ensure a better outcome for animals. I have put forwards… ...
    GreensBy Mojo Mathers MP
    2 weeks ago
  • We want access!
    Access to buildings is a big issue for many New Zealanders. It looks like that, due to the hard work and persistence of people in the disability community, the Government may finally be starting to take access to buildings seriously.… ...
    GreensBy Mojo Mathers MP
    2 weeks ago
  • Greens call on Super Fund to divest from fossil fuels
    The Green Party today called on the New Zealand Superannuation Fund (the Fund) to divest from fossil fuels, starting immediately with coal. The call was accompanied with a new report, Making money from a climate catastrophe: The case for divesting… ...
    GreensBy Russel Norman MP
    2 weeks ago
  • Young Kiwis’ housing crisis
    Shelter is a fundamental human need along with food, water and clean air. All humans need adequate shelter; it’s a human right. Warm, safe, stable accommodation is critical for young people to be able learn and grow and just be.… ...
    GreensBy Jan Logie MP
    2 weeks ago
  • On the River Patrol in Te Tai Tokerau
    Last Wednesday, I went on a tour of some of Northland’s rivers with  Millan Ruka from Environmental River Patrol as he monitored water quality throughout Te Tai Tokerau. The dry conditions meant we couldn’t use the boat but we visited… ...
    GreensBy Catherine Delahunty MP
    2 weeks ago
  • Opening of Parliament 2015
    Russel NormanOpening of Parliament Speech February 2015 Tēnā koutou Tēnā koutou Tēnā koutou katoa. A brief history of climate change What a summer! It's been hot, even here in Wellington, hotter than any summer I can remember. All… ...
    GreensBy Russel Norman MP
    2 weeks ago

Removed at the request of The Daily Blog.
Public service advertisements by The Standard

Current CO2 level in the atmosphere