web analytics

Two paths diverged

Written By: - Date published: 6:44 am, October 10th, 2012 - 16 comments
Categories: Economy - Tags:

So, we know what Key’s utopia is: golf, holidays, no jobs, and, um, no toilets. But what about the Nats’ economic policies? Where are they heading? Let’s examine each and their results.

  • Asset sales/privatisation – so more of NZ will be foreign-owned, sending profits offshore, and more pubic services will be run for a profit, excluding those who can’t afford them.
  • More expensive education – so our workforce will be less educated.
  • Lower minimum wages and reduced work rights – so our incomes will be lower.
  • A high dollar strategy -killing manufacturing and meaning there will continue to be a large current account deficit funded by borrowing and asset sales.
  • A focus on mining, oil and gas, and agricultural intensification for economic growth – so the only route to prosperity is greater environmental degradation.
  • Low-value roads rather than public transport – so we are more dependent on petrol and exposed to oil shocks.
  • Urban sprawl rather than compact urban form – locking in high transport costs for generations.
  • Crony capitalist deals with (often foreign-owned) favoured businesses – so success  depends more and more on lobbying and personal links with ministers, rather than economic, environmental, and social viability.

This, then, is National’s plan for New Zealand. Let’s fast forward to see what we would have if they were to be in government for the next, say, two decades….

The low-skill workforce works in low-pay, ununionised jobs for foreign companies who ship the profits offshore. The massive current account deficit thereby created can’t be funded through high-value exports because the high dollar strategy has destroyed manufacturing. Instead, more assets are sold and our environment is exploited ever more heavily for minerals, oil and gas, and agriculture.

Businesses see success as getting government subsidies. Workers can’t afford user-pays services, or housing, or transport. And they’re stuffed if they lose their jobs – unemployment  and poverty are rife. Emigration is hollowing out our skill base – in 2012, the number of people leaving every year for Australia could fill Eden Park. In 20 years, they could fill it every 6 months.

The high dollar can’t protect the country from rising oil prices and the lack of public transport and the prevalence of urban sprawl makes people dependent on consuming high amounts of oil to live their lives. The rising national debt is a disaster waiting to happen, and then an oil shock hits … and no-one’s coming to bail-out some poor farmers and miners on islands in the middle of nowhere.

Of course, there’s an alternative to National. An investment approach, rather an an asset-stripping one.

Rather than lowering youth wages with the justification that it may create a few more low-value jobs (and reduce the pay of all young people on the existing minimum wage at the same time), you direct your energies toward creating high value industries that create high paying jobs. The high-pay jobs with supportive savings policies create a large capital base so that we no longer need to import foreign capital (is borrow/sell assets) to develop.

You don’t put all your effort into more farming, more mining, and more drilling, you look at increasing manufacturing of what we already produce so that New Zealand is exporting valuable goods, not raw materials.

You don’t let your manufacturing sector die because you have to play by the ‘rules’ and not interfere when all your trading partners are undertaking competitive devaluations of their currencies to steal wealth from you, instead, you fight fire with fire.

You reduce your economy’s dependence on oil – the most rapidly rising cost in the world economic system – by investing in smart, energy-efficient transport (you don’t cross your fingers and pray the electric car will save you).

You protect New Zealand ownership because, at the end of the day, only people in this country really give a damn about it – to everyone else, we’re a short-term profit centre.

And you invest in public services because they’re simply the most cost-effective means of delivering services and, if there’s anything the last 20 years have proven, it’s that competition in public goods is an illusion in small economies – the private investors will always over-price and asset-strip and the government will be forced to get back into the market with money or ownership (telecoms, air, banking, rail,…). And you invest in housing, health, and poverty reduction because a) they lead to a more productive workforce and b) what is the point of all this if not more fulfilling and enjoyable human lives?

16 comments on “Two paths diverged”

  1. IrishBill 1

    We know what’s going to happen because we’ve seen it before. The savaging of social capital and public wealth in the eighties and nineties set us up for a generation of inequity, crime, and ill-health while reducing the government’s power to change anything substantially. Only it’ll be worse this time round.

    Back in 2008 Nicky Hager described National’s agenda as picking up where they left off in ’99. I’ve seen nothing so far that would refute that. I’d also note that having a managerial fifth labour government rather than a transformative one* meant it’s been easy for National to do so. That’s something we can’t afford to have happen again.

    *Unlike some on the left I don’t hold a grudge against Labour for this – many forget just how tired, mistrustful, and intolerant of “big-idea” restructuring and transformation the electorate were after fifteen years of right-wing revolution.

    • karol 1.1

      IB: *Unlike some on the left I don’t hold a grudge against Labour for this – many forget just how tired, mistrustful, and intolerant of “big-idea” restructuring and transformation the electorate were after fifteen years of right-wing revolution.
       
      I have some sympathies for both sides on this.  I do remember that once ‘neoliberalism’ became the dominant discourse in politics, the media and elsewhere, it was very difficult for any party with a strong left wing agenda to get elected – the MSM would have led the way in demolishing them.

  2. Tom Gould 2

    The right worked out some time back that there would not be enough to keep everyone comfortable so they invented trick down, which was actually trickle up. And they have been very successful at it.

    • karol 2.1

      TG, I suppose it depends what you mean by comfortable.  I’m not an economist, but I understood there  was enough resources for everyone to live at a reasonable standard – so long as we keep the global population under control.
       
      But the trickle-up brigade are just greedy, and want more than is necessary for a reasonably comfortable life.  They want EXCESS!

    • Draco T Bastard 2.2

      There’s plenty to keep everyone comfortable – if the wealth wasn’t given to the few, if population was under control and that we lived within the hard physical limits set by the real world.

      EDIT: Oh, and we stop trying to have people working for 40+ hour weeks. When everyone has to work all the time is when those hard physical limits get ignored.

  3. Roy 3

    On a side issue, why the aversion to toilets anyway? Those of us who have ever had to use a long-drop have a quiet appreciation of how nice it is to have a clean flush toilet when we need one. Is Jonkey afraid that someone will shove his head in a toilet and flush?

    • brybry 3.1

      Nah. If your first name is also a name for the crapper then they must be abolished from your planet. That’s the rule.

  4. Wairua 4

    Has James reverted to his toilet obsession ?

  5. JonL 5

    Perhaps we will see job growth – like the USA – where all the “growth” in jobs has been low paid menial jobs like waitressing, fast food chains and low paid age care.workers.
    No production – that’s all gone to China.
    Also, we’re taking after the USA in the Student Loan debacle, which is impoverishing a generation or two of Americans, just like in NZ…….here, it’s in the billions, there it’s in the Trillions! Another generation of debt slaves amongst the young, which, without the jobs to repay, will dog them to the grave!
    Well done!!!!

  6. karol 6

    Just to throw this into the mix of possible policies for the future.  There was a press release from Mana today, in response to the Greens proposed policies on quantitative easing.  They say that they will see your QE, and raise it by a financial transaction tax.
     

    MANA welcomes the Green Party announcement of three specific proposals to begin tackling the high New Zealand dollar.

    Along with changes to the Reserve Bank Act and measures to curb another housing bubble, the Green Party are suggesting “quantatitive easing” as a way to reduce our over-valued dollar.

    “We are prepared to look at these proposals and given they have been attacked so vociferously by Economic Development Minister Stephen Joyce, then they must have real merit” says MANA Vice President John Minto.

    “The glaring omission from the Green Party proposals however is a Financial Transaction Tax which would address the high dollar directly without the problems of other proposals. MANA’s Hone Heke Financial Transaction Tax would target speculative buying and selling of the New Zealand dollar which is the main reason for its high value”.

     
     
     

  7. Fisiani 7

    •Asset sales/privatisation – so more of NZ will be foreign-owned, sending profits offshore

    care to show some proof of this ridiculous claim. Apparently you have to do so on this blog.

    Such a ludicrous claim will surely join the hysterical ‘wall of shame’ of employers exploiting the 90 day rule.
    The non existent wall and the non existent foreign buyers.

    • tracey 7.1

      treasury stated in ten years the shares could be in foreign hans which is profit going overseas.

  8. RedLogix 8

    the non existent foreign buyers.

    “A yearly survey by Goldman Sachs & Partners shows foreign ownership of the stock market in the June quarter was 35.9%, compared to 36.1% in the same period last year.”

    http://www.nbr.co.nz/article/new-zealand-sharemarket-36-foreign-owned-nk-100102

    And just who do you think is getting the roughly $12b a year in ‘negative investment income’ that flows out of our economy every year?

    And who owns our our biggest four bank fisi?

  9. Fisiani 9

    When the first mixed ownership flotation is snapped up by New Zealanders you will look rather silly

Recent Comments

Recent Posts

  • Minister approved OIO consent despite death and investigations
    Louise Upston must say if she knew Intueri was being prosecuted for the death of a student and under a funding investigation when she approved its overseas investment consent to buy another education provider, says Labour’s Land Information and Associate ...
    17 hours ago
  • Brexit vote costs NZ effective EU voice
    Despite being extremely close the result of the referendum in Britain reflects the majority voice, Labour’s Foreign Affairs spokesperson David Shearer says. “While we respect the decision to leave the EU, it goes without saying the move will usher in ...
    2 days ago
  • Pasifika Education Centre doomed
    The Pasifika Education Centre appears doomed to close down this December, says Labour’s Pacific Island Affairs spokesperson Su’a William Sio  “In a written question I asked the Minister whether he would put a bid in for more money. His answer ...
    3 days ago
  • Onetai Station review a shameful whitewash
    A report released today on the Overseas Investment Office’s (OIO) good character test is a whitewash that does nothing to improve New Zealand’s overseas investment regime, says Labour’s Land Information spokesperson David Cunliffe. “The review of the good character test ...
    3 days ago
  • We need a national strategy to end homelessness now
    Long before I entered Parliament, housing and homelessness were issues dear to my heart. I know from personal experience just how hard it is to find an affordable home in Auckland. In my maiden speech, I talked about how when ...
    GreensBy Marama Davidson
    3 days ago
  • Capital feels a chill economic wind
      Wellington is on the cusp of recession with a sharp fall in economic confidence in the latest Westpac McDermott Miller confidence survey, says Labour’s Regional Development spokesperson David Clark.  “Economic confidence amongst Wellingtonians has dropped 12% in the past ...
    3 days ago
  • Dive school rort took six years to dredge up
    News that yet another private training establishment (PTE) has rorted the Government’s tertiary funding system since 2009 shows that Steven Joyce has no control of the sector, says Labour’s Associate Education (Tertiary) spokesperson David Cunliffe. “Like Agribusiness Training and Taratahi, ...
    4 days ago
  • National’s housing crisis hitting renters hard
    National’s ongoing housing crisis is causing massive rental increases, with Auckland renters being hit the hardest, says Labour’s Housing spokesperson Phil Twyford. ...
    4 days ago
  • A Day with the PSA
    This week, along with Labour MP Kris Faafoi, I accepted an invitation to spend a day working alongside the good folk at the Public Service Association in Wellington. As the Workplace Relations and Safety spokesperson for the Greens, I was ...
    GreensBy Denise Roche
    4 days ago
  • A Day with the PSA
    This week, along with Labour MP Kris Faafoi, I accepted an invitation to spend a day working alongside the good folk at the Public Service Association in Wellington. As the Workplace Relations and Safety spokesperson for the Greens, I was ...
    GreensBy Denise Roche
    4 days ago
  • Government holds Northland back
    New information shows Northland remains the most economically depressed region in New Zealand, says Labour’s Regional Development spokesperson David Clark. “The latest Westpac McDermott Miller regional survey found that more Northlanders believe their local economy will deteriorate this year than ...
    4 days ago
  • Rebstock report into MFAT leaks a disgrace
    An Ombudsman’s report on the Paul Rebstock investigation into MFAT leaks shows the two diplomats at the centre of the case were treated disgracefully, says Labour’s State Services spokesperson Kris Faafoi.  “The Ombudsman says one of the diplomats Derek Leask ...
    4 days ago
  • More families forced to turn to food banks for meals
    Increasing numbers of families are having to go to food banks just to put a meal on the table, according to a new report that should shame the Government into action, says Labour’s Social Development spokesperson Carmel Sepuloni. ...
    4 days ago
  • We have a housing emergency in New Zealand
    Auckland, New Zealand, where house prices have risen 20 percent in the last year alone We have a housing emergency in New Zealand.  Like many people we are ashamed and angry that in a wealthy country like ours, we have ...
    GreensBy Eugenie Sage
    5 days ago
  • We have a housing emergency in New Zealand
    Auckland, New Zealand, where house prices have risen 20 percent in the last year alone We have a housing emergency in New Zealand.  Like many people we are ashamed and angry that in a wealthy country like ours, we have ...
    GreensBy Eugenie Sage
    5 days ago
  • Aussie reforms signal trouble ahead for school funding plan
    Plans by the Government to return to bulk funding are likely to see increased class sizes and schools most in need missing out on much-needed resources, Labour’s Acting Education spokesperson Grant Robertson says. “The signaled return to bulk funding is ...
    5 days ago
  • Toxic Sites – the down low on the go slow
    In  2011, I negotiated an agreement with the National Government to advance work on cleaning up contaminated sites across the country. This included establishing a National Register of the ten worst sites where the creators of the problem could not ...
    GreensBy Catherine Delahunty
    5 days ago
  • Aucklanders face new motorway tax of up to $2500 a year
    The Government wants to tax Aucklanders thousands of dollars a year just to use the motorway network, says Labour’s Auckland Issues spokesperson Phil Twyford. “Officials estimate the average city commute is 11.8km. This means for the average Aucklander commuting five ...
    5 days ago
  • 15 corrupt bank managers identified in student fraud
    New information show 15 bank managers in India have been identified by Immigration New Zealand as presenting fraudulent documents on behalf of foreign students studying here, Labour’s Immigration spokesperson Iain Lees-Galloway says. “Documents obtained by Labour under the Official Information ...
    5 days ago
  • National leaves Kiwi savers the most vulnerable in OECD
    News last week that Israel’s Finance Minister will insure savers’ bank deposits means New Zealand will be left as the only country in the OECD that has no deposit insurance to protect savers’ funds should a bank fail. Most Kiwis ...
    GreensBy James Shaw
    6 days ago
  • Comprehensive plan for future of work needed
    A Massey University study showing many New Zealanders are unaware of the increasing role of automation in their workplace, highlights the need for a comprehensive plan for the future of work, says Grant Robertson, Chair of Labour’s Future of Work ...
    6 days ago
  • Another National Government failure: 90 day work trials
    On Friday last week, the Treasury released a report by MOTU economic consultants into the effectiveness of the controversial 90-day work trial legislation. The report found that there was “no evidence that the policy affected the number of hires by ...
    GreensBy Denise Roche
    6 days ago
  • Iraq mission extension case not made
    The Prime Minister has not made the case for extending the Iraq deployment another 18 months nor the expansion of their mission, says Opposition Leader Andrew Little.  “Labour originally opposed the deployment because the Iraqi Army’s track record was poor, ...
    7 days ago
  • Denial is a long river
    William Rolleston from Federated Farmers made the absurd claim on RNZ on Saturday that “we actually have very clean rivers”. This statement doesn’t represent the many farmers who know water quality is in big trouble and are working to clean ...
    GreensBy Catherine Delahunty
    7 days ago
  • Denial is a long river
    William Rolleston from Federated Farmers made the absurd claim on RNZ on Saturday that “we actually have very clean rivers”. This statement doesn’t represent the many farmers who know water quality is in big trouble and are working to clean ...
    GreensBy Catherine Delahunty
    7 days ago
  • Melanoma deaths could be avoided by an early access scheme
      The tragic death of Dunedin’s Graeme Dore from advanced Melanoma underlines the cruelty of this Government in promising a treatment but delaying for months, says Labour’s Health Spokesperson Annette King.  “Graeme was diagnosed with Melanoma last year. He used ...
    7 days ago
  • Assessing the Defence White Paper
    The Government’s recently released Defence White Paper has raised questions again about New Zealand’s defence priorities, and in particular the level and nature of public funding on defensive capabilities. The Green Party has a longstanding belief that priority must be ...
    GreensBy Kennedy Graham
    7 days ago
  • Kiwis’ confidence drops again: Economy needs a boost
    Westpac’s consumer confidence survey has fallen for the seventh time in nine quarters, with middle income households ‘increasingly worried about where the economy is heading over the next few years’, says Labour’s Finance spokesperson Grant Robertson. “This survey is a ...
    7 days ago
  • Relocation grant simply kicks can down the road
    The response by state house tenants and social agencies to the Government’s rushed plan to shift families out of Auckland tells us what we already knew – this is no answer to the chronic housing shortage, Opposition Leader Andrew Little ...
    7 days ago
  • Peace hīkoi to Parihaka
    On Friday a Green crew walked with the peace hīkoi from Ōkato to Parihaka. Some of us were from Parliament and some were party members from Taranaki and further afield. It was a cloudy but gentle day and at one ...
    GreensBy Catherine Delahunty
    7 days ago
  • Children’s Commissioner right to worry about CYF transition
    The Government must listen to the Children’s Commissioner’s concerns that young people under CYF care could be ‘negatively impacted’ as the new agency’s reforms become reality, says Labour’s Children’s spokesperson Jacinda Ardern. “Dr Russell Wills has used the second annual ...
    7 days ago
  • Bill English exaggerates PPL costs to justify veto
    The Finance Minister has used trumped-up costings to justify a financial veto against parents having 26 weeks paid parental leave, says Labour MP Sue Moroney. “Bill English’s assertion on RNZ yesterday that the measure would cost an extra $280 million ...
    1 week ago
  • Government must refund overcharged motorists
    Labour is calling on the Government to refund motor registration fees to three-quarters of a million Kiwi motorists whose vehicles were wrongly classified under National’s shambolic ACC motor vehicle risk rating system, Labour’s ACC spokesperson Sue Moroney says.“Minister Kaye’s ridiculous ...
    1 week ago
  • 90-day work trials an unfair failure which must change
    A new Treasury report shows the Government’s 90-day trials haven’t helped businesses and are inherently unfair, Labour’s Workplace Relations spokesperson Iain Lees-Galloway says. “The Motu report found that 90-day trial periods had no impact on overall employment and did not ...
    1 week ago
  • Massey East houses a start but Nick Smith should think bigger
    The Massey East 196-home development is a start but the Government must think bigger if it is to end the housing crisis, Labour’s Housing spokesperson Phil Twyford says. “It is great the Government is finally realising it needs to build ...
    1 week ago
  • More changes needed to ensure fewer cases like Teina Pora’s
    Teina Pora spent 21 years behind bars for a crime he didn’t commit, shafted by a Police investigation that prioritised an investigator’s hunch over the pursuit of credible evidence. Yesterday’s announcement that the government is to pay him $2.5m in ...
    GreensBy David Clendon
    1 week ago
  • New Zealand Labour sends condolences to UK
    The New Zealand Labour Party is sickened and saddened by the murder of British Labour MP Jo Cox, Labour Leader Andrew Little says. “Ms Cox was killed in cold blood while simply doing her job as a constituent MP. She ...
    1 week ago
  • Shameful refugee quota increase still leaves NZ at the bottom of the list
    Minister for Immigration Michael Woodhouse announced this week that the government will put off increasing the refugee quota by 1000 places until 2018.  It’s a shameful decision that undermines the Government’s claim that it takes its international humanitarian obligations seriously, ...
    GreensBy Denise Roche
    2 weeks ago
  • Paula Bennett as a victim hard to swallow
    The National Party spin machine has gone into overdrive to try and present Paula Bennett as the victim in the Te Puea Marae smear saga, says Labour Housing spokesperson Phil Twyford. “Bill English in Parliament today tried valiantly to paint ...
    2 weeks ago
  • Voters to have the final veto on paid parental leave
    New Zealanders will have the final right of veto on a Government that has ignored democracy and is out of touch with the pressures and demands on families, says Labour MP Sue Moroney. “Today’s decision by National to veto 26 ...
    2 weeks ago
  • Collins should put Kiwis’ money where her mouth is
    Labour’s Police spokesman Stuart Nash is calling on anyone who has received a speeding ticket for going up to 5km/h over the 100km/hr open road speed limit to write to him and he will take it up on their behalf ...
    2 weeks ago
  • Where is the leadership on equal pay for work of equal value?
    The gender pay gap in the public service is worse than in the private sector. I’ve always found this particularly galling because I expect our Government to provide an example to the private sector on things like human rights, rather ...
    GreensBy Jan Logie
    2 weeks ago
  • Kiwis’ real disposable income goes nowhere for the year
    New Zealanders’ hard work for the last year resulted in no increase in real disposable income, showing Kiwis aren’t getting ahead under National, says Labour’s Finance spokesperson Grant Robertson. “Today’s GDP figures reveal that real gross national disposable income per ...
    2 weeks ago
  • Pora case a case to learn from
    Conformation that Teina Pora will receive $2.5million from the Crown for more than 20 years of wrongful imprisonment does not fix the flaws in our system that led to this miscarriage of justice, Labour’s Justice spokesperson Jacinda Ardern says. “The ...
    2 weeks ago
  • Government needs to start again with RMA changes
    The National Government’s proposed changes to the Resource Management Act have attracted more than 800 submissions, many of them critical of key aspects of the Resource Legislation Bill. There has been much criticism of the new regulation making powers given ...
    GreensBy Eugenie Sage
    2 weeks ago
  • Bennett’s briefing completely unacceptable
    It is completely unacceptable that Paula Bennett briefed her political staff on the police investigation into Hurimoana Dennis after her meeting with him, despite it having nothing to do with her social housing portfolio, says Labour’s Housing spokesperson Phil Twyford. ...
    2 weeks ago
  • Speech to Green Building Council
    Building smarter, greener cities It will be clear to anyone who has been watching the public debate on the housing crisis that housing in New Zealand is sadly far from being economically sustainable when Auckland has the fourth most unaffordable ...
    2 weeks ago
  • Paula Bennett has more questions to answer
    It is unthinkable that Paula Bennett’s press secretary went rogue and tried to smear the reputation of someone involved in helping the homeless, Labour’s Housing spokesperson Phil Twyford says. “Political staff would not take such serious unilateral action without the ...
    2 weeks ago
  • Speech on Notice of Motion on Orlando
    Mr Speaker, The Labour Party joins with the government in expressing our horror at this atrocity and our love and sympathy are with the victims and their families. Our thoughts are with the people of Orlando and of the United ...
    2 weeks ago
  • Tiakina Ngā Wai – Swimmable Rivers Report June 2016
    The campaign to clean up our rivers was launched at the Green Conference at Queens Birthday weekend. However, the work prior to the launch goes back a number of years. Russel Norman and Eugenie Sage deserve full credit for the ...
    GreensBy Catherine Delahunty
    2 weeks ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere