web analytics
The Standard
Advertising

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

Important links

Recent Comments

Recent Posts

  • Government’s housing failure puts pressure on Reserve Bank
    The Government’s failure to take action on the housing crisis has put pressure on the Reserve Bank Governor who has to deal with a rampaging housing market and low inflation at the same time, says Labour’s Finance spokesperson Grant Robertson.… ...
    11 hours ago
  • Labour wishes Russel Norman well
    The Labour Party wishes Russel Norman well in the future as he stands down as Green Party co-leader, Labour Leader Andrew Little said today. “Russel has made a significant contribution to New Zealand politics in his nine years as co-leader… ...
    11 hours ago
  • Russel Norman to stand down as Green Party Co-leader in May
    Green Party Co-leader Dr Russel Norman has announced today that he will stand down as leader at the party's Annual General Meeting in May.Dr Norman will remain as Co-leader and retain his finance and climate change portfolios until the AGM."After… ...
    GreensBy Russel Norman MP
    14 hours ago
  • Russel Norman to stand down as Green Party Co-leader in May
    Green Party Co-leader Dr Russel Norman has announced today that he will stand down as leader at the party's Annual General Meeting in May.Dr Norman will remain as Co-leader and retain his finance and climate change portfolios until the AGM."After… ...
    GreensBy Russel Norman MP
    14 hours ago
  • UE bar hike denies access to thousands
    A Government rule change denying access to thousands of young Kiwis access to tertiary education is doing nothing to build a smart, fair future, Labour’s Tertiary Education spokesperson David Cunliffe said today.  “NZQA rules changed by the Government have reduced… ...
    16 hours ago
  • Progressive Rainbow rights? Yeah, nah….
    Legally, New Zealand is perhaps one of the more progressive countries when it comes to lesbian, gay, bisexual, transgender and intersex (LGBTI) rights even though we have further to go on the last two. However, the latest Westpac’s Rainbow Acceptance… ...
    GreensBy Jan Logie MP
    1 day ago
  • National’s back to the future on housing sell-off
    National’s newly announced state housing policy is simply a re-run of its failed ideologically-driven 1990s experiment, Labour Leader Andrew Little says. “News articles from the mid-1990s uncovered by Labour shows this is just more of the same. ...
    1 day ago
  • National’s back to the future on housing sell-off
    National’s newly announced state housing policy is simply a re-run of its failed ideologically-driven 1990s experiment, Labour Leader Andrew Little says. “News articles from the mid-1990s uncovered by Labour shows this is just more of the same. ...
    1 day ago
  • National’s back to the future on housing sell-off
    National’s newly announced state housing policy is simply a re-run of its failed ideologically-driven 1990s experiment, Labour Leader Andrew Little says. “News articles from the mid-1990s uncovered by Labour shows this is just more of the same. ...
    1 day ago
  • Waihopai – years on, still the same
    On 24 January, I attended the Waihopai Base protest in my electorate.  It was attended by a great range of people who are all concerned about the direction our country is heading in.  Thank you to all of those who… ...
    GreensBy Steffan Browning MP
    2 days ago
  • Greens call for ring-fencing of state home proceeds
    The Government must ring-fence the proceeds of any state home sales and spend every dollar raised on more Government-built homes in order to address the housing crisis, the Green Party says.Prime Minister John Key has indicated that his first major… ...
    GreensBy Kevin Hague MP
    3 days ago
  • English breaks his $6000 wages promise
    Just one month into the new year Bill English has already rowed back on his election promise of real wage rises for New Zealanders, says Labour’s Finance spokesperson Grant Robertson. “During the election campaign National promised Kiwis that the average… ...
    1 week ago
  • National fails to produce evidence justifying attack on RMA
    The National Government is misusing evidence provided in the Motu report on planning rules to justify gutting the environmental protections secured by the Resource Management Act (RMA), says the Green Party today. The Motu group's research into the impacts of… ...
    GreensBy Julie Anne Genter MP
    1 week ago
  • RMA changes won’t knock a dollar off the cost of a new home
    The Government’s proposed changes to the RMA won’t increase the number of affordable homes or knock a dollar off the cost of building a new house, Labour Leader Andrew Little says.  “Tinkering with the RMA will not solve National’s housing… ...
    1 week ago
  • What is the real ‘price of the club’?
    What price is too high to join a club?  According to the current the New Zealand Prime Minister, the lives of young Kiwi men and women are a part of the package. In his latest BBC interview, John Key fails… ...
    GreensBy Kennedy Graham MP
    1 week ago
  • Palestine – NZ talks loudly in New York, does little at home
    Even though New Zealand has been gently slumbering over the last few weeks, world affairs have been progressing at its usual break-neck speed. There have been a number of significant steps since we all disbanded from the last parliamentary year.… ...
    GreensBy Kennedy Graham MP
    1 week ago
  • DOC debacle means hundreds may have missed out on fishing licences
    Hundreds of families and recreational fishers may have had their holidays spoiled by missing out on their fishing licences, with Conservation Minister Maggie Barry preferring instead to focus on more high profile portfolio priorities over the summer break, Labour’s Conservation… ...
    2 weeks ago
  • Effective action needed against pirate fishing boats
    New Zealand’s failure to detain pirate shipping vessels poaching endangered species in our region is simply not good enough, Labour’s Defence spokesperson Phil Goff says. “We send New Zealand naval vessels to the Arabian Gulf to board pirate ships there… ...
    2 weeks ago
  • Housing affordability crisis gets worse under National
    News that Auckland’s housing is now among the 10 most unaffordable in the world confirms the Government’s housing policy has failed, Labour’s Housing spokesperson Phil Twyford says. “After six years in power, National’s housing policies have not fixed the housing… ...
    2 weeks ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere