web analytics
The Standard

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

  • Ministry must protect organic food industry
    The Ministry for Primary Industries must take urgent action to protect New Zealand’s $150 million organic food and beverage industry by establishing a certification regime, Labour’s Primary Industries spokesperson Damien O’Connor says. “Despite working with Organics Aotearoa on the issue… ...
    12 hours ago
  • Tony Abbott, indigenous rights, and refugees
    This week, Tony Abbott has visited Aotearoa New Zealand, bringing with him his racist policies against indigenous Australians and his appalling record on refugee detention camps. Abbott has launched a policy “to close” remote aboriginal communities, which is about as… ...
    GreensBy Catherine Delahunty MP
    16 hours ago
  • PM’s housing outburst bizarre
    Labour’s Housing spokesperson Phil Twyford has described the Prime Minister’s latest comments on the Auckland housing crisis as bizarre. “John Key is deep in denial. He must be one of the only people left who are not concerned about the risk… ...
    1 day ago
  • Deflation: Another economic headache linked to housing crisis
    National’s housing crisis is causing even further damage with the second consecutive quarter of deflation a genuine concern the Reserve Bank can do little about, as it focusses on Auckland house prices, says Labour’s Finance spokesperson Grant Robertson. “This is… ...
    2 days ago
  • Pot calling the kettle black over fossil fuel subsidies.
    Over the weekend alongside nine other countries the New Zealand Government has endorsed a statement that supports eliminating inefficient subsidies on fossil fuels. Fossil fuel subsidies are a big driver of increasing emissions. Good on the Government for working internationally… ...
    GreensBy Gareth Hughes MP
    2 days ago
  • At last – a common sense plan for Christchurch
    The Common Sense Plan for Christchurch released by The People’s Choice today is a welcome relief from the shallow debate about rates rises versus asset sales, Labour’s Christchurch MPs say. "Local residents – who have spent weeks trawling through the… ...
    3 days ago
  • National must lead by example on climate change
    The National Government must meet its own climate change obligations before it preaches to the rest of the world, Labour's Climate Change spokesperson Megan Woods says. "Calls today by Climate Change Minister Tim Groser for an end to fossil fuel… ...
    3 days ago
  • Biosecurity rethink a long time
    The Government has opened New Zealand’s borders to biosecurity risks and its rethinking of bag screening at airports is an admission of failure, Labour’s Primary Industries spokesperson Damien O’Connor says. Nathan Guy today announced a review of biosecurity systems in… ...
    4 days ago
  • Chinese rail workers must be paid minimum wage
    KiwiRail must immediately stop further Chinese engineers from working here until they can guarantee they are being paid the New Zealand minimum wage, Labour’s MP for Hutt South Trevor Mallard says. The Ministry of Business, Innovation and Employment today released… ...
    4 days ago
  • Better consultation needed on Christchurch asset sales
    The Christchurch City Council (CCC) should be promoting wide and genuine public consultation on its draft ten year budget and plan given the serious implications for the city’s future of its proposed asset sales, outlined in the plan. Instead, it… ...
    GreensBy Eugenie Sage MP
    4 days ago
  • ‘Healthy Families’ a good start but not enough to tackle obesity relate...
    Today the Government is making a the meal out of the launch of its ‘Healthy Families’ package to promote ‘healthier decisions’ and ‘changing mindsets’ over nutrition, physical activity and obesity. Great! The programme is based on a successful model from… ...
    GreensBy Kevin Hague MP
    4 days ago
  • ‘Healthy Families’ a good start but not enough to tackle obesity relate...
    Today the Government is making a the meal out of the launch of its ‘Healthy Families’ package to promote ‘healthier decisions’ and ‘changing mindsets’ over nutrition, physical activity and obesity. Great! The programme is based on a successful model from… ...
    GreensBy Kevin Hague MP
    4 days ago
  • No more sweet talk on obesity
    The Government should be looking at broader measures to combat obesity rather than re-hashing pre-announced initiatives, Labour’s Health spokesperson Annette King says.  “While it is encouraging to see the Government finally waking from its slumber and restoring a focus on… ...
    5 days ago
  • Government two-faced on zero-hour contracts
    The Government should look to ban zero-hour contracts in its own back yard before getting too high and mighty about other employers using them, Labour’s Health spokesperson Annette King says. “Information collated by Labour shows at least three district health… ...
    5 days ago
  • Scrutiny of battlefield deaths should continue
    As New Zealand troops head to Iraq under a shroud of secrecy, the Government is pushing ahead with legislation to remove independent scrutiny of incidents where Kiwi soldiers are killed in hostile action overseas, Labour’s Defence spokesperson Phil Goff says.… ...
    5 days ago
  • Damp-free homes a right for tenants
    Labour is urging tenants to use a little known rule which gives them the right to live in damp-free rental homes. Otago University researchers have today highlighted the Housing Improvement Regulations 1947 as a way tenants can force landlords to… ...
    5 days ago
  • National must take action on speculators
    The Government must take action on property speculators who are damaging the housing market and shutting families and young people out of the home ownership dream, Labour Leader Andrew Little says.  “There are a number of options the Government could… ...
    6 days ago
  • Milk price halves: A $7b economic black hole
    Global milk prices have halved since the peak last year, creating an economic black hole of almost $7 billion that will suck in regions reliant on dairy, crucial industries and the Government’s books, says Labour’s Finance Spokesperson Grant Robertson. “The… ...
    6 days ago
  • Kitchen plan set to swallow up health boards’ funds
    The financial impacts of implementing a proposal to outsource hospital food, forced on them by a crown-owned company which is now facing an auditor-general’s inquiry, are being felt by district health boards across the country, Labour’s Health spokesperson Annette King… ...
    6 days ago
  • Reserve Bank scathing of Government
    The Reserve Bank’s most scathing critique to date of National’s inability to handle the housing crisis shows the Bank is sick of having to pick up the pieces, Labour Leader Andrew Little says.  “John Key continues to deny there is… ...
    6 days ago
  • Time for McDonald’s to upsize work hours
    Labour is calling on McDonald’s to have more respect for their workers and offer them more guaranteed work hours. McDonald’s is proposing to guarantee its workers 80 per cent of their rostered hours, Labour’s spokesperson for Labour Issues Iain Lees-Galloway… ...
    7 days ago
  • Brownlee misses the boat on asbestos
    Gerry Brownlee has once again missed an opportunity to improve the lives of Cantabrians post-earthquakes, Labour’s Canterbury Earthquake Recovery spokesperson Ruth Dyson says. A new report from the Royal Society of New Zealand and the Prime Minister’s Chief Science Adviser,… ...
    7 days ago
  • Government must come clean on troop deployment and protections
    New Zealanders deserve more than to hear about their troops’ deployment overseas from Australian media, Opposition Leader Andrew Little says. “News from Australia that Kiwi troops are on their way to Iraq this week is another example of the culture… ...
    7 days ago
  • Cancer prevention calls gain momentum
    Research showing bowel cancer treatment sucks up more public health dollars than other cancers once again highlights the need for a national screening programme, Labour’s Health spokesperson Annette King says. A study by Otago University, which found colon cancer is… ...
    7 days ago
  • Burger King shows zero-hour contracts not needed
    The abandonment of zero-hour contracts by Burger King is further evidence good employers do not need to use them, Labour’s spokesperson on Labour Issues Iain Lees-Galloway says. "Congratulations to the Unite Union and Burger King for settling an employment agreement… ...
    1 week ago
  • Kiwis deserve more than reheats
    The Government looks set to rely on regurgitated announcements for this year’s Budget if today’s speech is anything to go by, Labour Leader Andrew Little says. “National has been building up to this Budget for seven long years, promising a… ...
    1 week ago
  • Landlords not cashing in on insulation schemes
    The fact so few landlords have taken up the generous taxpayer subsidy for retrofitting shows it is time to legislate minimum standards, says Labour’s Associate Housing spokesperson Poto Williams. “Many landlords aren’t using Government insulation schemes because they don’t want… ...
    1 week ago
  • Zero excuses, end zero hour contracts now
    It’s time Workplace Relations Minister Michael Woodhouse cut the weasel words and banned zero hour contracts, Labour Leader Andrew Little says. “Michael Woodhouse today acknowledged zero hour contracts are unfair. ...
    1 week ago
  • We’ve reached Peak Key with ‘artificial target’
    John Key’s attempt to redefine his cornerstone promise of two election campaigns as an artificial target suggests his other promises are works of fiction, says Labour’s Finance spokesperson Grant Robertson. “For seven years and two election campaigns, John Key has… ...
    1 week ago
  • Top 10 need to know facts on climate change
    All the numbers and stats around climate change can be confusing, so we’ve put together a handy list of the top 10 numbers about climate change that we should all know- and then do something about. You can sign up here to… ...
    GreensBy Frog
    2 weeks ago
  • Campbell Live a bastion of investigative journalism
    The announcement that current affairs programme Campbell Live is under review and may be axed has sparked outrage from the New Zealand public, for good reason, says Labour’s Broadcasting Spokesperson Clare Curran. “Investigative journalism is a precious resource in today’s… ...
    2 weeks ago
  • Ground Zero for ‘disastrous’ contracts
    Yesterday the Green Party called on the Government to follow the leadership of Restaurant Brands and ditch zero-hour contracts. Currently it looks like the Government is a large part of the zero-hours problem. It allows these types of “non-jobs” to… ...
    GreensBy Jan Logie MP
    2 weeks ago
  • Trust in National will disappear with deficit
    Bill English is set to break his promise to get the books back in the black this year and lose the trust of Kiwis who have had to do it too hard for too long, says Labour’s Finance spokesperson Grant… ...
    2 weeks ago
  • Dorothy Jelicich passes away
    It is with sincere sadness that the Labour Party conveys its sympathies and condolences to the bereaved family of Dorothy Jelicich who passed away last night at the age of 87 years, says the MP for Mangere, Su’a William Sio.… ...
    2 weeks ago
  • Government leaves aquaculture industry at sea
    If the Government had acted in its first term, the Sanford mussel processing plant would not have to close, says Labour’s Fisheries spokesperson Rino Tirikatene. “Sanford is considering closure after a decline in the natural supply of spat. This is… ...
    2 weeks ago
  • Maggie –it’s time to roll your sleeves up
      It’s time for the Minister of Conservation Maggie Barry to listen to the Parliamentary Commissioner for the Environment  and start untangling the mess around  New Zealand’s stewardship land, says Labour’s Conservation spokesperson Ruth Dyson.  “The Commissioner has called for… ...
    2 weeks ago
  • Gutting of prison jobs a gift to private prison provider
    Today’s announcement that sections of three prisons are to be closed is the thin end of the wedge for the privatisation of the country’s prison service, says Labour’s  Corrections spokesperson Kelvin Davis.  It's estimated that 260 prison officers will lose… ...
    2 weeks ago
  • Joyce must rule out revising export target
    Steven Joyce must rule out a second revision of the Government’s export target in six months and stop trying to massage statistics when he fails to meet his goals, says Labour’s Economic Development spokesperson David Clark. “National set a target… ...
    2 weeks ago
  • Caregiver law passed in haste now a fail
    The Government’s response to supporting family caregivers is mean spirited and designed to fail, says Labour’s Disability Issues Spokesperson Ruth Dyson.  “Figures released by the Ministry of Health show that only a tiny percentage of the eligible families have applied… ...
    2 weeks ago
  • Clear message handed to nuclear states
    MPs Phil Goff, Shane Reti and Marama Fox are due to meet with diplomats from the United Kingdom, Russia, the United States, China and France tomorrow to hand deliver a letter calling for their countries to disarm their nuclear weapons.… ...
    2 weeks ago
  • Parity is no party for export businesses
    The extent of the damage done by the high dollar to New Zealand businesses is larger than many think as shown by a dramatic decrease in exports to Australia as our dollar rises, Labour Leader Andrew Little says. “When the… ...
    2 weeks ago
  • Nats’ limited thinking stifling innovation
    Businesses trying to innovate and create better products are being let down by this Government with an industry expert saying Steven Joyce’s mini-tax credits will have almost no impact, says Labour’s Finance spokesperson Grant Robertson. “Andrew Dickeson, director of taxation… ...
    2 weeks ago
  • Vanishing Nature: A must-read for all New Zealanders
    The Environmental Defence Society’s new book Vanishing Nature – facing New Zealand’s biodiversity crisis, should be read by every New Zealander concerned about our native plants and wildlife and striking natural landscapes; and particularly by Government Ministers before Budget Day… ...
    GreensBy Eugenie Sage MP
    2 weeks ago
  • The CYF review – an exercise in predetermination?
    Child Youth and Family (CYF) has a troublesome history of underperformance and botched care and protection cases, the most recent being its abject failure, along with the Police, to address the Roastbusters sexual abuse allegations with any semblance of professionalism.… ...
    GreensBy Metiria Turei MP
    2 weeks ago
  • Time to act to protect Hector’s Dolphins
    The death of a Hector’s Dolphin in a set net must lead to action from the Minister of Conservation, Ruth Dyson, Labour’s Conservation Spokesperson said today. “Despite the fact that the Akaroa Harbour has been a Marine Mammal Sanctuary since… ...
    2 weeks ago
  • Double-laning Darby and Joan disputed
    The Prime Minister’s by-election promise to double lane the road between Northland’s iconic Darby and Joan kauri trees has been contradicted by officials, Labour’s spokesperson Phil Twyford says. The NZ Transport Agency has told a media outlet that not all… ...
    2 weeks ago
  • Parity: Cheaper trips but lower incomes
    The Kiwi dollar’s near-parity with the Australian means some tourists will have cheaper Gold Coast holidays but New Zealand incomes will stay lower for longer, making it harder for many to afford the trip, says Labour’s Finance spokesperson Grant Robertson.… ...
    2 weeks ago
  • English’s state house flog off plans exposed
    Labour is calling on Bill English to confirm or deny a claim the Government is exploring a mass sell-off of state housing to tenants. Property magnate Bob Jones writes in a newspaper column published today that the Minister responsible for… ...
    2 weeks ago
  • Extension of work scheme urged for disaster relief
    The Government is being urged to extend the Regional Seasonal Employment (RSE) scheme to help families in the most severely-damaged islands of Vanuatu, following Cyclone Pam. “Allowing a further 300 people to take up seasonal employment in New Zealand under… ...
    2 weeks ago
  • Nuclear deal with Iran should be just the start
    A deal struck by Iran and major powers to ensure the Iranian facilities producing nuclear material are not used for the purpose of constructing nuclear weapons has been a long time coming, Labour’s Disarmament spokesperson Phil Goff says. “Undoubtedly Iran’s… ...
    2 weeks ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere