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A little help

Written By: - Date published: 1:13 pm, January 17th, 2009 - 25 comments
Categories: economy, employment - Tags:

Oddly the Standard hasn’t received its invite to the “job summit” yet. I’m sure this is just an administrative error but just in case it’s not I’d like to offer the National/Act government a few ideas for their consideration.

I’ll start with three of my favorites, none of which will surprise regular readers:

1. Home insulation

Put the Green’s housing retrofit fund in place. By doing this you’ll aid the ailing building sector, provide work for unskilled and semi-skilled workers and save money on energy, Kyoto payments and costs to the health system as well as increase the productivity of the work force. You might even win over a few more Labour voters next time around.

2. The railways

I know you don’t like the trains and I know you’d dearly like to sell them but let’s face it they provide a very efficient method for transportation of goods around the country and they are run down to buggery. Add electric light rail into the mix and you can do something about the congestion that costs NZ billions of dollars in lost time. You’d be providing a lot of jobs and helping insulate business against future oil shocks. Because they are coming. I suggest you start with the tunnels that are too small for international standard containers.

3. Apprenticeships

Make it compulsory for large businesses to take on a quota of apprentices. The last time you were in government you destroyed the apprenticeship system and claimed the market would sort it out. It really really didn’t. That’s why we had a major skills shortage during the last boom and still do in some industries despite the recession. We might see an upswing in the next three years. That’s about how long the average apprenticeship takes. Imagine going into an upswing with enough skilled workers to cope with the demand!

There are plenty more ideas including decent broadband (when will we see the plan for that?), incentives for productive capital investment, funding for research and development and upgrading public amenities but I think it’s time to throw open the floor to our learned commenters to give their ideas on how to stimulate the economy and provide jobs. The government doesn’t seem to be able to come up with anything solid so let’s give them a little help.

25 comments on “A little help ”

  1. the sprout 1

    “Oddly the Standard hasn’t received its invite to the “job summit'”

    Yeah, well National’s Imaginary Plan For Economic Salvation wouldn’t exactly stand up to any actual questioning would it? Better to just let the msm pretend to cover it.

    Bad for the country, good for National.

  2. IrishBill 2

    I was kind of expecting they’d invite us for our advice rather than our reportage.

  3. the sprout 3

    the truth hurts though, especially when you’re on holiday

  4. I would also suggest we sack John Key for slacking off. If he had been absent from any other job for so long he would’ve been dismissed long ago.

  5. One and two may be a good idea, but the third one reeks of government interference in business.

  6. spot 6

    IB – I don’t know myself, but what did the numbers look like for this policy (costs, benefits etc), either for the work which was already underway, or forecast to be if LPG Govt had a term?

    Sizeable direct injection with good ‘downstream’ spinoffs?

  7. IrishBill 7

    Spot, none of the above ideas were Labour policies (except the retro-fitting which they pinched off the Greens). That one was a billion dollar fund that was projected to save more than $3bn in health costs alone.

    As far as I know neither the rail upgrades or the reinstatement of the apprenticeship system have been costed by any party.

  8. Bill 8

    Why not follow the US lead? Do Sweet F.A… wait for the banking system to collapse further and throw another $800 Billion at them on top of the $750 Billion they have already received?

    http://www.guardian.co.uk/business/2009/jan/16/barclays-bank-shares-in-new-collapse

    In other words, sacrifice the real world and real people to the god with the invisible hand. Details will differ between countries, but the basic thrust well, that’s the same.

    Actually, thinking back to a Xmas post about evolution and pondering the difference between high priests of old and their human sacrifices to their gods to cover their own cock-ups, and the financiers of today who seem to be saying that as long as we give them everything we have and ‘hold the faith’ then we’ll be sweet.

    I guess some things just don’t really change. How long you reckon before the inevitable iconoclasm kicks in?

  9. Quoth the Raven 9

    On the issue of broadband I agree with Gordon Campbell:

    It is precisely because the Key government stimulus package is likely to be so puny that its thrust needs to be well directed. A fresh and convincing rationale will need to be tabled, for instance, as to why the $1.5 billion spend-up on providing faster broadband is the best use of scarce resources in the current crisis. It looks more like a piece of frippery from a bygone era of prosperity.

  10. spot 10

    IB, sorry, I meant the insulation one in any case.

    Suprised the Lab Govt didn’t do much with appenticeships during those 9 years (did they?).

    Someone wiser than I can comment on the actual lead-time to benefits on things like the training/re-training front, but any short vs mid/long term impact should be no excuse for not looking pretty hard about where our skills need to be over the coming decades.

    On matters rail – if that baby gets wrapped into a wider infrastructure debate and we get cr*p off the roads and travelling between major hubs, then I can see the argument for state ownesrhip and investment (add to that the ‘green’ angle).

  11. IrishBill 11

    spot, no need to apologise. Labour introduced the modern apprenticeship scheme which has had some good results but, as in most of that government’s dealings with business, the incentives were all carrot and no stick and the result was limited. Sometimes a little compulsion is needed to make business do what’s good for it.

    qtr, thanks for that link. I’d missed Campbell’s post. It’s very good.

  12. bobo 12

    Talking about American policies, does there come a tipping point when China realizes America can’t pay back the trillions they have borrowed? 13 trillion, 15 trillion…?

  13. toms 13

    Here is an idea: Anyone who is made redundant gets to keep their redundancy tax free until they get another job paying above a certain threshold – at which point they pay the tax as a surcharge. Just like paying off a student loan.

  14. Rex Widerstrom 14

    1. Yes, absolutely. The clown who canned it should be sent to Dunedin in July dressed only in jandals and boxer shorts.
    2. Grrr… alright, since we now own the whole rusting hulk I guess it makes sense to set about spending more money catching up on all that deferred maintenance and investment that its private owners indulged in in order to inflate their margins. But only if I can shackle the idiot Minister who sold it for a pittance to the idiot Minister who bought it back for an over-valued fortune and then tie them to the tracks ahead of an onrushing freight train. I promise to wear a top hat and cape if you want.
    3. Hmmm… I applauded Labour’s carrot, which I was under the impression was working. Is it not? Incentives seem to be working in Australia, from the admittedly little bit I’ve read on the topic. Just because a firm is large doesn’t necessarily mean it has a place for apprentices… for one thing, if it’s lost skilled workers overseas it may not have the supervisory capacity. And I instinctively dislike compulsion.

    R&D, productive capital investment etc – absolutely. Should have been done a long time ago, though. Incentivised or not, people are just too darn skittery at present I fear.

    toms:

    Brilliant idea. When I was made redundant just before Christmas a few years back (by a union no less!) the kindly accounts lady “forgot” to deduct income tax from the final payout (not really redundancy – the bruvvers were all in favour of that for their members, just not their employees). As a result I made it through Christmas and into a job early the next year, and the appropriate amount of tax got paid when I put in my annual return.

    I realise that’s not quite as generous as what you’re proposing, but I’ve experienced such a scheme in an ad-hoc way and can testify that it works well for all concerned. I do hope you write to someone in charge and put the idea to them.

  15. Whero 15

    Bobo said:

    ” . . .Talking about American policies, does there come a tipping point when China realizes America can’t pay back the trillions they have borrowed? 13 trillion, 15 trillion ? . . . ”

    That’s when the shit really hits the fan. Maybe 12 months ?

  16. Point 1 is one Helen’s biggest failures. For the reasons given in Steve’s recent posts on peak oil this is an area that government should have acted on very early this decade when the rental investor driven hot housing market coincided with a winter electricity crisis. With that combination of circumstances the government was in the position to rush through tougher building insulation standards and even make some of the easier bits like ceiling and hot water cylinder insualtion standards applicable to every home being sold rather than only to new houses. Unfortunately that opportunity was missed and the Green’s scheme is the only good option left available.

    Point 2 was a no-brainer 30 years ago. Today the situation is far too complex to make such a simpe assumption because of the changes wrought by the 70s oil shocks, the introduction of RUCs and the revolution in distribution channels.

    The oil shocks resulted in dramatic improvements to the fuel efficiency of cars and to a lesser extent trucks and ships but only insignificant improvements for rail. Investing in facilities for containerised coastal shipping may be a better option than investing in rail. The change from the gross weight mileage tax to cubed axle weight RUCs have completely changed the economics of roading. Under the old system reducing the amount trucks on the road would have reduced road costs much more than it would have reduced road fund revenue.That is no longer the case, in fact within the limits of engineering knowledge of just how much road damage is caused by traffic and environmental factors it is plausible that revenue will fall more than costs.

    There is no evidence that LRT (or BRT) reduces congestion. On the contrary, the best studies to date provide convincing evidence that the maxim that you can;t build your way out of congestion is as true for PT capacity as it is for roadway capacity simply because both trigger the triple convergence effect to almost exactly the same degree. While LRT does address the peak oil aspect of urban travel it fails to address AGW because of the carbon released during the construction of the tracks and especially the tunnels that LRT inevitably need in heavily built up corridors. Electrifying the bus system avoids that problems and has much lower capital costs and avoids resource consent delays. Kiwis are inventive enough to be able to develop a plug-and-play motor swap to convert deisel buses to trolley buses. In fact, with our skills in electronics we shouldn’t have to much trouble designing a battery system to allow the buses to run on batteries on residential streets and as trolleys on arterial route segments. I can’t see that being more expensive than existing hybrid buses but with the advantage of completely breaking the oil dependency of PT.

  17. Julie 17

    I’ll be very interested to see what engagement the Government has with unions through the jobs summit. Unions do after all have a vested interest in saving jobs, and growing them, and actually quite a lot of expertise in the area of employment.

    What ever happened to the Mayoral Taskforce on Jobs (or whatever it was called)?

  18. Tanya 18

    No, it’s the National/Act/Maori Party government, not just National and Act, no matter what you say. I sense the sour grapes of bitter defeat still being gagged on here.

  19. gobsmacked 19

    “No, it’s the National/Act/Maori Party government, not just National and Act, no matter what you say”

    Tanya’s right. So let’s blame Judith Collins AND Pita Sharples for this news:

    “Police are hunting three escaped prisoners in Hamilton.

    Details about the escape remained sketchy but it is believed the prisoners escaped from a police paddywagon near Ohaupo Rd around 10.20am.

    Police cordoned off a large section of Melville as they searched for the prisoners using dogs.”

    Corrections Ministers are responsible for this. We know, because National told us so.

  20. George.com 20

    one area of infrastructure not mentioned which I think should be, is water & waste water. For several years Labour led govts made money available to local bodies to upgrade their water/waste water treatment facilities. There was some form of cost sharing involved. I cannot believe all of the necessary work has been completed. Putting money in to these services in smaller communities will have some payback – health issues, pollution issues and future proofing infrastructure. Whether this sort of work employs more bods than building roads or laying firbe optic I don’t know. It does though deal with two of the fundamental collective goods – water and waste treatment.

  21. Chrisburger 21

    The railway system (yes, the one that the government overpaid for by a factor of about 2.5) is NOT a very efficient means of transporting goods. For the many who don’t understand (on the left, it seems, or mainly those who don’t work in the private sector), trains don’t actually go to their end destination. They require trucks, an awful lot of double handling and trained people to organise it all, pushing the cost up substantially, which is passed on to the consumer.

    The few goods that are suitable for transport on trains, such as unprocessed logs heading for export (yeah, a real money earner there), are of such low value and priority in the economy that it renders rail-freight pretty much useless in New Zealand.

    And this isn’t the 1980s. The railways can’t simply be used to soak up unemployment. New Zealanders voted in a right wing government because they do not want this to happen.

  22. roger nome 22

    Chrisburger:

    “New Zealanders voted in a right wing government”

    Yes, but did they do so knowingly?

  23. Paul Williams 23

    I think the statement about apprenticeships is overstated.

    National implemented recommendations from a review established by the fourth Labour government.

    Apprenticeships were in serious decline for lots of reasons including their relative inflexibility but also changes in the nature and content of work. The Industry Training Strategy was working reasonably well until later in National’s last term of government when it was naively decided that government should progressively reduce funding to nil… ideology gone made. Lots of the early gains were put at risk by Creech and Bradford.

    Maharey/Clark did a brilliant job of re-energising, refunding, refocusing and rebuilding a scheme that was struggling from poor policy and leadership – they full deserve credit for their excellent stewardship over a number of years.

    Unions and employers have a rare and significant consensus around industry training, I only hope the new Government respects and supports it.

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