economy

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Brownlee, not the brightest spark

Written By: Steve Pierson - Date published: 10:05 am, May 7th, 2008 - 48 comments

Here’s Gerry Brownlee in the Herald today: Brownlee said the [Whirinaki] power plant, near Napier, was intended as an emergency backup to be used seldomly in dry years. But he said the figures – from use over 32 days in the three-month period – suggested otherwise. “Its increased use is more evidence that Labour has […]

Wages up at record rate

Written By: Steve Pierson - Date published: 12:58 pm, May 5th, 2008 - 17 comments

The Labour Cost Index rose a record 3.4% for the March year. That means wages and salaries for doing the same job rose an average of 3.4% over the year. Public sector wages were up 3.3% and private sector wages up 3.5%. Retail and other low-paid workers did especially well, with their pay up 5.1%, […]

For whom the Toll bells

Written By: Steve Pierson - Date published: 10:26 am, May 5th, 2008 - 62 comments

The Government has bought back the rail stock and ferries from Toll for $655 million. The privatisation of these vital assets, which are also natural monopolies, by National was a disaster from Day 1. National flogged the railways and the ferries off dirt cheap to their mates who asset-stripped them by slashing maintenance and taking […]

Our bank beats the rest

Written By: Steve Pierson - Date published: 2:34 pm, May 2nd, 2008 - 29 comments

Today, ANZ and National Bank announced they are lifting their variable mortgage rates another quarter of a percent to 10.95%. That comes a week after the two banks, which are jointly owned, announced a net profit of $520 million in six months, up 7% on the previous period. Yesterday, Westpac announced a $244 million profit, […]

Talking down the economy

Written By: Steve Pierson - Date published: 11:19 am, May 2nd, 2008 - 57 comments

National is a party weak on policy. It has had to drop nearly every one of its principled but unpopular policies to get itself in a position to win an election. This raises the question of why someone would vote for National, rather than keep the current lot. One of National’s answers is to claim […]

Right answer, wrong question

Written By: Steve Pierson - Date published: 11:32 am, April 30th, 2008 - 3 comments

It’s not often National gets something right but their latest flip-flop, on bio-fuels, is a good policy (well, partially and for the wrong reasons). National has announced they will no longer be supporting the bio-fuel requirement in petrol because it may put up the price of petrol a few cents. The bio-fuel requirement was always […]

Right question, wrong answer

Written By: Steve Pierson - Date published: 10:39 am, April 28th, 2008 - 15 comments

Interesting to see people gradually waking up to what Fidel Castro, last year, called “The sinister idea of converting food into combustibles”. Even crazy ol’ Mike Moore writes about it today, although he is dead wrong when he calls biofuels “a populist Green response to global warming”. Environmentalists were always suspicious of biofuels, seeing them […]

Does money buy happiness after all?

Written By: all_your_base - Date published: 4:15 pm, April 23rd, 2008 - 29 comments

In 1974, economist Richard Easterlin, published a study in which he argued that economic growth didn’t necessarily lead to more satisfaction. In poor countries, gaining the necesseties of life raised happiness but beyond those gains there was no increase. This became known as the Easterlin paradox. Just last week, two young economists presented what they […]

The cart before the horse

Written By: Steve Pierson - Date published: 12:18 pm, April 23rd, 2008 - 28 comments

The internet is awesome; you can use email, learn heaps, and read sites like The Standard. Faster internet is awesomer; you can watch the Porirua market video without having to wait for it to buffer. Personally, I can’t wait until I’m getting the internet through a chip in my skull. Why, then, is National’s $1.5 […]

Twin peaks

Written By: Steve Pierson - Date published: 3:31 pm, April 22nd, 2008 - 50 comments

We have all heard of the peak oil crisis that is already manifesting itself in fuel prices. Now, consider peak food, the point where our ability to produce food peaks even as demand grows. Wheat was the first plant to be domesticated, around 10,000 years ago. Our civilisations are built on the excess calories available […]

Cost of benefit system plummeting

Written By: Steve Pierson - Date published: 1:40 pm, April 17th, 2008 - 26 comments

Continuing our benefits theme, here’s a look at how much the benefit system costs you. The figures are the combined expenditure by the Government on the Unemployment, Sickness, Invalids’, and Domestic Purposes benefits per day per working age New Zealander, in 2007 dollars. Sources: MSD (1,2,3), StatsNZ (4,5) The portion of the working age population […]

Inflation targeting puts Kiwis under the gun

Written By: Steve Pierson - Date published: 2:34 pm, April 16th, 2008 - 31 comments

As you know, petrol and food prices are up. These are international prices spiralling up due to growing demand and limited or falling supply. When demand exceeds supply prices rise. Now, when food and petrol goes up, that’s inflation. In fact it’s most of the current inflation: out of 3.4%, 0.9% is from petrol and […]

On the scrapheap

Written By: Steve Pierson - Date published: 3:54 pm, April 15th, 2008 - 31 comments

This graph shows the number of people employed in New Zealand, and employment would have been had the number of people with a job as a portion of the working-age population had remained steady at 76% as it was before 1987. Look what happened during the rightwing economic revolution from 1987 to 1999 (when National […]

National’s interest rates record

Written By: Steve Pierson - Date published: 7:00 am, April 15th, 2008 - 22 comments

National’s latest line is that interest rates have doubled under Labour, with the implication that National would magically lower inflation (while simultaneously pouring more money into the economy through lower surpluses) so rates would fall. But, as with so much National says, a quick look at the record reveals the lie. Average Mortgage Rate- Nat: 9.7%, […]

NZ Growing Faster Than Aussie, US, Japan, and UK

Written By: Steve Pierson - Date published: 11:16 am, April 10th, 2008 - 42 comments

The Reserve Bank produces a series of helpful tables of economic data. One table compares our growth to that of Australia, the US, Japan, and the UK. Here’s a graph comparing growth across the countries between National and Labour’s periods in government. National has a pathetic track record on growth. Under them, our economy grew 1% […]

Winston and the FTA

Written By: Steve Pierson - Date published: 11:04 am, April 9th, 2008 - 28 comments

New Zealand First’s opposition to the China FTA is no surprise but it is interesting to reflect on the grounds for it that Winston Peters has laid out: a) the deal is not good enough. A pretty weak argument when the other option is no deal. b) the immigration provisions are bad and shouldn’t be […]

April 1 changes boost wages and cut taxes

Written By: Steve Pierson - Date published: 10:02 am, April 1st, 2008 - 15 comments

Today is a big day for government policy affecting Kiwis’ incomes: The minimum wage is now $12 an hour, up from $7 when Labour gained power. Youth rates have been effectively abolished, meaning young people will get the same pay for the same work. From today, employers must contribute to employees’ Kiwisaver accounts equivalent to 1% […]

Calling coal to account

Written By: Steve Pierson - Date published: 11:17 am, March 26th, 2008 - 18 comments

New Zealand’s coal industry is a mess of contradictions. We worry about carbon emissions and Kyoto while State-owned Solid Energy exports coal to dirty Chinese factories. Rather than being energy-efficiently shipped out of Greymouth, coal from the West Coast is taken by rail over the Southern Alps because taxpayer-subsidised Toll gives SOE Solid Energy and Pike River a cut-price deal to haul […]

GDP up; parents’ time with kids plummets

Written By: all_your_base - Date published: 12:13 pm, March 20th, 2008 - 19 comments

One of the most interesting questions from the audience at the Stiglitz interview in Wellington last week was whether he thought we were focusing unduly on “economic growth” as the sole indicator of societal wellbeing. The point being that, as in the headline, it’s easy to imagine situations in which GDP’s rising but quality of […]

Is it a recession Mr Key?

Written By: Dancer - Date published: 4:03 pm, March 19th, 2008 - 27 comments

I am intrigued by the recent coverage of the state of the economy. We have reports that things will get bumpy from some economists, with others saying dire predictions are “premature grandstanding”. Cullen doesn’t appear too worried, saying the economy’s in better shape than most to weather the storm. It was nice to hear this […]

What the hell is the sub-prime crisis?

Written By: Steve Pierson - Date published: 10:46 am, March 19th, 2008 - 49 comments

The sub-prime crisis is at the heart of the world’s current economic problems. It all boils down to financiers playing fast and loose with the rules of how money works, and the US government not keeping an eye on them. Essentially, they created a whole new class of interest-bearing pieces of paper that were supposedly […]

Guest post: Simon Tegg on Peak Oil

Written By: Guest post - Date published: 1:57 pm, March 18th, 2008 - 16 comments

Meet Guest post. Guest post is 32 years old, he likes long walks on the beach and lively political debate. He is our new vehicle for experts on interesting and relevant topics to contribute posts to The Standard. Our first guest is Simon Tegg, who has done research on peak oil. It says something about […]

Counting our collective coin

Written By: Steve Pierson - Date published: 1:44 pm, March 18th, 2008 - 9 comments

Check out this groovy little gadget. You put your money in the slot and it gets counted, with the power of â€˜digital’! Maybe we could all chip in and get one for the IRD. Seriously though, quite a cock-up on the IRD’s behalf, using the wrong figures so tax revenue was undercounted by $600 million […]

Good for the ears

Written By: IrishBill - Date published: 3:23 pm, March 15th, 2008 - 3 comments

For those of you who haven’t already found it, Left Business Observer editor Doug Henwood has a bloody good economics-based radio show that goes up on the web. I’ve rediscovered it after being an avid listener some years ago and can throughly recommend it. His latest interview is with Nobel laureate Joesph Stiglitz (who incidentally […]

Adapting to the oil endgame

Written By: Steve Pierson - Date published: 10:53 am, March 14th, 2008 - 52 comments

Today oil broke US$111 a barrel. Two weeks ago the record price was $101. Just six months ago the price broke $80 for the first time. Oil prices are rising at an accelerating pace. That flows into New Zealand fuel prices, predicted to top $2 a litre this year. What can the Government do to […]

Reactions to New Zealand Fast Forward

Written By: Steve Pierson - Date published: 10:32 am, March 12th, 2008 - 1 comment

Groups that issued press releases welcoming the Government announcement of the $700 million research and development fund for argiculture (press releases on Scoop): NZ Veterinary Association – Science funding just in the nick of time Science New Zealand – Science New Zealand welcomes science fund announcement Export New Zealand – Export NZ welcomes innovative funding […]

Dolla Dolla Bill, Y’all

Written By: Steve Pierson - Date published: 5:17 pm, March 11th, 2008 - 14 comments

Days after saying ‘we’ve always said, we aren’t that worried about, um, whether the Crown needs to borrow a bit of money [for a] programme of tax cuts’ Bill English has accused Michael Cullen of â€˜um, ah, borrowing for tax cuts’. What English’s researchers have discovered is that the amount of Government Bonds on issue […]

$700m for R&D

Written By: all_your_base - Date published: 1:48 pm, March 11th, 2008 - 11 comments

The Dom reports that “Prime Minister Helen Clark unveiled the $700 million funding boost for research, development and innovation projects today and said the fund would grow to around $1 billion as it earned interest over the next 10 to 15 years. Industries would be expected to match the government’s commitment, causing the fund to […]

Stepping in

Written By: Tane - Date published: 1:45 pm, March 11th, 2008 - 8 comments

No Right Turn makes a good point about the government’s $700 million innovation fund for the agricultural and food sector: I’m a little surprised that its the government doing this. We have a number of large companies involved in these sectors, and under competent managers, they’d already be making these investments themselves. Unfortunately, corporate management […]

Ralston’s hyprocrisy hyperbole

Written By: Steve Pierson - Date published: 2:54 pm, March 10th, 2008 - 45 comments

In an article on the economy that would have had my high-school economics teacher in fits, Bill Ralston says that it is hypocritical of the Government to block the sale of Auckland Airport because it is a strategic asset while the Government-owned New Zealand Superannuation Fund (the Cullen Fund, as National dubbed it, I guess […]

Stripped

Written By: Steve Pierson - Date published: 11:08 am, March 7th, 2008 - 21 comments

The two major dailies have been running bizarre editorial lines against the government’s intervention to block the sale of Auckland Airport, even as their letters columns fill up with people supporting the move. The Herald called it ‘xenophobia’. Of course, the Herald would know a bit about xenophobia having enthusiastically supported the anti-Asian campaigns by […]