David Parker’s Greece-proof paper

Written By: - Date published: 5:05 pm, May 22nd, 2012 - 30 comments
Categories: budget2012, david parker, economy, labour, same old national - Tags:

Don’t blame Greece.

I was fortunate enough to go to David Parker’s pre-budget speech to business people this morning. He coined it his “Greece-proof paper” as he talked through how New Zealand’s problems are for our government to solve – rather than just blaming Greece.

Conservative ol’ National isn’t prepared to change the orthodoxy, to change from business as usual.

And with that we continue down the same track – down OECD rankings for wealth, and to an ever larger current account deficit as we slowly, inexorably, sell ourselves off to sustain our path.

As ever, it will be up to Labour to make the changes we need to our economy.

National will tinker with welfare, increase class sizes and prescription costs, and reduce police numbers.

But they won’t solve the real problems in their budget.

They won’t make it so it’s better to invest in productive Kiwi businesses rather than land as it is now. They won’t solve our lack of capital. They won’t look at the severe problems our exchange rate has on our exporters. They won’t encourage investment in research and development to make a smarter economy.

They won’t touch superannuation with a barge pole. Despite the fact that in just 3 years time it will be 20 times all other benefits combined, and they tell us of the pressing need to make sure the few hundred parents under 18 are spending “correctly”.  In 3 years time the super budget will be larger than all education – from pre-school to tertiary – combined.  Will they consider how we afford that?

No.

A CGT, compulsory savings, changes to our monetary policy, r&d tax credits and a rise in the super age are all necessary, and all out of the Government’s view.

Parker would like to see Reserve Bank decisions made by the Board, rather than just the Governor, and that Board to have the interests of exporters, and labour (small l) represented.  A few more instruments would be added to their tool kit and they wouldn’t solely target inflation – growth, exports, current account deficit, jobs would all be a consideration.

We wouldn’t wait until we have only 2.5 working people for each pensioner (or worse if those left have headed to Oz to escape the bill…) before we discuss changes to the age of eligibility for our Super scheme.

And we don’t want to keep flogging our brightest and best companies overseas because there is no New Zealand money to invest in them.  A compulsory savings scheme like Australia’s (or Kirk’s, as scrapped by Muldoon…) would massively deepen our capital pool.  A Capital Gains Tax would mean that people are less likely to invest in property for the tax advantage, and more likely to invest in productive business that will actually help our economy.

Research and Develop­­ment tax credits will encourage our businesses to focus more on the smart tech­nologies that are high value and create high value jobs.

While not against all mining, drilling and mineral exploitation (outside National Parks at any rate…), Parker points out they’re unlikely to save us – or they already would have.  Other than our pristine National Parks the restrictions on those industries are light, so any lack of exploitation is due to private companies not feeling it is worth it…

When asked about working with the Greens on such issues, Parker’s own environmental streak came through: he doesn’t see a problem working with them, because he agrees with them – and the Pure Advantage group of businesses.

We shouldn’t mine our parks, we shouldn’t have watered down our Fresh Water standards, and the polluter should pay the costs, not push them off to society or the environment.  That’s why he spent 3 years fighting to get the ETS through – again sadly watered down by this government.

Pure Advantage understands that it’s beneficial to NZ for business to own their environmental credentials. More regulation will in fact strengthen our environmental services sector, and is a real selling point overseas.

Some good ideas from David Parker, and once again it is up to the left to be Progressive and initiate the change our society needs.

If you change nothing, nothing changes, and we’ll keep getting fabulous projections and disappointing results like all of National’s budgets so far.  0.6% growth in total over the last 3 years, despite predictions like this:

30 comments on “David Parker’s Greece-proof paper ”

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  1. ochocinco 1
    22 May 2012 at 5:32 pm

    I take issue with your comment (on the frontpage blurb) that our “brightest and best” are heading to Australia

    Our “best” don’t abandon their country for 40 pieces of silver. Our “best” are loyal to the bitter end. Our “best” value patriotism above individual wealth. Our “best” realise NZ won’t get better by running away to the GC.

    • Carol 1.1
      22 May 2012 at 5:42 pm

      Our “best” are loyal to the bitter end. Our “best” value patriotism above individual wealth.

      You don’t include John Key in “our best”, then?

    • tc 1.2
      22 May 2012 at 6:00 pm

      admire the sentiments but hardcore reality differs once you see medical,engineering and trade talent moving across the ditch.

    • Kotahi Tane Huna 1.3
      22 May 2012 at 6:05 pm

      Our best know that when patriotism is valued, a nation has fallen into decay.

    • Draco T Bastard 1.4
      22 May 2012 at 6:35 pm

      Patriotism isn’t rewarded or, to be more precise, those who stay out of patriotism get shafted even more. It cannot be a one way street, the community needs to ensure that people have a reason to stay. NACT and the previous governments back the 4th Labour government haven’t been doing that as they’ve been cutting away all the reasons why people would want to stay – interesting, well paid jobs and community spirit rather dog eat dog competition. The only people who have been catered to over the last three decades have been the rich and they’ve seen their exploitation of the masses made easier under free-market dogma.

    • Eddie 1.5
      22 May 2012 at 6:49 pm

      I don’t think it’s morally bad of people to leave nz for opportunities overseas. it’s bad when government policy and poor economic management results in more people making that choice.

      and i’m wary of an argument that relies on patriotism. there’s a valid case for looking out for the national interest, because that’s the community you live in. patriotism though, loving your country right or wrong, that’s something else.

      • Draco T Bastard 1.5.1
        22 May 2012 at 7:27 pm

        patriotism though, loving your country right or wrong, that’s something else.

        Yep, sure is.

        Patriotism is the last refuge of a scoundrel.

    • prism 1.6
      22 May 2012 at 7:12 pm

      What? ochocinco

      Our “best” don’t abandon their country for 40 pieces of silver. Our “best” are loyal to the bitter end. Our “best” value patriotism above individual wealth

      What is this stirring propaganda? Sounds like a general or sergeant major busy building team morale to be ready for going over the top chaps. People deserve to have a life of their own. We don’t want to be chesspieces for deluded people who think like you.

    • Ben Clark 1.7
      22 May 2012 at 8:05 pm

      Actually heading to Australia isn’t particularly our brightest and best either – it’s a wide cross-section of the population (including our brightest…), as 1.2% of us is highly likely to be. But those motivated to move are likely to be the go-getters – as seen by the fact that NZers have the lowest unemployment of any group in Oz (despite Australians thinking it’s quite the opposite).

      The real brightest and best that it’s a worry that we’re losing are our tech companies: A2 milk, Right Hemisphere, Biovittoria – great New Zealand success stories sold overseas or in the process of selling. Largely to get more capital. Now our great ideas are earning other countries their fortunes.

      State asset sales will of course worsen the problem. What little capital there is free here will be absorbed by those behemoths as they completely dominate. More innovation will be lost. And yet somehow the Nats think it’ll be good for our stockmarket etc to be completely dominated by these energy companies, ruining any diversity and absorbing all capital…

      • prism 1.7.1
        22 May 2012 at 8:47 pm

        Just think of all those useful millions that might have gone into building great innovative NZ businesses but went down with shitty finance houses of cards. Plus South Canterbury Finance where private money was lost and then public money went in to save it from drowning. That is the likely end of all our savings because our investment environment controls are geared towards such behaviour.

        • Colonial Viper 1.7.1.1
          22 May 2012 at 9:24 pm

          R&D tax breaks are going to encourage NZ companies to do private research? A little maybe, but its drop in the bucket stuff which does not recognise the sheer size of the mountain this country faces. What are others in the asia-pacific doing, in comparison?

          The Biopolis is the hallmark of Singapore’s R&D success. It co-locates public sector research institutes with corporate labs and is designed to foster a collaborative culture among the institutions and organisations under its roof. At Biopolis, scientists, technoprenuers and researchers meet, forge partnerships and grow with renowned scientific institutions, through intensive research and graduate training programmes.

          The Biopolis enables researchers to access state-of-the-art facilities, scientific infrastructure and specialised services. These allow companies to cut R&D costs significantly and accelerate the development timeline. In addition, there are conference facilities and meeting rooms that companies can use. By 2013, the Biopolis will provide more than 3.3 million square feet of space for biomedical sciences R&D activities.

          http://www.edb.gov.sg/content/edb/sg/en_uk/index/industry_sectors/pharmaceuticals__/industry_background.print.html

          • prism 1.7.1.1.1
            23 May 2012 at 11:04 am

            CV So that’s how smart countries get on! A tutor at a business economics class told us that NZ was an outlier, the only country that had been able to progress into the developed economies using agriculture.

            Now dairy prices are falling, the wool and lamb market decimated, trees dependent on mono culture fast growing pine, a type of tree that will only remain strong using expensive compression methods or unpopular and unhealthy chemicals, when we have drowned our scenic rivers in flat lakes suitable for boaties and jet skis, will we have much income earning capacity with jobs providing livable wages?

            Our smart industries will have been bought out by overseas interests because of our own dopy cargo-cult lack of interest in providing for ourselves in a self-managing country with expertise and energy and capability. We’re going along that slippery slope quite nicely now thank you but all children’s slides have a soft end that absorbs the fall, I do hope the powers that be think ahead far enough to provide that. Not!

    • kiwi_prometheus 1.8
      22 May 2012 at 10:52 pm

      Not for 40 pieces of silver, just a half decent chance of getting a reasonable wage, owning a home etc.

    • JonL 1.9
      23 May 2012 at 4:22 pm

      Bollocks!

  2. Ad 2
    22 May 2012 at 6:30 pm

    That was a good solid speech. I liked that he put his business credentials on the line. I liked that he supported his colleagues. I liked him reaffirm support for the Capital Gains Tax.

    Didn’t like the wiggle on Kiwisaver. We should get straight back into saving as a nation.

    Didn’t like the lack of export or sector targets, particularly if he is prepared to be so bold.

    Parker, please do more of this. Just need that extra media cuthrough rather than being overshadowed by Norman.

  3. prism 3
    22 May 2012 at 7:06 pm

    Yes Norman has been heard a lot recently and making good points, sounding good.

  4. Colonial Viper 4
    22 May 2012 at 9:27 pm

    Labour being the advocates of raising the retirement age. Talk about walking away from your base.

    Why not institute a 0.5% asset tax focussed on the top 5% in order to pay into the super fund. Then drop the retirement age 2.5 years in order to help the mass excess of young people to enter the workforce.

    The more you raise the retirement age, the more you turbocharge youth unemployment.

    Think, people, please.

    • Ed 4.1
      22 May 2012 at 9:59 pm

      I don’t see this as walking away from the base. The reality is that Labour started doing something about the baby boomer bulge, but a worse extra liability is increasing longevity. With National plundering any cash they can see, we will find it difficult to fund even longer term liabilities. It is a discussion we need to have – National are likely to turn from ignoring the problem and denying they will ever do anything (either to pre-fund or to reduce payments) to suddenly creating a scare and wanting to move quickly to an age 70 or 75 start – but you can bet they will never want to means test payments. This is an issue that must be talked about, and I believe any changes should be phased n over 20 to 30 years. There are alternatives – and we should not be rushed into making sudden changes.

      In the meantime there are other important issues that Labour is also addressing – lets not concentrate on the long term at the expense of the short term – already this budget and policies around it are shaping up to be a shocker for the majority of New Zealanders

      • Colonial Viper 4.1.1
        22 May 2012 at 11:59 pm

        I don’t see this as walking away from the base.

        The base sees this as walking away from the base. I’m not talking about the social liberals. I’m talking about the 80% of the Labour Party which has long gone since the 1980’s.

        That is, the working class. I’ve heard old (>70 years of age) Labour supporters whom these retirement age proposals don’t even impact, tell me how shit the proposals are and how they voted for Winston because of them.

    • rosy 4.2
      22 May 2012 at 10:48 pm

      I’m beginning to agree with you on this CV. I do think a flexible retirement age is a good thing, depending on how worn out the body and mind are, but you’re are right – there are not enough jobs to go around.

      First things first, imo, is means testing super and never paying it while a person is still in paid employment.

      • Blue 4.2.1
        22 May 2012 at 11:25 pm

        “First things first, imo, is means testing super and never paying it while a person is still in paid employment.”

        That should be a no-brainer. I really don’t get why Labour wants to move the age up to 67 rather than addressing the elephant in the room.

        NZ Super is a massive cost to the state, and paying it to people who don’t need it is a straight up waste of money. But no pollie will touch it, to the point where increasing the retirement age for everyone, even manual workers who physically can’t work until 67, is seen as more palatable than trying to introduce means-testing.

  5. Roy 5
    23 May 2012 at 4:33 pm

    I know I’ve been flamed on this site before for saying this, but I think we need means-testing of superannuation. It could be quite generous; there is no need to penalise the pensioner who supplements their income with rental from a single spare house they were canny enough to buy. I’m talking about not shovelling money at people who are already millionaires. The Wellington CBD high-rise office block I work in belongs to a superannuatant (not Bob Jones in this case, but he’s another example). I mean, seriously, is it really so tory to object to seeing the likes of Don Brash and Bob Jones getting superannuation?

    I also agree with those who think it is absurd to pay super to people who still have a job. Someone who still holds down a job and also is collecting super is a double-dipping bludger, IMO. I speak as someone who has a close relative who made plenty as a GP until they were 75 years of age, happily pocketing super as well from 65. What a rip-off artist!

    • prism 5.1
      23 May 2012 at 8:41 pm

      Roy GPs are not in huge over supply so he was probably more asset than money drain. And any money earned or capitalised should be looked at. Someone working could be good, and allowed to keep super if they also mentored and trained a young person. That would not be easy but would get some started in the workforce. Those not working but creaming off the money in interest, or who have arranged their affairs so well that they can actually be issued a Community Services card are another matter.

      It could be that the wealthy could still have cheap prescriptions or such. Just not the dosh that they don’t need.