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Hands on Labour

Written By: - Date published: 9:51 pm, August 16th, 2012 - 31 comments
Categories: capital gains, david cunliffe, david parker, Economy, exports, jobs, minimum wage, monetary policy, superannuation, wages - Tags:

Fresh ideas to grow a stronger manufacturing sector, on top of the major changes Labour has already signalled, such as capital gains tax, r & d credits, universal kiwisaver, increase to the minimum wage, honesty about superannuation and a willingness to change fixed ideas about monetary policy to ease pressure on exporters featured in a speech given today by David Parker to a union audience in Wellington.

I was there to hear it along with organisers and delegates. David Cunliffe and Andrew Little were there as well. You can read the speech here. Vernon Small summarised it thus:

Labour is eyeing a raft of new economic policies including tax breaks and incentives for exporters, extra spending on infrastructure in depressed areas of the country and ways to lower the barriers to capital raising for small businesses. In a speech to unionists this morning finance spokesman David Parker said Labour was looking at ”pulling levers big and small” to help boost economic growth and jobs, especially in manufacturing.

Parker said the policy challenge for Labour was how to get more people into good middle income jobs.

He said the ideas were not policy, and he was only ”floating” them at this stage, but they would come on top of Labour’s other macro-economic policies which include a capital gains tax, research and development tax credits, a long term move to a higher state pension age, and changes to monetary policy.

He said Labour was looking at further moves on monetary policy, but was not backing away from its 2011 policy in the area. Any new measures would go ”at least as far” as its 2011 policy. Labour rejected National’s ”hands-off, leave-it-to-the-market strategy”.”I want an economy which delivers social well-being and maintains New Zealand’s control of our own destiny. Redistribution through the income tax system is important but is not enough to deliver fairness, nor lift our productivity to change our economic destiny.” A productivity breakthrough was needed and that required a stronger manufacturing sector.

David Cunliffe has just come back from a trip to Denmark, a country that could teach us a lot about how to diversify and build high paying jobs in sustainable manufacturing industries. David Parker is off shortly to the US to discuss among other things alternative approaches to monetary policy.

It was good to see Labour getting on to the front foot. It looks like there will be a real economic alternative on offer through to the next election.

The other good thing about the event was the debate and discussion afterwards. It looks like the policy formation will be open and the key players receptive to good ideas.

31 comments on “Hands on Labour”

  1. higherstandard 1

    Blah blah blah blah.

    Waffle waffle.

    Trough.

    • Colonial Viper 1.1

      Its not like you to be against discussion and debate on economic alternatives is it? 🙄

    • xtasy 1.2

      To be honest some of the ideas have raise my eyebrows, but also interest, as this is what some hot shot economists talk about. My concern is, does Labour take it serious, and how are they seriously going to implement these policy ideas? See no plan, still.

    • mike 1.3

      HS. You only parade your utter ignorance here, like the rest of your talk-back mates in government, because there’s no way you can get your thick head around a reasoned argument. Sad

  2. captain hook 2

    well HS has never actually worked in his life but the reality is that the next Labour government has got to produce jobs.
    you know.
    where people go every day and make things that other people want.

    • Colonial Viper 2.1

      Can I speculate on existing assets like houses and hydrodams without making a single new thing, and call that a job?

  3. Colonial Viper 3

    Wow language has changed. Now, providing “tax credits” and “incentives” is considered “hands on”.

    In the old days, the Ministry of Public Works and the DSIR would just go out there to frakking develop, design and build the thing for us, asap, from the ground up. The highways, the railways, the powergrid, from start to finish. Well almost.

    THAT’S what I call “hands-on”.

    • millsy 3.1

      baby steps…

    • Draco T Bastard 3.2

      The Labour Party is hard core free-market that fails to learn the lessons of both the Great Depression (1930s) and the Great Recession (2k8 ongoing). The rather simple lessons that capitalism doesn’t work unless thoroughly regulated and that the private sector isn’t the source of wealth no matter what the capitalists say.

  4. xtasy 4

    Yeah some hope, hope and hope that one day a “miracle” will happen right?

    Well maybe watch the version on Youtube (Zarah Leander had a nice once):

    A wonder is due, aye!?

  5. xtasy 5

    With pleasure I take note that Cunliffe has been in Denmark! That is country not necessarily of a revolutionarly type, but is of a healthy economic and social policy approach, which National has no idea about.

    Otherwise for young Labour I can only recommend to learn from closer to home and the truly revolutionary and down to earth ideas of what Chilean revolutionaries, especialy students like Camilla Vallejo have to communicate. Always be alert, careful and resolute, I think, as the present soft tough Labour policies lack substance and direction. Go and learn – from Chile and somewhere else, please, left and Labour youth!

  6. AmaKiwi 6

    I’ll be interested to hear what they come up with for monetary policy.

    There is a lot of fantasy thinking like the idea that we can have a free floating (freely traded) currency and also control its value. If you go to a trillion dollar global open auction and think you can control the prices, you are delusional.

    Likewise, if you think your central bank can set an arbitrary lending rate and the trillion dollar bond market will follow you, you are equally delusional. Just ask the central banks of Greece, Italy, Argentina, Spain, etc. Studies repeatedly show that central bank interest rates FOLLOW the rates set by the global open auction market place. Central banks NEVER lead the market. They ALWAYS follow.

    Monetary theory says a central bank can control the supply of money in the banking system. Another delusion. The amount of money put out by a central bank is miniscule compared to the credit created by bank lending. In a deflationary cycle (as we are entering now), banks don’t lend because no one wants to borrow and banks won’t lend to anyone except the AAA most credit worthy. Thus the supply of credit contracts. As we saw in 2008-2009 and in Japan for the past decade, interest rates can drop to nearly 0% and still no one is borrowing. No borrowing means the amount of credit (money) in the system is drying up. The US Federal Reserve has pumped over $7 trillion into their system since 2009 and prices continue to drop because banks aren’t lending and no one wants to spend.

    On the other hand, we don’t HAVE to have a freely traded currency. Maybe they have in mind going back to a 1960’s type controlled currency. That would be a HUGE change. It would mean the NZD could only be used inside NZ. Importers and travelers would have to buy foreign currency inside NZ at the rates set by the crown. It can be done, but it would be a shock to the country.

  7. xtasy 7

    The reality is that Labour may have to learn from “Laobur” movements in other countries and even dare to take some semi nationalistic economic policies, to protect and develope local industries, to create and protect jobs, not fall for the bs free enterprise crap that says we must seell cheaps dairy produce to buy low Chinese made consumer products we need.

    The left has been taken hostage by right wing economic pseudo liberal crap talk since the ACT acteurs took over Labour. It is time to take a fucking stand and end this indoctrination, which sadly even Parker, and some other Labour head ones adhere to, even though they do not admit it. Shearer has NO clue about economics by the way, test him!

    • Colonial Viper 7.1

      Resource nationalism is going to be a way of life in the mid 21st century. NZ and NZ politicians better smarten up.

      • xtasy 7.1.1

        Are ou going to share your natural water, healthy soil, minerals witth me, while I want them to grow my econom y in Europe, Us or China, or even India? I am sure you love to “share” but that is not what I learned in life. It is sadly every one to themselves. That is at least a new admission CV. So to make it just, is to sit down and do FAIR deals with like-ninded societies that want to have fair trade and fair deals, to advance all of their societies, not to benefit a few at the expense of the rest.

        What about a “fair trade” agreement, rather than Fran O Sullivan’s FTAs?

        • Colonial Viper 7.1.1.1

          +1

          Although it is likely we will still have to pay some kind of levy to the Imperial Powers of the moment, to hold on to certain benefits.

      • weka 7.1.2

        Greens co-leader Russel Norman says his member’s bill to restrict foreign land ownership is likely to be narrowly defeated
        tonight by an ‘‘evil coalition’’.

         

        The bill aims to retain New Zealand ownership and control of sensitive land and has the support of Labour, NZ First, the Maori Party and Mana.

         

        However, Dr Norman said it was likely to be opposed by National, UnitedFuture and ACT.
        ‘‘The job of Parliament is to represent the will of the people and people don’t want land going into overseas ownership,’’ he said

         
         
        http://www.stuff.co.nz/dominion-post/news/politics/7480511/Norman-predicts-defeat-by-evil-coalition
         
         

        • xtasy 7.1.2.1

          What is needed for all opposition to bloody sit down at a table, have a ruthless brainstorming sessing, make compromises with party politics and agree on some CORE policies. That will set the agenda for a forceful, resolute and united opposition, which we sadly have NOT got yet. Maybe all party members and supporters tell their leaders to ge this bloody worked out?

          • Colonial Viper 7.1.2.1.1

            Maybe all party members and supporters tell their leaders to ge this bloody worked out?

            +1

          • Carol 7.1.2.1.2

            To me it looks like there are some instances in the House when opposition parties are working on the same page. It has seemed like this in some questions and debates on asset sales. And it seemed like that yesterday when National Ministers and the PM’s proxy were under constant pressure over questioning about ministers breaching privacy codes.

            This may not have been planned, but they seem to understand where to put the pressure.

            Also there are some instances of Green and Labour MPs attending meetings on campaign issues eg Auckland transport.

  8. IrishBill 8

    This is some good stuff from Parker and Cunliffe. We’ve been hamstrung by crazy monetarist orthodoxy for far too long.

    • rosy 8.1

      +1 I’m looking forward to a more concrete commitment to hands-on policy rather than just floating the ideas around – but yeah, it’s a start (small yay! for now).

      • Carol 8.1.1

        +1, rosy.

      • mike e 8.1.2

        rosy and Carol unfortunatly revealing full policy now is just oppening the door for National to steal those policies as they have none of their own,its better to look at direction now and have input and consultation with the job creating sector to see what every bodies views are and so we don.t get off side with them.

  9. saniac 9

    I’m pleased to see the boundaries of acceptable discourse edge open a bit wider.

  10. jack 10

    Glad to hear someone mention manufacturing. I like what Parker is saying but will labour follow through. Look at Singapore. They have the highest rate of income per capita and their population is very similar and a lot less land! The only way it can be done is through tax incentives because the labour here can’t compete with asia. I don’t mean bringing in the banks to shuffle money around. Ireland did it and paid a heavy price. If banks get complete tax subsidies, then they become parasites. Draco is somewhat right about regulating the free market to a certain degree, particularly banks. But too much will stifle manufacturing. Fisher and Pykle didn’t have to go offshore if there were tax incentives to keep them here. Maybe that is what Parker is talking about.

    • Draco T Bastard 10.1

      The only way it can be done is through tax incentives because the labour here can’t compete with asia.

      Bollocks. There’s a number of ways to do it but, as history shows, maintaining the capitalist free-market system through subsidies isn’t one of them.

      Fisher and Pykle didn’t have to go offshore if there were tax incentives to keep them here.

      They didn’t have to go offshore so I suspect that even if we had given them subsidies tax incentives they still would have left. Probably used the subsidies tax incentives to help fund their move.

      As for Singapore, well, they still have poverty issues.

      • jack 10.1.1

        They didn’t have to go offshore so I suspect that even if we had given them subsidies tax incentives they still would have left. Probably used the subsidies tax incentives to help fund their move.

        So, your saying regulate all the private sector.. it’s been done but didn’t work. It’s called communism. To fund their move? That’s a generalization. There was no effort to keep them here only a “bad bad employer looking for cheap labour” from Helen Clark and Labour. Your response?? “good riddance.” But tell that to the employees that lost their jobs.

        http://sg.news.yahoo.com/s%E2%80%99pore-is-now-richest-in-the-world.html

  11. ad 11

    I thought it was great that he committed to supporting manufacturing in New Zealand, to a union audience.

    He did not lay out any policy instruments to do so – hopefully they won’t leave these announcements to the last minute like last time.

    I had no idea that he had had a major accident while labouring on a road working gang. Interesting.

    He clearly cribbed pretty heavily from Wayne Swan’s speech a month ago. Sure he didn’t need to do that. OK, he’s not Sam Seabourne or William Saphire, but yinno….

    If Labour can do ten more of these in two months they will begin to turn the tide away from the arcane and Byzantine internal politics and start making some policy stories, like a good Opposition.

    Definitely a solid meat and two veg effort.

  12. Fortran 12

    Jack

    Lets look at Singapore not through tinted glasses.
    The Singapore model of Governance – restricting political freedoms for security and the greater economic good – is that it only works if the ruling elite, and above all the man at the helm, leads by example, avoids the temptations offerred by high office and near-total control of the political apparatus.
    And I love going to Singapore.
    Could not see New Zealanders accepting these disciplines, where it is believed wrongly that Jack is still as good as his master. There is an enormous class systems in Singapore.

  13. QoT 13

    … on top of Labour’s other macro-economic policies which include a capital gains tax

    Wait, capital gains tax is back on now?

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