Policies for the wrong time (again)

Written By: - Date published: 8:40 pm, August 10th, 2008 - 39 comments
Categories: economy, same old national - Tags:

Rod OramWe’ve heard a lot about the ‘private’ opinions of some senior National MP’s this week. What we haven’t heard much about is the policy direction National was putting out in public during the conference.

Rod Oram has a very interesting commentary on that topic in Sunday Star Times “National needs a shake-up”. Rod Oram always takes a long term perspective on the policy direction and its relationship to national economics, which is why I enjoy reading his columns.

Rod runs us through the fiscal mismanagement by National the last two times they have faced externally caused recessions. In both cases the policy response from the National government of the time was proved to be inappropriate and moved directly against stated objectives.

Rod points out that the current external recession is more widespread than previous ones. He then analyzes the economic policy from National articulated at the National party conference.

Then it starts to get interesting as he finishes with a number of conclusions.

So, that is pretty much all we know so far about National economic policies. It’s a rerun of the party’s 1990 mantras about less tax, spending and regulation. That’s no surprise at one level. English, National’s chief policy developer and economic manager, learnt them from the master of budget micro-management, Bill Birch.

Then he gets sarcastic.

She’ll be right, he [English] reckons. We’ll sell more food to Indians and Chinese at higher prices. That was the only vision of New Zealand’s economic future he offered delegates.

Indeed, it would be nice if life were so simple. But, as his own farming constituents would tell him, it’s not. At home, they face distinct physical limits to expanding volumes and financial limits from rising land, fertiliser and other costs. Abroad, they face growing competition from foreign farmers.

The primary sector has a great future, as do many other sectors. But rerunning their 1990s’ strategies won’t deliver that future. The world has already changed hugely since National was last in power and is changing even more radically before our very eyes.

Yes, the change in his own electorate over the last 15 years should be telling English that the world is changing very fast. Dairy, where there used to be sheep. The global marketing of Fonterra pushing dairy products into markets that had little previous penetration.

But the world economy is moving very fast these days as a consequence of the rate of increase of world population and changes in living standards in other countries. NZ is a small exposed economy that has to be fast to move into new markets. This gets driven at least in part by government preparedness and vision beyond the capabilities and short vision time spans of business. When the government goes to sleep then later working generations suffer.

The “she’ll be right” attitudes and policies of the National governments in the 1960’s prevented the critical changes required in the economy then. This meant that changes in our export markets like the entry of Britain into the EEC were not handled. This caused the severe economic difficulties that plagued the following generations. It looks like English still subscribes to this attitude and wants to do the same to more generations in the future. The problem is that everything happens faster. The government going to sleep for a generation is not viable any more.

Key told this columnist in an interview in March that National was working on a “stunning” set of economic policies. But judging by what it has delivered so far, National has spent the past nine years in opposition ignoring a changing world.

He hasn’t said it outright, but I think that Rod is saying that National are conservative. They are looking to solve economic issues the good old way. It didn’t work the last two times they tried it, caused immense damage both socially and economically, but that doesn’t stop them from wanting to try it a third time.

This is why I always feel uneasy about National and its ‘visions’ – they have a habit of being repeats of previously failed policies. It is why the $3 billion fibre to the home policy worries me. It resonates like one of Muldoons “Think Big” projects. Great sound-bite, but what is the economic point?

[hattip: Jafapete]

39 comments on “Policies for the wrong time (again)”

  1. Oram’s piece really is compulsory reading. He presents a very clear view of what National’s offering that cuts through all the bullshit and hype, such as the infrastructure nonsense. (What National is offering in the way of *additional* infrastructural spending is chickenshit, as Labour has already ramped it way up.)

    Thanks for the hat-tip.

  2. Draco TB 2

    He hasn’t said it outright, but I think that Rod is saying that National are conservative.

    I disagree – what he’s saying without saying is that National are simple. They’ve got a fixed idea of how the economy works and they’ll make policies to fit that preconceived idea no matter what’s actually happened before or what’s happening now. As the saying goes Stupidity is doing the same thing over and over again and expecting a different result.

  3. jbc 3

    As one who is leaning to give National a vote I think Oram has nailed my biggest concern: that the Nats don’t have a strong plan to transform the economy. I despair many of their front row (especially Williamson in Communications and IT).

    However that worry of mine is not only directed at National: I feel much the same way about all of the contenders. There is nothing that is going to propel NZ towards #1 GDP/capita in any policy that I have seen.

    I may have missed something – but unfortunately I don’t have my hopes up.

  4. John Key is not stupid. You don’t earn $ 50 mill by being stupid. You don’t end up as the global head of Foreign Exchange of Merrill lynch by being stupid and you certainly don’t get invited to be an advisor to the Federal Reserve of New York if you’re stupid. If you think that John Key is stupid than respectfully I think you are stupid.

    What he and National want may make you a hell of a lot poorer but it certainly won’t make them poorer. John Key and his puppet masters will make a mint out of the coming recession. John Key has just entered the top rich list and that is just for starters.

    Recessions do not destroy wealth (not money but actual wealth in the form of resources, property and assets), it transfers wealth from the general population to a very small super rich class.

    Vote John Key at your own peril because you are voting for a very smart, very rich, very greedy man with very smart,rich and greedy minders.
    And they want access to NZ’s assets and resources and you can rest assured that they don’t give a flying f*&k about us small people.

  5. Lynn – in the interests of transparency, do you think it’s worth noting that several times this year, Rod Oram has been touted as a possible Labour party candidate for 2011 or beyond. At least then, readers would be able to look at this article with a degree of objectivity.

  6. vto 6

    IV2, I had a bunch of thoughts to bang down after reading the post, then saw your comment. I have never rated Oram, for various reasons, one of which was that he tended to illustrate some of the dreamy unrealistic suggestions of the left. He seems out of touch. You have just confirmed why.

    Iprent, imo your post is not robust. Illustrated by;

    “This gets driven at least in part by government preparedness and vision beyond the capabilities and short vision time spans of business.” It is govt’s which tend to have the short time frame matters at the top of their lists, not people in business. Sure, biz reacts to the rules put in place but most look well to the future. Certainly further than most govts.

    and this is in fact proved by your suggestion that the 1960s 70s govt reactions (lab and nat and muldoon(lab) you know) were short term and not up to scratch in the EEC driven changes. You disprove your own point.

    Govts of course react to their survival cycle (3 to maybe 10 years). Business reacts to their survival cycle (often the lifecycle of the person and family i.e. a generation or two).

    The current labour govt illustrates your own point perfectly. They inherited a set of strong and rising economic conditions from the previous national govt and proceed to sit on their hands (except for socials). Top half of OECD? Where are the policies that Clark introduced to achieve that? Seriously. Where are they?

    You say re the last nat govt “It didn’t work the last two times they tried it,” In fact it did – labour inherited it as I’ve just said.

    I disagree with you virtually right across the board on this one.

  7. vto 7

    argh, wont let me edit. first sentence para 6 – should read “The current labour govt disproves your own point perfectly”

  8. lprent 8

    IV2: Touted by whom? National party hacks (thats the type of thing that McCully likes to do)? C/T spin doctors?

    Perhaps you’d better provide a links, and to someone who is credible. If you wanted to discredit a commentator, what do you think is the absolutely best way to do it. While I don’t bother taking much notice of most political stuff inside the party, then I’d expect to have noticed if Oram was approached.

    Coincidently the reason that I ask is because I’ve heard exactly the same statements about every economist when they criticise a parties policy. The only one I’ve ever seen happen was Brash.

    vto: Sorry to break your bubble. Businesses typically have a viewpoint that doesn’t go much beyond 5 years. At least that is what I was shown in the strategic portions of my MBA, and is what I’ve observed before and since. They will take longer viewpoints on some investments, but typically only where the long term risk levels are low – typically where the return occours early in the project. There are very few companies that take investments where the major returns happen past 10 years after project start.

    One main reasons for this is the relatively rapid turnover of managers in businesses. In the corporate world, this is typically only a few years in a position, and usually less than 5 years for a given organisation. Policies often get changed by new brooms.

    On the other hand, senior politicians often have well over 20 years in parliament. They therefore tend to take longer term investments. For instance really expensive long-term projects like education systems, housing, roading networks, rail networks, social development, forestry industries, etc.

    The approaches to the EEC by the UK started in the early 1960’s and caused a hell of a shock to the NZ govt of the time. However no significant changes were made to the NZ economy until after the first and second oil shocks. That was despite steadily worsening terms of trade through the late 1960’s and the eventual entry of the UK into the EEC.

    Most of the effort was instead expended in trying to get special deals with a UK/EEC. About the only change I’m aware of was a desultory effort to find alternative markets for the same old produce.

    Anyway have to go and fight traffic..

  9. jeremy eade 9

    It is govt’s which tend to have the short time frame matters at the top of their lists, not people in business. Sure, biz reacts to the rules put in place but most look well to the future. Certainly further than most govts.”

    Tell that to the new telecom board. They destroyed their market with short term thinking.

  10. lprent 10

    I’ll let other people argue about the infrastructure investments by this government. But suffice it to say that I’ll driving some of them. The physical have been less than the social and developmental. In particular their emphasis on continuing to develop trade has been great for exporters.

    Damn – now I’m going to be a bit late.

  11. Tim Ellis 11

    LP this is a very interesting discussion, thank you for starting it off.

    Rod Oram trumpeted Labour’s economic transformation agenda as a great strategy to turbo-charge the economy, boost productivity, and lead us to the top of the OECD. What happened to the economic transformation agenda? It turned out to be spin, with no substance. It was a talk-fest. As was the closing the gaps “strategy”, the Knowledge Wave, and the Sustainability measures. All just part of Labour’s spin machine. Every one of them, Rod Oram has talked about in mystical terms as if they’re the great solution that is going to solve all our economic problems.

    For years he has claimed he is the great economic guru that knows more about how to make us wealthy. None of his great left-wing pronouncements have turned out to be accurate. He has been feted by left-wing circles since coming to New Zealand eight years ago, but he doesn’t actually stack up. He only got a job in New Zealand because he had the Financial Times on his CV, but he wasn’t an economics correspondent for them. He was the consumer affairs correspondent. Now, Kevin Milne is a nice guy and is good at exposing business scams, but we don’t make him our economics prophet, just because he hosts Fair Go. But give a guy an English accent, a penchant for extolling mystical economics within a narrow world view and decrying everybody who doesn’t subscribe to that world view as stupid, and disregard that he hasn’t got a single prediction right, despite applauding every major announcement from Labour that has never ended up going anywhere, and you get Rod Oram.

    The Labour Party and Rod Oram are very good at talking about what needs to be done, but never actually do it. Bill English was part of a government that rescued the New Zealand economy from two recessions: the first caused by the Fourth Labour government’s fiscal dishonesty and corruption in 1990, and the second caused by a mix of the drought and the Asian crisis in 1997-1998. As we are going into the worst global recession since the early 1980s, Labour’s only response is to call John Key a “rich prick” and smear him.

    Rod Oram isn’t the guru that he’d like us to believe.

  12. vto 12

    Iprent, not convinced.

    Again your reference to govts non-existent / slow reactions to the EEC devpt disproves your own main point about govts making long term changes to adjust to new environments. They don’t. And you prove it with the EEC.

    And that is even with,as you say, politicians in Parliament for up to 20 years! So what do they do in those 20 years? Make a series of short term decisions aimed at elections, that is what.

    And, do you not know of any people in New Zealand who have owned and operated the same business for more than 20 years? Or over generations? Really… s t r e t c h i n g

    btw, I would be interested in your answer to my previous question – what policies has Clark put i place to achieve top half of the OECD? Surely that is a long term aim that should have been followed through. But it hasn’t. The reason imo is the settings required for such a move are too politically hard in the SHORT ELECTORAL TERM so they dont get done. Only talked about.

    Side issue – why is that those who own business have such different views from those that don’t?

  13. Draco TB 13

    If you think that John Key is stupid than respectfully I think you are stupid.

    Then the we must accept the other alternative which is that the NZ people as a whole are stupid because we keep voting National in when they have the same policies that didn’t work last time. This would lend credence to Bill English’s comments about punters.

    However that worry of mine is not only directed at National: I feel much the same way about all of the contenders. There is nothing that is going to propel NZ towards #1 GDP/capita in any policy that I have seen.

    I feel the same way except that I’m not about to vote National as I know that their sole reason for seeking government office is to make things better for the rich and worse for everyone else. There is no vision coming from any of the parties that will revolutionise our socio-economic systems. All parties are committed to the business as usual approach and the capitalist system itself is the problem. This just highlights the fact that we have no system to replace it with and we need one that is acceptable to the majority before we try to replace the present failed system.

  14. randal 14

    national are not conservative. conservatives are people who know if there is any change to the governments policies then they will not benefit. the national party are hiding under a blanket of no change when they intend to have another go at looting the treasury for their own personal benefit this time.

  15. vto 15

    Draco and randal, I really don’t think the nats intend to “loot the treasury” or “make things better for the rich and worse for everyone else”. That’s silly.

    Don’t you realise that business is most happy when the people are happy and prosperous. It is in business’s interest to keep as many people as possible ‘rich’. Its no good having a nation of poor with a smattering of rich – that’s useless.

  16. lprent 16

    Tim: Exactly how fast do you think that things happen for infrastructural changes, especially for the people based ones?

    All of these measures you’re talking about only got started less than 8 years ago, and most are significantly less than that. Most are skills based – ie require trained people as a prerequisite.

    Lets assume that something happened in the education system to support say biochem 8 years ago. It’d take a year or so for an initiative to get put into place. So I’d expect that a student that started them may have just finished their masters.

    Now the classic response at this point is to say, just buy them in. But to do that requires that facilities are built and support services are in place first. Plus of course you’d have to raise wages which is hard work for initiatives that don’t turn immediate profits.

    Similarly high-tech incubators take a long time to start showing sustained results.

    Anyway, your precepts show that you are without a sense of time scale required for these transformational projects. The countries that have done the types of transformations we’re talking about usually require at least 15 or 20 years before they start reaping benefits. Look at Finland, Ireland, Singapore, etc etc.

    The difficulty with the Nat’s and their policy directions is that they look like they are dropping back to their traditional directional vagueness. In which case we’d probably have to just hope that

  17. Draco TB 17

    That would be correct vto except that capitalism cannot work if everyone is rich as then there would be no one to do the actual productive work. Basically, business works when everyone is equally well off but capitalism doesn’t. Capitalism requires poverty so that people are forced to work for someone else.

  18. lprent 18

    vto: National governments certainly don’t adapt to changing world economic conditions. Between 1960 and 1984 Labour was only in power for 3 years between 1972-1975. They managed to start a few things, but Muldoon then killed them or starved them of funds.

    Consequently we did virtually all of our economic transformations for several decades in less than 6 years between 1985 and 1990

    The 1990’s national government did a few changes, but basically hunkered down and stopped doing anything after they screwed up the welfare reforms and dropped us into a recession.

    vto – face it. The National governments are totally useless at preparing for changes. The current National party policy doesn’t look any better than their usual efforts.

  19. Rob 19

    This pretty well spells out the difference between National and Labour very Succinctly I thought

    To Matt Jum and all other lefties We will always disagree but I thought this little analogy illustrates the difference between Labour and National succinctly.
    Father/Daughter Talk

    A young woman was about to finish her first year at university. Like so many others her age, she considered herself to be a Labour supporter and very liberal. Among her other liberal ideals, she was very much in favor of higher taxes to support more government programs, in other words redistribution of wealth.

    She was deeply ashamed of her father who was a staunch Nationalite, a feeling she openly expressed.

    Based on the lectures that she had participated in, and the occasional chat with a professor (who sported a full beard), she felt that her father had for years, harboured an evil selfish desire to keep what he thought, should be his.

    One day she was challenging her father on his opposition to higher taxes for the rich and the need for more government programs. The self-professed objectivity proclaimed by her professors had to be the truth and she indicated so to her father. He responded by asking how she was doing at university.

    Taken aback, she answered rather haughtily that she had passes in 4 subjects, and let him know that it was tough to maintain, insisting that she was taking a very difficult course load and was constantly studying, which left her no time to go out and party like other people she knew. She didn’t even have time for a boyfriend, and didn’t really have many varsity friends because she spent all her time studying.

    Her father listened and then asked, ‘How is your friend Clarrisa doing?’

    She replied, ‘Clarrisa is barely getting by. All she takes are easy classes, she never studies, and she has only 2 passes. But she is ever so popular on campus; varsity for her is a blast. She’s always invited to all the parties and lots of times she doesn’t even show up for classes because she’s too hung over.’

    Her wise father asked his daughter, ‘Why don’t you go to the Chancellor’s office and ask him to deduct 1 pass off you and give it to your friend who only has 2 passes. That way you will both have 3 passes and certainly that would be a fair and equal distribution of passes’.

    The daughter, visibly shocked by her father’s suggestion, angrily fired back, ‘That’s a crazy idea, and how would that be fair! I’ve worked really hard for my grades! I’ve invested a lot of time, and a lot of hard work! Clarrisa has done next to nothing toward her degree. She played while I worked my tail off!’

    The father slowly smiled, winked and said gently, ‘Welcome to the National party.’

    If anyone has a better explanation of the difference between National and Labour then I’m all ears.

    Ps

    Talk about policies at the wrong time I see the Labour Party have taken Ruth Dysons gender bender speech off their website after all the comments (They of course have a hidden agenda how hypocritical)

  20. lprent 20

    Rob: What a waste of bandwidth – how exactly does that relate to this thread’s topic?

    I think that you’re trying to compete with d4j as being surrealistic electioneering art form. But I think d4j wins because his comments are more succinct.

  21. Felix 21

    Shorter Rob:

    Poor people have less money because they are lazy, stupid and undisciplined.

  22. vto 22

    Iprent, sure I agree the nats can be just as slow to change. It reflects the electorate as much as anything. They have been elected more times than any other party after all. So perhaps look to the electorate. Which is perhaps also why this labour govt is as slow and conservative as any other govt – the desire to keep the electorate happy and remain in power.

    So again, why didnt Clark bring in policies to achieve OECD top half? Very conservative of her not to try. Especially as it was a key policy plank.

    This govt had the perfect opportunity to step out a bit given the sunny economic conditions they were lucky enough to operate under. But they didn’t.

    I will concede that labour tends to reflect that social component of the kiwi character that will stand up for things like equal voting, nuclear free, ect, all tough-at-the-time changes that nat govts are unlikely to pursue. But not when it comes to economics. This labour govt has been hopeless imo. Wasted opportunity.

    I guess, getting to your point – what govt IS likely to introduce the types of reforms that are required to catapult NZ somewhere? None really. Especially now with MMP. Which is yet another reason to reduce the amount of power resting with the govt.

    I have to say, I keenly await (once Clark announces the election date – what’s up with that delay? ay?) the nats full policy announcements which Key thinks will do the catapultion. Be interested to hear how he intends to give it a go. See if he breaks the trend.

    btw, a description of even one policy / law introduced to further the top half of the OECD policy of Clark would be at least be a part answer to the thrice asked question.

    Rob, good analogy in part. Easily attacked though so watch out.

  23. ak 23

    even shorter Rob:

    Workers don’t work.

  24. Tim Ellis 24

    LP, those are interesting points, and I agree that we are talking about long-term timeframes for transforming the economy. But I don’t think you’ve addressed my point. Labour was talking about economic tranformation as its buzz-word eight years ago. It stopped soon after because the things that needed to take place just weren’t being done. Labour has talked about increasing economic productivity, but economic productivity has remained at a stand-still. You also seem to be ignoring the specific commitments Labour made around 2000. They talked about the knowledge wave, and economic transformation, not as very long-term goals, but as medium term ones. Do you remember Helen Clark’s plan to bring New Zealand into the top half of the OECD? The deadline she set was 2010.

    How have we performed against that? We’ve gone down a position in eight years. Labour’s rhetoric on economic transformation has stopped, because after eight years of claiming we would be propelled into prosperity, they haven’t even been able to shield the country from some of the damage of the recession. Labour has increased government spending to remarkable levels for no real return on investment. Bureaucracy is out of control. There are no demonstrable improvements in the education system, despite much more money going into it. Unemployment is projected to increase to 6% in the next few years. If there is any party that has talked about great plans and great visions, but failed spectacularly to implement anything, then it is this Labour Government.

    This is a very interesting debate, and I congratulate you guys at the Standard for hosting it LP. But getting back to Rod Oram, I think he has a real credibility problem. He was the flag-waver for all of Labour’s grand visions for knowledge waving and economic transformation and the jobs machine, and yet none of them actually achieved anything. There was no substance behind the spin. And here we have him demanding National front up with much more detail from National about its grand infrastructure plans than he ever demanded from Labour about its grand economic transformation agenda, which he cheer-led. There makes him a partisan hack in my opinion.

    What I find really annoying about Rod Oram is that he disparages anybody who doesn’t subscribe to his world view as stupid. He’s an arrogant snob who tries to mystify economics to make himself smarter. Why we have to pander to these people, I have no idea.

  25. randal 25

    I am getting really sick of reading all the drivel from posters who have obviously never bothered themselves to read the 2008 budget and are interviewing their typwriters as real journalists say. Stop speculating about WORDS and get down to the real nitty gritty. Labour are doing allright and things are going to get a lot better after the current downturn without the nuclear powreplants and car factory’s and other massive projects that the fantasists think is an indication of economic progress. get real.

  26. LC 26

    Felix – poor people have less money. Disregarding lotto and crime, poor people get more money by working. You either work harder (more hours) or smarter (higher hourly rate). Luckily Labour have put the right conditions in place to ensure that either of these methods can be used (WFF, Education, etc).

  27. lprent 27

    vto:

    So again, why didnt Clark bring in policies to achieve OECD top half? Very conservative of her not to try. Especially as it was a key policy plank.

    Same answer as for Tim. How fast do you expect this type of policy to take effect? I get frustrated with the continual short-term thinking that is always evident on the right. It is like you’re infected with an immediate satisfaction addiction.

    The policies have been put into place and are being nurtured along. We will find out if they are the correct policies over the next decade. This is much the same time frame as the policies put in the 1980’s that have stopped the economy going further backwards. However they took well over 15 years to really stop the slide (about 2003 was when I consider that we started to see the full benefits). They may have worked faster but for the recession in the early 1990’s and the way that crushed the domestic economy.

    I keenly await (once Clark announces the election date – what’s up with that delay? ay?)

    I believe that the PM has to announce the election 3 months before the last possible date, which is November 17. It can also be announced before that for shorter campaigns, ie 6 week snap elections.

    But someone else probably has better details of this little biut of law.

    btw, a description of even one policy / law introduced to further the top half of the OECD policy of Clark would be at least be a part answer to the thrice asked question.

    Ummm serious lookup mode for me will have to wait until I’m not coding and the local internet is back up (going out on a t3g at present). But mainly it isn’t law, it is mainly funding and programmes

  28. lprent 28

    Tim: HC might have set that as a target – link please? But I’d have considered it to be an unreasonably tight target. It takes a bloody long time to put programs like that in place.

    Hell it takes me years just to write export-level programs (quite different to corporate code let me tell you).

    I have to tell you that is feels weird to have such a thin link to the net as a dinky 3G modem…

    captcha: Corporation price
    WTF…

  29. vto 29

    Iprent ” How fast do you expect this type of policy to take effect?”

    Well you will have to ask Clark. She said by 2010.

    And you still haven’t offered a policy that was intended to seriously head for the top half. Shouldn’t need looking up.

    And I realise policies take a longer time to have an impact. I’m glad you can see that too and acknowledge that “the failed policies of the past” were anything but. And that this govts benign economic conditions were a result of past policies (lab and nat) not their own.

  30. randal 30

    some things take effect immediately and others take a little time and yes it is true that each government inherits its own luck. Labour has been blessed and so have the people and everybody knows that. there are some people however who think they deserve a bigger share.
    everybody wants a bigger share but present policies are the fairest that have obtained in the modern era since 1981. demands for more are more or less infantile whingeing for things that are not instantly available and require patience and maturity in securing those things or discarding the desire to posses them for better alternatives upon reflection. This is a time where new zealanders could be discussing what they really want instead of this infantile back and forth blather that dribbles it all out in a sort of beltway whine. lets have a real discussion instread of wishy washy generalities substituting for real examples and the cheap politics of the uninformed.

  31. lprent 31

    vto: I’m afraid that when I’m programming that I lose ‘names’. You’ll have to wait until I get home (or someone else digs a few out for you).

    But my point isn’t about Labour – it is about National. We know you like to vote against – but what are you voting for?

    Where exactly can you see National doing better on long-term structural changes than Labour. At present it looks like they are simply going to be lazy and not do anything. Which means that long-term gains are not going to be made.

    That is what Oram states, and I haven’t seen anything yet from the right that says it isn’t going to happen.

    For instance where exactly is the policy that National is going to have to increase wages to aussie levels for instance? They’ve been beating up labour for merely making sure that the difference didn’t plummet any further (like than last time the Nats were in). Where does English give a policy to reduce the difference.

    As far as I can see, so far he is relying on a cheesy grin to do it?

  32. vto 32

    Iprent, I don’t disagree in that neither large party has the gumption to take on the big challenges (economic). The policy is not there yet from national. But I don’t see a lot from labour either. I do like the sound of the infrastructure bonds announced though, and I don’t like labour paying cash for everrything at the expense of today. For various reasons.

    I did say above that I will be interested to see what the big vision and the big technique is from the nats. Whenever it gets announced – when Clark stops playing games and tells everyone when the election is going to be.

  33. lprent 33

    vto: I haven’t looked at the details of the bond structure that the Nat’s are proposing. Usual problem – lack of detail on their policies. Perhaps you could tell me what type of bond they are proposing. Fixed interest? Fixed maturity? What risk – eg secured in some way? etc etc.

    My problem with infrastructure bonds is that they often allow the political initiators of the projects to avoid the risks – they push the costs on to future taxpayers. Regardless of the success of a project as a taxpayer, I still wind up paying.

    Tell me how this will be different from Muldoon socking me with the debts from Think Stupid and SMP’s

    captcha: Boasting Report
    National policy?

  34. vto 34

    Iprent, only heard the sound of the bonds, no detail so waiting for that too.

    What I also like is the idea of spreading payment for the infrastructure over the generations that get the benefit of it. It would be nice to set our future generations up with a debt-free and fantastic set of stuff but given our current economic situation (relative to the rest of the world as always) I think that is unfair on todays generation.

    How it is different from Think Silly from Muldoon it seems to me is that Muldoon’s problems stemmed from the actual projects and concept. The bonds are only the payment part of the project, not the worth of the project itself.

    The bonds and infrastructure and ppp’s interest me personally because I like the idea of actually building something myself. Like a bridge or a tunnel or an airport or an army (think I’d be allowed?). There is one glaring piece of infrastructure that the lower north island could do with. It’s on my list.

  35. lprent 35

    vto: I think that you just proved my point.

    With your project, exactly how are you going to decide that the project is worth while or not? If you can pass the costs to a future generation… Woohoo – I’ll retire in 15 years or so (maybe). I’ll pass the costs for my golf course to the kid I father tomorrow to pay in 25 years.

    As far as I can see, National are just trying to get a free lunch.

  36. vto 36

    Eh? Not at all.

    The approach to all such projects is that if it doesn’t stack up the funding will not be obtained. It is not possible to pull the wool over eyes on projects of that sort of scale (unless you have ridiculous power and can make the decision alone e.g. muldoon). By ‘not stacking up’ I mean if the people will not use and pay for the proposed infrastructure, which has to be proven conclusively using every possible measurement available.

    How I would “decide that the project is worth while or not” is, like my current slightly similar but ridiculously smaller business, out of my hands. I do not get to decide whether my current projects are worthwhile or not. That is established by market demand and by independent authorities advising the funders. The funders decide. A case is made out and the best foot put forward. The funders then look at it, get independent advice, and make the decision. These infrastructure projects would work in exactly the same way. The funder is the govt. The govt raises the funds through either taxes or debt (bonds). Its quite simple.

    The financial rewards are not an issue. Whatever is the appropriate recompense is fine. I think, other than the odd greedy person, you will find this to be the case with most all business.

  37. Kevyn 37

    Felix, “Poor people have less money because they are lazy, stupid and undisciplined.”

    That’s absolutely right. But there is a corollary – Rich people have more money because they are driven, cunning and disciplined.

    Where do you draw the line between rich and poor? I say the line is broad enough to cover eveyone within two standard deviations from the mean. That’s a very big percentage of the population who, financially, are neither rich not poor but simply satisfied, or satisficed.

  38. Kevyn 38

    Iprent said “I’ll let other people argue about the infrastructure investments by this government.” It would be nice if we could. Are all of the infrastructure investment figures available in one place? Or are they only available sepearately from each of the different infrastructure agencies? Has National actually stated which infrastructure the $500m a year is going to be spent on? I could only find the general refernce in Key’s speech. There is no policy or discussion documents on infrastructure.

    The land transport financial reports don’t report PT spending seperately for improvements and maintenance/operations but a reasonablr estimate is a real twenty-fold increase for improvements and 100% for operations/maintenance. Impressive!

    For roads and highways there has been an increases for maintenance/operations of 35%, sufficient to cover increases in the construction price index. The increase for improvements depends on where you drive. A fourfold increase for Wellington and Auckland, no increase for the rest of the North Island and one-third decrease for the South Island. Allow for the increase in the construction price index and there have been real reductions of one-third and two-thirds despite a real two-thirds increase in charges for road use.

    Any info for improvement spending by Transpower or the generating companies, hoepitals, schools, police stations, fire stations? Or courts and/or prisons?

    The problem with so much infrastructure being operated by SOE’s, LATE’s and councils is that it’s damned near impossible to know what the infrastucture situation is either now or in the near future

  39. Draco TB 39

    The problem with so much infrastructure being operated by SOE’s, LATE’s and councils is that it’s damned near impossible to know what the infrastucture situation is either now or in the near future

    Government needs better real-time, online, interactive reporting of all expenses and income. This is needed so that the taxpayer and the rate payer knows exactly what their money is being spent upon so that said government can be more fully held to account of the people that it serves.

    I’m only being slightly mischievous 😛

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