Rhetoric vs reality

Written By: - Date published: 1:55 pm, October 2nd, 2008 - 25 comments
Categories: economy, election 2008, john key, national, spin - Tags:

With expectations about National’s tax cuts justifably very high (thanks to National talking them up for nine years), National is suddenly trying to change course. John Key, who has promoted tax cuts as the solution to doctors’ strikes, the wage gap, and petrol prices along with every other issue facing this country, is now saying tax cuts will be just a part of a bold economic package that would lift us out of recession.

So, what is this economic package? Well, there’s tax cuts, of course and.. um… oh and minor modifications to the RMA.. and and minor modifications to the ETS… no more civil servants, well, maybe a few more… and, yeah, borrowing for a couple of roads (which the industry doesn’t have the capacity to build any faster than they are already).. oh and don’t forget more fossil fuel power plants. Hardly visionary. Hardly actions that will have large immediate impact.

Even National’s most fervent allies, like the Independent, are tiring of National’s inability to match its rhetoric with real policy. They, of course, want National to outline a bold right-wing economic agenda. And that is the direction National would head in government; the Independent reports National MPs are promising to announce more right-wing policies after the election. That doesn’t placate business who want guarantees of a rightward shift now but National can’t make such promises in public yet. First, it has to secure a blank cheque from the voters.

[In fact, the only significant changes to the economy that National has announced are in work rights. Under National, your work rights wouldl be weaker. With the balance shifted in favour of the employer, wage increases would be smaller. National would also let the minimum wage to be eaten by inflation as they have every other time they’ve been in power. In economic terms, that would mean a bigger share for business owners but lower consumer demand.]

25 comments on “Rhetoric vs reality ”

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  1. G 1
    2 October 2008 at 7:33 pm

    “… With the balance shifted in favour of the employer.”

    You mean the people who create the jobs will have a bit more to say on the conditions upon which they kindly offer us employment?

    About bloody time.

    [G. have more respect for yourself, you’re not a house slave ‘masta, masta is so kind to me, masta.’ I am a worker, I sell my labour to a capitalist so I have an income to live and raise a family on but I do not need to feel grateful, the capitalist needs us to work the capital too, without us the capital is worthless – we have the right to demand a fair share of the fruits of production in return. Because a worker is not a slave, not a serf, the system should be set up in a manner that offsets the inherent power inbalance between capitalist and worker. SP]

  2. illuminatedtiger 2
    2 October 2008 at 8:00 pm

    Will be interesting to see the outcry when the National taxcuts are all eaten up when the GP fee cap is lifted. I’m sorry Johnny boy but “going down the road” just doesn’t work in reality.

  3. Felix 3
    2 October 2008 at 8:12 pm

    I hope you’re not suggesting that the market won’t take care of everything.

    Probably you don’t know as much about markets as that Mr Key though. He used to work for the big Wall Street banks dontchaknow.

    Oh hang on…

  4. Alexandra 4
    2 October 2008 at 8:25 pm

    G – Thats a draconian idea, conjures up notions of serfs and masters. Labour for security at all costs. Why would any worker support a change to employment law which reduces their rights and provides less rights for new employees?? unless you act as the employers agent??

  5. randal 5
    2 October 2008 at 10:17 pm

    strawboss…peonage…day labouring…stoop labour…god these tories love other people doing hard work!

  6. Steve Withers 6
    2 October 2008 at 10:20 pm

    The tax cut won’t mean much for Wellingtonians or South Islanders.

    Contact Energy has made its play to grab it for themselves.

    Anyone surprised the only private generator is the greediest and most expensive?

    I mean really, genuinely surprised…not the faux sort.

    Anyone happy with their excuses? Security of transmission? Are they going to spend the premium they are demanding on transmission?

    The tax cuts were always just going to be grabbed by the sharks out there. Much better to pay the taxes and get some social value for it at least.

  7. Steve Withers 7
    2 October 2008 at 10:22 pm

    G: You’re smoking drugs if you think the balance is NOT already firmly on the employer’s side.

    People are fleeing to Australia BECAUSE employers here can get away with paying too little……and cutting every other benefit not legally required.

    It’s bloody sad and pathetic that anyone believes giving power to the employers party will see people earning higher wages.

    one young guy on the TV news the other night said it all: “I’m off to OZ. Wages here are crap.”

    Workers have too little power in NZ as it is…..unlike in Australia.

  8. T-Rex 8
    2 October 2008 at 10:27 pm

    “Anyone surprised the only private generator is the greediest and most expensive? ”

    Gerry Brownleee must be – he’s forever going on about the greed of the state via the SOE’s. Greedy greedy state. Benevolent Benevolent private sector.

    I think the main difference is that Contact are dumber – basically the government is a more thoughtful shareholder. Contact want money now, Meridians business practices are much more sustainable.

    I’m sorry – I should say the LABOUR government is a more thoughtful shareholder. A National government would be all about the money now (that being the only reason you’d ever sell an SOE… and Nat’s LOVE selling SOE’s)… much like… the private sector? Hmm.

  9. the sprout 9
    2 October 2008 at 11:01 pm

    sounds like National’s will be a… chewing gum tax cut 🙂

    you’ve got to love the irony of their situation though. anything more than a pittance will get lots of very loud pre-election flak for being irresponsible in the current global climate, and National really don’t want to be seen as financially adventuristic to an increasingly anxious electorate.

  10. T-Rex 10
    3 October 2008 at 12:16 am

    That’s why they’re delaying the announcement of the tax cuts until next week. National are desperately hoping that the bailout will get through congress, the markets will launch themselves heavenward, and they’ll be able to say “The crisis is over, risk gone, all happy, here are your tax cuts and nobody needs to worry about the borrowing we’re indirectly doing to fund them or the cuts in services because plainly we’re all going to be richer than astronauts anyway”.

    Good luck with that one, Nats.

    So they either:
    a) Offer big cuts, and are rightly labeled a bunch of fiscally irresponsible morons who shouldn’t be put in charge of an apple cart. An EMPTY apple cart.

    or

    b) Offer meaninglessly small cuts (Steves 3 grams of cheese using all that waste that isn’t actually waste the nats have managed to identify) and get rightly annihilated for failing to deliver on their tireless and loud promises and primary (when you get down to it – what else have they even pretended to offer?) election platform.

    What will be especially hilarious is that they’ll have to retract the offered tax cuts at almost the same moment as Labour, who the Nats never tire of accusing of renegging on tax cuts, have actually delivered some.

    In which case I think I’ll write them this letter…

    —

    Dear National.

    AAAAHAHAHAHAHAHHAHAHAHAHAHAHAHHAAAAAAAAAAAAAAA

    That’s what you get for putting your faith in the empty promises of hollow leadership – Suck it up. Next time try having some substance behind the sparkle.

    T

    —

    I think the Nats main hope is that a lot of people still seem to have a huge amount of anger at Labour (however weak their reasoning) and might just cut off their noses to spite their faces.

    To all those people – if you like Labours policies, but not Labour… vote Green! You get to teach the lesson you want to teach without selling yourself down the river in the process.

  11. Draco T Bastard 11
    3 October 2008 at 12:19 am

    Steve Withers:

    The tax cuts were always just going to be grabbed by the sharks out there. Much better to pay the taxes and get some social value for it at least.

    Worked that one out a few years ago – tax cuts only ever go to the capitalists even when they’re targeted to the poor simply because the capitalists are in a dominant position in the market and are able to scoop up the extra money in the economy.

  12. G 12
    3 October 2008 at 1:49 am

    Alexandra: G – Thats a draconian idea, conjures up notions of serfs and masters. Labour for security at all costs. Why would any worker support a change to employment law which reduces their rights and provides less rights for new employees.

    Let me ask you, Alex, once an employer creates a business does he have a right to shut it down and make all his staff redundant?

    Steve Withers: It’s bloody sad and pathetic that anyone believes giving power to the employers party will see people earning higher wages. One young guy… said it all: “I’m off to OZ. Wages here are crap.’

    During the early days of the Industrial Revolution, before the employers were taxed and regulated, they had ALL the control, yet the economic boom meant a shortage of workers, which naturally led to a voluntary — and necessary — increase in wages as they sought the better workers. In a very short space of time wages doubled and in some fields even trebled.

    People are moving to Australia because their economy can support higher wages — not because their unions or MPs strong-arm employers. Unions and politicians are not the wealth-creators; that is the dominion of the entrepreneur and the businessman.

  13. jbc 13
    3 October 2008 at 2:00 am

    T-Rex: “I think the Nats main hope is that a lot of people still seem to have a huge amount of anger at Labour […] To all those people – if you like Labours policies, but not Labour vote Green!”

    I find many of Labour’s and the Green’s policies, on employment and the environment respectively, to be very good. On matters of employment rights, leave, maternity and paternity I think Labour have done some real good. I have been an employee – in the plain sense – for most of my working life. No big argument there, nor with the stated mission of “The Standard”.

    Unfortunately both those parties struggle to avoid thumbing their noses in the general direction of the top of the income pile. Both seem to have a distrust of business, however Labour does a better job of restraining themselves.

    The main difference between Labour’s and National’s tax cuts will probably not be in magnitude but in spirit. Labour’s cuts are through gritted teeth while National’s are, as Steve noted, core policy (talking them up for nine years [while Labour ridiculed them]).

    The day that NZ has a smart, green government that gives a nod to everyone (rich and poor pricks adn everyone in between) and has an avowed policy to attract and grow business (and the employment that comes with it) – will be a great day.

    Could Labour do it?

  14. nommopilot 14
    3 October 2008 at 10:24 am

    Unions and politicians are not the wealth-creators; that is the dominion of the entrepreneur and the businessman.”

    the entrepreneurs cannot create wealth without people to do the work. it is a symbiotic relationship and both employees and employers are dependent on one another.

    and like any relationship it functions best when there is at least some equality between the two. when one party seeks to dominate or control the other, the other will be victimised and things get toxic. Unions & politicians seek to keep a balance to these relationships through regulation and negotiation.

    “which naturally led to a voluntary — and necessary — increase in wages”

    um, so it was voluntary and necessary? so the employers were beneficently increasing wages of their own volition because they had to… right…

    try harder.

  15. Steve Withers 15
    3 October 2008 at 10:29 am

    G: In the early days of the industrial revolution people worked 16 hours / day 6 days / week and children as young as 4 years of age were working in coal mines. Only AFTER laws were changed (1830s and 40s) and labour unions founded did that end. Only AFTER.

    The reality of employer hegemony was grim and drove people to flee across the world to get away from it.

    National says their policies will reverse this trend, whereas all history says giving employers more power will make it worse.

    NZ’s focus on exporting has made the domestic consumer’s purchasing power less relevant, placing the premium on lowering wages in this country to improve export competitiveness. That imbalance is a product of our small local market. national’s polices can only reinforce that trend….and cutting taxes will widen the gap between those who benefit and those who don’t. The “brighter future” they promise will be for the few….not the many. The many can only vote with their feet with their own government squatting on them like an 800lb gorilla.

  16. jo zinny 16
    3 October 2008 at 12:15 pm

    Steve Withers:

    A thought re: power prices.. Given that consumers are reliant on corporate providers, and that corporate setup is more an extra to power supply than consumer necessity – viz. corporate deals its own profit centers, costings and cashflows — the latter means to that corporate(rather than consumer) end — how would you respond to a firm demand to eliminate such corporate(aka financial) dealings OUT of the consumer price of power..?

    As consumers we need consider how such financials are possible loss-makers and price hikes to sustain or increase board members’ returns would seem to moi moral hazard and what goes with it…

    If agreed, how might the notion fly..?

  17. rave 17
    3 October 2008 at 10:57 pm

    Red rag for the righties, intelligence test for the left
    http://leninology.blogspot.com/2008/10/spec-tac-u-lar.html

  18. rave 18
    3 October 2008 at 10:58 pm

    Here’s a red rage for the right and a intelligence test for the left.
    http://leninology.blogspot.com/2008/10/spec-tac-u-lar.html

  19. rave 19
    3 October 2008 at 11:08 pm

    How come I can’t post this

  20. G 20
    4 October 2008 at 9:42 am

    Steve: “G: In the early days of the industrial revolution people worked 16 hours / day 6 days / week…”

    That’s true. In the height of summer. Due to England’s geographical position near the arctic circle winter days are much, much shorter, the lack of light restricting working hours to as little as five. The supplement to the Sadler Report recorded that the workers, who were paid by the hour, complained bitterly during the winter months because there wasn’t enough work.

    “… and children as young as 4 years of age were working in coal mines…”

    Life expectancy in 1750 England was 20.3 years, accounted for mostly by the child mortality rate (due to malnutrition), which killed most children before they reached 9. Their choice wasn’t go to work or go to the pretty little preschool down the road; it was work or starve to death.

    “… Only AFTER laws were changed (1830s and 40s) and labour unions founded did that end. Only AFTER.”

    Actually the reforms started much earlier than that. The Apprentice Bill was passed in 1802, aimed at the appalling abuses suffered by the Pauper Apprentices at the hands of the parish officials. These were homeless kids, abandoned by dead or starving parents, sold into parish factories — by the state.

    The vast majority of workers, however, were ‘Free Labourers’ — children and adults who worked voluntarily in factories run by private business. For the first time in their lives this great underclass was able to fend for itself, affording a roof over their heads and 3 square meals a day, instead of just 3 a week.

    The state, having first profited from them, then legislated to end the children’s gainful employment and suddenly 8-year-olds were being sent off into the world by their families. Unskilled and unemployable, the vast majority ended up becoming vagabonds, pick-pockets and prostitutes. Those that got out of town returned to the agrarian nightmare that literally plagued the pre-industrial world, resorting to eating grass to survive. The lucky ones ended up in ‘unscrupulous’ factories in the country.

    Fortunately, the revolution created so much wealth that within a relatively short space of time even the poorest parents could afford to send their kids to schools.

    “… The reality of employer hegemony was grim and drove people to flee across the world to get away from it.”

    Between 1750 and 1850 Great Britain’s population almost trebled. When Europe’s starving masses heard about the conditions of Free Labourers, England became their number one destination.

  21. randal 21
    4 October 2008 at 10:05 am

    g I think you are talking about the agricultural revolution that ptreceded the industrial revolution. potatoes, pumpkins, maize, sugar, tea and rotation of the humble turnip for winter forage made al the difference.

  22. G 22
    4 October 2008 at 4:48 pm

    Yes, Randal, I can see you’re intimate with vegetables. 🙂

  23. RedLogix 23
    4 October 2008 at 6:18 pm

    G,

    Can we have another impassioned defense of Wall Street and ‘free market’ capitalism again? They are such delightful little flights of folly.

    Meanwhile back at the ranch, another hard look at Wall St. Longish, but puts current matters in a historical context.

    BTW; smart momey does not to take cheap pokes at randal.:)

  24. G 24
    4 October 2008 at 7:11 pm

    Red, I’m just putting Mr Withers straight on certain facts about the Industrial Revolution — dispelling some of the great myths. No need to get all sarcky. 🙂

  25. RedLogix 25
    4 October 2008 at 7:24 pm

    Right now I’m all mellow cuddled up with a nice Aussie Shiraz, a process control algorithm that is getting a pimping, and Ry Coooder’s leftie anthem “My Name is Buddy” gently reminding me WHY.

    It’s OK, sarky all used up.