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Time for a real debate on the economy

Written By: - Date published: 9:45 am, July 20th, 2009 - 62 comments
Categories: economy - Tags: ,

I wish Finlay MacDonald wrote more about politics and less about cats and kids and stuff because he’s well worth reading when he’s on a serious topic.. and a weekly column in the Sunday Star-Times is a hell of a thing to waste.

His piece yesterday eviscerates Key’s vacuous economic speech from last week. He approvingly quotes my description of it as like a high school essay you haven’t studied for ‘just chuck in every key-word you can think of and bulk it out by restating the question in longer form.’ (would have been nice if he’d named The Standard though 🙁 )

MacDonald goes on to give a penetrating run-down of the problems with our economy’s fundamentals and the lack of a plan (or even an ambition) from Key to do anything about them:

“Conservative and liberal commentators alike acknowledge that New Zealand cannot hope to return to its pre-recessionary ways, buying and selling houses to fill up with consumer junk bought with the borrowed savings of more successful national economies.

The trouble is, without meaningful reform of the fundamental economic conditions that have created and sustained this fantasy, New Zealanders can only ever be expected to behave in predictable ways.

Our capital markets are feeble, our finance companies black holes, so we invest in personal property. Our tradeable sector suffers due to manufacturers and exporters being routinely hobbled by an over-traded and over-valued currency. Our foreign-owned banks have used the hot money gushing through their coffers due to that volatile exchange rate to flood the economy with credit, fuelling the preoccupation with property and flat screen TVs. We train lawyers and accountants instead of scientists and engineers. We can’t save because we’re already borrowing just to maintain a static standard of living.

That’s the counter-productive economic tailspin we’ve been in for too long now. John Key isn’t a financial illiterate, so he knows all that…why doesn’t he take the next logical step and start talking about the real impediments to growth, namely the exchange rate volatility and the fixation with fighting inflation that drives it? He doesn’t need to advocate a return to the command economy, or repudiate everything that has happened since 1984. But he can’t keep waffling about the effects of fundamental economic failure without at least opening up for discussion their fundamental causes.

…we seem to be looking in all the usual old places for signs of ‘recovery’ house prices and sales volumes, a pulse in the sharemarket, an uptick in consumer spending. And despite the rhetoric about these factors being the problem rather than the answer, what are the chances of Key and co. not trying to take credit for any evidence of life returning to our moribund economy, superficial or not?

Key could have used the crisis of this recession and his own considerable political capital to break the circuit and reset the macro-economic controls that determine how we might work, save, invest and produce our way into the top half of the OECD. Instead, we get this: ‘In the end, New Zealand’s economic prosperity relies on the hard work and inventiveness of our businesses and their employees.’

It’s great to see commentators pushing for a real debate on the economy, just as Chief Justice Elias has done on law and order. Unfortunately, it doesn’t look like Key is interested.

62 comments on “Time for a real debate on the economy”

  1. Tim Ellis 1

    Interesting points, Eddie. I think we probably come from different perspectives economically, but on the general point I don’t think there will be a wide ranging public debate on the economy. As much as many of Mr Goff’s supporters may want to bring about a rejection of capitalism and monetarism towards Labour’s principles of a cooperative rather than competitive economy, Mr Goff supports the major tenets of a free market, open, trading competitive economy. So does Mr Cunliffe.

    Unless there are two big changes at the top of the Labour Party, I don’t think any debate will happen.

    Likewise, I don’t think there will be any major debate of penal reform and justice as long as Mr Goff and Mr Cosgrove are the major drivers of Labour’s law reform policy. Neither of them are going to commit to a prisoner amnesty, or shorter prison sentences, or any of the liberal ideas that the Chief Justice has advanced, for fear of political annihilation.

    Labour supporters have a choice if they want to have those fundamental debates. They can risk having their vote eaten by parties to the Left (the Greens mainly) by continuing to advocate policies that are out of sync with their core supporters, or change the leadership for people who are going to advocate liberal, center left policies.

    • r0b 1.1

      Hi there Tim. If you’ve read a newspaper lately you might have noticed that National is the government now! Yup, your team is running the show! So the attempt to turn every thread into speculations about Labour leadership is kinda lame don’t you think?

      I know you’re trying to deflect attention from the fact that National hasn’t a clue what to do, but seriously, these issues are currently National’s to deal with – and you never seem to have anything so say about that…

      • Tim Ellis 1.1.1

        r0b you seem to have missed the point of my comment, but you’re quite right that National is in Government now.

        Eddie called for a public debate on this issue. The status quo is the government position. If there is going to be a real public political debate then the Opposition has to be coming up with something that is significantly different to the Government’s status quo.

        Labour isn’t arguing a different economic model, or a different criminal justice model. If Labour supporters really want their party to engage in those debates then they have to either change their leadership, or change their party.

        There isn’t much point in Labour Party supporters believing the economic model is flawed continuing to support a leadership that believes it’s fine and robust.

        • felix

          If there is going to be a real public political debate then the Opposition has to be coming up with something that is significantly different to the Government’s status quo.

          Why’s that, Tim?

          National never advocated anything different from Labour last year – just “tax cuts nanny state time for a change”. No policy differences though Tim. Just keep all Labour’s policies and promise a bit more.

          (It turned out to be a crock of course. Everyone enjoying their massive tax cut? Glad to have the oppressive state off your backs for a change?)

          How’s work today anyway, Tim? Plenty to keep you busy? Boss still doesn’t mind you blogging all day?

        • r0b

          Labour isn’t arguing a different economic model, or a different criminal justice model.

          We don’t know yet what Labour is arguing for – when Labour thinks the electorate is ready to listen they will tell us. The Greens have put out a comprehensive alternative package – arguably too soon, it hasn’t started the debate that needs to happen, the public isn’t in a mood to debate this stuff yet. But don’t fret, Labour will move when it thinks the time is right.

          But we do know where National stands, as you point out, status quo is fine. So: If National supporters really want their party to engage in those debates then they have to either change their leadership, or change their party.

          • Tim Ellis

            Bollocks r0b. Read Chris Trotter. He writes:

            can’t honestly say surprised, to hear Phil Goff dismiss Labour’s founding objective “the socialisation of the means of production, distribution and exchange” as “nineteenth century history.”

            It got worse, with Phil adding ideological insult to historical injury by declaring that the modern Labour Party believed “a well-functioning market system is the most effective and efficient way of organising an economy”. Yes, he was willing to “recognise market failure”, but only to the extent of ensuring “an adequate level of regulation”.

            As the indignant hum of Mickey Savage spinning in his grave grew louder, Phil then proceeded to define Labour’s twenty-first century mission as being all about “how you make a modern capitalist system work more effectively, and work in favour of all of the citizens of a country and not just the chosen few, the elite at the top.”

            You can be sure Phil Goff isn’t arguing for a different economic model. He’s arguing to retain the current capitalist system.

            Likewise, you’re talking bollocks if you say that Clayton Cosgrove is suddenly going to drag Labour down a much more liberal criminal justice policy. Nothing he or Phil Goff have ever said remotely suggests that.

            • r0b

              Read Chris Trotter

              Life’s too short.

              You can be sure Phil Goff isn’t arguing for a different economic model. He’s arguing to retain the current capitalist system.

              And John Key isn’t arguing for rolling back the welfare state either Tim – he’s arguing to retain the current socialist system.

              Both parties have converged on centre ground which more or less works (apart from failing the crucial issue of the environment of course), and to keep trying to portray the debate in terms if decades old stereotypes isn’t very productive (but of course you know that already, which is why you do it).

              But there is plenty of room in the centre ground for differentiation, and that is what has and will keep happening. National is doing nothing. The last Labour government did much more – long term planning (KiwiSaver) and redistribution (WFF). When Labour thinks it’s time it will outline its economic policies for the current environment, and I for one hope that they pick up a whole heap of the Green New Deal.

              Likewise, you’re talking bollocks if you say that Clayton Cosgrove is suddenly going to drag Labour down a much more liberal criminal justice policy.

              I never said any such thing Tim, nor am I likely to, because you’re right, I don’t think it is likely. For which we can thank National in large part, and the last 9 years it has spent drumming up fear and hysteria in its redneck supporters, it has succeeded in making rational debate on this issue nigh on impossible. Cheers National.

    • Maynard J 1.2

      “Labour’s principles of a cooperative rather than competitive economy,”

      Not often one to swear, Tim, but WTF are you on about there?

      In general, this debate is around the reserve bank’s types of control, and the various types of regulation that must exist in a so-called free market. It is not about whether we should evolve a centrally-planned socialist economy. If that is what you have to assume Labour wants to do in order to try and pretend there is some great division within Labour, can I just remind you it is no longer the 1950s.

      • Tim Ellis 1.2.1

        Maynard J, I am referring to Chris Trotter’s recent column:

        LISTENING to Radio New Zealand-National’s “Focus on Politics” yesterday evening, I was incensed and depressed, but I can’t honestly say surprised, to hear Phil Goff dismiss Labour’s founding objective “the socialisation of the means of production, distribution and exchange” as “nineteenth century history.”

        It got worse, with Phil adding ideological insult to historical injury by declaring that the modern Labour Party believed “a well-functioning market system is the most effective and efficient way of organising an economy”. Yes, he was willing to “recognise market failure”, but only to the extent of ensuring “an adequate level of regulation”.

        As the indignant hum of Mickey Savage spinning in his grave grew louder, Phil then proceeded to define Labour’s twenty-first century mission as being all about “how you make a modern capitalist system work more effectively, and work in favour of all of the citizens of a country and not just the chosen few, the elite at the top.”

        It is hard for Labour to aggressively debate a new economic model when its leader subscribes to the current one.

        • stormspiral

          FINALLY some of you are getting around to the basic problem. Why do you think I commented negatively about Phil Goff’s right-leaning tendencies? (vide ‘Meme to Labour). The Labour Party is constrained by its recent past, while delying its farther past.

          Don’t EVER knock the 1950s. None of you knows. I was there. It was very far from perfect, but at least humanity was part of the true societal meme of the time.

          Did any of you know Wally Nash? I did, and he wasn’t perfect either, but at least he was aware and tried to stick to the Labour Party principles, while over-subsidising the farmers.

          Hmm. Come to think of it, Mr Nash had at least one of John Key’s propensities. He also liked to roam. In those days a trip to Mother England took all of six weeks each way, and he did it quite a lot.

          And there never was a recognition of the problems of Moari. So we’ve gone ahead a bit and we’ve gone back a lot.

        • Maynard J

          Tim, do you think Trotter represents the views of most labourites, and that you have to subscribe to that view, and want Labour to also subscribe to that view, before it is possible to have a debate such as this post is about?

          If so, then you have an awfully narrow way of thinking, and you could do well with investigating what alternatives there are to the ‘status quo’ that would not require New Zealand to isolate itself from the world economy..

          A debate on the economy is not the same as advocacy of a ‘new economic model’, but it does fit with your recent theme of talking about ‘the right’ of Labour and how Goff and King need to go before Labour can be the opposition, so I can see why you invented this little straw-man. You have been doing much the same on other threads, of course, and transparently at that.

      • So Bored 1.2.2

        Maynard, like yourself I dont know where Tim is coming from here but on the subject of “Labour’s principles of a cooperative rather than competitive economy,’ have a read of Trotters latest missive. Seems that Goff has reiterated his faith in markets and competition which is, given the current economic / ecological / energy paradigm somewhat proscriptive of reasoned debate from Labour.

        I think the real issue is that nobody in NZ parliament currently has the intellectual ability or balls to frame a debate that encompasses the breadth of the issues we need to address. Their house has become a sad little rubber stamp for the current orthodoxy.

        • Draco T Bastard

          Yep, both National and Labour are parties of yesteryear. There’s been a lot of economic research over the last century to prove that classical/neo-classical economics don’t work but I can pretty much guarantee that they not read any of it.

          • Maynard J

            DtB, to me So Bored and Trotter seem to think that the solution is a centrally planned socialist (or at best, perhaps somewhat mixed) economy, and that if you do not agree with that then you are ‘to the right’. Nothing to do with any recent critques of neo-classical economics, this viewpoint pre-dates that by a fair bit.

            Perhaps I am just more economically to the right than I imagined, although there are a few things I would like to see nationalised again…

            • So Bored

              Maynard, I think we might agree that a centrally planned socialist system might be as big a liability as an open market economy. Both are demonstrably failures, which is why a pre framed debate favouring either of these options is doomed to failure. Much broader thinking is needed. Coming back to Goff, neither he nor Key appear to have the intellectual background to even envisage this debate, certainly not to partake.

            • Pascal's bookie

              From that trotter bit:

              “a well-functioning market system is the most effective and efficient way of organising an economy’. Yes, he was willing to “recognise market failure’, but only to the extent of ensuring “an adequate level of regulation‘.

              emphasis mine.

              Defining a well-functioning market as one that is ‘regulated’ to deal with ‘market failures’ potentially covers a lot of ground.

              Just saying.

            • Maynard J

              Indeed, PB, but to Trotter that is anathema. When everything is black and white, Trotter invariably comes out with a bushesque “oyou are with us or against us” and that is what he has done here. Perhaps I can see why Tim is so confused over it all – he thinks that Trotter is bang on the money and seeminly a typical representation of the left.

              Although reading that perhaps Goff is not the one to undo the damage inflicted by M. Bradford, but when the time comes I would be very interested in hearing his ideas for the economy, what he thinks is working well and what regulation is required.

              So bored – to be honest I think that (a centrally planned economy) is what Tim Ellis and Trotter are talking about. I think that within the borad economic framework we are under there is plenty of scope for debate, improvement and change. Take something likee the New Green Deal – that is exactly what it does. Things like a non-inflation based target for the RBNZ, capital gains taxes, externalities-based taxation – all of these can happen without an upheaval. Whether they are ideas Labour would consider I do not know.

            • Tim Ellis

              Perhaps I can see why Tim is so confused over it all he thinks that Trotter is bang on the money and seeminly a typical representation of the left.

              Not quite Maynard.

              Clearly Mr Trotter’s view is a common view among some on the Left. In my view, there is an ongoing ideological debate among the Left about the direction that the country should take, whether it is further to the Left, or remaining in the center. This is not just a feature of the Left, since the Right have these ideological debates as well.

              Helen Clark was able to subdue these debates because she could honestly say to those further to the Left that she was sympathetic to their views and would try the long game to gradually move the policy agenda towards the Left. I think she was pretty successful in that regard.

              Phil Goff can’t make that same claim. He’s not ideologically of the Left of the Labour Party. He’s not sympathetic to a left wing view at all. He doesn’t want to gradually shift Labour to the Left. He wants to continue a moderate, centrist course.

              The same could be said of John Key, who has rejected proposals to shift National dramatically to the Right.

              The difference is that John Key is winning, and he’s a popular prime minister in a popular party that doesn’t look like losing for a long time to come. He’s built relationships with other parties well to the Left of National so that he can tell the right wingers in Act to bugger off if he needs to.

              That deals with the potential friction from the right quite handsomely.

              Phil Goff doesn’t have that strength. The party is polling poorly, and even its natural friends are talking and or governing with National. I don’t think Phil Goff can win those ideological debates and remain leader while he’s polling at six percent.

            • Pascal's bookie

              Tim, awful lot of mind-reading going on there. Here are two questions you begged.

              What makes you think Helen wanted to be further to the left than where she governed from?

              What makes you think Key wants to govern from the centre?

              And as Felix said before, you really are all about the politics rather than the policy aintcha? Makes your reprted shift from Labour to National for the 05 election sort of explainable. Just running with the tide: which is better than the other plausible reason I’ll grant you.

            • Pascal's bookie

              “A common view amoung some on the left” though, is classic Tim.

              A common view amoung some on the right is that Hi8ler should’ve finished the job, another common view amoung some on the right is that Obama is a stealth muslim secret son of Malcom x, etc and so on.

            • Maynard J

              “Phil Goff [is] not ideologically of the Left of the Labour Party. He’s not sympathetic to a left wing view at all. He doesn’t want to gradually shift Labour to the Left. He wants to continue a moderate, centrist course.”

              Now you are just talking out your arse. Given you thought Trotter was representative of the Left (not to mention the rather incredible position you put forward, that everyone from the Left needs to think as Trotter does before the Left will be in any position to debate economic policy), your ability to know what a “moderate, centrist course” is, let alone to deduce a political figure you clearly have little knowledge of is subscribing to that course is in question, to put it mildly.

              Interesting that you are steering as far from the idea of this post as possible.

              I wonder why you are so insistent this debate can not happen. In reality all it takes is a single economic idea from Labour and it will begin, even though you think Labour and National are so alike under Goff and Key that there is no room for difference of opinion. Strikes me as a very tenuous grasp on political reality, and that you have decided to run with this Goff=right wing meme to such an extent that you not only believe it, but think the effects of it are likely to impact Labour policy as a whole. Still, like all your little memes I am sure you will be done with it soon. At least Goff has moved up from panty-sniffer to a centrist in Tim’s World (if that is really a shift up 😉 ).

              Apparently you are satisfied that Key can (and you assume, will) maintain some centrist course with help from his friends on the left, and for some reason, tell ACT to piss off from now on. If that was to happen I would not be too upset, but that you consider such a course of action likely is laughable, and that you want that to happen shows how malleable your politics are, unless you voted National to be Labour Lite alone.

              Oh, by the way, there is no debate among the Left about “the direction that the country should take, whether it is further to the Left, or remaining in the center”. There is a glaring flaw in your view there, which perhaps makes your other views make a bit more sense – you seem to have no idea what the left is, let alone what it thinks.

            • Tim Ellis

              A common view amoung some on the right is that Hi8ler should’ve finished the job, another common view amoung some on the right is that Obama is a stealth muslim secret son of Malcom x, etc and so on.

              Funny, I haven’t seen any of those things articulated by a National Party supporter, let alone a long-time columnist in a major daily newspaper. Mr Trotter was however endorsing Labour at the last general election and is a regular columnist of standing.

              There are at least half a dozen commenters here who are Labour Party supporters who believe that Phil Goff isn’t left wing enough.

              What about you, PB? Do you believe Phil Goff is the right person to be leading the Labour Party and articulating a different view of the economy, as Eddie is calling for?

            • r0b

              Funny, I haven’t seen any of those things articulated by a National Party supporter

              Check out Kiwiblog some time. Since you have vigourously argued that random blog commenters represent the view of the Labour Party, you must agree that KB commenters represent National.

              There are at least half a dozen commenters here who are Labour Party supporters who believe that Phil Goff isn’t left wing enough.

              Me included.

              What about you, PB? Do you believe Phil Goff is the right person to be leading the Labour Party and articulating a different view of the economy, as Eddie is calling for?

              Speaking for myself, much too early to say. Let’s see how he develops, it’s early days yet. Labours massive victory in Mt Albert was certainly an endorsement of Phil’s leadership.

            • Tim Ellis

              Not such a huge victory, r0b. Fewer people voted in the entire by-election than voted for Helen Clark at the last general election. Not a swinging endorsement. Mr Shearer did not increase the majority over the 2008 result. As many of National’s voters stayed at home as Labour’s did.

              National’s campaign in mount albert was pretty disastrous, so it’s no great surprise that Mr Shearer won so resoundingly.

              Labour must be counting on many, many things to go wrong for National in 2011 to claw back a twenty five percent difference in the polls. You have already identified some of the things that you think are going wrong for National, but none of them are affecting National’s vote yet.

              Good luck though, it’s nice to see an optimist about.

        • r0b

          Not such a huge victory, r0b.

          63% to 17% will do nicely thanks Tim.

          You have already identified some of the things that you think are going wrong for National, but none of them are affecting National’s vote yet.

          Yes, and G W Bush did very well in the polls early on too. Until weak leadership, ongoing crises, and out of control subordinates brought him crashing down to earth…

  2. he says ..John Key isn’t a financial illiterate, so he knows all that. ?

    I really question that . His area is the narrow one of currency trading. Which is like betting on horses when you are jockeys.
    This is why he didnt rise further in Merrill Lynch. He may wow us provincials with the patter of Wall St, but really what economics is all about eludes him still.
    And the canny Bill English isnt going to give him any tips soon.

  3. Kevin Welsh 3

    Quoted by the MSM, Eddie… nice 🙂

    I guess it goes to show that quality pieces on the interblogs get recognised further up the feeding chain.

    • Draco T Bastard 3.1

      Yes, but it still would have been nice if the source had been recognised rather than merely attributed as “a critic”. Try that in a research paper and you’ll probably get done for plagiarism.

  4. Ianmac 4

    Dame Elias Chief Justice enunciated clear cut sharply defined identification of the problems and some solutions. The result it gave Key/Power evidence to refute her ideas. Damned woman! But a target eg Sunshine TV this morning.
    Key gives no enunciated clear cut sharply defined identification of the problems or any real solutions. The result is that it is harder to criticise the vagueness of mist. Cunning eh!
    “Can’t catch me because I am neutral,’ says Key.

  5. Tom Semmens 5

    Politics is to a certain extent a generational beast, and whilst John Key is the “fresh face of a new generation” – if one is so disposed to believe the wishful wafflings of John Armstrong – the reality is this is the last government of the economic illiterates of the Rogernomics era. His government effectively consists of a core of 1990 retreads with a patina of flakey newcomers like Bennett, Tolley and Wilkinson (oh! If National were to have the strong, competent women ministers labour had!).

    Already Roger Kerr and the likes of the Business Round Table are increasingly ineffective and anachronistic voices. The cheerleaders of this lot – the David Farrars, the Nevil Gobsons – are waning in relevance and more and more being ignored.

    Once this National administration is gone the last lingering stink of Rogernomics will also be gone. The next election will be fought on privatisation. National has no choice, since their backers will not tolerate another promise not to touch Labour’s legacy. I think that if the next election becomes a referendum on privatisation, Labour will win. That will give the next Labour government a historic opportunity, given that when it returns to office in 2011 it will only be three years out of government and it will bring a wave of really talented new MP’s to office. Unlike National’s veneer of renewal built on the rotting timber of the 1990’s Phil Goff will bring experience to a foundation of new talent, finally free of the Rogernomics era.

    • So Bored 5.1

      “Once this National administration is gone the last lingering stink of Rogernomics will also be gone”. Not if Goff is to be believed, the smell of the skunk is strong and lasts long, Goff was standing next to it when it was around.

    • jarbury 5.2

      The next election will be fought on privatisation. National has no choice, since their backers will not tolerate another promise not to touch Labour’s legacy. I think that if the next election becomes a referendum on privatisation, Labour will win.

      The privatisation debate will certainly be an interesting one as we close in on the 2011 election. I agree that National can only hold back their backers’ obsession with privatisation for so long, and eventually that will have to come to the fore.

      Interstingly, a poll of North Shore City residents over the last few weeks found that around 85% of them opposed the sale of council assets. This figure was used by the North Shore City Council in their oral submission on the super city bill, but is quite fascinating given that the North Shore is a National stronghold. That result certainly suggests that National could lose a LOT of support if they go down the privatisation path.

    • stormspiral 5.3

      Politics of expediancy. That’s how we got where we are.

  6. jcuknz 6

    I can remember when a dollar was five bob … tranlated into modern terms that would mean the NZ dollar should be worth two American dollars. Obviously something has gone dreadfully wrong in the last sixty years. Too many cars, wide screen TVs, fridges, washing machines, electric shavers ad infinitum. Wages too high? We lost WWII by winning?

    • Ianmac 6.1

      I think a dollar was equal to 10 shillings wasn’t it ?

      • stormspiral 6.1.1

        10 bob. Yes

      • jcuknz 6.1.2

        I guess ypou are not as old as me becuase a ‘dallar’ was ‘five bob’. Ten shillings was half a pound and also the conversion rate for the New Zealand dollar when we went metric in the sixties.

        The lead story here is talking about the United States dollar and that is what I am talking about back in the forties. It was four US dollars to the UK pound and the NZ pound maintained par with the UK pound.

        NZ converted to decimal maing two dollars NZ to the UK pound and our ten shillings became a NZ dollar.

        Hence my converted memory about the [US] dollar being five bob or five shillings.[50cents].

  7. Sorry it’s a bit rich to quote one commentator as gospel simply because he unerringly agrees with the majority view here. Seriously, Finlay is a close to a card carrying Standardista in the MSM as you can get.

    Having said that, there is some validity in his general comments and they are ones that apply equally to both parties.

    It leads to a couple of conclusions.

    On the one hand, I have to accept that National has done little to refocus the debate on the macro-economic changes that are necessary to ensure our longer term prosperity.

    On the other hand, the great unwashed here must finally accept that Labour indeed wasted the golden opportunities to use the good years to make changes rather than ride on the crest of the bubble.

    captcha: upwards – indeed

  8. Mark M 8

    unfortunately if a debate was to be had on the economy then all the taboo issues such as privatisation , gross government overspending , state sector employment, superannuation, middle class welfare etc would need to be discussed.

    Unfortunately this would cause amass hysteria amongst the left.
    The same people who are calling for a debate.

    You cant ask for something if you dont want to hear the painful truth.

    Unfortunately to carry out your policies you need to be re elected hence nervousness about making changes that bring cries of Hidden agendas.

    After all we are still hearing the bitterness towards the Labour reforms of 25 years ago.

    • Daveski 8.1

      perfectly put – in other words, lets discuss the problems not the solutions

    • Draco T Bastard 8.2

      Just so long as the debate held all the research and not just the stuff that supports the neo-classical school I don’t think it would be that much of a problem for the left. It would certainly be a problem for the right as all their delusions are shown for what they are.

  9. Tom Semmens 9

    Mark M, I think that you would find that if National chose to campaign on a neo-liberal agenda built on privatisation, slashing government spending, slashing the state sector, axing the Cullen Fund and Kiwisaver and getting rid of WFF, they would have about twelve MP’s left in 2012.

    So I, for one, welcome their manifesto if that is what they want to campaign on.

  10. randal 10

    by definiton new zealand business is competitive and productive otherwise it would not be in business.
    the problem is that the government cannot or willnot find more enterprise.
    it is no good bleating on about entrepreneurial skills and vibrating or any of that nonsense.
    its about making things and so far except for the farming sector and a few gadget makers the only things the vibrators can make is hot air.

    • Zorr 10.1

      I think that you have something fundamentally wrong in your understanding of how modern capitalism actually works. It is no longer survival of the fittest for big, successful business so much as it is a case that the big, fat and old alpha male is now being cared for by the rest of the community. As the current saying goes, “Privatize the profit, socialize the risk”.

      For a long time my point of view on the way that New Zealand should be focusing its future economic and business development is that we have two very important attributes to our country and our society.
      1) We like to believe in clean and green – use this to reshape the debate on farming and retool our primary industry to be able to specifically target the growing community that demands conscientiously grown/raised food. This has the added bonus of improving “Clean and Green NZ” for tourism marketing.
      2) We are a nation of “No. 8 Wire” solutions – as a nation, we prize entrepreneurs and we should foster this as much as possible. However, the idea that we should be producing and labeling “NZ Made” products is fallacy to me. We just don’t have the population base for that, we need a knowledge economy predicated on the fact that we have the brains to come up with solutions and then mass produce them in other countries.

      captcha: education

      • Draco T Bastard 10.1.1

        However, the idea that we should be producing and labeling “NZ Made’ products is fallacy to me. We just don’t have the population base for that,

        You can design and build a large factory that employs 100 people anywhere in the world. There’s a reason most developed countries have a greater and greater share of the economy as service jobs. Transportation from NZ is the problem there, not population.

        we need a knowledge economy predicated on the fact that we have the brains to come up with solutions and then mass produce them in other countries.

        I think you’ll find that China has just as many bright people per head of population as we have – they also have 1.3 billion people. I read an article awhile back that put it succinctly (paraphrasing) Today the iPods Have “designed in the US, made in China” on them. Tomorrow they will say “Designed and made in China” When that happens, because it will, what will we trade to China, and other countries, for those products?

  11. vto 11

    randal i dont think thats quite right. making things is so yesterday.

    in the very very olden days the economy consisted of people going about hunting and gathering. that took up nearly all the available energy.

    then along came the thought to plant plants and raise animals thereby doing away with hunting and gethering. this of course resulted in redundant hunters and gatherers. but it was only a transition phase.

    so then of course agriculture freed people and energy up because not as many were needed to feed everyone.

    This freed energy eventually led to people making tools and things to assist with improving life etc. which of course sparked the making things age (industrial revolution i think some call it) and it was all hands on deck to make things.

    But now of course things have been made that make things so we dont need as many people to make things. and so there is some redundancy in the current transition phase.

    which leads to the next phase which is… um … anyone have a crystal ball?

    anyway, point being that getting people to make things is no answer. the making things age is in its death roll. (clearly there will always be some need for thing makers, just like there is a need for plant planters).

    the economy is simply about human activity. people getting up each morning and going about life in a fruiful manner, whatever that manner is. so the answer o the debate is to get people active – in whatever field. so come on – get offa the computers people and get active. do something.


    • Zorr 11.1

      Nice to see someone else actually shares my point of view that staying stuck in the current rut is not a real solution.

  12. Tom Semmens 12

    Here we go then, here are some of my ideas:

    First of all, income:

    – Introduction of a land tax similar to New South Wales, it would dampen housing speculation and around two billion dollars.

    – Introduce a Financial Transaction Tax – this is a tax easily gathered, makes masses of lollie for the government and very hard for corporates to avoid. It is therefore vigorously oppsed by all of them, which makes it a perfect tax to impose to me.

    – Reintroduce 33%, 40% at around 100k and 50% at 175k personal tax rates and index all personal tax rates to inflation.

    Then, the competitive environment:

    – Exchange rate controls aimed at stabilising the currency.

    – Controls on foreign ownership of key economic levers – Require the floating of 51% of any trading bank operating in New Zealand on the New Zealand share market.

    – A very strong anti-trust law to limit cartels and monopolies within NZ’s service sector.

    – Tariffs and targetted assistance to reverse the de-industrialisation of New Zealand. If we can tell Australia to fuck off on Vitamin B9 we tell the WTO no parliament is bound by the decisions of a previous parliament.

    – Much stronger regulation of the entire finance sector and share market, aimed at restoring faith in investment for productive rather than speculative gain.

    Finally, send the signals for raised productivity:

    – Make all education and training conducted by NZQA qualified institutions tax deductable.

    – Introduce R&D tax breaks.

    – Introduce tax breaks for investment in plant and machinery that improve output.

    – Introduce a employer-levy funded training sabbatical year at 80% of your income for every fifteen years of employment. in other words, if I started work in 1994 then this year I would qualify for a fully funded year of study at an approved institution (in agreement on the study program with my current employer) at 80% of my inflation adjusted salary over that time.

    _ Change the current contestable funding model for scientific research. Universities & government research facilities, for example, should be funded on a ten year cycle for science & research projects and the private sector on a five year cycle.

    – Cancel a student’s debt if the student achieves their qualification and agrees to stay working in New Zealand for a period not less than twice as long as they studied.

    – raise the minimum wage to twenty dollars over six years. This would allow trickle up of consumer spending and provide a beneficial boost to the local economy.

    – restore benefits to pre-Richardson levels (inflation adjusted). See justification to minimum wage rises.


    • Tim Ellis 12.1

      I appreciate the sincerity of your views, TS, and how you’ve come up with your concrete ideas to move New Zealand in the direction you want it to go in.

      It begs two question for me, however.

      Firstly, how can you be such a staunch Labour supporter when the last Labour government, after nine years, did nothing to advocate for any of these policies while in Government let alone implement them?

      Secondly, what faith do you have in Mr Goff and Mr Cunliffe to take up the cause for these policies?

      Thirdly, a related question: do you think many people in the Labour Party might share your policy prescription?

      • stormspiral 12.1.1

        You’re begging the question, though I’m not too sure about the science cycle, considering some of the shonky work that’s been coming out of the labs lately, from all over the world, though a lot of what we hear is dumb media sensationalist choices.

        Goff has to be factored out.

        Yes. It’s a dream, but without dreams and concrete suggestions, we are all dead, along with the poor whom we are killing off at the moment. Pity we couldn’t set up a memorial, and name them…just to give them a voice.

  13. Tom Semmens 13

    Oops – I forgot to add – restore all the Kiwisaver and Cullen fund cuts made by the current government and announce that kiwisaver will be made compulsory at the 4+4 level over six years.

  14. Pat 14

    The problem is, Tom, that a lot of your ideas (without debating the merits of them) would be difficult to campaign on and to win an election on the back of e.g. your tax ideas. Hence it is unlikely that a Goff-led Labour party would be pushing such a policy program when they are trying to win back the centre ground.

    The changes you suggest are better implemented once a party is in government, and is confident of staying there. Unfortunately our 3 yearly election cycles hinder the implementation of fundamental changes to the economy such as you are suggesting. Perhaps an argument why a 4 year cycle is better.

  15. Tim Ellis 15

    PB, I’ve taken the liberty of popping this thread down here rather than immediately before your comment, because replying that far into a thread irritates me.

    What makes you think Helen wanted to be further to the left than where she governed from?

    A lot of reasons. How she railed against Rogernomics and its adherants (although much after the fact), yet didn’t actually dismantle any of its core features in the economy. In my view she was gradually pushing New Zealand further to the Left. I assume that her stated goals, such as sustainability, student allowances etc were things that she long wanted to achieve rather than just came up on the eve of an election. I also assume that she’s further to the Left than Phil Goff

    What makes you think Key wants to govern from the centre?

    I base this on the governing arrangements he’s put in place to buffer National from the extremism of the Act Party, his commitments to the welfare state, his rejection of several of Don Brash’s policies, and his commitments to many of the policies Labour introduced which some on here are claiming as evidence that Labour won the debate.

    • Pascal's bookie 15.1

      But those things she did Tim, which you claim are examples of her leftishness, are the things you claim Key is a centrist for supporting. If she was a secret leftie, why didn’t she move further to the left than what you now claim is ‘the centre’ when describing Key.

      Are you saying Goff opposes those things from the right? .

      Do you not think that Key wants to get rid of them? Look at the appointments he made Tim. If he doesn’t like Brash, why appoint him commisar of productivity? If he doesn’t like ACT, why give them dosh for research and troublemaking in the coalition agreement?

  16. Tim Ellis 16

    PB, do you think Helen Clark shifted the government further to the Left of the last Shipley Government? Do you think she did it in one hit, or in incremental bites? Do you believe that the Government in 2008 was as far Left as Labour was going to go under Helen Clark?

    If the latter is the case, then really it highlights the pointlessness of this whole post, believing that Phil Goff is somehow going to drag Labour’s direction to the Left of what Helen Clark would have done or wanted.

    John Key has made many appointments PB. He appointed Michael Cullen to several major boards. As for giving Act “dosh for research and troublemaking”, the Greens were given advisers as well by the last Labour government.

    • Maynard J 16.1

      Tim, what you said this post is about is nothing at all remotely like what the post is about. What are you talking about? Is this comment on the wrong thread? If so, where is the post about whether Goff is more left than Clark, I have not read it and would be keen to.

      however, do you think Goff is to the right of Key?

      If you do not, then being the leader of the largest opposition party would make Goff one person in a good position to suggest alternative economic ideas to those Key would rather pursue. He does not have a monopoly on being able to suggest ideas though, as you seem to believe.

      Your last sentence does not really help your argument by the way, since you are trying to argue National does not like ACT’s policies – Labour had a habit of supporting the Greens’ policies.

      • Tim Ellis 16.1.1

        For goodness sake, Maynard, read the thread for crying out loud.

        I didn’t say Phil Goff couldn’t advocate a different economic direction. I said that a lot of his supporters evidently want him to take a more left-wing position. I said that he isn’t taking that direction, and there is no sign that he will. I said that Mr Goff’s reluctance to take a more left wing position would cause friction among those further to the Left of him in the Party, and that it would undermine his leadership.

        Eddie wants there to be a debate about the economic direction of this country. That is the point of this post. It is very pointless crying out for such a debate when the leader of the largest centre-left party doesn’t want to engage with it, because he doesn’t share the left-wing views of those who want the debate to happen.

        • Maynard J

          You said “the pointlessness of the post”, Tim. You then spun some stupid meme that had nothing to do with the post, and are now pretending that is the point of the post.

          I am aware of all the little points you made above, and note that you are avoiding the most obvious question because it makes those points look completely stupid.

          I repeat: do you think Goff is to the right of Key? If not, then we can have that debate. If you do believe that, then there is no point engaging with you.

          And calling the post pointless even if what you imagine is true – signalling to the party leader that a debate on economic direction is overdue… What could possibly be pointless about that? What the hell are you bothering with any of this for if you think that is pointless?

    • Pascal's bookie 16.2

      Thing is Tim, I don’t pretend to know what goes inside politicians heads. Not doing so means I judge whether or not to support them based on what they say and do.

      You seem to think that once you’ve put say, Goff, in a box, then that’s him quantified and anything outside of the label you’ve put on him is inconceivable.

      I think that’s a pretty stupid way to approach it myself. He is a politician, I’d expect him to act like one.

  17. Irascible 17

    I agree. Findlay MacDonald’s piece was worth reading and did make a change from the yawning PR pieces usually published in the NZ print media. What is worth noting is that he has begun to examine and demonstrate the essential shallowness of the Key PM ship and the distortion that the use of economicspeak has on the actual content of the speech. Once key’s jargon is removed the emptiness of the rhetoric is exposed despite the protestations of the Timmy Ellis’s of this world.

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