Yesterday I attended the rally in Civic Square protesting the government’s latest attacks on worker’s rights. It’s always interesting to put events of today into context. This quote comes from Peter Fraser’s speech to Parliament on the Employment Bill back in 1945:
“…if we have learned anything … it is that the worst thing in the world is to go on making a depression worse by reducing incomes. At that time, the whole power of the State should be used to maintain purchasing-power … I declare that as long as this Government remains in office, notwithstanding what happens in the outside world, notwithstanding what happens to prices, even of our own commodities, we can still produce sufficient to house and feed and clothe adequately our men, women and children, and particularly the children. Never again will this country be permitted to return to the terrible conditions that prevailed before this Government came to office. It is indeed a terrible thing and a reflection on our civilization that, in a land of plenty, children should lack sufficient to eat…”
The old cliche goes that those who don’t learn the lessons of history are bound to repeat them. Ministers in the current National government obviously didn’t pay much attention during their history lessons. Since coming to office they’ve slashed spending on many vital public services, laid off thousands of public servants, and yanked away vital support from many of those who find themselves down on their luck. The purchasing power that Fraser alludes to is being eroded through their GST increase and the inflation it will cause, along with their unofficial ‘wage freeze’.
National’s latest moves to impose ‘fire at will’ provisions on all new employees and sell their holidays will only make matters worse. National promised Kiwis they were ‘aspirational’ – the question is for whom? It certainly isn’t ordinary hard-working Kiwis who are struggling with rising costs, stagnant wages, and lower levels of support from their government.
Fair wages and good conditions are important for society. Bad government! Grrrrr
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Of course this is basic Keynesian economics which advocates doing things against the tide: saving when times are good and paying down debt, in order to be in a good position when times are bad, to do the opposite.
What occurs to me looking at history is that unfortunately, during the recent good times – best in living memory – we didn’t do all that we should in terms of wisely squirreling away our winter nuts. We could have been completely debt free earlier than Australia, instead we never even approached it thanks to very specific but extremely large spending on interest groups that coincidentally had a high Labour vote in them. Such as the interest-free student loans which wasn’t required to address any immediate social need other than the one which involved getting Labour re-elected.
Given that we’re currently hemorrhaging $250m per week, I’d say that the current govt doesn’t have much of a choice, thanks to the limited range left it by the predecessor. Which wouldn’t have been so bad, had the result of it’s unwise spending during the good times been spread evenly around.
And when I now look around at her emerging legacy, I don’t actually see a lot of significant lasting change. I don’t see any infrastructure, any engineering, nothing physical. I don’t see leaps and bounds in education or health or science or industry either, compared to where it was before she began.
I’m not sure Peter would have been too impressed, quite honestly.
You forgot English and Key were calling for the last Labour Govt to slash taxes instead of paying down debt. Cullen took the long term view and while many thought he kept taxes too high he paid down NZ’s foreign debt.
Maybe you should write something about how English and Key are happy for NZ to borrow from overseas to help fund their personal $300 pw tax cuts.
“Cullen took the long term view and while many thought he kept taxes too high he paid down NZ’s foreign debt.”
I didn’t say we didn’t do it all, Loota, I said:
“…we didn’t do all that we should.”
“Maybe you should write something about how English and Key are happy for NZ to borrow from overseas to help fund their personal $300 pw tax cuts.”
So what about it not being a direct cost but a stimulus don’t you get. It’s unfortunate that GST also has to rise, but again, that’s a reflection of the lack of options that were left by Labour.
Your presumption of how the PM’s tax cuts to the wealthy will work is incorrect. These monies will go into the shares and bonds of Wall St, the rich won’t spend it as a stimulus on Main St.
The rich won’t be buying an extra dinner a night, they won’t be buying an extra TV a month, etc. with this money. Its simply going to go into building their own personal asset base.
And further, the PM and DPM are borrowing to fund $300 pw tax cuts for themselves and you are complaining about Labour not paying down enough foreign debt?
This is merely a variant of the “9 years of damage” line that NACT have been pulling in the Beehive all year to disguise their lack of imagination over what to do next.
But there is one real constraint on National’s right wing ideology and that is the fact that they need to be careful not to scare moderate voters ahead of 2011.
Who is this “we” you are talking about? Because you’ve been praising NAT a hell of a lot and haven’t been critical of them doing nothing but increasing our debt, by $250M p.w.?
Firstly Loota are you rich and secondly if not how do you personally know every single rich person in the country? Because in order to predict that above, then you must, right?
Secondly what about the people who aren’t rich who also get tax cuts: i.e. everybody. Don’t they count?
The basic re: stimulus Loota is that those with disposal use it to accumulate and eventually invest in capital markets and what’s wrong with that. Those to whom its not disposable spend it on consumer activity, which is what makes the capitalist world that you live in, everyday, go round. It’s not pretty when that stops. What are you going to spend your tax cuts on, Loota? A Labour Party subscription?
I’m glad you’re no longer using “we” to include yourself as Labour.
(1) Like I said, the money goes into Wall St investments, not to Main St. Every day people see nothing of it, it goes to Jonkey’s mates in the investment banks to play with.
(2) Those to whom its not disposable spend it not on consumer activity, they spend it on Bill and John’s GST increases.
(3) Meh capitalism is our current system in the western world, there have been others in the history of civilisation and there will be again.
(4) Good question. I think I think I will come out ahead personally with the tax cuts. But I am sorry to see my friends decide to send their kids to do uni in Australia instead of NZ, and I am sorry to see adults in my community struggling without access to education, and the frail elderly have to fend for themselves without home help.
All in all I’d rather give back the extra dollars per week in tax cuts to see all these areas of my community properly looked after and not scrimped on and corners cut on. You?
“The old cliche goes that those who don’t learn the lessons of history are bound to repeat them.”
Precisely. Policies aimed at “maintaining purchasing power” turned a stock market crash into a severe depression by preventing labour prices from falling in line with other market prices when deflation kicked in after the inflationary boom of the 1920s. The policies you advocate caused millions of people to starve when letting the market adjust to the smaller money supply would have seen the depression finish within a year.
Excellent quote Chris, you need to run it up the flagpole again in view of recent news about hungry kids.