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Archive for the ‘Economic Development’ Category

What’s half a billion between the Government’s friends?

Posted by on May 8th, 2013

Half a billion dollars. $500 million dollars. It’s an almost unimaginable amount of money to an ordinary person.

Half a billion is almost a third of Police’s annual budget. It’s more than DOC’s entire funding.

It’s a year’s wages for 4,150 experienced nurses and 4,150 experienced secondary school teachers as well.

It’s $113 for every man, woman and child in New Zealand.

And it’s the amount National promised Peter Dunne last week for potential overruns in his “upgrade” of IRD’s computer system.

Yes, you read that correctly. I’m not talking about the known project costs – National has committed $1 billion for those.

The extra half a billion is just in case Mr Dunne blows through the first billion without getting the job done. It’s a shadowy “slush fund” equal to half the basic worked-out cost of the project.

And let’s be frank – the Revenue Minister’s reputation for basic maths hasn’t been strong of late. This year Dunne’s had to back down on reckless new taxes on car parks and iPads and laptops and cellphones, because Labour proved he hadn’t done his sums.

But what do the experts think? Well accountants KPMG reviewed Mr Dunne’s project at the end of last year and there appear to be real issues with the way it has been set up.

Here’s what KPMG said:

“We do not believe the timeline presented… is achievable. A programme of this complexity, where scoping and articulation of long-list options, a robust options assessment (critical for Treasury support) and the programme’s design (i.e. ordering of tranches and projects) have not yet occurred.”

Now Labour does agree the IRD’s FIRST mainframe is not fit for the internet age. IRD started as a revenue collecting department, but now it has responsibilities in KiwiSaver, child support and student loans.

But surely a project of this magnitude needs to be planned better than “give or take half a billion”? Especially after this Government’s total botch-up with Novopay.

It all beggars belief really, just as National and Peter Dunne will beggar New Zealand until they’re given the boot at the next election.

Filed under: Economic Development, economy, Revenue
4 Comments

Saving New Zealand’s own eel

Posted by on April 23rd, 2013

We’re a passionate people about our natural environment. From the kiwi to the kauri, from the black robin to Maui’s dolphin, our shared sense of responsibility to protect (and when necessary save) our native flora and fauna unites New Zealanders from all walks of life.

The longfin eel (known in Te Reo Māori as tuna) is this country’s only native eel. It’s an amazing species.

Longfin eel only reproduce once in their lifetimes. When the females reach about 80 years of age their instinct drives them from their homes in freshwater streams and rivers out into the sea, and onto a journey of thousands of kilometres to the Tonga Trench where they breed and pass away. Their spawn are carried by ocean currents all the way back to New Zealand, where they make their way up the rivers and that very slow reproductive cycle begins again.

Tuna are taonga to many Hapu and iwi, and at times in history they have been a crucial food protein source for Māori.

Indeed eel is a reasonably popular food in West European markets, particularly in Belgium and the Benelux countries. New Zealand fishers have long exported to Europe and recently there’s been some tentative steps towards selling into Asia.

The available science shows longfins are in decline. They are particularly susceptible to water pollution and sedimentation, and their slow breeding cycle has been disrupted by overfishing and damming of rivers.

Perhaps the starkest evidence is the size of the commercial fishery. At 82 tons it has dropped a whopping 96% since the 1960s.

Yet, for all which we do know, our longfins remain mysterious creatures – and we as a country don’t have adequate science to know just what is required to turn around their path to extinction.

That’s a gross failing on the part of Primary Industries Minister Nathan Guy, who is supposed to be responsible for fisheries science, as well as Conservation Minister Nick Smith who is responsible for the DOC estate where much of the population lives.

In the face of hands-off inaction from the Government, Parliamentary Commissioner for the Environment, Dr Jan Wright, launched her own investigation into the status of longfin eels. Last week Commissioner Wright released her comprehensive report, and it’s a true landmark.

The Commissioner calls for better science, which is a no-brainer – but also for a total moratorium on the commercial fishery.

Now a moratorium is a bold step which would hit fishing communities and some iwi in the pocket. However if the eels go extinct the outcome is the same – only we’d all be the losers.

Conservationists and fishing industries around the world have long looked to New Zealand as an example of a country where the people care for the environment, and as a an early leader in science-based quota management. If the choice is extinction or saving our native eel, then I expect New Zealanders will want their Government to take responsibility and rescue our natural heritage.

So the Government’s deafening silence in the face of Commissioner Wright’s report has been truly disturbing. Ministers haven’t even issued press releases, and the only acknowledgement of the report has come from officials.

I asked Nathan Guy “Is he concerned that the longfin eel (tuna) might go extinct; if so, why, if not, why not?” and here’s what he said:

I will not be able provide the Member with a response within the timeframe available and will endeavour to provide this response at the earliest opportunity.

I received that non-answer three weeks ago but haven’t heard a peep from the Minister since.

The Parliamentary Commissioner for the Environment couldn’t have been clearer that the time for action is now. If we don’t commit to saving our native eel then it will go extinct – and extinction is forever.

Could it be that the National Government are so hands-off and hostile to the environment that they just don’t care?

Filed under: Comservation, Economic Development, economy
14 Comments

Tell us it’s Dunne and dusted now Peter

Posted by on March 13th, 2013

United Future leader and Revenue Minister Peter Dunne’s belated recognition that he holds a casting vote in John Key and Steven Joyce’s shonkey SkyCity convention centre deal is welcome.

The question remains, however, whether Dunne will use his veto to stop the sale of our country’s laws to a casino.

Because he most certainly should.

By Dunne’s own admission the National Government “did play very fast and loose at times” during the rotten tender.

The Deputy Auditor-General was more clear – the deal was “unfair” and managed so the “SkyCity proposal was always going to be the most attractive”.

Last week Dunne (finally) appeared to lay down a challenge to the National Government which he otherwise supports:

There is a time-bomb warning to the government here. Support for the cut through approach will wither if it is seen to be a standard proxy for bending the rules or doing special deals to achieve the desired outcome. While the government is not immediately vulnerable on this issue, the clock has started ticking.

And it is worth remembering the adage, the ends do not justify the means.

Well National has responded to Dunne’s challenge.

I asked Steven Joyce written Parliamentary question [1307 (2013)]:

Does he regret any of his actions as Minister for Economic Development related to the Government’s decision to negotiate with SkyCity Entertainment Group Ltd for an international convention centre; if he does, which actions?

And Joyce has (finally) responded with one word:

No.

This is just about the only time I can recall the Economic Development Minister giving a straight answer to any question. But what an answer it is.

With one word Joyce has confirmed he’s learned nothing from the Deputy Auditor-General’s scathing criticism. He’s thumbed his nose at fair and proper process, at accountability to the people of this country, and at their hard-earned (but fast fading) reputation for having the lowest level of Government corruption in the world. Joyce has effectively confirmed that so long as he’s a Minister he’ll trade New Zealand’s laws if he sniffs a special deal for the big end of town.

So there you have it Peter Dunne. National do think the ends justify the means. The time-bomb has exploded.

And you – and only you – can put a stop to this madness.

The question the whole country wants to know is whether you will. So do it today Mr Dunne.

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Filed under: Economic Development, economy, Revenue
5 Comments

Economic Development

Posted by on February 28th, 2013

David Shearer has been clear from the start that he wants a clean, green, diversified economy – to ensure New Zealand’s future prosperity.

With my appointment as Economic Development Spokeperson comes a big challenge. We need to present a credible plan to get to a prosperous diversified economy.  I’m excited about this opportunity.

Steven Joyce spent a year with the huge bureaucratic resources of MoBIE and failed to map anything but a managed decline. His ‘Business Growth Agenda’ finalised yesterday has proven little more that a year long coms plan. It’s been a year of existing policy re-heats with a few meek ideas thrown in for colour.

But Joyce is vulnerable. Because the facts are drowning out his spin.

Last year 30,000 jobs were lost.  Unemployment is pushing 7%.  1000+ Kiwis are leaving for Australia permanently every week.

No amount of spin can hide the fact that the Government has no plan for sustainable economic growth. Selling off our best revenue-generating assets is National’s big idea.  Treasury says it will set back the Government coffers by about $100m/year. Other than that, they intend things to continue as they are.

I’ve always maintained that the market makes an excellent servant and a terrible master. And this Government is failing to control the market. It is failing to deliver jobs. Right now so many hard-working New Zealanders are being treated like its slaves, forced to be grateful for any scraps that fall from the table. A full 40% of Kiwis earn less than a living wage.

Labour already has chunky policy announced that will lead to economic growth, jobs and an export-led recovery. In particular we want a pro-growth capital gains tax, Research and Develoment Tax Credits, Universal Kiwisaver, Pro-Kiwi procurement policy and tools for the Reserve Bank that will allow it to do what overseas countries are doing to assist their exporters.  These changes will give the economy a shot in the arm and create jobs.

There is more to explore.  Sector-specific incentives for growth beg consideration, as do the implications of Labour’s affordable and healthy housing announcements.  They will create jobs as will our commitment to creating more apprenticeships.  Labour wants a market that generates jobs, living wages and future prosperity for our country.

We need change, because the old solutions have been shown to fail. Right now, the market and it’s hands-off disciple Mr Joyce are not working in the interest of New Zealanders.

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Filed under: economic, Economic Development
32 Comments

Moving on to the next challenge

Posted by on February 25th, 2013

I have enjoyed the Health portfolio. It is huge and arguably, it takes longer than one year to get around and establish networks. I have been doing that in the past year and I am grateful to all those who were prepared to engage intelligently and repeatedly with me. I have been pleased to stick up for diabetics in the disastrous changeover to the Care Sens blood glucose meters. It was a mistake and should be rescinded. It affects the way people manage their diabetes and directly impacts their well being, especially for Type 1 diabetics.

I have also made a running on the increase in prescription charges, changes to pharmacists’ contracts with the DHBs, and the burden of implementation of changes falling on local pharmacies. This sector is in chaos and Tony Ryall continues to pretend that there is nothing to see here. Shelves full of uncollected prescriptions would say otherwise. If people can’t afford medicines, and some clearly can’t, we are only going to see additional hospitalisations further town the track.  This isn’t rocket science – just medical science.

But now I take up a new challenge with the Environment portfolio.  And there are challenges aplenty.  We would all love our myth of being 100% pure to become fact again but we need aggressive leadership in this area if that is ever to happen. From our waterways to our air quality, and much more besides, there is much to do to restore our natural environment and to protect it for future generations.  I look forward to that challenge.

Thanks again to all you good health folk for working with me over the last year.  Keep up the good work!

Filed under: #OpenLabourNZ, climate change, conservation, Economic Development, environment, Green Jobs, health, tourism, trade
6 Comments

Today the house must not win

Posted by on February 20th, 2013

New Zealand is a small, remote country with an unfortunate reliance on imported capital to maintain our standard of living. A crucial insurance for the economy is New Zealanders’ hard-earned reputation for having the lowest level of government corruption in the world.

Or at least that’s something we had.

I write this post with the heaviest of hearts because I know how completely National has jeopardised the economy. I know how foreign investors will be frightened by the truth. Their reaction could see more hardworking and innocent Kiwis turfed on the unemployment scrapheap.

Ultimately, though, there is an overwhelming public interest in having on record just how low Prime Minister John Key and his factotum Steven Joyce have sunk in their bid to trade our country’s laws for a casino’s cash.

Yesterday the Deputy Auditor-General released her report into the tender process for the SkyCity convention centre. At 71 pages it is among the longest and most damning auditor’s reports I have seen. John Armstrong, writing in the New Zealand Herald, assessed the tender as “verging on banana republic kind of stuff without the bananas.” Armstrong was too polite.

Labour leader David Shearer summed the report up more completely: “Kiwis know [Key] was donkey deep in this entire process. The deal with SkyCity was his idea. He knew exactly what was going on and was pulling the strings behind the scenes.”

I have followed the convention centre tender since it first came to public light in 2010 – months after John Key had a cozy dinner with the casino company’s board and (in the PM’s own words) “discussed a possible National Convention Centre and they raised issues relating to the Gambling Act 2003”.

As time has passed I have become more and more outraged by what was transparently a stacked process seemingly designed to ensure SkyCity was the only tenderer left standing at the end.

All throughout the National Government have obfuscated, played cat-and-mouse games with the Opposition and the media, and denied multiple Official Information Act requests on the most specious of grounds.

Not only did ministers refuse to answer more than 100 of my parliamentary questions on the SkyCity deal – but they even took to using the SkyCity deal as a supposed reason to refuse answering dozens of questions which were quite unrelated to the casino!

The Commerce Select Committee (which I am a member of) even had to take the most extraordinary step of recalling Ministry of Economic Development/MoBIE officials to a second testimony session, following their failure to answer legitimate questions as part of the committee’s 2011/12 financial review.

As the years passed and the stench of the rotten tender grew overpowering, the sole explanation Key and Joyce offered for their preference for SkyCity was that taxpayers wouldn’t foot the bill for the conference centre. But that was an outright lie – $2.1 million of your dollars were diverted from the Christchurch earthquake recovery effort and other economic development programmes to support the convention centre design!

Finally, when the Deputy Auditor-General prudently announced a probe into the whole sordid affair, Steven Joyce vowed to push on in contempt of her. In my time in Parliament I have never seen anything like it.

But now the auditor has published her report. Her findings are damning and they back up what I have been saying and what my Labour colleagues have been saying since 2010. It is beyond comprehension that Steven Joyce did not resign from the ministry immediately after receiving the report.

The Deputy Auditor-General’s findings include (and I quote):

  1. We do not consider that the evaluation process was transparent or even-handed (p5).
  2. SkyCity was treated very differently from the other parties that responded [to the tender] and the evaluation process effectively moved into a different phase with one party… the steps that were taken were not consistent with good practice principles of transparency and fairness (p5).
  3. The Prime Minister/Minister of Tourism… annotated the [tender] briefing paper by hand, stating that “we should close off the SkyCity angle first” (p15).
  4. It was well known among officials that SkyCity had met with various senior Minister in the previous months. In our view, there was an obvious risk that SkyCity would have a better understanding of the Government’s thoughts than other participants (p45).
  5. There were a number of flaws with the way the evaluation process unfolded during 2010 (p50).
  6. Given the nature of the responses, it is likely that the SkyCity proposal was always going to be the most attractive (p51).

So what are the broad consequences for New Zealand?

Has the opaque and unfair SkyCity deal been scrapped? No.

Instead National has thumbed its nose at the auditor’s office and is about to restart the negotiations. They have to finalise pesky details such as how anyone will receive the television news once a hulking great pokie palace is plonked where our state broadcaster has some of its studios.

Has the Government promised not to change the law to flood central Auckland with very low-taxed pokies, while taking money out of high-taxed pub pokies which fund kids’ learn to swim programmes and quit gambling programmes?

It’s a no to that too.

As my Labour colleague Ruth Dyson succinctly put it “The convention centre will not be ‘free’. The social cost for New Zealanders and their families battling problem gambling will be significant.”

So National seem quite happy to plough along with their trade in our laws, whatever the consequences. Well Labour will fight them every step of the way. I can only hope that the government’s support partners in the Māori and United Future parties will do the right thing and join us.

Ultimately, though, this is not only about one shady deal – although one shady deal is clearly one too many.

This speaks to the whole world about what sort of country New Zealand is in our collective soul. It speaks to the truth about whether we have a clean government which stands up and stops corruption wherever its finds it. Or whether we don’t.

And it speaks to our longstanding core values of egalitarianism and equality. Labour MPs face the human casualties of the National government’s economic mismanagement in our electorate offices every week. We know the despair felt by ordinary, honest kiwis who can plainly see that John Key’s ‘brighter future’ means one law for them and sweet deals for his mates at the big end of town.

The casino deal is a total disgrace. Clearly John Key and Steven Joyce don’t care.

So, in light of the Deputy Auditor-General’s report, I am publicly calling on SkyCity to formally withdraw their current tender. That should trigger the entire process to restart from the beginning, so it can be run fairly and transparently.

I look forward to SkyCity’s quick, positive and public response.

Extra: David Shearer, Grant Robertson, David Parker and Ruth Dyson all gave excellent speeches on the convention centre deal in Parliament today. Well worth a watch!

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Filed under: David Shearer, economic, Economic Development, economy
26 Comments

National 100% dirty on the environment and the economy

Posted by on November 15th, 2012

This month the National Government pulled New Zealand out of the Kyoto II negotiations to tackle climate change. With John Key’s blessing, the Minister for Climate Change Issues Tim Groser put our country squarely in the fringe group of the world’s big polluters. How can National expect the developing world to commit to targets for curbing emissions when they won’t show good faith by doing the same?

Everyone can see the National Party are lost in a time warp on economics and the environment. In National’s twilight every problem can be ignored just as long as their mates can milk more cows and burn more coal, and especially if everyone else can be kept quiet. That’s why National abolished democracy in Canterbury: they’re so consumed with protecting their failed ideologies from the facts that they can’t even tolerate Cantabrians having a voice to say our rivers shouldn’t be making kids sick.

Today the Pure Advantage clean-tech group of business leaders issued their second landmark report on the multi-trillion opportunity in clean-tech and renewable energy.

The report comes with detailed analysis from some of the world’s leading economists and climate scientists. It’s a must read for anyone with an interest in turning around New Zealand’s economic decline.

Pure Advantage’s contribution proves what most New Zealanders instinctively know: the economy and the environment are two sides of the same coin. Protecting our environment not only doesn’t have to harm our economy – it can be the best thing for it.

Earlier this year, when Pure Advantage launched their first report, Economic Development Minister Steven Joyce responded with an insulting attack on the trustees which include Sir George Fistonich, Rob Fyfe, Chris Liddell, Phillip Mills, Jeremy Moon, Rob Morrison, Geoff Ross, Justine Smythe, Mark Solomon, Sir Stephen Tindall, Joan Withers and Duncan Stewart.

But today Bill English was trotted out to do the government’s dirty work.

The Finance Minister had hours of advanced warning that I would be grilling the government about Pure Advantage: my question was on written notice.

But in all that time English didn’t even bother to read the report. It’s a 100% dirty disgrace.

In the coming days National MPs will spout all the usual nonsense and deny and demean science and sustainable economic growth, and may abuse the Pure Advantage team some more (unless they’ve learned from their earlier foot-in-mouth outbreak).

But the facts are clear. This government took New Zealand out of the international effort to stop climate change and they’ve just set a new record for unemployment too. National have no credibility on either the environment or the economy.

The only way New Zealand will have a clean, green, clever and growing economy is if Kiwis clean the National Party out of our Parliament come election time.

Filed under: climate change, Economic Development, economy, Green Jobs
6 Comments

The right-wing track

Posted by on November 13th, 2012

History suggests the “right track” in politics often leads to inequality and bad outcomes for ordinary people.

Back when today’s university students were still in kindergarten Bill English was New Zealand’s Finance Minister. English’s first half-life at Treasury is mainly remembered for setting a new record in unemployment.

Decades later, zombie-like, Bill English is back with responsibility for our economy. And last week history repeated when the National Government set a new record for unemployment in our country: 7.3% and trending upwards.

A reasonable person might expect the minister to reconsider his policies now he’s won a double-crown for atrocious economic management. After all English was a dry neoliberal obsessed with his ideologies and prejudices and wholly unmoved by evidence last time around. Now in John Key’s government he’s exactly the same and it’s delivered exactly the same awful result.

But no, there is no reflection. Today Bill English was asked in Parliament “What results has he seen of progress in the Government’s programme to build a more competitive economy?”

He replied “We have seen good, steady results.”

If record and growing unemployment is a good result for Bill English then what on earth would a bad result be? Probably it’s an economy where his mates have to pay their fair share of taxes like the rest of us.

But the Finance Minister’s boss sets the tone. And John Key has Steven Joyce as his as Economic Development Minister alongside Bill English so that says it all really.

Almost as soon as the Finance Minister had resumed his seat the Prime Minister jumped up to proclaim “I definitely think we are on the right track”.

The “right track”? Seriously?

Every fair-minded Kiwi can see that 7.3% unemployment is unacceptable. People know that declines in job ads, and over-speculated currencies, and unaffordable housing, and manufacturers in crisis, and the exodus of young people to Australia might be the result of right-wing policies. But the policies are not right.

Under National, the only track New Zealand is on is the right-wing track to ruin.

Filed under: Economic Development, economy, finance
17 Comments

Unemployment: The National scourge

Posted by on November 9th, 2012

The National Party is a downright irresponsible manager of New Zealand’s economy.

John Key inherited from Labour one of the lowest unemployment rates in the developed world. This Prime Minister promised to create 170,000 new jobs, but instead we have 175,000 looking for work.

Overall unemployment  is up to an horrific 7.3%. That’s the worst rate in 13 years – and guess which party was in government the last time things were this bad.

What’s worse is when you drill down into the detail. It’s much worse.

Auckland’s unemployment rate is up to 8.6% at the exact same time as tax-driven property speculation pushes house prices hundreds of thousands of dollars beyond what ordinary families can afford.

In the Hawkes Bay unemployment is now 8.9%. Like the Bay of Plenty and Southland, the Hawkes Bay has thousands of conscientious Kiwis who want to work but who have been completely disappointed and let down by their government.

What really worries me, though, is the youth unemployment rate for 15 to 19 year olds. It’s now 25%! What sort of New Zealand can we expect if one in four of our kids have no hope of even getting a job? Our young people will give up and leave for Australia, like so many of their peers before them. The few who stay will never know an affordable education, or a sustainable public health system, or a livable pension. It’s so unfair to our children.

Earlier this week I wrote about just one element of Labour’s plans to turn this mess around, the importance of pro-growth tax reform. The global orthodoxy has changed and big discussions are happening in economics. Labour is fully engaged in the discussions and we’re energised too. Kiwis need us to be.

But National MPs are as “relaxed” as ever while our beautiful country collapses. They should feel nothing but shame for their government’s record.

There is one thing all Kiwis can do to fight back. In 2014 New Zealand will have a general election. The people can show 59 National MPs just what a scourge unemployment is.

Please join the Labour Party. Give hope to our young people. Help put New Zealand’s best days ahead of us again.

 

The National disappointment.

Filed under: Economic Development, economy, employment, jobs
41 Comments

Manufacturing in crisis: Why pro-growth tax reform matters

Posted by on November 8th, 2012

During the last two weeks new data has confirmed what we already knew: manufacturing is in crisis. Far more manufacturing businesses are closing than opening and half the manufacturers that started up in 2008 have since gone bust. Iconic Kiwi manufacturer Fisher & Paykel Appliances has been sold offshore and will be delisted from the stock exchange. Advanced crystals manufacturer Rakon has laid off 60 hardworking New Zealanders. Dynamic Controls, a leader in high-tech mobility systems, is moving to close their New Zealand plant.

At the same time the overheated property market in Auckland is rearing its head again.

And just today we learned unemployment has climbed to a horrific 7.3%. Change is clearly needed in New Zealand.

Reform starts with the realisation that the current tax system has a fundamental and inappropriate bias towards speculation and against production and exports. So it is timely to note what a pro-growth tax package should contain, and why it matters to New Zealand’s manufacturing sector economic development.

New Zealand is one of only 3 OECD countries that does not have a capital gains tax and, as my colleague David Parker has noted, both the OECD and the IMF have reminded us this creates real problems.

Why should every dollar that you and I earn in wages or business profits be taxed, while nearly every dollar arising from gains in the value of property or shares or business ownership is tax free?

It’s not fair. And it’s just  not good for the economy either.

Making property speculation tax-free drives money into the property sector, meaning more competition to buy properties, meaning rents go up, and meaning young families are locked out of home ownership.

Making capital gains on business disposals tax-free simply makes an incentive for entrepreneurs to sell their businesses offshore, instead of growing taxable profits and creating jobs in New Zealand. A case in point is the “accountant farmer” who collects farms to realise capital gains, instead of farming to make sustainable profits.

A simple capital gains tax can help move the distortion that currently exists because of our biased tax system.

Without a CGT, the National Government is penalising innovators, meaning the positive spill-overs to our economy of a healthy innovation system are never fully captured by the innovators themselves. Capital is too scarce for young companies trying to commercialise research and development, and too many sell up early and lose their intellectual property to offshore buyers.

That’s why Labour believes a realisation-based, first-home-exempt fair capital gains tax is a no-brainer. All our polling indicates a New Zealanders are coming to agree.

Pro-growth tax reform also means giving our innovators a break; recognising the huge spill-over effects for our economy from a healthy innovation ecosystem.

R&D tax credits create a positive incentive (as opposed to the negative incentive around property). They encourage companies to look forward to future opportunities and help create a more neutral and long sited production environment and create high-value jobs.

Labour is looking seriously at how to bring back R&D tax incentives based on a survey of world best practise. My colleagues David Clark and Megan Woods are working on the link between taxation and innovation.

The bottom line is this: Everyone except the National Government can see the current system is not working. The IMF says we will have the OECD’s largest current account deficit by next year – bigger than Greece! That’s a road to ruin for today’s businesses and tomorrow’s young New Zealanders, so something must change.

Labour, the Greens, NZ First and MANA have launched an inquiry into manufacturing, and we expect submitters will canvass these important issues (along with other crucial issues like the over-valued and over-speculated dollar). Interested people should submit at manufacturinginquiry.org.nz.

Filed under: economic, Economic Development, economy, Global financial crisis
10 Comments

We borrow the world from our children

Posted by on October 25th, 2012

I was reminded today of an ancient proverb:

We do not inherit our world from our parents, we borrow it from our children.

That’s a sound philosophy for any Parliamentarian but, sadly, I doubt many of the MPs on the National side of the House will agree with it.

I very rarely talk about my family in Parliament. I do my best to protect my kids from the vicissitudes of politics because they didn’t chose my job and they miss out on enough with me being in Wellington so often. Today, though, I was thinking about my sons and about their future children.

I know that, if things keep going as they are, then one day my sons will ask “Dad, why didn’t you do more to stop them from destroying our planet?”

National’s Climate Change Response (Emissions Trading and Other Matters) Bill is very dishonestly named. It’s the National Party’s latest attempt to gut the Emissions Trading Scheme (ETS) by giving special exemptions to their traditional backers and fundraisers. It’s an attempt to force everyone who sees through National’s spin to give a multi-billion dollar subsidy to people who don’t give a stuff about the next generation of New Zealanders.

Climate change is a scientific fact. It’s not a philosophy, it’s not a political statement. The overwhelming majority of climate scientists around the world say our climate is dangerously changing and humans are contributing to that change. Those who deny the scientific reality are often uninformed, in the pocket of Big Pollution, or lost in the conspiratorial fringe twilight.

Or they’re National Party MPs.

The last Labour Government’s ETS was world leading, moderate, but broad-based. It was a model the rest of the world were looking to as a way to smooth the necessary transition to a low-carbon future. National have already destroyed most of the gains that were made, and today’s children will surely pay the price for their recklessness – just as we’re all paying for National’s recklessness in abolishing Labour’s superannuation scheme in the 1970s.

This latest National environmental vandalism puts New Zealand squarely in the group of climate science denying countries. It’s a 100% Pure Disgrace.

National’s support partner, the Māori Party, are refusing to back National’s latest attack on science, so John Key and his mates are relying on the single vote of Peter Dunne to wreck the Emissions Trading Scheme.

Labour wants the Bill withdrawn, of course. But, as National won’t do that, we’ve put forward amendments, including:

  1. Ensuring the ETS is an all-sectors all-gasses scheme, so everyone plays an equal part in the solution.
  2. Bringing agriculture into the ETS in 2015, as scheduled, so a huge advantage isn’t given to the minority of dirty farmers who’ve done nothing to prepare for this long-established deadline.
  3. Restricting international units to 50% so that New Zealand Units are preferred over international ones, thus protecting our forestry industry.
  4. Make the Environmental Protection Authority (EPA) publish annually the amount industries charge their customers for carbon.

National aren’t having a bar of any of it. As I type National MPs are sitting in our Parliament cravenly doing the bidding of their funders in Big Pollution. They genuinely seem to think if they can only get this Bill through then climate change will be history!

When Labour comes to government we will put good science and innovation at the core of our environmental and economic policies. We will put in place policies that support a future that is clean, green and clever.

Filed under: Economic Development, environment
22 Comments

Spotted in Southland

Posted by on October 19th, 2012

The National Government doesn’t care about jobs in Southland.

But the people of Otatara do – and so does Labour.

Filed under: Economic Development
8 Comments

Minister for Abuse needs to read David Shearer’s speech

Posted by on October 18th, 2012

It was great to be with finance spokesperson David Parker and local Wigram MP Megan Woods in Christchurch today to see our leader David Shearer deliver his Jobs that work for you speech.

New Zealand has suffered through four years of economic vandalism under the National government. Manufacturing and exporting is in crisis, thousands and thousands and thousands have been chucked on the unemployment scrapheap, and new records have been set almost every month for the numbers of disappointed New Zealanders moving to Australia.

Through it all National ministers have alternated between denying the facts and pretending there’s nothing that can be done.

Well David Shearer knows what New Zealanders know – the government has a responsibility to turn the country’s decline around, and David and Labour are intent on doing it.

Some of David’s bold and responsible proposals include:

  1. Expanding the scope of the Reserve Bank so the Governor can look at important economic wellness measures other than inflation,
  2. Expanding KiwiSaver to build the pot of capital for businesses to access to grow,
  3. Getting Government agencies to focus on purchasing from New Zealand suppliers,
  4. Launching a ‘one in a million’ target for significant government contracts. This would mean companies who win big contracts would be required to take on one apprentice or one trainee for every $1 million contract received.
  5. Pro-growth tax reform, including a capital gains tax to get investment flowing to real jobs and exports (not property speculators).
  6. Putting more checks and balances in place for employers who’d hire workers from overseas instead of job-seeking Kiwis.

No sooner had David finished speaking then guess who launches a petty and spiteful attack – Minister for abusing all and sundry and Finland, Gerry Brownlee.

Brownlee might have helped himself if he’d bothered to read David’s speech. He might have gotten some of his facts straight but, more importantly, it might have made him pay attention to the jobs crisis. Brownlee should read the speech because it’s full of ideas and his National government have none.

The minister seems to believe David was laying out a peculiarly Christchurch policy. Christchurch’s recovery is crucial – that’s why the entire Labour Caucus visited there this month, and it’s where we heard more about how major employers are shutting up shop and trainee teachers have no jobs to go to next year.

But if Brownlee had read David’s speech he’d know it’s a strategy for all New Zealanders and all of New Zealand. If ever evidence was needed of the myopic and selfish thinking in the National Party, it’s found in Mr Brownlee’s seeming inability to care about anyone past the end of his own gate.

Brownlee went on to paint a picture of growth in jobs which is completely at odds with reality. He misled his readers by quoting from an old job ads report while deliberately ignoring the current figures published by MoBIE – a government department which he has some ministerial responsibility for!

For Gerry Brownlee’s education, the official government figures show there was a 5.4% drop in online skilled job ads in September – including a 1.4% decline in skilled job ads in Canterbury. Brownlee cited positive job ads figures for Taranaki and the Bay of Plenty, but the official figures say skilled job ads in those regions crashed a horrific 9.9% last month.

Having already humiliated New Zealand in front of the world with his abuse of Finnish people this year, Brownlee should have learned to do his homework before attacking people. He should have focussed on the things that matter to ordinary New Zealanders, like whether they’ll have a job next week.

Now his abuse is exposed for the world to see all over again.

Gerry Brownlee should apologise to David Shearer, and he should read David’s speech because it’s full of excellent ideas and the National government has failed.

Filed under: Economic Development, economy, finance
8 Comments

Ostrich economics

Posted by on October 18th, 2012

There’s a crisis in manufacturing and the National government seems not to have noticed. But doing an “ostrich” doesn’t alter what’s happening in the real world.

This year Labour’s economic team have met with exporters and manufacturers all around the country. We’ve heard over and over again how those sectors are in crisis because of the National government’s hands-off-and-hope policies.

Even if you’re not in exporting or manufacturing yourself, while you live in New Zealand you’re affected by those sectors’ decline. 40,000 manufacturing jobs have been lost since 2008, and because unemployed people have nothing to spend they’re not reinvesting in their local communities. The facts are that there was a 14% decline in simply transformed manufactured exports and a 10% decline in elaborately transformed manufactured exports from the 2008 to the 2012 financial years.

Things are getting worse too. Just yesterday we found out job ads fell 4.5% in September (with a 5.4% decline in skilled job ads), so yet another record might be set for Kiwis giving up and moving to Australia.

Exporters and manufacturers aren’t just talking to us about their problems – they’re pleading to anybody who will listen. Unfortunately the National government are so arrogant they won’t give fair hearing to people who don’t subscribe to their dated ideologies.

In the face of government inaction Labour, the Greens and New Zealand First have come together to hold a parliamentary inquiry into the manufacturing crisis. We’ll keep you updated via Red Alert as that progresses.

Exporters and manufacturers have repeatedly told us their #1 problem is the unsustainably high and over-speculated Kiwi dollar. New Zealand contributes about 0.23% to world GDP, but our dollar is among the most traded globally. It seems that New Zealand’s money has become a plaything for John Key’s New York currency trader mates.

The government’s monetary policies have a huge impact on the dollar. Labour supports an independent Reserve Bank Governor, but we completely reject National’s apparent dogma that an independent Governor means the government has no responsibility for the economy.

The government are responsible for the wording of the Reserve Bank Act, not the bank’s Governor. The current Act makes controlling inflation the primary responsibility of the Governor – to the deliberate exclusion of consideration of other important measures of economic wellbeing, such as the current account and value of the dollar. Exporters tell us that’s madness and we agree (and so do the Greens and New Zealand First).

The National government are responsible for agreeing the inflation policy target range. In recent years that policy agreement has targeted 1% to 3% inflation in any one year. That’s the agreement that finance minister Bill English has signed.

But now the IMF is forecasting for New Zealand’s current account deficit to be the worst in the developed world next year  - and with inflation at 0.8% for the year below the target range. So the bank isn’t delivering the single target that the National government has given to it. And all the while New Zealand’s economy is collapsing around us and ordinary Kiwis are losing their livelihoods and leaving the country.

A thinking and responsible government would take from this that something must change.

But yesterday when David Parker and I questioned Bill English in Parliament, the minister barely even addressed how inflation is forecast to drop below his target range – let alone concede there is a problem (or announce any rethink of his obviously failed policies).

How much economic misery does New Zealand have to endure? Will there be any jobs left by the time Labour is elected at the next election? Will there be any young people left on this side of the ditch to fill them?

Filed under: Economic Development, economy, finance
5 Comments

No hope on Planet Joyce

Posted by on October 2nd, 2012

RADIO NEW ZEALAND NATIONAL [TRANSCRIPT], MORNING REPORT, 2 OCTOBER 2012:

Geoff Robinson (RadioNZ): So this is the grumpy growth, is it?

Economic Development Minister Steven Joyce: Well it’s a little bit that way. I mean it’s also the grumpy Treasury. I notice that they didn’t pick the March quarter number and they didn’t pick the June quarter number, and now they’re picking a low number for the next quarter, so, we can only hope that they continue to get their numbers wrong.

Filed under: Economic Development
13 Comments

Exodus honesty

Posted by on September 21st, 2012


166,000 loved ones gone to Australia since Key became PM – and counting…

Yet another all-time record has been set for the number of Kiwis leaving for Australia. The National Government just cannot continue with this dishonest head-in-the-sand approach to what can only be described as an exodus.

The latest figures show a net loss of 39,956 people to Australia in the year to August 2012 – the biggest loss ever.

More than 166,000 Kiwis have given up on a future in this country and moved to Australia since John Key became the Prime Minister. That’s the equivalent of three Invercargills and then some!

In 2008 National candidates promised over and over again to reverse the brain drain. But since they’ve gotten into Government they’ve: cut wages, cut access to education, cut services, increased GST on the poorest so they could pay for tax breaks for their mates, and thrown thousands and thousands and thousands of New Zealanders on the unemployment scrapheap.

It just seems National is unwilling to take the steps that New Zealanders know are needed to get out economy moving again. Things like:

  1.  Rebuilding our export and manufacturing heart through monetary reforms that will drive a more stable and realistic exchange rate, instead of heading for dollar parity with the US dollar,
  2. Creating more local savings available for positive local businesses to grow and employ Kiwis who might otherwise jump the ditch, through measures like universal KiwiSaver and pro-growth tax reform,
  3. Revving up our innovation engine through R&D tax credits, increased direct investment, and better linking out research institutes, universities and businesses together,
  4. Building high performance work places that enhance productivity and pay good wages with decent conditions. Finance Minister Bill English actually seems to love the idea of a “low cost” and low waged economy. Everyone else wants New Zealand to be a high value economy,
  5. Actively partnering with regions and industry sectors to create sustainable growth and strong communities all around New Zealand.

Unless we do these things, unless we have the courage to make changes, then the terrible slide currently underway will continue and the numbers of skilled young Kiwis giving up on a future here will continue to grow. These are not just words. We are talking about real humans struggling through an economic crisis, and unless New Zealand has a government that is prepared to act strongly and decisively to deal with it then we are on a road to ruin.

Ultimately this emigration crisis cannot be sustained, either by New Zealand or by Australia.

There is a terrible hollowing out of young people who want to make a contribution, and this will jeopardise Kiwi healthcare and superannuation in the decades to come.

Even the Australians are fed up. Across the ditch Government MP Kelvin Thompson is working to stop the free movement of people between our countries. If he is successful, without any jobs or hope at home, then the result could potentially be serious unrest in New Zealand.

John Key has had four years and the evidence is clear. National’s dishonest promises are not matched by workable policies. That party need to pull their heads out of the sand and look at how out of whack they’ve gotten New Zealand with the OECD orthodoxy.

How many Kiwis need to head for the departure lounges before this Government wakes up? How much damage has to be done to New Zealand and our shared future before they take off the ideological blinkers?

How much hope needs to be destroyed before National takes the responsibility they promised to take when they were trying to win the election?

Filed under: Economic Development, economy, finance
18 Comments

Today they’re terrified

Posted by on September 19th, 2012

Today is Women’s Suffrage Day. It’s a day to remember how New Zealand blazed the path of progress and extended the vote to all women, regardless of wealth, family background or ethnic makeup. It’s a day to be proud to be a Kiwi.

But, sadly, New Zealand today is in a terrible economic rut. The median household is at least $900 worse off than a couple of years ago. Jobs and hope are being lost everywhere – and today, of all days, it should be remembered that downturns in the job market have a disproportionate impact on women. Kids are going to school with empty tummies, and anyone who doesn’t believe how bad things have gotten under the National Government needs to watch this.

The structural tax imbalance which is delivering another Auckland residential property bubble is a contributor to the economic doom and gloom.

But a huge factor is National’s not-my-responsibility approach to the over-inflated and over-speculated New Zealand dollar. Manufacturers and exporters and now even the bankers know it’s just not sustainable for things to go on as before.

Today should be a day for action. Instead it’s shaping up as a day when National will vote down Winston Peters’ Reserve Bank of New Zealand (Amending Primary Function of Bank) Amendment Bill at first reading.

The New Zealand First leader has a flair with words, and I expect he’ll accept that the language of his Bill can be moderated and polished.

However, the purpose of Mr Peters’ Bill is valid:

The simple fact is that interest rates, the only tool available to the Governor of the Reserve Bank to combat inflation, impacts on far more than just inflation—it is not a siloed effect. Most obviously it impacts on the exchange rate…. A far more co-ordinated approach between monetary and fiscal policy is required to both combat inflation and keep the economy balanced.

What’s crucial is expanding the scope of the independent Reserve Bank Governor to take action based on measures of New Zealand’s welfare additional to inflation – measures such as the strength of the dollar, the external balance, GDP growth and the level of unemployment.

There are several stages to passing a Bill in the New Zealand Parliament. The only thing that is being voted on today is whether Winston Peters’ Bill will be sent to a Select Committee for review and expert and public submissions, or whether it will be chucked in the bin.

If National are so confident in their ideology then they should vote for the first reading of the Bill today. If Winston Peters has gotten it wrong then this should come out in the Select Committee process.

But, as my colleague David Parker has rightly pointed out, National are terrified because they know their approach is on the wrong side of today’s orthodoxy. They seem to think they can vote to shut down the debate. But things are going from bad to worse and the head-in-the-sand approach isn’t durable.

Today is a day when New Zealanders are reflecting with pride on our country’s trailblazing progressive legacy. Today the conservative National Party should do the same, for once, and support the Reserve Bank of New Zealand (Amending Primary Function of Bank) Amendment Bill at first reading, so it can be examined by Select Committee.

Filed under: economic, Economic Development, economy
13 Comments

They don’t care about your job

Posted by on September 13th, 2012

Sometimes the National Party’s arrogance and contempt for ordinary people just blows me away.

This week the news coming into Parliament has been horrible and unrelenting. We have received report after report after report of lost jobs and lost hope.

The thousands of layoffs haven’t happened because Kiwis workers haven’t been putting in their fair share of work. Normal wage earners are working longer hours than they were a few years ago – they’re just getting less back for it.

What’s actually happening is working New Zealand families are being victimised by ideological National Government policies which force contraction and ever-more job losses.

Steven Joyce is the economic development and employment minister. It’s his job to grow the economy and grow jobs. But he doesn’t seem to care enough to even get the basics right.

There are several recognised measures of unemployment in New Zealand, including the Household Labour Force Survey (HLFS) and the Linked Employer Employee Data (LEED).

Statistics New Zealand says LEED is the best measure of what’s really happening in the jobs economy. But today Steven Joyce decided the HLFS is the best measure – if only because he thought a focus on the HLFS would make the dire unemployment situation look slightly better. It doesn’t.

If Joyce consistently quoted from the HLFS that would be one thing, but he never seems to. Just this past Tuesday the minister told Parliament that quarter of a million jobs are being created every year under National. It’s complete rubbish, and today I called him on it, but Steven Joyce is not the kind to be accountable and answer questions.

Next we discovered Joyce is not only unsure what the LEED is called but, much worse, he doesn’t even know that certain self-employed people are covered in the data set! This is absolutely basic stuff for an economic development and employment minister, and when someone in his position gets it so wrong the outcome is ordinary Kiwis lose their jobs.

Evidently Steven Joyce just doesn’t care. Finance Minister Bill English doesn’t care either because he does the same thing with jobs data. John Key certainly doesn’t care because he’s on record for criticising the HLFS as “notoriously volatile”, so he sets the tone which allows these ministers to get away with it.

However, as Radio New Zealand covered today, Statistics New Zealand was very clear. From 2008 to 2011, 452,000 jobs were created but 465,000 jobs were lost. The result was a net loss of 13,000 jobs. It’s ordinary working families who are paying the price.

A change in New Zealand’s government cannot come soon enough.

Filed under: Economic Development, finance
34 Comments

The cult of National Party economics

Posted by on September 12th, 2012

“Economics” is a term which is often misused, most particularly by those on the right-wing of politics.

“Economics” is not a religion. “Economics” does not sit on a throne and dictate how humans must arrange their lives. Economics is only lots of models and measures which different people in different contexts have applied to things they were studying.

A good/useful economist behaves like a scientist. They adapt their models and add new measures and methods in a never-ending drive to improve their understanding. The good economist recognises there is no final truth in economics.

Bad/useless economists behave differently. They use meaningless phrases like “economics says”.  They nod at each other and quote Margaret Thatcher: “There is no other way”. They prioritise the imperfect economic tools over the perfectly-human people who use tools.

In the 1970s a group of economists at the University of Chicago reworked a few of the classical economic models – and ignored the rest – and decided they had hit on a new truth about the role of government in the economy (or, more accurately, a belief that government has no role in the economy). Effectively the “Chicago School” economists founded a religion.

This might have been just academic if it weren’t for the likes of Thatcher in the UK, Ronald Reagan in the USA – and Roger Douglas and Ruth Richardson and certain Treasury officials right here in New Zealand in the 1980s and 1990s.

Those politicians became true disciples. But, just like the Chicago School, they only picked and chose those small bits from the economics field which matched their existing prejudices. To use an economics analogy they loved Adam Smith’s The Wealth of Nations but never made the time to read The Theory of Moral Sentiments – let alone Keynes’ General Theory or John Rawls’ A Theory of Justice.

Today The Herald carried an excellent piece from Peter Lyons. Peter teaches economics and he’s been following the often dramatic changes in New Zealand’s economy for more than 30 years. He clearly understands the Chicago religion, but he’s weighed up the evidence and – quite properly my opinion – he doesn’t buy into it.

Unfortunately for ordinary New Zealand families the ministers who are driving economic and finance policies in the National Government do.

In the dogmatic world of John Key, Bill English and Steven Joyce there are no lessons to be learned from the Global Financial Crisis. They appear not to care that their obviously failed policies have seen thousands upon thousands of New Zealanders lose their jobs, their livelihoods and their hope of making a future in New Zealand. They maintain their ‘not my responsibility’ passive government approach when the soaring and over-speculated dollar is killing manufacturing, killing exports, killing the regions and killing hope. It seems it doesn’t even matter to them that Kiwi children are going to school without food because their parents can’t afford to provide it.

While the USA, the UK and the New Zealand people have moved on, all the National Government does is preach failed ideologies.

Read Peter Lyons’ story. Then join the Labour Party. Get involved and help us with our clean, green, clever and evidence-based economic plan, please.

Because, for New Zealand’s sake, we must get rid of this ideological and destructive National government as soon as we can.

Filed under: Economic Development, finance, Global financial crisis
22 Comments

Playing the ball, not the man

Posted by on September 11th, 2012

Today Radio New Zealand reported comments from John Whittaker, CEO of significant Otago manufacturer and exporter Farra Engineering:

The government is not looking after manufacturers, and should take a leaf out of Australia’s approach. The New Zealand government is so hell-bent on being squeaky clean so they can enter into trade agreements with anyone and everyone so they actually neglect their own, where every other country has a lot more importance placed on their manufacturing industry and go out of their way to support them.

Now in the main I agree with John Whitaker, who is a patriotic business leader trying to run a business, build New Zealand’s exports, and keep Dunedinites in jobs.

John has every right to speak out about government policies he thinks need to change. He’s not privy to all of the information that ministers have. He certainly didn’t attack any individual.

So how did Steven Joyce respond? As Mike Smith has noted at The Standard, Joyce said:

… [John Whitaker] really does need to go and have a look around – most of the manufacturing organisations I talk to –he hasn’t been hit hard by it  — yet  — New Zealand firms are getting more competitive –to suggest that is not happening really is a little bit ungracious.

“Ungracious”? Really?

And how arrogant is it to suggest that this successful exporter can’t see the world for himself and form his own views?

Just this month the NZMEA manufacturing confidence index plummeted 181 points. That’s a horrific drop. Manufacturers are desperate for reform in the currency settings and the Government refuses to even countenance a discussion.

Hundreds of jobs have been lost or threatened at Spring Creek and Huntly mines, at Norske Skog’s mill in Kawarau, APN centres and elsewhere.

Today we had the Parliamentary Library compile a list of redundancies recently reported in the newspapers. The librarians only had a couple of hours to work but they came up with a list of thousands. Thousands! And remember those are only job losses that have made it into print. (As an aside I tried to table that document in Parliament so MPs could see it for themselves, but the National Party refused the required leave).

There is a genuine economic and jobs crisis happening right now in New Zealand. Some desperate families can’t even afford breakfast for the kids before school; the worry about job security just keeps piling on for everyone; and the government isn’t giving anyone a shred of hope.

Steven Joyce promised New Zealand a brighter future. Instead, while manufacturing collapses, he’s not doing his job. He seems to spend his days vilifying New Zealanders who have minds of their own and who are hard at work doing theirs.

I’m calling on Steven Joyce to publicly apologise to John Whitaker.

Filed under: Economic Development
6 Comments

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