PARLIAMENT | PARTY | GRASSROOTS

Red Alert

Posts Tagged ‘economics’

The Poor List

Posted by Darien Fenton on July 29th, 2011

The wealth of New Zealand’s 150 richest people have grown by almost 20% in one year with the combined wealth of New Zealand’s richest burgeoning from $38.2 billion to $45.2 billion – the highest total ever.

But it seems enough is never enough. Having made their fortune, some of the Rich Listers are still demanding the  ”freedom” to make even more money.  They want reduction in costs for business and excessive regulation addressed. I take that to mean the usual : cut workers’ rights, privatise ACC, reduce taxes. This is despite New Zealand consistently ranking as having the highest levels of business “freedoms” in the world.

They talk about “wealth creation” as if they have done it all on their own, without the help of governments, taxpayers, workers and the generations gone before.

The NBR editor-in-chief Nevil Gibson even called the Rich Listers “national treasures” in the headline of his editorial about the Rich List.

For goodness sake. What have we come to?

I want to know where the poor list is.

Yes, we talk about the poor, (occasionally) but they are faceless individuals.  If their stories are told, they are often blamed by the likes of John Key for having a “poor attitude”.

Being poor is nothing to celebrate, but we have to talk about it and face facts.

The question is how we better share wealth in New Zealand today.

Could the Rich Listers tell us their ideas for that – just for a change, rather than the continuing demand for more of the same that has led us to being one of the most unequal societies in the world.

Please?

Tags: ,
Filed under: Wealth, poverty
75 Comments

International ratings a load of old cobblers

Posted by Darien Fenton on January 18th, 2011

The weekend Herald Business had an article headlined “NZ rates fourth in the world for economic freedom”, so I had a closer look.

Turns out it’s from the Heritage Foundation, a US based Right wing Conservative based group who boast among their membership Rush Limbaugh and Sean Hannity. Their mission is to “formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.”

While I did wonder why the Herald bothered to report on a poll like this, it does say something that this outfit rates NZ fourth after Hong Kong, Singapore and Australia.

New Zealand could have been higher on the index, but our government size is rated at 49.3 (eighth ranking) because

In the most recent year, total government expenditures, including consumption and transfer payments, increased slightly to 41.1 percent of GDP. The state maintains significant stakes in the transportation, electricity, and telecommunications industries. Past surpluses had reduced net public debt before the global crisis struck, leaving New Zealand room to enact a fiscal package measuring 6 percent of GDP over two years.

Putting aside the obvious that the right think we should sell everything, it was interesting to see the last sentence acknowledging Michael Cullen’s paying down of debt and Labour leaving New Zealand in a good position to cope with the global financial crisis. The NACTs are in denial about this of course.

We rate at 86.2 on the labor freedom index because “New Zealand’s flexible labor regulations facilitate its dynamic labor market, increasing the economy’s overall productivity. The non-salary cost of employing a worker is low, and dismissing an employee is costless. Regulations on work hours are flexible”.

Apparently, we rate well because we have almost no working hours regulations, we can fire workers for redundancy with no compensation and sacking a worker is easy.

On the other hand, Australia rates higher than New Zealand on this measure, even although their minimum wage is higher, they have statutory severance pay and working time regulation, including overtime pay. And they just introduced 18 weeks paid parental leave.

Go figure.

Tags: ,
Filed under: economy, international
32 Comments

The Left and Economics

Posted by Grant Robertson on June 20th, 2010

My good friend Rob Salmond has written an excellent post over at Policy Progress about the importance of the political left talking about economics.

If folk on the left are to challenge the caricature that they are economic illiterates swimming against the tide, we need – all of us – to confront economic issues much more directly.

Rob is of course right.  But how has economics somehow become a dirty word to many on the left? It seems to me that the motivating drivers for the involvement of most on the left of politics are equality, fairness and social justice. In turn this seems to have meant for many that discussion focused on the direct mechanisms for achieving this through social policy. The point  of course is that economics matters for those values as much as those social policy factors.

As someone who did not study economics to any great degree I have in the past found myself put off from studying economics, partly on the basis of buying into some of the stereotypes about where many economists are coming from. But as Rob (and others in the comments on the post) points out there is some great work underway, some of which has been discussed here, such as the work of Stiglitz and Sen on genuine progress indicators or Wilkinson and Pickett’s The Spirit Level. These people’s work can not be dismissed by the right, and it must be understood by the left.

I was also interested in Jordan’s comment on Rob’s post when he asked

how can we who do have an understanding of economic policy debates and principles and the implications for our politics and our societies, make that more exciting – to the extent it’s the main focus of debate and campaigning energy inside our political movements?

I don’t know the full answer to that question, but I am sure that a part of it is talking about economics as part of the package of progressive politics, rather than in isolation.   The direct links need to be drawn between social progress, environmentally sound development and the economic ideas that underpin them.  Its no different than anything else in politics- there needs to be a vision and a believable and relevant narrative to go with it.

In any case, for those who are interested there are a number of links in Rob’s post and the comments that go with it that provide loads of references to some exciting progressive economic ideas.

Tags: , , ,
Filed under: economic, social democracy
96 Comments

AXING THE TAX PACK

Posted by David Cunliffe on March 1st, 2010

Labour is taking the fight to the government on its unfair tax plan.  The “Axe the Tax” bus tour is covering the country.

We are campaigning against is whole tax package, which includes all of:

  • GST going up from 12.5% to 15%, even though National said before the election they would NOT;
  • The unfairness of the massive cut to the top tax rate, dressed up as “alignment”, which delivers windfall gains to the top few percent.

The government’s GST tax switch is really just cover for the massive shift towards top end tax reduction.

Politics is, at least partly, about who gets what – and guess who stands to benefit most from National’s plans?

Not the vast bulk of Kiwis, who are on middle and lower incomes and who have toughed out the recession.

Labour will release its tax policy before the next election.  Labour’s tax plan will be fair to all Kiwis, not one aimed at delivering big cuts only to a few.

Tags: , , , ,
Filed under: GST, Tax, Tax Working Group, Uncategorized, business, economic, economy
54 Comments

Monetary Policy Reform

Posted by David Cunliffe on November 19th, 2009

Phil Goff’s landmark speech to Federated Farmers today is a highly significant step.

It has three major themes:
- boosting technology to grow productivity in our primary sector
- a strong stand on including agriculture in the ETS (given NZ’s emission profile ag can’t be left out);
- ending two decades of consensus on monetary policy.

This monetary policy announcement is historic.  It will help shape Labour’s economic policy into the next election and beyond.

The core problem is that the officail cash rate (OCR) acting alone has not achieved inflation control alongside reasonable stability of exchange rates and money supply.  Combined with an imbalanced tax structure, high real interest rates helped suck in hot money that drove the housing bubble.  

That was great for banks and baby boomers who already owned houses, but bad for productivity, the foreign debt and younger Kiwis trying to realise their dream of home ownership.

The writing is now on the wall: New Zealand has to earn more, export more, save more and be more resilient: combining a sustainable environment and a decent society with a real plan for growth and high skill, high value jobs.

Kiwis can’t just keep borrowing ever greater amounts of foreign capital, then periodically electing National to flog off what’s left of the family silver to cover the debt.

Government debt is not the principal problem (although the Nats are planning to massively increase it through pollution subsidies to big emitters). Private debt is.  And the way out of that quicksand is more savings combined with monetary policy that achieves a better balance between inflation control, growth and external stability.

These are tough problems, and more work is being done to learn from overeas experience and to refine solutions.

It is important to note that Labour will continue to support an independant, full service central bank. We will continue to fight inflation and guard against inflationary expectations. There will continue to be an important role for the OCR.

But as the recent banking Inquiry rightly pointed out, the OCR should not bear the whole weight of adjustment on its own, nor can one instrument be addressed at several objectives. Complementary tools are required.

We can’t expect exporters to thrive with exchange rates swinging from 35c US to 76c US in a year.

We can’t grow without serious investment in smarts and technology that give us in-country commercialisation and manufacturing capability.

And we can’t deepen domestic capital markets through an effective tax subsidy to real estate speculation, or a banking system that is 97% owned offshore!

Labour is on the move to solve these hard problems. Good on you Phil – great speech!

Tags: , , , , , , , , ,
Filed under: Uncategorized
24 Comments