The Dim-Post

June 14, 2012

The vision vacuum

Filed under: Politics — danylmc @ 2:23 pm

I’m not sure why National are in government. Or, at least, I’m not sure what we’re supposed to think they’re doing in government. Their election vision statement was ‘a brighter future’, wed to fixing the economy – but once re-elected Treasury assured them that the economy was going to be awesome anyway, so they didn’t need to do anything. Bill English now mutters about helping business by recalibrating the microeconomy. (I assume this is code for smashing the unions and lowering wages.)

In the past few days Treasury has tweaked their forecasts a bit – instead of robust economic growth we might be headed for a depression. Bill English concedes we may be in for ‘fifteen years of grumpy growth’. The Reserve Bank has lowered its growth forecasts and thinks English’s all-important surplus in 2014/15 will be a two billion dollar deficit. Apparently John Key’s financial genius doesn’t extend to growing the economy when its not growing anyway.

National’s other great task is the re-organisation of the public service to make it more ‘efficient’, which mostly seems to involve sacking as many public servants as possible and replacing them with Paula Rebstock. I’d argue that the budget debacle in which Treasury and the Education Minister accidentally(?) sacked most of the country’s intermediate teachers, then backed down while insisting it was ‘still the right thing to do’ has destroyed their credibility on this issue.

But I still don’t see a coherent critique of the government from either opposition party. They’ve been on the offensive and gaining in the polls, because how could they not – but it still seems very piecemeal. My sense is that this government is vulnerable to attack on the issue of ‘corporate cronyism’ – that almost of their policy ideas involve sweetheart deals with (usually foreign owned) corporations to increase their profits by transferring costs and/or risk onto the New Zealand taxpayer. (Today’s leaked TPP document is just the latest manifestation of this.)

And we still don’t know what Labour’s alternate vision is. David Shearer gave two ‘state-of-the-nation’ speeches which were so dire they prompted speculation of a leadership coup, so he’s been very quiet recently which seems to be working well for him. David Cunliffe is still giving leadership speeches, most recently to the Kensington Swan Insolvency function (metaphor?). And, via Jordan, I see that Chris Trotter and Josie Pagani are locked in battle over whether Trotters pre-1970s ideals or Pagani’s 1990s Blairite real-politik are the best fit for Labour in 2014.

I think National will lose the 2014 election, but it’s not hard to imagine a scenario in which Labour’s turn-out slumps still further, because no one knows what the hell they stand for, and National get back in with a plurality and form a government with New Zealand First and the Conservative Party as partners.

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64 Comments »

  1. I think National will lose the 2014 election, but it’s not hard to imagine a scenario in which Labour’s turn-out slumps still further, because no one knows what the hell they stand for, and National get back in with a plurality and form a government with New Zealand First and the Conservative Party as partners.

    And if Labour persists in promising to fuck over its supporters by cutting their superannuation, they’ll hav eno-one but themselves to blame for that.

    Comment by Idiot/Savant (@norightturnnz) — June 14, 2012 @ 2:36 pm

  2. On one level I think it’s quite straight forward. National is hopeless: they aren’t delivering on their economic vision, but instead are putting money in the pockets of their mates and laughing behind their hands at the rest of the “punters” who are persisting in thinking the Emperor has a suit on. Labour stands for a different economic model that will see more jobs with higher wages, and that looks after everyone with a focus on those working hardest. Us and the Greens, working together, will both transform the economy along more financially and environmentally sustainable lines, and do so in a way that means everyone has a fair go.

    It isn’t poetic but I do think it’s serviceable.

    Comment by Jordan Carter — June 14, 2012 @ 2:40 pm

  3. Jordan sez “Labour stands for a different economic model that will see more jobs with higher wages”

    Oh purhrlease.

    Comment by merv — June 14, 2012 @ 2:48 pm

  4. Yeah, you don’t need much more than what Jordan said to win an election. Just add a few flagship specifics (I am only half-joking when I suggest smaller class sizes).

    The major political dilemma for both Labour and National is whether to play nice with Winston going into 2014.

    Comment by bradluen — June 14, 2012 @ 2:59 pm

  5. We could start having dutch auction election campaigns with the two major parties (Greens and National) competing on who can cut superannuation the most.

    Comment by merv — June 14, 2012 @ 3:04 pm

  6. National has 2 competing visions, neither of which a very visionary but are actually based more around personalities. One is the Stephen Joyce crony capitalism which is govt facilitates dirty or dodgy economic growth at all costs. Key actually tries to do this too but his ideas around cycleways and Financial Hubs are just plain stupid, at least Joyces ideas actually work in a short termist view of things.
    The otherside is the Bill English version which is about shrinking the government which is actually pure ideology rather than vision. They are doing this by slowly and carefully total reorganising the Public Service through starving them of funds and slashing Budgets.
    Behind all this is the ridiculous surplus target. Sadly National are winning because the Bill English narrative totally won over the public between 2008 and 2011, due alot to useless media and silly bank economists scaremongering about debt. Labour are struggling to put a narrative together because this debt/surplus narrative has totally dominated and pulled most members of the public into thinking this. Even the greens have got sucked into aiming for a 2014/2015 target, and Labour has decided its too hard to change the publics mind so will just stick with it too.

    Comment by Luke C — June 14, 2012 @ 3:18 pm

  7. The reason National hasn’t “fixed the economy” is because they can’t. NZ is a little cork bobbing in the ocean of a global economy lurching from crisis to crisis, and the dream that the Government can wave a magic wand and fix everything is just a fantasy used by politicians, both left and right, to try and win the votes needed to implement whatever rent-seeking policies they feel are necessary.

    If you think the left, no matter how visionary, would do any better than the right, you are deluded. The only difference is in the nature of the pointless projects they would waste money trying to implement.

    Eventually the global economy will recover, and whoever is in power will take credit for their amazing financial management, and then the cycle will start again.

    Comment by R — June 14, 2012 @ 3:37 pm

  8. So Josie advocates ‘Blairite realpolitick’ because she endorsed Kinnock and Schroeder! Who are both kind of, y’know, the opposite of Blairism? Is it possible your visceral loathing for her husband has a lot more to do with your statement than anything she has actually written or said? I would have thought the quote she has from Julia Gillard is a pretty good alternative to your cynicism.

    Comment by Jen — June 14, 2012 @ 4:03 pm

  9. Modern politics is about winning the 5to10% swing vote. David Shearer & John Key know that.

    Comment by Simon — June 14, 2012 @ 4:07 pm

  10. @Simon

    Check out No Right Turn’s blog post on turnout. Shearer (or rather, his so-called “strategists”) can’t assume Labour voters have nowhere else to go. They have the couch.

    Comment by sammy 2.0 — June 14, 2012 @ 4:14 pm

  11. Oh R don’t be such a pragmatist.

    Comment by merv — June 14, 2012 @ 4:25 pm

  12. “I’d argue that the budget debacle in which Treasury and the Education Minister accidentally(?) sacked most of the country’s intermediate teachers, then backed down while insisting it was ‘still the right thing to do’ has destroyed their credibility on this issue.”

    I’m not sure about this. There has historically been a big disconnect in the public mind between teachers (also police, nurses etc) and “public servants”. Cutting back on teacher numbers is controversial, cutting back on “public servants” (a broad category which includes teachers) for some reason always conjures visions of faceless drones in badly ventilated Wellington offices compiling reports nobody reads, and fuck, who wouldn’t want to get rid of those guys on principle! The irony is it’s becoming so accepted that it’s become self-fulfilling – a government that campaigned on a promise to cut the numbers of public servants and took a razor to a hospital’s staff budget claiming that technically nurses are public servants would get slaughtered.

    “I think National will lose the 2014 election, but it’s not hard to imagine a scenario in which Labour’s turn-out slumps still further, because no one knows what the hell they stand for, and National get back in with a plurality and form a government with New Zealand First and the Conservative Party as partners.”

    I see you’ve got your ‘We didn’t lose the election even though we didn’t get to form the government’ argument down pat. Let me offer an alternative squiz at the old crystal ball. National will remain in power in the 2014 election, although their vote share will slump significantly, possibly as a minority government. Labour will win in 2017, and their policy will be a muddle (as it was in 1999 and 1984).

    A ring-stinging, bulletproof alternative policy vision is not necessary to win an election. In fact, I’m not even sure it’s helpful at all.

    P.S: Did you just say the Greens don’t have a coherent critique?

    Comment by Hugh — June 14, 2012 @ 4:50 pm

  13. @8 No R you are deluded if you think that National’s actions — especially the last lot of tax cuts and billions being wasted on the roads of national significance projects and the billions in public subsidy to heavy industry and famrers and the partial assets sales — aren’t making a bad situation much much worse, all in the name of fact free ideology.

    Comment by Andrew R — June 14, 2012 @ 5:32 pm

  14. There’s money there, it may not be a lot, but there is money there for the Government to use; they’re simply choosing to spend it on the wrong things, or at least the wrong things for this time. They take measures (free contraception, tightening up on welfare) because they like to portray themselves as “providing opportunities for beneficiaries”, however how many of these infrastructure jobs are going to be long term? Probably none. They could have chosen to spend some of the funds on providing permanent fulltime jobs in another sector instead.

    Welfare is now in a ridiculous state. There are more part-time jobs and fewer full-time jobs. Well, who wants a part-time job, if they’re on a benefit, when the threshold is $80 gross ($64 net per week) before you have to fork over 70% of all additional earnings to Work and Income and 20% in taxes. The threshold needs to rise and the repayments after reaching that threshold need to be lower, say a threshold of $130 and a repayment of additional funds of 50% to Work and Income and 20% in taxes directly to the Government.

    Then there’s housing which is an astronomical issues at the current time. There’s a huge shortage of state housing. And, I’m sorry, but I don’t care high up a politician is, they won’t ever be able to get away with telling me that there’s not enough me to soften the blow of this crisis. The fact is that they can (and need to) afford to build more council flats and more state houses. It doesn’t have to be a lot initially but they can get access to, without borrowing it, the half a billion dollars necessary to contribute something towards this and get the money flowing back into the Government’s coffers because, I’m telling you, not a lot of money is going to flow back from landlords. The Nats may have changed the law on depreciation of investment properties but that actually puts less in their coffers because droves of people are selling up, the property market will slump and this will adversely affect future Governments in terms of bringing in a lot less revenue, up to 75% less, from the Capital Gains Taxation that will have to be brought in eventually.

    Comment by Daniel Lang — June 14, 2012 @ 6:01 pm

  15. Sorry, I meant “not enough money to soften the blow of this hosuing crisis”.

    Also, I forgot to state the fact that the welfare system is really, truly, horrifically outrageous at the moment. The saving of paper has not been restricted to this year’s budget. It has run over to Work and Income, who now do not send out letters of appointments and seminars you need to attend within a timely manner (five days’ notice), but instead just get their hapless “case managers” and “work brokers” (many of whom never even went to university) to give a phone call a day or two in advance. If you’re not home (and they do only call once and expect you to pick up immediately and know what they are on about even if you have never heard of these new changes before), then you can be expected to be worktested because you haven’t showed up to an appointment (because you never received the phone call, but this fact may not be recorded. They don’t record their phone conversations, they don’t give you proper notice, so they’re not doing due diligence because they have no records of having contact with you and, I will say it again because it is the most important facet of this mocu-drama, they don’t give you proper notice).

    Comment by Daniel Lang — June 14, 2012 @ 6:09 pm

  16. Pattrick Smellie made a point very similar to this on The Nation during budget week. Basically he was questioning English on whether or not there was any long term vision for growing the economy after we had got back into slim surplus. English answered in a very waffly manner, didn’t really make any points, so it would suggest that the government really has no idea what they want to do with said surplus. A cynic might suggest the reason for that is that they don’t expect to make it to surplus anyway, so why bother planning for that future? http://afinetale.blogspot.co.nz/2012/05/english-on-vision.html

    Comment by alex — June 14, 2012 @ 11:00 pm

  17. @ Jordan Carter – Ummm, John Key may be the naked emperor, but you are Hekia Parata in the nude, dude! Labour refuses to tell us what you genius economic policy that will bring us to the sun-dappled uplands actually is, which is why no-one trusts Labour. How are you going to get ‘more jobs with higher wages’? Please tell us peasants…

    The dissapointing thing about the Greens is they seem to be following Labour into the ‘don’t ask, don’t tell’ disclosure of economic policy with their ‘Green Growth’. There is no follow up discussion on exactly *how* their R&D funding boost, etc will actually improve the economy when Clark’s Labour gave buckets in R&D tax credits for little economic effect.

    At least Mana are clear about their socialist economics ;)

    But given the dishonest behaviour of National, surely we most urgently need political transformation to greater democracy? The ability to recal at least electorate MPs (list MPs are harder to do), so we can hold them to account for crony appointments to quangos (Jenny Shiple, Georgina te Heu Heu, Wayne Mapp, etc) and dodgy deals (SkyCity, SkyTV, SkyNet… ;) )

    Let’s not leave NZ, let’s fix it it. Sans Bob the builder ;)

    Comment by bob — June 14, 2012 @ 11:26 pm

  18. Add Cunliffe’s Kensington Swan speech to his Blockhouse Bay one in April and you do see a coherent analysis of where we are, why we got there and what we should be doing. He, and Grant Robertson, are expanding further on the vision In Titirangi next week.

    The Dolphin and The Dole Queue
    David Cunliffe, New Lynn MP and economic development spokesperson
    invites Labour members and supporters  to discuss
    with Grant Robertson, Labour Deputy Leader and environment spokesperson
    what a green economy would look like
    At the Titirangi War Memorial Hall, June 23, 1pm

    Comment by AnnaLiviaPluraBella — June 15, 2012 @ 7:15 am

  19. Today’s leaked TPP document is just the latest manifestation of this.

    given that Labour supports the TPP, as with other free trade agreements, it will make any Labour-Green-NZ First coalition interesting.

    Under Norman the Green Party has morphed into an ultra-nationalist party which used to be Peter’s private turf. How would Labour deal with two parties like that.

    Comment by NeilM — June 15, 2012 @ 8:34 am

  20. Is the Jordan Carter at comment 2. the same one who is in charge of policy for the Labour Party?

    Is there anyone outside of Wellington government departments who wants his waffly bureaucrat-driven key messages that look exactly like the bland mix no one wanted last year?

    Carter looks like he is trying to have it both ways. He wants to pretend he can make great environmental and fairness changes, and that this will be much different to National, but he also seems to think real change can be just like flicking a switch. It’s like saying ‘if we all put on woolly jumpers the world will change.’

    I don’t really believe many of us want a radical government. We might even want woolly jumpers – but that should be a selling point, not something they are doing while pretending they want something else.

    Actually Labour has to choose. If they want to tack toward the Greens, they should do so full on. If they are not going to go left, then they should say Labour is changing from were they were last year trying to be all things to all people. And change from the technocratic managerialism of the Clark government. What won’t work is sitting in a vague no-things to no one middle, as Jordan Carter is trying to.

    Comment by KMT — June 15, 2012 @ 9:21 am

  21. And if Labour persists in promising to fuck over its supporters by cutting their superannuation

    It’s surprising that the biggest exercise in cutting social wefare since Ruth Richardson is being hailed a sort of moral victory over National.

    It may well be that we can no-longer afford super as it stands but that’s just an admission from Labour that they will not be able to grow our economy any more than can National.

    Perhaps if there’s a demographic bulge in high school students in the furure we can just decrease the school leaving age to cope.

    Comment by NeilM — June 15, 2012 @ 9:22 am

  22. What’s the vision in Greece I wonder?

    No point in having a vision when you’re past the tipping point of social and economic disaster.

    This country is doomed and its the fucked in the head political ideas of the regular Marxist commenters on this blog that are to blame.

    Comment by Redbaiter — June 15, 2012 @ 9:54 am

  23. @ Daniel Lang

    While you are clearly frustrated with the inability of WINZ to manage their interactions with you adequately (entirely fair enough), I am intrigued by one statement you make: “…their hapless “case managers” and “work brokers” (many of whom never even went to university) to give a phone call a day or two in advance…”.

    What relevance do you feel a tertiary degree has to being a minor bureaucratic functionary?

    @NeilM

    Under Norman the Green Party has morphed into an ultra-nationalist party…

    It’s funny – I don’t see the streets swarming with Green-shirts beating up Asian investors and farmers.
    I can’t have been sent that memo by the Vast Ultra-Nationalist Eco Conspiracy I guess.

    Comment by Gregor W — June 15, 2012 @ 9:57 am

  24. I think you are underestimating the constituency of people who believe when it comes to government – the less “vision” the better.

    Comment by Swan — June 15, 2012 @ 10:02 am

  25. It’s funny – I don’t see the streets swarming with Green-shirts beating up Asian investors and farmers.

    did Norman ever come up with any evidence of Huawei spying on us? Perhaps he’s been too busy going on about how our sovereignty is under threat from foreigners.

    Comment by NeilM — June 15, 2012 @ 10:11 am

  26. Well, Gregor, in answer to your question: not a whole heck of a lot. However, it would be preferable for them to have more education than they currently do (and more supervisory assistance when first starting out on the job) because a lot of them look like they’ve been plucked from the street and just had a set of clean clothing slapped on them for appearances sake.

    Comment by Daniel Lang — June 15, 2012 @ 11:28 am

  27. @ NeilM – Ultra nationalist? What a pile of shit, surely you jest. Is it now ultra nationalist to oppose the TPP, or to argue that we should be buying more stuff made in New Zealand? No, its bloody sensible. I wouldn’t even call New Zealand First ultra nationalist, and they take those arguments to an extreme degree compared to the Greens.

    Comment by alex — June 15, 2012 @ 11:38 am

  28. did Norman ever come up with any evidence of Huawei spying on us?

    An uninformed jab at a commercial company – admittedly, one that has been tightly coupled with the PLA from it’s inception and bases a good deal of its IP on stolen property – is hardly evidence of ultra-nationalism. At most, Norman is guilty of misreading a commercial spat within NBN.

    From a social perspective the I haven’t seen policy prescription from the Greens that actively promotes (to crib from wiki);

    “authoritarianism, efforts toward reduction or stoppage of immigration, expulsion and or oppression of non-native populations within the nation or its territories, demagoguery of leadership, emotionalism, fomenting talk of presumed, real, or imagined enemies, predicating the existence of threats to the survival of the native, dominant or otherwise idealized national ethnicity or population group, instigation or extremist reaction to crack-down policies in law enforcement, efforts to limit international trade through tariffs, tight control over businesses and production, militarism, populism and propaganda.”

    Protectionist? Sure. Ultra-nationalist? I think not.

    Comment by Gregor W — June 15, 2012 @ 11:44 am

  29. An uninformed jab at a commercial company

    ok, not ultra-nationalist but there is an element of nationalistic jingoism coming from the Greens. An uniformed jab that just happened to be aimed at a Chinese company. What was the purpose of that if not cheap populism?

    Comment by NeilM — June 15, 2012 @ 12:08 pm

  30. “…Protectionist? Sure. Ultra-nationalist? I think not…”

    NeilM’s problem is with the heresy implied in being patriotic or in caring about protesting local jobs from a nationalistic perspective.

    Nationalism implies we are all in this country and in this economy together; New Zealanders with shared culture, experiences, language and homes working together rather than atomised rational units competing for scarce resources who happen to inhabit a certain geographic area. So any hint of collectivism, of society, needs to be attacked in the most hysterical terms, lest it grow in the consciousness of the people and they create organisation whose values are at odds with the over-arching religious fundamentalism of neo-liberal cheerleaders.

    Comment by Sanctuary — June 15, 2012 @ 12:22 pm

  31. An uniformed jab that just happened to be aimed at a Chinese company. What was the purpose of that if not cheap populism?

    So by that logic, a jab at British American Tobacco is ipso facto, anti British?

    Grasping at straws, my man.

    Comment by Gregor W — June 15, 2012 @ 12:24 pm

  32. a jab at British American Tobacco is ipso facto, anti British?

    even with a tobacco company I’d suspect ulterior poiltical motivations if the allegation was untrue. But he didn’t choose to target a company that does harm in NZ.

    Comment by NeilM — June 15, 2012 @ 1:50 pm

  33. Sanctuary said “Nationalism implies we are all in this country and in this economy together”

    Channelling Wus Sanc?

    http://www.scoop.co.nz/stories/PA1206/S00031/speech-norman-were-all-in-this-together.htm

    Comment by merv — June 15, 2012 @ 2:17 pm

  34. But he didn’t choose to target a company that does harm in NZ.

    OK. What about Monsanto as an example?

    Even though their commercial and ethical practices are perfectly legal within NZ but which a fair number of people regard as questionable if not outright predatory, would Green party opposition to those practices (both locally and globally) constitute anti-Americanism?

    Comment by Gregor W — June 15, 2012 @ 2:24 pm

  35. GreorW @ 29, you’ve described the Soviet Union! Doesn’t that just show us how inadequate labels are? I love it how Anders BB is always described as right-wing. If you read his economic thoughts, they seem rather left-wing…

    Comment by Clunking Fist — June 15, 2012 @ 2:27 pm

  36. @ CF

    you’ve described the Soviet Union! Doesn’t that just show us how inadequate labels are?

    Or the Roman Empire under Caligula, but the point is not the label, rather NeilM’s hyperbolic inaccuracy (since rectified) in applying it.
    Chocolate and dogshit both have the common attributes of being brown and sticky, but most people don’t have issues acknowledging the difference.

    I love it how Anders BB is always described as right-wing. If you read his economic thoughts, they seem rather left-wing…

    Not sure how your non-sequiter statement re Breivik applies tbh, considering that the political economy elements of the Nazi Twenty Five Point Programme (e.g. “profit-sharing in large enterprises, “the abolition of all incomes unearned by work”) was pretty left wing as well…

    Comment by Gregor W — June 15, 2012 @ 3:23 pm

  37. @ R

    I think you are pretty much spot on but you left out an important point. NZ’ers voted for MMP because they were sick of successive governments coming in and completely throwing things up in the air in an attempt to fix things, aka Rogernomics. Thus John Key and this government, while having more power than a US president for example, are pretty constrained in what they can do. Any large change in their first term probably would have meant they were a one term government. I think this is a better explanation for what appears to be a lack of vision – it is more a case of being hamstrung. I am 100% sure John Key and his mates would like to do *a lot* more than what they are doing right now.

    They are just eyeing a third term.

    Comment by Beerocrat — June 15, 2012 @ 4:33 pm

  38. Woops forgot to make my point – MMP + NZ in a global economy = bobbing cork going with the general direction. FPP + NZ in a global economy = boat able to navigate (although may capsize at some point due to idiot (roger) not able to steer the boat properly :)

    Comment by Beerocrat — June 15, 2012 @ 4:35 pm

  39. This is all going straight over the top of my head, but in a shrewd populist move, I’m going to side with Gregor :)

    Comment by Daniel Lang — June 15, 2012 @ 5:33 pm

  40. Meanwhile, Labour will save your assets, and then give foreign investors exclusive rights over your laws.

    Clayton Cosgrove has come out with a rousing defence of investor protections in the TPPA. The Australian website The Conversation has a good rundown of all the issues involved: http://theconversation.edu.au/a-mercurial-treaty-the-trans-pacific-partnership-and-the-united-states-7471

    Comment by George D — June 15, 2012 @ 7:28 pm

  41. NeilM’s hyperbolic inaccuracy

    nice phrase.

    It is just my opinion but I am of the opinion that the Greens aren’t above a little populist scare-mongering when it suits them,

    but I was trying to make a point about how well the Greens and Labour can work togther. Perhaps Clayton Cosgrove has a more generous assessment of Russel Norman than I do.

    Comment by NeilM — June 15, 2012 @ 7:29 pm

  42. NeilM – so in effect what you are really saying is that Russel Norman isn’t above perfectly normal political behaviour displayed by any other party leader? Got it.

    Comment by Gregor W — June 15, 2012 @ 7:53 pm

  43. Old Rus the Red did lay the scaremongering “eatin’ dolphin’ reason about as to why Tim Grosser the TPP monster hates the environment on red radio this morning although on current air time it’ll be known as green radio soon. So yes Neil I agree that the Greens are into scaremongering like a rat up a drainpipe or perhaps a academic beltway Labour activist onto a dimpost thread.

    Comment by Tim — June 15, 2012 @ 7:56 pm

  44. The scaremongering that the Greens do now is nothing compared with the old Greens with Jeanette Fitzsimons and Sue Bradford. The current Greens party have the tendency to stay away from scaremongering in an attempt to disassociate themselves from their former members.

    Comment by Daniel Lang — June 15, 2012 @ 10:16 pm

  45. I heard Bill English intends to lower interest rates and lower the NZ$ by lowering government debt through cuts in spending. This is like a bomb for destroying the economy in my view. 1. Cut interest incomes to thousands of elderly (and everyone else) 2. Make all imports more expensive – mostly affecting the lower paid. 3. Sack more public servants and cut the wages to the rest – making more of us poorer while the few get richer. 4. Give a fresh burst to the housing bubble as savers continue to subsidise people who pile on the debt paying ever more for houses. This is all on top of the tax cuts that we couldn’t afford anyway they were always intended to provide an excuse for dismantling the state and handing everything to National’s private sector cronies….most of whom aren’t even New Zealanders.

    This is what I have been calling then the “Multi-National 1% Party (NZ Branch” for the past 4 years. They may be doing good someone…..just not anyone who actually lives here….and that seems to have been their plan all along. Whether they actually understood this to be the outcome is another matter. I’m getting to the point where I agree some of them are tactically clever sometimes…..but most of them aren’t very bright. True believers who don’t actually understand how their ideology really works.

    Obvious enough to the growing number of Kiwis working 60-hour weeks for lower pay on temporary contracts, though.

    Comment by Steve (@nza1) — June 15, 2012 @ 10:22 pm

  46. 44.I heard Bill English intends to lower interest rates and lower the NZ$

    he’ll certainly be very popular with middle NZ if he can lower interest rates even further but I doubt he has that influence.

    I’m not certain if it’s National’s policy to lower the dollar but it is definilty Labour’s policy to do that. They haven’t said quite how they would do it which is not surprising as what ever way they chose to doesn’t look very pretty.

    Comment by NeilM — June 15, 2012 @ 11:21 pm

  47. it is definilty Labour’s policy to do that..

    Evidence?

    Comment by paritutu — June 16, 2012 @ 5:29 am

  48. The latest Listener has a cover shot of John Key that makes him look like a psychopath. Inside, he explains his vision for NZ – which is to sell it.

    Comment by Me Too — June 16, 2012 @ 3:02 pm

  49. Labour have been advocating active Govt intervention to lower the exchange rate for a while.

    It would certainly help exporters but like with most things to do with the economy there’s no free lunch. How would Labour go about doing this?

    Labour’s finance spokesman David Parker says simple changes like broadening the bank’s objectives beyond just controlling inflation…

    in other words they would allow infation to go up. That’s just going to make the less well off even worse off.

    Perhaps there is a greater good argument. Lower the exchange rate therefore boost exports, short term pain for some on the bottom but long term we’re all better off. Hoperfully. Sounds a bit like National.

    Comment by NeilM — June 16, 2012 @ 5:50 pm

  50. I think as long as their wages get the annual inflation adjustment, higher inflation has little effect for people “on the bottom” seeing as pretty much all their money goes on living costs. Hell I’m on the median wage wage and I pretty much live pay-cheque to pay-cheque.

    The people high inflation really hurts is those unproductive people hoarding massive piles of money, who can’t bear the thought of it’s value slowly evaporating.

    Comment by Rob — June 16, 2012 @ 8:51 pm

  51. English and Key and all that lot are in Government, so they certainly do have influence to lower the interest rate. It’s not going to increase if the economy gets worse, and while National are in Government, the economy will get worse through their policies to enable the interest rate to drop in order to accomplish their goals. It’s no coincidence that billions of dollars were borrowed to fund disproportionate tax cuts (extra money for the rich) and it’s no coincidence either that Fay and Richwhite have showed up on the New Zealand investment scene again.

    As for affecting interest income for the elderly, it will be the future elderly that this affects the most because it takes time for the markets to adjust to changes in interest rates. Current elderly people are getting anywhere from 10% to 15% in annual returns (net) if they have over $300,000 worth of investments and invest in a wide range of areas (property, hedge funds, foreign currencies). Changes to the interest rate will affect the savings of the tail end of the boomers and the start of Gen X. However, by the time they are in retirement, 50 – 60% of them will have inherited an adequate lump sum from their parents.

    What will happen then is that they will need to fund their own retirement (at considerably less lower interest rates than their predecessors) and they won’t be able to invest long-term. Government-funded superannuation (probably changed to 67 years by Labour and reduced back to 65 years by National (compulsory retirement age even though it’s not being Government funded). All this means low unemployment for Generation Z and the majority of NZ companies in the hands of the few. Labour, whenever they get in to Government, won’t be able to stop any of this because the economy will be driven down so much that no possibility will exist for them to change any of it.

    Low unemployment is good. And an eventual increase in tourism again. But, apart from that, we’re looking at increased decay in health, education and housing.

    Comment by Daniel Lang — June 16, 2012 @ 10:50 pm

  52. Where does one start?

    “Current elderly people are getting anywhere from 10% to 15% in annual returns (net) if they have over $300,000 worth of investments and invest in a wide range of areas (property, hedge funds, foreign currencies). Changes to the interest rate will affect the savings of the tail end of the boomers and the start of Gen X. However, by the time they are in retirement, 50 – 60% of them will have inherited an adequate lump sum from their parents.”

    er, arse.

    Sorry but that pretty much sums up my response to the rest of your comments Dan. But lets assume I’m wrong in which case can you help me understand by posting some sources for arguments especially the comment above and this one

    “What will happen then is that they will need to fund their own retirement (at considerably less lower interest rates than their predecessors) and they won’t be able to invest long-term. Government-funded superannuation (probably changed to 67 years by Labour and reduced back to 65 years by National (compulsory retirement age even though it’s not being Government funded). All this means low unemployment for Generation Z and the majority of NZ companies in the hands of the few. Labour, whenever they get in to Government, won’t be able to stop any of this because the economy will be driven down so much that no possibility will exist for them to change any of it.”

    Comment by Tim — June 17, 2012 @ 9:10 am

  53. Hey, fair enough Tim, but that’s where I think we’re headed. I’ve personally seen financial documents that state that people are getting returns of 15% and 16% net per annum. These people are elderly. They’re not millionaires but they are quite well off.

    What exactly are you struggling with here? The notion of low unemployment in the future? 50% to 60% of Generation X inheriting an adequate lump sum from their parents? What?

    What we are going to be seeing, from a global perspective, is high rates of poverty in western countries and therefore more of a gap between the poor and the rich. What we will be seeing, from a New Zealand perspective, is an expanded middle-class and a huge gap between the middle-class and the rich. It all depends on current rates of home ownership, pretty much, and New Zealand is a young country and there out statistics out there that state that there is a higher rate of home ownership here than in many other western countries, although rates of home ownership have of course decreased in all western countries over the past thirty years.

    Comment by Daniel Lang — June 17, 2012 @ 3:52 pm

  54. I think National will back in 2014 and we’ll have a Green-led government in 2017 (assuming we are still having elections by then).

    Between then and now we’ll have a left-wing rejectionist government in one or more EU states, the China crash, the consequent Australian resource crash and the further consequence of an Australasian banking collapse.

    Comment by Rich d'Rich (@rich_d_rich) — June 17, 2012 @ 5:41 pm

  55. Just the economic backdrop you know you want with a Green govt. holding the reigns.

    Comment by Tim — June 17, 2012 @ 6:58 pm

  56. Just the economic backdrop you know you want with a Green govt. holding the reigns.

    Tim – At the risk of laying troll-bait, that’s not really a response to Daniel’s questions that makes any sense.
    The “I just don’t like your face” school of rhetoric doesn’t hold much water.

    Comment by Gregor W — June 18, 2012 @ 9:47 am

  57. Rob @ 52 “higher inflation has little effect for people “on the bottom” seeing as pretty much all their money goes on living costs”
    Interesting thought, though if you have nothing left to cut from your budget, then prices go up, you become even more desperate. So not sure it has “little effect” on the poor.
    “The people high inflation really hurts is those unproductive people hoarding massive piles of money, who can’t bear the thought of it’s value slowly evaporating.”
    Um, you mean like those retired folk who have thought it worthwhile to save all their working life? They now find that, no: borrowing to excess and inflating away the repayments is the way to go! You know that those unproductive folk are the “savers” that provide the money to enable “borrowers” to buy stuff. If there were no savers in our economy, then even more of our debt would be to the Chinese. Is that what you want?
    Or are you simply economically illiterate?

    Daniel Lang @55 “I’ve personally seen financial documents that state that people are getting returns of 15% and 16% net per annum.”
    And I’ve personally seen financial documents that state that people (heroic savers) lost 60%, 70% or 80% of the value of their savings, mostly via the collapse of finance companies, some through the difficulties with share markets. That 15% and 16% may be correct for some, but don’t discount the fact that 15% to 16% this year in sharemarket may not have clawed back the -15% to -20% net per annum of the last couple of years.
    Go to: http://www.findata.co.nz/markets/nzx/nz50/chart.htm and click on the “period” drop down, changing the period to 5 years. What you will see is positive recent returns, but a market still below the level of 5 years ago.

    Comment by Clunking Fist — June 18, 2012 @ 1:57 pm

  58. Hey Gregor – I didn’t reply because Dan rolled out another set on non answers.

    Comment by Tim — June 18, 2012 @ 5:47 pm

  59. lol

    Comment by Daniel Lang — June 20, 2012 @ 11:15 am

  60. Clunking Fist

    You’re right there. Upon a review this morning, I found this to be a case. One portfolio in particular gained my attention. It had a value of $524,000 in 2007; $472,000 in 2009; $508,000 in 2011. Obviously there’s $16,000 more to claw back before the break-even point, although, to point out, the funds have been dipped into during this time to the tune of $22,000 so it’s not all the fault of the market and the gains back over the last couple of years haven’t been returned back to the pot (compounded) either.

    Comment by Daniel Lang — June 20, 2012 @ 11:20 am

  61. R’s analysis fails because labour actually did do some very good things that National is currently wrecking. Public debt was paid down thanks, in part, to a sustainable tax rate that kept money cycling around the NZ economy….as opposed to bleeding it off to China and elsewhere to buy ore imported goods. TVNZ 7: finally a real public broadcasting channel. So national kills it to hand broadcasting to a Sky network 44% owned by the biggest crook in global media: Rupert Murdoch. As an Aucklander, Labour was setting up the means for Auckland to FINALLY build the public transport system it has needs for decades….and National are now doing all they can (yet again) to prevent that. The list goes on….. It absolutely is not correct to say there is no difference between these two flavours of governance. I include the Greens here on the side that can actually deliver good stuff for New Zealand. National has actively pushed down wages and conditions for a large segments of workers…and impacted most upon those with the least means to defend themselves…and who already have the least anyway. The choice could not be more clear. the neo-liberal National are the party who can be relid upon to wreck New Zealand. They are proving that just as thoroughly now as they did in the 1990s. Fool Kiwis once shame on you…..fool Kiwis twice….well….dumb-shit Kiwis.

    Comment by Steve (@nza1) — June 21, 2012 @ 3:10 pm

  62. TVNZ 7: finally a real public broadcasting channel.
    I belive a pre-requisite of broadcasting is that you have viewership numbers greater than zero.

    Comment by Phil — June 22, 2012 @ 9:11 am


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