The Dim-Post

November 2, 2011

Plan B

Filed under: economics,Politics — danylmc @ 7:06 pm

The main criticism of National’s welfare policy – in which they plan to reorganise the welfare system and spend half a billion dollars to move ~50,000 solo Mother’s and sickness beneficiaries into paid work – is that there aren’t any jobs for those people to go to, and National has no plans to create them.

But National doesn’t see this as a problem. Treasury has predicted robust economic growth over 4 years creating 170,000 new jobs. There will be – somehow, magically – loads of new jobs for welfare recipients to transition to. Why would the government waste money creating jobs when the market will supply an abundance?

Enter the Greek government’s referendum stunt. The probability of an unmanaged Greek default on >50% of debt now looks high. This will precipitate a banking crisis which will cause a second global recession. In this not-unlikely outcome New Zealand won’t get ‘robust economic growth’. At best we’ll remain stagnant. The problem is that we’re in an election campaign and both major parties are promising policies that rely on Treasury’s insanely optimistic forecasts.

This isn’t so bad in Labour’s case – they can still implement a CGT, compulsory savings and raise the super-age, although they won’t be able to afford payments to the Cullen fund, the $5k tax threshold or the GST waiver.

But look at what happens to National’s flagship policies. If they try to sell the assets during a global recession they won’t be able to realise the prices they want which means they won’t address the deficit. And spending $500 million dollars to transition solo mums and sick people into jobs that won’t exist would be an act of utter madness.

So it’d be nice to know what National’s ‘Plan B’ is, since the chances of them being able to follow through on either of their key election promises are pretty minimal. I don’t expect Key to answer questions on this – our Prime Minister doesn’t do reality – but Bill English and Steven Joyce should be called to account on this issue.


  1. Steven Joyce doesn’t really do reality either. He livesin a world where spending money on remote motorways in the country, with benefit cost ratios of 0.4, will magically make our country rich. Or to take a more cynical perspective he has a really good grip on the reality of who donates to the national party and doesn’t really care about anybody else

    Comment by Amy — November 2, 2011 @ 7:40 pm

  2. Unfortunately the brain-dead ill-informed average voter doesn’t do reality either.

    It’s a worry. Factor in the major problems China is facing which will trickle down to us directly and via Australia and the future is not looking too rosy.

    It’s time to stop waving “Occupy Wall St” banners and to devise alternatives. It’s revolution time. The party-based democracy system served us well for the best part of a century but it’s now broken beyond repair. It needs major reconstruction.

    Comment by Alan Henderson — November 2, 2011 @ 7:51 pm

  3. The Greeks are so fracked they have sacked all the top military brass, was it to stage a coup or stop one?

    In a surprise move, on Tuesday evening the defence minister replaced the country’s top brass.

    An extraordinary meeting of the Government Council of Foreign Affairs and Defence (Kysea), which comprises the prime minister and other key cabinet members, accepted Defence Minister Panos Beglitis’ proposal that the following changes be made to army, navy and air force and the general staff:

    BTW you know Plan B is slang for an emergency contraceptive pill….?

    Comment by andy (the other one) — November 2, 2011 @ 8:03 pm

  4. You mean Joyce and English do reality? C’mon, get real.

    Comment by peterlepaysan — November 2, 2011 @ 8:04 pm

  5. “Acts of utter madness” more or less describes the (Multi-) National (1%) Party’s history for the past 30 years….from Muldoon onward.

    But they are aided and abetted by the 40%+ of Kiwis who have strong opinions on a vast range of subjects they actually know very little about.

    Ignorance on such a vast scale makes “acts of utter madness” not only possible…..but possibly inevitable.

    Of course when the proverbial hits the fan…it will all be someone else’s fault.

    Same old same old.

    Am I bitter? Maybe. My disappointment in the determined – smug – intellectual laziness of so many in this country may be crossing over into anger and frustration that I and my family have to suffer the consequences of stupidity from people who won’t listen…and can’t be told.

    Comment by Steve (@nza1) — November 2, 2011 @ 8:10 pm

  6. *chucks some more popcorn in the micro & pops the scab off a beer*

    LOL. Keep the bitter fest running boys & girls.

    Comment by little_stevie — November 2, 2011 @ 8:39 pm

  7. Andy, at a completely uninformed guess, I’d say that the sackings and the referendum call are about staving off a coup. Mil guys get the chop, go quietly on the condition there’s a ref.

    Comment by Pascal's bookie — November 2, 2011 @ 9:01 pm

  8. It’s Greece, the Mil guys would have been paid off.

    Comment by fil — November 2, 2011 @ 9:25 pm

  9. This is still politically untouchable, but to address the fact that most voters are quite uninformed, perhaps you just have to pass a very simple test where you must name one policy that each party running is advocating. It could be multi choice but the options are randomised so people can’t just memorise the results.

    Personally though I still prefer a much more localised and participatory approach but am myself woefully uninformed about how these work in practice (yes, I do see the irony in that). Maybe the test thing would be one step towards that though, and at least you’d have to read up a bit about other parties and acknowledge their existence and what you’re not voting for.

    Comment by Zo Zhou — November 2, 2011 @ 9:32 pm

  10. Only the Party should vote eh Comrade.

    Comment by fil — November 2, 2011 @ 9:37 pm

  11. Hopefully in gold and not Euros.

    Comment by Gregor W — November 2, 2011 @ 9:37 pm

  12. oops – ref fil #8

    Comment by Gregor W — November 2, 2011 @ 9:38 pm

  13. Personally though I still prefer a much more localised and participatory approach
    Anything like this?

    Comment by Pete George — November 2, 2011 @ 9:45 pm

  14. Sadly I find myself in complete agreement with Alan about our future prospects. National has no plan B but will still get the votes of the average voters and be returned to government about the same time as the Chinese bubble finally pops and our export industries find there’s no one left with any money to sell to.

    I think it’s time to put that vege patch in and get to know the neighbours a bit better with an eye to future barter opportunities in our future as a subsistence-level agrarian-based economy.

    Comment by Conrad — November 2, 2011 @ 9:53 pm

  15. $13.50 x 40 x 52 = $28080, goes into $500 million 17806 times. So $500 million is wages for about over a third of the 50000 people you are talking about. If your numbers are right it would seem more efficient to create the work if anyone could think of something for them to do.

    Comment by bka — November 2, 2011 @ 10:47 pm

  16. It will be interesting to see if Labour can come up with an explanation for how they would fund their plan A.

    They want to spend more, so a Plan B would be even tougher for them to fund.

    Comment by Pete George — November 3, 2011 @ 4:15 am

  17. “…which says more about the quality of the Opposition than it does about the govt…”

    It may also relate to my last comment about TVNZ seeing politics as a form of light entertainment. To paraphrase Brian Edward’s take on the leaders “debate” on TVNZ –

    “…Television New Zealand has never treated politics as anything more than an entertainment. Its remit to sell audiences to advertisers, its suspicion that viewers are fundamentally uninterested in politics, its conviction that the attention span of the average television consumer is seven minutes tops and its paranoia about doing anything that might bore that viewer into switching channels, all contribute to the entertainment ethos that drives news and current affairs…”

    I suspect even TV3 would be less irresponsible than TVNZ.

    People spend a lot of time criticising “brain dead” voters (see the “Plan B” thread on this site), but democracy requires not just the citizens but also the media and the political leadership to take it seriously. When the political and media elite are as incestuously corrupt, cynical and decadent as ours, how can the voters be expected to make informed decisions on economic management? There is no point in castigating voters for being superficial when those they entrust a certain democratic duty of care to don’t care.

    Comment by Sanctuary — November 3, 2011 @ 8:05 am

  18. Labour’s plan B is to not get elected.

    If National get elected all they’ll do is turn around and blame that on Labour.

    Comment by NeilM — November 3, 2011 @ 8:11 am

  19. I find it belittling that National scorn those on the DPB. It’s a witch hunt and it’s stupid. It’s a case of the minority making the majority look bad. There are mostly mothers on the DPB that have one child or two children. The ones with four, five, six are few and far between and a lot of them are close to middle-age anyway and have had work in the past. The young ones with four or five children are even rarer.

    Solo mothers should be able to wait until their second child turns five before the re-enter the workforce.

    Comment by Betty — November 3, 2011 @ 10:23 am

  20. They don’t need a Plan B because Plan A was so phenomenally good. I have an employment contract here to prove… oh, wait.

    Comment by Dizzy — November 3, 2011 @ 11:12 am

  21. “This is still politically untouchable, but to address the fact that most voters are quite uninformed, perhaps you just have to pass a very simple test where you must name one policy that each party running is advocating.”

    Ugh, not this again. Zo, I’m sure your policy feels very sensible and moderate to you, but it’s interesting to me that the people who propose these sorts of tests always come up with a hypothetical test that they themselves can pass.

    I’ll start to take this “only the informed should vote” proposal seriously when somebody who self-identifies as uninformed proposes it.

    Comment by Hugh — November 3, 2011 @ 4:49 pm

  22. I’ll start to take this “only the informed should vote” proposal seriously when somebody who self-identifies as uninformed proposes it.

    Oh Hugh, you nitpicker.

    Merely replace ‘the informed’ with ‘those informed by TV/Talkback’ and the proposition makes perfect sense, given that anyone who self identifies as within that population is ipso facto, uninformed.

    Comment by Gregor W — November 3, 2011 @ 5:06 pm

  23. “He lives in a world where spending money on remote motorways in the country, with benefit cost ratios of 0.4, will magically make our country rich.” – Amy

    Amy, at Marsden Point is a deepwater port – the closest deepwater port in New Zealand to international markets. Among other things, what comes in through that port according to Refining NZ is all of the country’s jet fuel, 80% of diesel, half the petrol, 80% of bitumen, all fuel oil for ships, sulphur for farm fertiliser and apparently the fizz in fizzy drinks. What goes out is logs and timber products eg Carter Holt produces & sends out LVL from there. Agricultural products and cement also go out from there.

    Its also so far being underutilised. There’s a lot of growth potential there.

    You might have thought that if Tauranga had to temporarily close because of Rena, then Northland could have temporarily taken some of the surplus, but no, it couldn’t. One of the reasons, according to the paper, is that the shite road makes it uneconomical.

    Whangarei Council has also noted there’s potential to redirect the bulk stuff that comes through Auckland – eg gypsum & cars. Auckland could downsize, becoming just a container port serving the local area and a place for tourist ships. Aucklanders could have more of their waterfront back to develop for prettiness. Auckland wouldn’t have to dredge its harbour as often if at all.

    One of the big obstacles is the inadequate links between Northland and Auckland – both road and rail. The NZTA project summary gives a range of cost benefit ratios – the worst one is 0.8 (which is with an 8% discount rate and measures only direct transport benefits and not wider economic benefits), and the best one they gave was 2.0 (with 4% discount rate and wider economic benefits included)

    Comment by Bea — November 3, 2011 @ 7:15 pm

  24. I would imagine that when they can’t get the dollars they want for a 50% share, they’ll sell a larger chunk of the companies, sell Kiwibank, ACC, Kordia and Kiwirail and increase GST further. ‘dynamic’, innit.

    Comment by Rich — November 4, 2011 @ 1:29 pm

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