I’m not going to waste a lot of time on the Welfare Working Group’s report. It follows the Brash-esque formula of mis-representing the issue as some massive problem and then presenting ‘solutions’ that have failed overseas. Like the Brash reports, it will be used by the Nats for bait and switch, making their actual cuts seem moderate by comparison.
It’s official: the Auckland CBD rail loop would bring more benefit to the country for its cost than any of National’s ‘Roads of National Significance’. And that’s even before we talk about peak oil. Any rational government would put the money into the project that gets most benefit for the taxpayer buck. Not this one.
In Question Time yesterday, Bill English said Ireland is an example of how bad the recession might have gone in New Zealand. That triggered a memory of John Key three years ago saying we should follow the Irish economic model. I guess we can just be thankful Key wasn’t in power at the time to put that crazy ‘aspiration’ in effect.
You remember John Key’s ‘blind trust’ that turned out not to be so blind. Key denied all but anyone could easily see into the ‘blind trust’. Key certainly knew of his wine and dairy interests, giving him a conflict of interest he failed to declare. Now, after the furor, the ‘blind trust’ has sold the shares. Funny things, coincidences.
Standard and Poor’s shock move to downgrade our credit rating caused markets to plunge late yesterday. Bill English’s reaction, predictably, is to pretend nothing is wrong. John Key says it’s about debt, even as he borrows for tax cuts. But let’s look at what S&P says is wrong with us:
The Commissioner for the Environment says New Zealand’s greenhouse emissions will be 26% above 1990 levels in 2020, compared to the Nats’ promise to cut them by 10-20% – leaving us with a $1b bill. Worse, the IEA shows that even if we and other countries meet our promised cuts its only half of what’s needed to avert disaster.
National Bank has joined NZIER in estimating the economy shrank 0.2% in the September Quarter and all the projections say it’ll go backwards this quarter too. Bill English now admits John Key’s ‘rapid recovery’ isn’t happening. But he insists it’s coming – tomorrow, no, the day after for sure. We’ve just got to keep waiting…
Labour picked up on the statistics I revealed yesterday that show the median income of Maori has fallen 11.5% under National and the Pacific Island median income is down an astounding 19%. Kris Fa’afoi and Annette King put out press releases. Then King took the battle to Bill English in the House, who it seems is also a reader.
Here’s a little something that Kris Fa’afoi and his team might like to being to the attention of Mana voters as they prepare to go to the polls. On National’s watch, the median Maori income has fallen 11.5%. For Pacific Islanders the fall’s 19%. Pakeha are down 2.6%. No tax cut for the rich can cover the gaping holes in those family budgets.
What little we know of Whanau Ora is that it is essentially the privatisation of government delivery of social services to private groups. Rather than deliver services themselves, government departments entrust taxpayer funds to small groups that often have little or no track record to do the job instead. It’s an invitation for corruption.
The International Energy Agency’s annual World Energy Outlook forecasts that by 2035 oil will cost $200 a barrel in today’s dollars. That’s not $200 during a price spike, that’s $200 as the new normal. The world entered recession when the price went over $100 in a spike during 2008. A permanent price of $200 a barrel is simply unaffordable.
We should treat the economy as a tool to serve our collective needs within the environment’s limits. Instead, we elevated it to the status of a god. Now, environmental degradation and resource exhaustion will leave us with no choice but to live within those limits. To do that, we need to build a system with two goals: fairness and sustainability.
What’s so great about free trade negotiations with Russia? We export only $180 million a year to them, most of it butter. That’s 2% of our exports to the US and Japan and Key’s made no progress on their trade barriers. Rising oil costs will soon make our butter uncompetitive vs Russian dairy farmers. Key got his photo op – but not with Obama.
Economist Jeff Rubin explains that the peak oil crisis is the underlying cause of the global economic crisis and why the economy isn’t shaking itself out of recession as in the past. In the age of peak oil, trade advantages will be overwhelmed by transport costs. The winners will be self-sufficient countries with their own agricultural and manufacturing bases.
House prices are a good indication of how the economy is going. They rose rapidly in the 2000s, stalled in 2007, plummeted in 2008, and made a slight recovery in 2009. Now they’re heading down again. The median house price is over 16% below the peak in late 2007 and I reckon they’ve got a long down way to go yet.
The US Government has begun creating new money out of thin air, to inflate away the value of its debt and lower its currency to make its industries more competitive. It’s not the only country. Nearly all the major currencies are engaged in the ‘Currency Wars’, trying to force down their exchanger rates. We’re in the cross-fire doing nothing.
The latest Roy Morgan poll shows confidence in government plummeted during the Hobbit debacle. It shows confidence in government falling to a new low for Key’s administration. At the beginning of the year, nearly three-quarters of the population agreed the country was heading in the right direction. Barely 50% do now.
While the unemployment rate continues to jump around like mad, the dole numbers are telling a consistent story. And it’s not a good one. Every month this year has been worse than normal. In October, the number of Kiwis on the dole fell by 0.1%, that’s compared to a 1.1% fall last October and an average 3.1% drop each October under Labour. This October there were 4,800 more people on the dole than last October. Didn’t you say we were coming out of the recession strongly, Mr Key?
I’ve never really understood the logic of paying CEOs multi-million dollar salaries. Can Telecom’s $7m man, Paul Reynolds, for example, really be worth 100 skilled technicians? Is there no-one who is basically as good who would work for a million or two less? Now, research shows high pay gaps for CEOs actually makes them worse bosses.
We’ve been critical of this do nothing government’s economic record, but now I/S at No Right Turn has received documents that lay out the Nats’ economic plan. They rejected the notion of government, business, and workers pulling together to create a better economy and went with: 1) find lots of oil 2) lots of GM cows.
The Government is planning to reduce ACC cover and portray it as a cost saving for levy-payers. You would get less income coverage when injured and have to endure a longer wait time of three weeks until your coverage would begin. Levies would be personalised on the private model. This is privatising ACC on bite at a time with no actual cost savings.
The title of Don Brash’s latest exercise in making John Key appear moderate second 2025 Taskforce report is “Focusing on Growth”. Why should we be myopically focused on growth? Neoliberalism treats growth as an end in itself. That reduces us to mere cogs in the machine of ‘New Zealand Inc’. A healthy society is more than its GDP growth rate.
At 6.4% unemployment appears to be falling, slowly. But it also looks to be above where it was at the start of the year, when it supposedly plunged to 6.0%. Economists are viewing the wildly fluctuating numbers sceptically. Whatever precisely is happening, with one in ten working age Kiwis unable to get work, it’s not time for dancing in the streets.
September Quarter unemployment numbers are out today. It will be an indictment on National if there is not a good sized drop. So how is this government doing on its flagship policy of closing the gap with Australia by 2025? No Right Turn has been trying to find out what work they’re doing to achieve that goal. Answer: Nothing.
Don Brash’s latest 2025 Taskforce report will be ignored like the last. Brash tries very hard to scare us into adopting his failed neoliberal agenda but we all know the point of the Taskforce is to make John Key look moderate. That said, Brash’s latest offering is a curate’s egg – nearly all of it foul and rotten but with one partially redeeming section:
Weren’t Bill ‘Double Dipton’ English and other ministers caught rorting the housing allowance system last year? Didn’t the Government revamp the system by giving ministers capped allowances, supposedly to save money and stop rorts? Why then are we, as I predicted, paying more than ever while ministers blatantly rip us off?
The Maori Affairs select committee has released its report on smoking. It’s great to see politicians setting a really ambitious goal coupled with policies to achieve it. Labour and the Greens are on board, what about National? Well our Do Nothing PM, John ‘ambitious for New Zealand’ Key says it’s too hard. Guess we need a government with some balls.
We know that poverty is the root of a good deal of society’s problems from crime, to poor educational outcomes, to poor health. Just the direct economic costs of these problems are in the billions per year, and we can’t forget the loss of human potential and happiness. The good news: we can easily afford to eliminate poverty.
I saw Labour’s press release yesterday about the latest Treasury monthly statements. Basically, Treasury says ‘the economy’s a whole lot worse than we expected but we stand by our growth forecasts in the Budget’. Odd, because the Budget forecast 1.6% growth so far this year and it has actually been 0.7%. How good is Treasury at forecasting?
The latest drink-drive crash has reignited the debate over the legal blood/alcohol level. It’s clear from John Key’s excuse-making on Breakfast this morning that the Nats have no intention of reducing the limit from 0.8 to 0.5. The argument that most drink-drivers have accidents when they are well over 0.8 misses the point.
After the Hobbit debacle, no-one can fail to understand the power that those who control capital exercise in a capitalist economy. The system is set up for them, hence the name, and their power is never stronger than during recessions. While capital is unaccountable, we cannot have true democracy and freedom. How can we democratise capital?
It takes a lot to screw up a great country like New Zealand. It can’t be done overnight. But if you’re really negligent, anti-worker, and focused on hand outs to the rich, you can start to make things worse pretty quickly. Let’s look at the key measures of National’s performance, according to their own criteria:
I’m confused by the up beat coverage of the tourism figures released on Wednesday. Have people actually read the numbers? Tourism is in decline. Employment and revenue are still going down, and the next time oil prices go through the roof, the situation will get worse. No cycleway will change that.
The Government will give the Hobbit producers an extra $33 million to stay in New Zealand and it’s going to use this ‘crisis’ as an excuse to slam through more anti-worker laws. New Zealand has been played like naive hicks. The Hobbit was never leaving. We let Jackson and his Hollywood mates whip us into a frenzy of fear – now we’re paying the cost.
The Hobbit ‘crisis’ is just the latest in a series of capital flight threats from Jackson and Hollywood. We’ll end up paying more to stave off the threat of capital flight because the wider economic benefit makes it worthwhile. Key is trying to talk down how much we can pay but he bears responsibility for talking up the ‘crisis’ to put the boot into unions.
The Hobbit ‘crisis’ is all about money. It’s about the producers of this long-troubled production, who are in financial difficulty, wanting to minimise their up-front costs. The mark in the con is the only one with cash to offer on the scale they need – the Prime Minister. He’s the one with the most to lose and the most ability to pay.
