Written By: - Date published: 12:04 pm, November 19th, 2008 - 30 comments
It’s exam season for high school students. So, for 10 points explain how the following statement (in the ACT-National agreement and repeated uncritically by the media) can be true, closing the income gap with Australia by 2025… will require a sustained lift in New Zealand’s productivity growth to 3 per cent a year. given: – […]
Written By: - Date published: 6:46 pm, November 15th, 2008 - 34 comments
With a masterful awareness of the import of his actions, President Roosevelt termed his economic program to lift the US out of the Great Depression ‘the New Deal’. Laissez-faire capitalism, whereby the ‘invisible hand of the market’ ruled, had failed to fulfil the conditions of the social contract (a fair distribution of wealth between capital […]
Written By: - Date published: 2:25 pm, November 14th, 2008 - 50 comments
One of the things I like about being left wing is how often the best moral decision is also the best economic decision. Take economic stimulus for example. In a recession it’s the most vulnerable such as beneficiaries, low paid workers and youth that are hit worst because they are the ones least likely to […]
Written By: - Date published: 2:55 pm, November 13th, 2008 - 192 comments
Michael Cullen has released the latest economic and fiscal update, the one Key commented on in today’s papers but which he refused to reveal the details of to the public. Basically, it’s pretty bad news. How Key is responding or, rather, not responding to this first test is even worse news. Since the Pre-election economic […]
Written By: - Date published: 10:21 am, November 13th, 2008 - 36 comments
From Stuff: Mr Key said New Zealand had a significant advantage over other countries because official cash rates set by the Reserve Bank were high. “If that weaker scenario is anything like what it could be, then you will see significant rate cuts in New Zealand.” Oh Christ. It was bad enough when he was […]
Written By: - Date published: 12:00 pm, November 11th, 2008 - 9 comments
During the debate over the economic stimulus package in the US earlier this year, Moody’s produced a model that shows which stimulus options result in the most increase in GDP per dollar of government spending/tax reduction. I’ve highlighted the three options that are relevant to NZ (the Bush tax cuts are remarkably similar to the […]
Written By: - Date published: 1:08 pm, November 6th, 2008 - 14 comments
Unemployment has risen to 4.2%, the first time in four years it has topped 4%. That’s lower than the experts expected, they thought the rate would blow out to 4.5% or more. But that’s the power of a full employment policy. Because we’ve had such low unemployment for so long, employers are reluctant to lay […]
Written By: - Date published: 11:42 am, November 4th, 2008 - 34 comments
The latest government accounts show the economy is in better condition than was expected. Tax take was $500 million higher than expected due to higher-than-expected income tax revenue. That means more money was being earned from wages and salaries than Treasury had forecast; in other words, unemployment is not rising as fast as Treasury had […]
Written By: - Date published: 9:15 am, November 2nd, 2008 - 22 comments
From this mornings SSTimes: New research has revealed a dramatic reversal in financial fortunes for the average Kiwi family, which is now $60 better off each week than it was six months ago. Falling mortgage costs teamed with the government’s October 1 tax cuts and a beefed up Working for Families package are the main reasons […]
Written By: - Date published: 10:39 am, October 28th, 2008 - 34 comments
Last month, Key lied when he was asked whether he had more Tranzrail shares, over which he had failed to declare his conflict of interest. On Sunday, it was revealed on The Standard that Key had also held shares in Fletcher Challenge Forests, which was campaigning for the Government to buy the rails off Tranzrail, […]
Written By: - Date published: 7:50 pm, October 27th, 2008 - 19 comments
Labour has unveiled its work rights policy, and it’s a good one: – minimum wage increases at least at the rate of inflation or the average wage increase, whichever is higher. That would bring it to nearly $15 a year by 2011. Why they didn’t just commit to $15 like the rest of the Left, […]
Written By: - Date published: 11:37 am, October 24th, 2008 - 26 comments
So, you’re talking with someone about politics and they say something really dumb and wrong and you know it’s wrong but you don’t have the arguments and facts at your fingertips to make a decisive point. That’s where our election series, The Standard line, comes in. The info you need in bite-size form. Today: Kiwisaver Points […]
Written By: - Date published: 9:02 am, October 23rd, 2008 - 30 comments
The OCR is down from 7.5% to 6.5%. That’s an unprecendented cut in one go and further confirmation that we are entering tough economic times. Inflation has been high but the Reserve Bank thinks the increasingly likely global recession will remove inflationary pressure. Keeping the economy going will be the challenge.
Written By: - Date published: 3:46 pm, October 22nd, 2008 - 38 comments
OK, we’ve reported on, given historical context to, and mocked Lockwood Smith’s racist comments about seasonal migrant workers. Now, to the substance of what Smith as saying, ie that fewer permits issued under the Recognised Seasonal Employer Scheme (RSE) should be allocated to people from the Pacific Islands (because, he says, other people are smaller […]
Written By: - Date published: 1:18 pm, October 21st, 2008 - 21 comments
Inflation hit 5.1% for the year to September driven by the mammoth spike in oil, food, and other commodity which has abated since then, for now. There is nothing that could be done to avoid this impact on New Zealand from international markets. The economy is already in recession, and now would be the worst […]
Written By: - Date published: 11:09 am, October 18th, 2008 - 64 comments
We live on a finite planet. We can’t just keep adding 75 million people a year to the human population while also increasing the average resource consumption per person without collapsing the biological systems that support us. Current projections have the world population rising another 2-2.5 billion in the next 40 years to peak around […]
Written By: - Date published: 2:15 pm, October 15th, 2008 - 24 comments
The Maori Party wants the dole abolished to be replaced by work schemes. It’s a bad idea but it’s not too far from being a good one. Make work schemes are bad in several ways. They distort the market for low-skill work. The State with an army of cheap, semi-involuntary labour ends up undercutting the […]
Written By: - Date published: 10:55 am, October 14th, 2008 - 90 comments
National’s Nick Smith has announced that they would cancel the $1 billion fund to insulate New Zealand houses, which the Greens won as part of the Emissions Trading Scheme. This massive programme would improve energy efficiency, create warmer, healthier homes and would provide useful employment during the downturn. A study, ironically carried out under National and mentioned to me […]
Written By: - Date published: 4:08 pm, October 13th, 2008 - 44 comments
While Key was blathering on about who-cares-what yesterday, Clark announced a radical and forward-looking economic stimulus package. Now, Key is having a cry over Clark not notifying him beforehand of the deposit insurance scheme. As if the Prime Minister needs to seek the approval of an opposition party before setting government policy. Key whines that monetary […]
Written By: - Date published: 11:50 am, October 13th, 2008 - 16 comments
It was inevitable that the focus of media coverage of Labour’s announements yesterday would be the deposit insurance, it’s a good self-centred middle-class story. But the important stuff, as Irish pointed out last night, is the re-training money, the speed-up of infrastructure construction, the money for sewerage, housing, and anti-erosion projects. The deposit insurance simply acts to […]
Written By: - Date published: 10:14 am, October 13th, 2008 - 25 comments
One of the first rules of politics is don’t set yourself up to be snookered; don’t position yourself in a way that your opposition can and will undercut, don’t run attack lines that your opposition can and will invalidate. National has repeatedly done this. They ran on tax cuts as their sole platform when it […]
Written By: - Date published: 8:21 pm, October 12th, 2008 - 16 comments
One of the things that has pissed me off about MSM political analysis lately is the constant repetition of the idea that cutting taxes in a recession is all you need to do to be considered Keynesian. This is generally remarked upon in the context of National shifting their economic policy left (that “Keynesianism” and […]
Written By: - Date published: 11:22 am, October 12th, 2008 - 11 comments
A few thoughts from today’s Agenda: Questioned about why National would introduce another tax rebate, having endlessly criticised Working for Families because of its complexity, English says ‘we do, in the long term, want a simpler tax system’. So, be on notice, Working for Families is under threat from National – they would ‘eventualy, but […]
Written By: - Date published: 12:53 pm, October 10th, 2008 - 23 comments
I was going to write about the economic effects of taking money out of Kiwisaver and spending it on tax cuts but this youtube video with South Park characters does the job and is much more fun: (hattip: Labour’s ‘Campaign Trail‘ blog)
Written By: - Date published: 3:42 pm, October 8th, 2008 - 61 comments
John Key has announced that Kiwisaver would be slashed along with National’s tax cuts for the rich (and they are tax cuts for the rich, while most people would get less than under Labour’s plan, under National’s plan by 2011 around half a billion a year more than under Labour’s plan would be going to […]
Written By: - Date published: 3:50 pm, October 6th, 2008 - 117 comments
The Pre-election Fiscal Update projects that gross debt will rise from 17.4% today to 24.3% of GDP in five years. Fortunately, we are facing these tough economic times starting from a solid position due the the Government’s policy of running surpluses and paying down debt, rather than slashing taxes. 24.3% debt is right at the […]
Written By: - Date published: 2:37 pm, October 6th, 2008 - 28 comments
With the economic situation deteriorating the surpluses the Government has run for the first eight years have turned to a deficit. National’s line now is that the Government ‘suquendered’ these surpluses when it could have been cutting taxes. As if when the Government runs a surplus it takes the extra money out and burns it. […]
Written By: - Date published: 12:49 pm, October 5th, 2008 - 9 comments
Tomorrow the government’s books will be opened up. It is not expected to be a pretty picture. Oil prices and the credit crunch have forced the economy into recession. The debt to GDP ratio will be higher than was modelled in the Budget for three reasons (at this point, I just want to remind our excitable righties that […]
Written By: - Date published: 12:05 pm, October 3rd, 2008 - 36 comments
As The Standard first reported on April 1 and Radio New Zealand picked up today, Treasury figures show that the wage gap between Australia and New Zealand increased 50% under National in the 1990s and has decreased moderately under Labour since then. Now, a lot of our readers simply won’t want to believe that […]
Written By: - Date published: 1:55 pm, October 2nd, 2008 - 25 comments
With expectations about National’s tax cuts justifably very high (thanks to National talking them up for nine years), National is suddenly trying to change course. John Key, who has promoted tax cuts as the solution to doctors’ strikes, the wage gap, and petrol prices along with every other issue facing this country, is now saying […]
Written By: - Date published: 9:40 am, October 2nd, 2008 - 59 comments
The formula to determine the fair value of a share is pretty simple – take the expected future dividends,adjust them using the discount rate, and add them up, there’s your fair share price. Of course, expectations on future dividends and people’s discount rates vary but it should all be pretty simple. It isn’t though because the […]
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