Written By: - Date published: 9:49 am, June 9th, 2008 - 95 comments
We regularly hear calls (not backed by any major party, including National) for the taxes on petrol to be lowered or removed because the prices are so high. After all, every time the price goes up, the government gets more revenue, doesn’t it? No, it doesn’t. Tax on petrol has two parts. There are four levies […]
Written By: - Date published: 11:37 am, June 5th, 2008 - 14 comments
The Reserve Bank has left the Official Cash Rate unchanged; no-one expected a rate cut this early. It’s encouraging that Bollard has firmly signalled that interest rates will be coming down this year despite projected inflation reaching 4.7% in the September Quarter. There’s no use in the Reserve Bank strangling our economy with high interest […]
Written By: - Date published: 2:59 pm, June 3rd, 2008 - 26 comments
This is the graph of the oil price forecasts Treasury used to underpin its fiscal model for the Budget. It assumes that oil would touch $115 a barrel US in about July this year before easing off to a long-run level of $100 a barrel. That is already up on Treasury’s forecast from November, which […]
Written By: - Date published: 10:56 am, May 28th, 2008 - 29 comments
Greg Clydesdale’s report that labelled Pacific Islanders a ‘drain on the economy’ has been rubbished as a lazy, intellectually dishonest piece of work by fellow academics. The report concludes that Pacific Islanders make no net contribution to the economy but the substance of the report does not justify that conclusion in the slightest. Moreover, it […]
Written By: - Date published: 9:50 am, May 22nd, 2008 - 44 comments
The Herald and National have started attacking every piece of government spending as pork-barrelling. Here’s some of what they’re calling ‘wasteful, needless spending’: $750 million of new health spending ($160 million for elective services) -Pork $700 million for Fast Forward Fund, food and pastoral sector research -Pork $665 million to buy the national rail operations […]
Written By: - Date published: 7:11 am, May 22nd, 2008 - 18 comments
From the MP who tried to ban water comes ‘don’t use crash statistics to work out which roads are dangerous’. Writing in the Oamaru Mail about a dangerous stretch of road, National MP Jacqui Dean says: “Transit New Zealand often places too great an emphasis on the crash statistics it receives from Land Transport New […]
Written By: - Date published: 2:41 pm, May 21st, 2008 - 9 comments
Seemingly content to coast along on the “time for a change” sentiment, the National Party are still refusing to offer any substantive details in major policy areas: government debt, work rights and retirement savings. English ended up sounding like a broken record on Agenda a few days back. His stock answer was ‘I can’t tell […]
Written By: - Date published: 1:59 pm, May 16th, 2008 - 23 comments
The economy is clearly slowing. Fundamentally, it remains strong with high employment, good wages rises, and strong prices for our exports but employment and retail spending both declined in the first quarter of this year, the housing market is flat, and there is a danger that if the Reserve Bank keeps its foot on our […]
Written By: - Date published: 10:50 am, May 14th, 2008 - 72 comments
Rio Tinto’s threat of capital strike appears to have backfired on them, with a political consensus emerging that the multinational has overplayed its hand on this one and some even starting to question whether we might be better to just shut the smelter down and be done with it. CAFCA were particularly blunt: Campaign Against […]
Written By: - Date published: 10:27 am, May 13th, 2008 - 87 comments
Multi-national minerals company Rio Tinto is threatening to close its Tiwai Point aluminium smelter in Bluff and move its production offshore if the Emissions Trading Scheme is enacted because they say it will increase power prices. This is not the first time Rio Tinto has held New Zealand to ransom using the threat of closing […]
Written By: - Date published: 10:05 am, May 7th, 2008 - 48 comments
Here’s Gerry Brownlee in the Herald today: Brownlee said the [Whirinaki] power plant, near Napier, was intended as an emergency backup to be used seldomly in dry years. But he said the figures – from use over 32 days in the three-month period – suggested otherwise. “Its increased use is more evidence that Labour has […]
Written By: - Date published: 12:58 pm, May 5th, 2008 - 17 comments
The Labour Cost Index rose a record 3.4% for the March year. That means wages and salaries for doing the same job rose an average of 3.4% over the year. Public sector wages were up 3.3% and private sector wages up 3.5%. Retail and other low-paid workers did especially well, with their pay up 5.1%, […]
Written By: - Date published: 10:26 am, May 5th, 2008 - 62 comments
The Government has bought back the rail stock and ferries from Toll for $655 million. The privatisation of these vital assets, which are also natural monopolies, by National was a disaster from Day 1. National flogged the railways and the ferries off dirt cheap to their mates who asset-stripped them by slashing maintenance and taking […]
Written By: - Date published: 2:34 pm, May 2nd, 2008 - 29 comments
Today, ANZ and National Bank announced they are lifting their variable mortgage rates another quarter of a percent to 10.95%. That comes a week after the two banks, which are jointly owned, announced a net profit of $520 million in six months, up 7% on the previous period. Yesterday, Westpac announced a $244 million profit, […]
Written By: - Date published: 11:19 am, May 2nd, 2008 - 57 comments
National is a party weak on policy. It has had to drop nearly every one of its principled but unpopular policies to get itself in a position to win an election. This raises the question of why someone would vote for National, rather than keep the current lot. One of National’s answers is to claim […]
Written By: - Date published: 11:32 am, April 30th, 2008 - 3 comments
It’s not often National gets something right but their latest flip-flop, on bio-fuels, is a good policy (well, partially and for the wrong reasons). National has announced they will no longer be supporting the bio-fuel requirement in petrol because it may put up the price of petrol a few cents. The bio-fuel requirement was always […]
Written By: - Date published: 10:39 am, April 28th, 2008 - 15 comments
Interesting to see people gradually waking up to what Fidel Castro, last year, called “The sinister idea of converting food into combustibles”. Even crazy ol’ Mike Moore writes about it today, although he is dead wrong when he calls biofuels “a populist Green response to global warming”. Environmentalists were always suspicious of biofuels, seeing them […]
Written By: - Date published: 4:15 pm, April 23rd, 2008 - 29 comments
In 1974, economist Richard Easterlin, published a study in which he argued that economic growth didn’t necessarily lead to more satisfaction. In poor countries, gaining the necesseties of life raised happiness but beyond those gains there was no increase. This became known as the Easterlin paradox. Just last week, two young economists presented what they […]
Written By: - Date published: 12:18 pm, April 23rd, 2008 - 28 comments
The internet is awesome; you can use email, learn heaps, and read sites like The Standard. Faster internet is awesomer; you can watch the Porirua market video without having to wait for it to buffer. Personally, I can’t wait until I’m getting the internet through a chip in my skull. Why, then, is National’s $1.5 […]
Written By: - Date published: 3:31 pm, April 22nd, 2008 - 50 comments
We have all heard of the peak oil crisis that is already manifesting itself in fuel prices. Now, consider peak food, the point where our ability to produce food peaks even as demand grows. Wheat was the first plant to be domesticated, around 10,000 years ago. Our civilisations are built on the excess calories available […]
Written By: - Date published: 1:40 pm, April 17th, 2008 - 26 comments
Continuing our benefits theme, here’s a look at how much the benefit system costs you. The figures are the combined expenditure by the Government on the Unemployment, Sickness, Invalids’, and Domestic Purposes benefits per day per working age New Zealander, in 2007 dollars. Sources: MSD (1,2,3), StatsNZ (4,5) The portion of the working age population […]
Written By: - Date published: 2:34 pm, April 16th, 2008 - 31 comments
As you know, petrol and food prices are up. These are international prices spiralling up due to growing demand and limited or falling supply. When demand exceeds supply prices rise. Now, when food and petrol goes up, that’s inflation. In fact it’s most of the current inflation: out of 3.4%, 0.9% is from petrol and […]
Written By: - Date published: 3:54 pm, April 15th, 2008 - 31 comments
This graph shows the number of people employed in New Zealand, and employment would have been had the number of people with a job as a portion of the working-age population had remained steady at 76% as it was before 1987. Look what happened during the rightwing economic revolution from 1987 to 1999 (when National […]
Written By: - Date published: 7:00 am, April 15th, 2008 - 22 comments
National’s latest line is that interest rates have doubled under Labour, with the implication that National would magically lower inflation (while simultaneously pouring more money into the economy through lower surpluses) so rates would fall. But, as with so much National says, a quick look at the record reveals the lie. Average Mortgage Rate- Nat: 9.7%, […]
Written By: - Date published: 11:16 am, April 10th, 2008 - 42 comments
The Reserve Bank produces a series of helpful tables of economic data. One table compares our growth to that of Australia, the US, Japan, and the UK. Here’s a graph comparing growth across the countries between National and Labour’s periods in government. National has a pathetic track record on growth. Under them, our economy grew 1% […]
Written By: - Date published: 11:04 am, April 9th, 2008 - 28 comments
New Zealand First’s opposition to the China FTA is no surprise but it is interesting to reflect on the grounds for it that Winston Peters has laid out: a) the deal is not good enough. A pretty weak argument when the other option is no deal. b) the immigration provisions are bad and shouldn’t be […]
Written By: - Date published: 10:02 am, April 1st, 2008 - 15 comments
Today is a big day for government policy affecting Kiwis’ incomes: The minimum wage is now $12 an hour, up from $7 when Labour gained power. Youth rates have been effectively abolished, meaning young people will get the same pay for the same work. From today, employers must contribute to employees’ Kiwisaver accounts equivalent to 1% […]
Written By: - Date published: 11:17 am, March 26th, 2008 - 18 comments
New Zealand’s coal industry is a mess of contradictions. We worry about carbon emissions and Kyoto while State-owned Solid Energy exports coal to dirty Chinese factories. Rather than being energy-efficiently shipped out of Greymouth, coal from the West Coast is taken by rail over the Southern Alps because taxpayer-subsidised Toll gives SOE Solid Energy and Pike River a cut-price deal to haul […]
Written By: - Date published: 12:13 pm, March 20th, 2008 - 19 comments
One of the most interesting questions from the audience at the Stiglitz interview in Wellington last week was whether he thought we were focusing unduly on “economic growth” as the sole indicator of societal wellbeing. The point being that, as in the headline, it’s easy to imagine situations in which GDP’s rising but quality of […]
Written By: - Date published: 4:03 pm, March 19th, 2008 - 27 comments
I am intrigued by the recent coverage of the state of the economy. We have reports that things will get bumpy from some economists, with others saying dire predictions are “premature grandstanding”. Cullen doesn’t appear too worried, saying the economy’s in better shape than most to weather the storm. It was nice to hear this […]
Written By: - Date published: 10:46 am, March 19th, 2008 - 49 comments
The sub-prime crisis is at the heart of the world’s current economic problems. It all boils down to financiers playing fast and loose with the rules of how money works, and the US government not keeping an eye on them. Essentially, they created a whole new class of interest-bearing pieces of paper that were supposedly […]
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