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Sunday, 26 December 2010

Return of Prebble's rebels?

Deborah Coddington writes in today's Herald on Sunday, arguing for the return of Richard Prebble to the leadership of the Act Party. Coddington says that this will revive the party's flagging luck.

Prebble's three elections as Act leader certainly were electorally more successful than Hide's 2005 and 2008 efforts. Moreover Prebble gave Act more coherence politically - he was very good at articulating their position. However, he never had to lead the party in any sort of post-election support arrangement, save for backing the Shipley Government in its dying days (1998 - 1999). Hide has, and his problems as leader should be ranked against that.


Hide's real problem goes back to the rise of Don Brash following his infamous Orewa Speech. By moving the National Party to the right, Brash took a significant portion of support off Act. In fact National's 2005 election result could be attributed largely to votes taken off minor parties - Act and United Future in particular. Hide has failed to capitalise on Key's leadership of the National Party, which has seen the party move back to the centre.

While this is clearly a failure of leadership, it's difficult to see how bringing back Prebble is going to change this. Coddington's column might get talking heads talking, but it really offers little substance to the future survival of Act or its leadership.

Friday, 24 December 2010

State of the economy by bullet points

Thursday, 16 December 2010

"Tax cuts don't cause growth"

...actually, it all depends on how you cut taxes, and what you raise. By raising GST at the same time as cutting income tax, the government effectively killed off any growth in consumer spending and hence immediate growth in the wider economy. Raising GST was politically one of the toughest decisions this government has made so far.

By doing so they've given New Zealanders reason to save. The same journalist The Standard quotes also called for a GST rate of 20% just last week (compare that with Roger Douglas' proposed rate of 17.5% in 1988).

Wednesday, 15 December 2010

Who's it gonna be Botany?

So, Pansy Wong has done the honourable thing and resigned from parliament before causing the institution further damage. Now for the by-election in Botany next March (which, by the way, essentially confirms the Prime Minister will call the next general election for November).

As with the Mt Albert and Mana by-elections for the Labour selections, the Botany by election will largely be determined by the National candidate selection. Expect their party membership to increase. So the names put forward to be the National candidate matter most. Jami-Lee Ross has just announced his candidacy. Aaron Bhatnager announced yesterday.

Whaleoil provides some analysis. Personally I think this battle is between Aaron and Jami-Lee, and I think Aaron is the favourite - for want of a better word, he's "ethnic", an experienced city councillor and seasoned campaigner. However, Jami-Lee could swing things with his assurance that he will step down as an Auckland Councillor, albeit that will force another council by-election.

Sunday, 12 December 2010

Lists of things

Not so many posts this weekend. Weather is good.

Lists to think about:

Monday, 6 December 2010

Put New Zealand First. Don't vote for them.

The Standard has an interesting analysis of what a National win in 2011 might look like. I think the most likely outcome is a National minority government dependent on the Maori Party for support. Act will most certainly be humbled.

But the real problem for the country in 2011, in my mind, is the potential return greatest raconteur of recent New Zealand political history: Winston Raymond Peters. If there's anyone in politics who stands for personal advantage over national interest, it's Peters. I hope the Prime Minister once more rules out doing a deal with him, as was the case in 2008.

Friday, 3 December 2010

Māori electorates by numbers

Some useful facts...
  • 437,400 - voting age population in Māori electorates
  • 174,842 - Electors on general roll who declared Māori descent (39.9% of voting age Māori)
  • 229,666 - Electors on Māori Roll (52.5% of voting age Māori)
  • 404,508 - Total Māori enrolled to vote (92%)
  • 143,334 - Total votes cast by electors on Māori Roll (62% of electors on Māori Roll, 35% of total Māori enrolled)
  • 642,900 - Estimated total Māori population in 2008 (14.8% of all New Zealanders)
This is why the Māori electorates will eventually be dissolved - not Don Brash, not the Māori Party - but simple demographics. 

Wednesday, 1 December 2010

Let the foals thrive

So says the New Zealand Herald on the SOEs. While Labour's change of policy on privatisation is a good thing, (if politically bizarre - as The Standard correctly points out, it takes away their strongest differentiation from National, one they played up in 2008) they might not be serious or take their finance spokesperson seriously. Nevertheless, it's cleared the way for a sensible privatisation process from National. The aim should be:
  • Apply the Air New Zealand approach to the existing SOEs;
  • In other words, make them all listed companies subject to Securities Commission oversight;
  • This would allow for the abolition of CCMAU (Crown Company Monitoring and Advisory Unit).
The other option is as the Capital Markets Advisory Group has suggested, which is share floats whenever SOEs or their subsidiaries (for example, KiwiBank) need money to expand, they can list ordinary shares on the NZX. Either way, Mark Weldon wins.

The other way would be to create one uber SOE with all the others as subsidiaries. Kind of like a New Zealand zaibutsu.

Tuesday, 30 November 2010

Anderton is right about DB

That's right - New Zealand's very own left wing dinosaur, Jim Anderton, is right. DB's ads about the invention of DB Export following the 1958 Black Budget are totally dishonest:
Rather than beating the system, Morton Coutts was doing exactly what the Labour government wanted – building up a strong manufacturing base and creating jobs for New Zealand workers.
Mind you, Rick Giles did point this out the other day. The funny thing is Steinlager, a competitor to DB Export (and far superior in my humble opinion) takes a different spin on the '58 black budget:
1958 Lion produces Steinecker in response to then Minister of Finance, Arnold Nordmeyer, who cut beer imports as part of his infamous Black Budget and challenged New Zealand brewers to compete by producing a lager of international quality.
Either DB's spinmeisters thought they needed to counter this or just wanted to tell a little tale.

Monday, 29 November 2010

Deficit down

So, the trade deficit has shrunk - good news. The important point is the New Zealand dollar has been on a high over this period, but exports have grown. Which goes to show that we shouldn't worry so much about our high dollar clobbering exporters - interestingly forestry products recorded strong growth. Forestry is an industry where prices are set well in advance. There's a lesson there for us.

Thursday, 25 November 2010

Labour becomes Labour Lite

Labour's Finance spokesman is proposing:
  • public-private partnership for transport;
  • an "inbound transactions tax";
  • allowing private shareholders to own shares in subsidiaries of state owned enterprises;
  • not going on a spending spree, but reducing net debt and build a stronger capital base;
  • working with Iwi and "community groups" to provide social housing;
  • considering using the Cullen superannuation Fund as a "cornerstone investor in long term growth opportunities.";
  • changing monetary policy by amending the Reserve Bank Act to "broaden its targets" while retaining the central bank's independence and the current 1-3 per cent inflation target. 
It's a mixed bag. Partial privatisation shareholding of SOEs makes sense, as does PPPs for transport and the privatisation returning to the community for social housing. But the real concern is whether Labour can restrict government spending (they don't have a good record on that) and how much it will screw around with the Reserve Bank Act.

Wednesday, 24 November 2010

There goes the OE

The United Kingdom has announced a cap on "non-EU" immigration of 21,700 visas per year. To further cut immigration, they will also look at cutting family visa allowances. One of the common arguments I hear against a republic is that doing so would put the sacred "Overseas Experience" - the 'colonial birthright' as the Front Lawn once called it - at risk. This just goes to show that this is nonsense.

Friday, 19 November 2010

Monday, 15 November 2010

Key to pass Shipley tomorrow

Via Wikipedia's page List of Prime Ministers of New Zealand by term (a page I admit to starting) John Key will pass Jenny Shipley tomorrow to become New Zealand's 23rd longest serving Prime Minister, out of a field of 38. It will also mean Key passes all the Prime Ministers who were interesting 'footnotes' of history (except Sir George Grey, who is more famous for being Governor twice, and Norman Kirk who died in office).

From here it's another 97 days before Key passes 19th century Premier John Ballance, who also died in office. From then on it's another 4 years (and at least two elections) before Key will pass another National Party Prime Minister, Jim Bolger who is currently ranked 10th longest-serving. Shortly after Bolger comes Ward, the master of the political comeback, and two further big names in 20th century politics - Muldoon (7th) and Holland (8th).

However, Key will need to be in office for another 12 years and 39 days to beat the record holder, Richard John Seddon at 13 years and 44 days.

"21st-century and Jurassic wings of the party"

Jon Johansson commenting on Sunday's Q+A program pointed to the internal differences within National (to a lesser extent reflected in Labour) regarding the Constitutional review. I think the differences are somewhat deeper than that.

The "21st century" wing of National grew up with Roger Douglas and Ruth Richardson as ministers of Finance, the "Jurassic" wing grew up with Muldoon. The Jurassic wing remembers when New Zealand's economy was highly protected by both trade walls, but also by guaranteed access to the country formerly known as the Motherland. They grew up in a time when our prosperity was maintained by being Britain's farm in the South Pacific; when up to two-thirds of New Zealand's exports went to the UK.

Friday, 12 November 2010

Increase savings, increase GST

The Savings Working Group is recommending another increase in GST plus further cuts to the top income tax rate to increase New Zealand's rate of savings:
Increasing the goods and services tax to 20 percent and cutting the top personal tax rate to 29.2 percent would be fiscally neutral and have a positive impact on both private and national savings rates, according to background papers prepared by the Inland Revenue Department for the government-appointed group tasked with finding ways to lift New Zealand’s savings across the board.
As a small business owner (Web Social Ltd) I'm weary of another GST increase. I'm still working through the changes from the last increase. Of course, the lower income tax for top taxpayers is attractive, but will be howled at by the left. What the Government really needs is a glimmer of success from the last tax-switch before making further moves.

Monday, 8 November 2010

Today's most important headlines

Thursday, 4 November 2010

Money doesn't buy elections

California's gubernatorial election result is an important lesson for everyone who's ever claimed big money can simply buy elections. Ex-eBay CEO Meg Whitman ('the biggest self-funded candidate in history') spent a good part ($143 million) of her billion-dollar fortune trying to win the Governorship of California, while her opponent Jerry Brown spent just $25 million. In other words, the losing candidate outspent the winning candidate 5.72 times over. And the real kicker: Whitman was the Republican candidate, and Brown the Democrat. In cash-strapped California it didn't bode well for the Republican to be blowing a huge amount of cash on just her election campaign.

There's probably plenty of other examples, but this one is certainly the real stand-out.

The gap

Lindsay Mitchell reproduces the two salient graphs from the 2025 Taskforce report, published yesterday.

In my mind, this graph is also very important:
The interesting point here is that when Labour was last in power (1999 - 2008) they actually managed to reduce spending as a percentage of GDP up until 2004. From 2005 onwards however its been a steep climb upwards again - remember what happened 2005 - 2008? Labour basically tried to spend its way back into power, succeeding at the 2005 election with interest-free student loans and working for families. Yet between 1999 - 2004 they actually greatly increased spending on hospitals, science and education and yet spending as a percentage of GDP decreased (by the same token National had a small blip between 1996 and 1999, probably due to the NZ First coalition disaster).

Wednesday, 3 November 2010

Off the rocker

The Sensible Sentencing Trust has become the Smash the Bill of Rights Trust:
The Sensible Sentencing Trust says offenders such as Pauesi Leofa Brown who killed Austin Hemmings should be subjected to preventive detention and lose all rights currently granted under the New Zealand Bill of Rights – including the right of appeal.
Just FYI, these are the rights the SBRT are talking about:
  • The right not to be arbitrarily arrested or detained.
  • The right to be informed at the time of the arrest or detention of the reason for it; and
  • the right to consult and instruct a lawyer without delay and to be informed of that right; and the right to have the validity of the arrest or detention determined without delay by way of habeas corpus and to be released if the arrest or detention is not lawful. 
  • The right to be charged promptly or to be released.
  • The right for charges to be brought as soon as possible before a court or competent tribunal.
  • The right to refrain from making any statement and to be informed of that right.
  • If deprived of liberty the right to be treated with humanity and with respect for the inherent dignity of the person.
  • The right to be informed promptly and in detail of the nature and cause of the charge; and
  • The right to be released on reasonable terms and conditions unless there is just cause for continued detention; and
  • The right to consult and instruct a lawyer; and
  • The right to adequate time and facilities to prepare a defence; and
  • The right, except in the case of an offence under military law tried before a military tribunal, to the benefit of a trial by jury when the penalty for the offence is or includes imprisonment for more than 3 months; and
  • The right to receive legal assistance without cost if the interests of justice so require and the person does not have sufficient means to provide for that assistance; and
  • The right to have the free assistance of an interpreter if the person cannot understand or speak the language used in court.
  • The right to a fair and public hearing by an independent and impartial court:
  • The right to be tried without undue delay:
  • The right to be presumed innocent until proved guilty according to law:
  • The right not to be compelled to be a witness or to confess guilt:
  • The right to be present at the trial and to present a defence:
  • The right to examine the witnesses for the prosecution and to obtain the attendance and examination of witnesses for the defence under the same conditions as the prosecution:
  • The right, if convicted of an offence in respect of which the penalty has been varied between the commission of the offence and sentencing, to the benefit of the lesser penalty:
  • The right, if convicted of the offence, to appeal according to law to a higher court against the conviction or against the sentence or against both:
  • The right, in the case of a child, to be dealt with in a manner that takes account of the child's age.
  • The right not to be liable to conviction of any offence on account of any act or omission which did not constitute an offence by such person under the law of New Zealand at the time it occurred.
  • The right, if finally acquitted or convicted of, or pardoned for, an offence shall not be tried or punished for it again.
  • The right to the observance of the principles of natural justice by any tribunal or other public authority which has the power to make a determination in respect of that person's rights, obligations, or interests protected or recognised by law.
  • The rights, obligations, or interests protected or recognised by law have been affected by a determination of any tribunal or other public authority has the right to apply, in accordance with law, for judicial review of that determination.
  • The right to bring civil proceedings against, and to defend civil proceedings brought by, the Crown, and to have those proceedings heard, according to law, in the same way as civil proceedings between individuals.
Now most of  these rights only apply when you break the law. However, they're rights important to all of us, not just criminals. Imagine if we were talking about someone the public believed to be innocent?

Tuesday, 2 November 2010

Weldon: float the SOEs

Mark Weldon of NZX has a well yes he would say that moment:
Government decisions on privatisation of state-owned companies are a key part of “ability for the capital markets to keep working in New Zealand,” says NZX Ltd. chief executive Mark Weldon.
Commenting in the wake of the Singapore stock exchange operator, SGX’s, A$8.4 billion takeover bid for its Australian counterpart, ASX, Weldon said there was still a role for a local share market both because local companies will want a domestic venue for capital-raising, and because global players won’t pursue small and mid-sized opportunities.
Weldon does have a very good point. As the Capital Markets Development Taskforce has reported, our government holds $25 billion of taxpayer funds in state owned enterprises, including Air New Zealand which is partially listed.

Trade in surplus

NBR reports New Zealand's ongoing trade surpluses are continuing. Exports are now sitting at $41.8 billion per annum while imports sit at $40.9 billion, a surplus of $900 million year to year. While this is good news on paper, there's an underlying trend which is concerning - a quarterly decrease in exports by 2.5%. This will get worse now that the $NZ - $US is strengthening. On the other side of the equation, it will make imports from the US cheaper...

Tuesday, 26 October 2010

Who's living off the sheeps back?

The recent discussions about South Island independence or autonomy has got me thinking about one of the underlying themes used by supporters of southern self-determination: that the North Island, and Auckland in particular, are parasites on the productive South. Reading the Maps has an excellent post comparing the two perspectives.

Inline with that theme, Auckland Trains presents some intriguing statistics showing Auckland gets a raw deal when it comes to transport spending. In a nutshell Auckland grew by 57% from 1996 - 2006, and is expected to do that again from 2006 - 2031. The need for increased infrastructure spending is clear. The challenge for the super city is to deliver that spending, while the central government's challenge is to balance increased spending with spending elsewhere.

Sunday, 24 October 2010

Trouble in Dunedin...

A gem from papers past: Otago Daily Times, 1891. Check out who got fined for having an unregistered Dog:


Weird... seems I'm not the only Lewis Holden in history (nor is Lewis Holden Snr, who I constantly get mistaken for).

Thursday, 21 October 2010

Irony

Kym Parsons is leader of the New Munster Party, a party advocating South Island independence. Mr Parsons is also a businessman, and good on him. He runs a transport company called Southlink Refrigerated Transport.

Its registered office? 202 Ponsonby Road, Auckland...

FAIL

Wednesday, 20 October 2010

The Commonwealth

Or, why monarchists are bad liars.

Teachers pay dispute: solution by numbers

New Zealand's teachers want to be paid more, and have smaller classes to teach. They earn on average $10,000 less than their Australian counterparts. A 4% pay increase will cost the government about $40m, plus an additional $12m for laptops and increased KiwiSaver payments. The additional costs seem to relate to smaller classes, bringing the total to $105m.

Meanwhile, the Government now spends $408m per year paying interest on student loans (this is almost twice the amount projected in 2005, by the way).

If we cancelled interest-free student loans, we could give the teachers what they want three times over and still have change. According to the OECD, New Zealand teachers earned on average between $10,000 and $15,000 less .

Sunday, 17 October 2010

Can Labour win in 2011?

On Saturday I spoke at the Labour Party's conference fringe sessions on republicanism. It was a lot less hostile than last year, when I was told on registering they could "smell a Tory coming". I shot back I'd rather be called a Whig, and I take my smell seriously. Fortunately at lot of my old debating and politics colleagues were around so there was plenty of people to catch up with.

I've put my thoughts on Andrew Little's realpolitik at the Republican Movement blog. It certainly created a buzz for our sessions. However, Little also raised the spectre of a Labour victory in 2011 during his speech to the main conference, which I snuck in to. I don't think it'll happen - and there were hints in Little's speech that it wouldn't. Little spent a lot of time emphasising that in order to win, Labour needed to be better organised and target specific seats. The list he read out won't be surprising to politicos:
  • Otaki
  • Hamilton West
  • Waitakere
  • Auckland Central
  • Maungakiekie
  • Ohariu
  • New Plymouth (Little joked "We quite like that guy's chances")
Apart from Ohariu, all of these seats are held by National MPs who scored "upset" victories, particularly in Auckland and particularly Nikki Kaye in Auckland Central (a seat that had never been held by National until 2008). Labour's chances are best in Otaki, Hamilton and New Plymouth and perhaps Ohariu and Auckland Central if the Greens don't run strong candidates as they did in 2008.

That said, even if they can win in those seats, they won't win Labour the election. National learnt this the hard way in 2002, from then on party president Judy Kirk regularly intoned that "it's the party vote that counts". In 2008, it certainly was. Little is a smart guy and I have no doubt he knows this. I'm sure his strategy is to win those "target" electorate seats back, including New Plymouth, to give himself momentum coming into Parliament (the only potential deflator, apart from not winning New Plymouth, is that Labour could lose Te Atatu). If Labour only marginally increases its share of the party vote, which seems like the way it will go given John Key's popularity, then they will be in with a fighting chance for the 2014 election.

On this basis it seems unlikely that Little genuinely thinks Labour can win the 2011 election. He knows that two of National's support parties - UnitedFuture and Act - are likely to disappear after the next election, along with the Progressives. This will leave National dependent on the Maori Party, who could take a beating given their base support gave their party votes to Labour.

What Key and National need to win and stay in power is another support party. It's likely that New Zealand First will make a comeback, albeit they probably won't make it back into parliament.

Thursday, 14 October 2010

Books being balanced, savings up

Good news - the government is closer to balancing the books (largely thanks to the Cullen Fund and ACC), and New Zealanders are saving more.

Ports as hubs?

Sydney Morning Herald notes an NZIER report calling for greater commercial emphasis at our larger ports. The report is also urging the government to make it easier for the smaller ports to exit the business. Here's New Zealand's biggest to smallest ports, by gross tonnes imported:
  • Whangarei - 1,551,435
  • Auckland - 2,796,110
  • Tauranga - 6,594,267
  • Taharoa - 583,500
  • Gisborne - 805,698
  • New Plymouth - 3,057,470
  • Napier - 2,004,555
  • Wellington - 789,277
  • Nelson - 1,180,064
  • Picton - 281,457
  • Christchurch (Lyttelton) - 3,216,969
  • Timaru - 314,179
  • Dunedin (Port Chalmers) - 1,598,753
  • Invercargill (Bluff) - 553,211

The Standard wrong on Bolger

The Standard notes Jim Bolger's comments on privatisation, saying that the former PM :
"...has announced that the neoliberal privatisation agenda has been a failure. He says we sold the wrong things, sold them the wrong way, got too little money, and created private monopolies. Of course, what we should have done is hold on to our assets, rather than turning them into cash cows for foreign owners."
Now, Bolger didn't actually say that, or at least The Standard's interpretation is slightly wrong. Reading the Herald's article, it seems what Bolger was saying was that there was a better way of going about privatisation. He blames Roger Douglas for getting it all wrong, and defends National's privatisation of NZ Rail in 1993.

On those two points, Bolger is right. Telecom should have been split into competing parts then floated on the share market, while NZ Post should've kept Postbank, as long-term that has shown greater value for the business than the declining revenues of postal services. In fact all privatisation should've been via public floats, as National required with the sale of NZ Rail (eventually allowing the government to buy it back), Air New Zealand and Contact Energy.

Monday, 11 October 2010

Campaign for Wool... not exactly pro-NZ

So, the Campaign for Wool isn't exactly favourable to Britain's ex-colonies:
It began as a rallying cry to buy British wool but now encompasses Australian and New Zealand wool (their cheap imports are seen as part of the problem).

Oil state dreams on hold

It turns out the Great South Basin isn't so great. The Todd family must be a bit peeved about that.

Sunday, 10 October 2010

Postal voting leads to corruption

C&R are (predictably) going to campaign against postal voting. Good. It seems they may have an ally in Len Brown, who seemed to imply on Q+A this morning that local elections should go back to "single-day" voting. Let's hope Brown pushes for this, instead of seats reserved for one ethnic group (on that note, it's interesting that two Maori were elected to the Auckland Council, or 10% of the seats. One more and the council would be representative of Auckland's population).

Super City results

Plenty of analysis elsewhere. A fairly left-wing council and Len Brown romping home. I predict Brown is going to have a very tough three years. His promises on the campaign trail for more spending on public transport will be difficult to reconcile with his promise to keep rates rises at inflation. Either there's going to be major savings made by the super city (which will require a lot of redundancies, fewer contractors and paying down the collective debt all the councils worked up) or Brown will have to break his promises on rate rises.

His first challenge will be finding a deputy mayor. I suspect it will be Mike Lee, the former Chairman of the Auckland Regional Council and a pretty competent leader. Lee has made a point of pushing for more spending on public transport. The other obvious choices are Penny Webster, former ACT MP and Rodney District Mayor, or George Wood, former Mayor of the North Shore.

The other interesting question is what John Banks does next. I doubt he'll want to fade out quite like this - and Guyon Espiner was suggesting this morning on Q+A that he might run for Epsom against ACT's Rodney Hide. I suspect the Prime Minister might be open to that suggestion, given that the super city results have been won by the left.

Personal vilification

I find personal vilification satisfying actually. It shows you're getting at your opponents, and they've got nothing to respond with other than personal insults.

Update: here's my response.

Friday, 8 October 2010

Something stupid was said

Homepaddock makes the point that there's plenty of other more important things going on in New Zealand. True... but this whole thing has now become international.

Thursday, 7 October 2010

A goal is not a strategy

Phew, I'm glad the New Zealand Institute cleared that misconception up. More later.

Nick for Porirua

Looks like my old home town doesn't live up to its stereotype:
Porirua, population 51,500, has the fourth highest income per capita in the country, the lowest crime rate in the Wellington region and 91% of residents say their quality of life is good or extremely good.
Porirua's economy has steadily expanded over the past decade, growing at a faster rate than the Wellington region and the country.
Some 15,500 people are employed full-time across 3840 businesses, producing $1.33 billion in GDP.
The exit of subsidised and protected industries (Todd Motors being the biggest) during the 1990s hit Porirua hard. However, the business base of the city slowly recovered - and there's now some really innovative high-value exporters based there.

Nick Leggett is running for Mayor. Economic development is his top priority, along with making council more cost-effective by working with other councils in the region. I would vote for him.

Wednesday, 6 October 2010

Sir Roger and the tax-free threshold

Roger Douglas writes at Craccum, predictably slamming the 1 October "tax switch":

National’s unwillingness to cut expenditure means that it just rebalances the tax intake. If it lowers taxes in one area it must raise taxes in another. Rather than reduce wasteful Government expenditure, National has chosen instead to continue to heavily tax.
Treasury has pointed out that this isn't exactly correct - the increase in GST doesn't bring in enough revenue to cover the reduction in income tax. Nonetheless, Douglas puts forward his perennial favourite policy: a tax-free threshold. This time he's proposing making the first $30,000 tax-free. According to the Budget 2010 numbers, this would mean 57% of New Zealanders pay no income tax. In order to do that, you would have to make significant changes to social welfare.

Law can solve everything

 

Richard Long expresses a sentiment we hear too often in New Zealand: the law can fix everything. Or more correctly, if only the law was changed (and quickly, preferably by Order-in-Council) we could reach some sort of utopia. The problem is, when you change the law quickly it only creates more uncertainty, ambiguity and compounds previous errors.... so then we quickly change the law, and so it goes on.

Tuesday, 5 October 2010

There are no teeth in our heads...

The Prime Minister tells us the recession won't be coming back, despite business confidence dipping substantially. I sure hope he's right. The "tax switch" will take $2 billion out of the economy in increased GST revenue and pump $4 billion back in decreased income taxes.

I suspect it will take some time for the changes to trickle through, and the retail sector is going to go backwards in the short-term. Expect flat retail sales for Christmas as everyone tries to avoid higher GST and keep more of their tax cut. That means more empty shops on Queen St, Broadway and Lambton Qy.

Sunday, 3 October 2010

Twenty years of the Bill of Rights

Kris Gledhill notes the 20th anniversary of the passing of the New Zealand Bill of Rights Act 1990. It's a significant piece of legislation that deserves greater attention.

Hobbling the Hobbit

The best analysis of the Hobbit debacle. New Zealand's comparative advantages in film do not include our scenery. It's our relatively well-educated cheap to hire workforce that's our primary advantage.

We've also now got good IT and technical skills. However neither of those things are enough to keep production in the country, especially when a Hollywood studio (MGM) wants to see a return on its investment. Jackson seems to be caught in the middle between his backers and a union determined to win more members and increase its muscle in the New Zealand industry.

The tax switch

Colin James asks in The Dominion Post today whether the changes in taxation will make a difference for the economy. Overall, I think the changes will make a difference.