Russel Norman
From 100% to 5%

The Government has suggested that up to 90% of shares will be owned by New Zealanders, and Treasury’s figures show that around 5% of all New Zealanders will be able to afford to buy shares. Without even thinking of the Australian share float, which will dilute Kiwi ownership, the asset sales program is about a transfer of wealth from the public of NZ to a few.

385 thoughts on “From 100% to 5%

  1. While I am strongly against the sale of state assets, I am disturbed by how deliberately disingenuous Greens are being about the whole thing. Firstly, you are cynically confounding the statistics/estimates in posts like this one. 90% of the shares indeed are hoped to be owned by New Zealanders (I personally think this is insanely optimistic on behalf of the government). The 5% figure is measuring something entirely different – the proportion of New Zealanders expected to purchase shares. You are trying to confuse people by mixing these together to look like a “gotchya!”

    Secondly, you are deliberately (or ignorantly?) ignoring the other side of the ledger on ALL of these matters. As an accountant I have an eye for this, and it’s disturbing to me how little you either care or understand in communicating on this issue. There is no transfer of wealth from the many to the few – the “few” will be paying the government for the shares, and they will be paying a fair market value (as determined by the IPO). The net wealth transfer contras to nil as the government receives cash of equivalent value in exchange for the shares. The people of New Zealand benefit from the cash received in the IPO, assuming the cash is used sensibly and appropriately to give New Zealanders a reasonable return.

    Now to be clear I DON’T support the asset sales program and overall I expect it will be a net loss for New Zealanders for a number of reasons. My party vote went to Greens in the last election and I still support the party. But it’s time to stop be disingenuous about this asset sales program and start being honest with yourselves and the NZ public.

    Like or Dislike: Thumb up 17 Thumb down 4 (+13)

  2. It’s not a transfer of wealth. The state gets the investors money in return.

    As for the 5%, you appear to have forgotten Kiwisaver. Anyone with a Kiwisaver will likely hold these shares. How many Kiwis have Kiwisaver, Russel?

    Like or Dislike: Thumb up 8 Thumb down 5 (+3)

  3. As for rising power prices, remind us how much power prices rose during the Labour reign?

    And haven’t the Greens been pushing for higher power prices in the form of wind energy? The higher cost being “worth it” in order to “save” the planet, and people should respond by using less power?

    So you’re keen on maintaining prices going forward? Given inflation, that means a decrease in real terms. How might we achieve lower power prices, Russel?

    Because I’ve yet to hear a Green plan for lower power prices.

    Like or Dislike: Thumb up 8 Thumb down 6 (+2)

  4. It was ever Thus. 5% of the population hold the majority of the wealth that remains in NZ. They will buy if they think they can make a buck. As for those of us who already own the Mighty River Power and are having their equity depleted by 49% – well, I guess that’s what dbuckley and other Key supporters are happy to happen. Buying a share in something in which I already own a share just sticks in my craw, however it appears that for the majority of Kiwis its all about making money today and to hell with our communities and grand-childrens future. Damn shame.
    BobL

    Like or Dislike: Thumb up 10 Thumb down 1 (+9)

  5. Hi Arana

    I can’t afford to buy any shares and I can’t afford to be in Kiwi Saver either. I presently am part owner of these power companies through paying taxes for nearly 40 years and enjoy their dividends via the money going to the government ie the taxpayer. I’m sure there are many others like me. I can’t see an asset I own going to someone else being anything other than a transfer of wealth. At best, those who can manage to own shares directly or through Kiwi Saver are actually spending their money to buy something they already own.

    Hi DBuckley

    What a cynical and unhelpful comment!

    Like or Dislike: Thumb up 13 Thumb down 3 (+10)

  6. Electricity prices are relatively high in New Zealand, and this results in very good returns for the utilities to their shareholders, Mighty River claiming 11.4% last year. This compares with typical American utility company returns of about half that figure.

    Now when all that excess collected revenue went into the coffers for “the good of the country”, it wasn’t a bad deal. It was just a consumption duty. Now, though, half that duty is not going “back to us”, but to “real” shareholders, which could be any mix of individuals and corporations. So there is a real transfer of wealth away from the great mass of citizens.

    The answer, of course, is for a Regulator to step in and constrain power prices so that the returns are more in line with the industry average. But NZ has never been good with electricity regulators…

    Like or Dislike: Thumb up 8 Thumb down 3 (+5)

  7. As for rising power prices, remind us how much power prices rose during the Labour reign?

    Not sure what your point is here, Arana.
    What the LP did or didn’t do historically is of no consequence to the GP.

    Because I’ve yet to hear a Green plan for lower power prices.

    Simple. Actively regulate the wholesale electricity market.

    Like or Dislike: Thumb up 7 Thumb down 2 (+5)

  8. Not sure what your point is here, Arana.What the LP did or didn’t do historically is of no consequence to the GP.

    Didn’t see the Greens making much of an issue of it in the house all those years, or making it a condition of confidence and supply. The interest seems very recent, indeed.

    Mighty River claiming 11.4% last year. This compares with typical American utility company returns of about half that figure.

    Indeed. So much for ownership, then. Gouged on power in order to fund politicians pet projects, more like.

    The taxpayer is getting a dividend stream up front, rather than waiting for it over time. They STILL receive the money, they just get it in a different form i.e. a lump sum. The dividends still go back into NZ as these shares will be almost entirely NZ owned.

    A lot of puff and wind from Russel. Sadly, not enough to drive down the cost of wind generation.

    Like or Dislike: Thumb up 5 Thumb down 9 (-4)

  9. Had Solid Energy had been the first of our assets in line for sale, the million dollar advertising campaign that we are now subject to would have trumpeted Don Elder’s coal mining giant as a great investment opportunity for New Zealand mums and dads. Instead, we are being excitedly presented with Mighty River Power as a safe bet, but how will New Zealanders know that “Mighty” won’t go down the river the same way “Solid” did?
    National’s advertising is designed to make us excited and confident about the assets they want to sell, but we’d be wise to be cautious about buying into a set of companies that has so recently experienced the unexpected and total collapse of one of its brightest stars, Solid Energy.

    Like or Dislike: Thumb up 8 Thumb down 4 (+4)

  10. If the government thinks it’s possible for Mighty River Power to be responsibly owned by New Zealanders who are skilled at investing then it may be plausible at least as an argument, but I think Danyl has a good point in noting that a largely overlooked issue here is that the government is giving “ordinary New Zealanders” horrible investment advice that could easily land them in personal catastrophes.

    It’s dangerous to encourage people to naively invest in a single company, or a narrow band of companies, like Mighty River Power, without having a good and diverse investment portfolio. If the government is seriously recommending that “ordinary New Zealanders” buy shares specifically in Mighty River Power, despite not really knowing what they’re doing, and Mighty River Power goes belly-up for any reason, then a heap of “ordinary New Zealanders” lose a whole lot of money, retirement savings, homes, children’s education funds, and so on, which was badly invested directly on government advice.

    Like or Dislike: Thumb up 4 Thumb down 0 (+4)

  11. total collapse of one of its brightest stars, Solid Energy.

    I suggest you stay well away from investing if you thought Solid Energy was a bright star.

    Coal, wood-pellets and biodiesel. The only thing worse could have been investing heavily in solar and wind.

    Like or Dislike: Thumb up 6 Thumb down 4 (+2)

  12. Didn’t see the Greens making much of an issue of it in the house all those years, or making it a condition of confidence and supply. The interest seems very recent, indeed.

    Its apples and oranges – selling the family silver wasn’t the defining factor of Labour’s recent election or governing strategy.

    As dbuckley has stated, while a ‘greater good’ argument could be made when the government was the recipient of a healthy dividend which predictably and continuously benefited the overall budget (a traditional factor in confidence and supply), the same argument cannot now be made.

    You can only sell strategic state assets once. Once they’re gone, short of arbitrary renationalisation, they’re gone forever.

    These factors quite simply explain why this is now a big issue.

    Like or Dislike: Thumb up 2 Thumb down 3 (-1)

  13. Again, what people are buying is a future revenue stream. The government, in return, receives that future revenue stream as a lump sum – right now.

    If they can make more from that lump sum by creating other infrastructure that pays more, you’d still oppose it? Keep in mind the dividend stream is likely to stay here, regardless, as most of it will end up in Kiwisaver and in the hands of Iwi.

    Like or Dislike: Thumb up 5 Thumb down 1 (+4)

  14. If they can make more from that lump sum by creating other infrastructure that pays more, you’d still oppose it?

    Red herring I’m afraid. Bill English has already publicly stated that the majority of the money won’t go to more productive assets.

    Fundamentally, I’m not actually opposed to a sell-off if a case can be made for long term nett gain. It’s just that that case hasn’t even remotely been made.

    Keep in mind the dividend stream is likely to stay here..

    Impossible to know unless of course you have a crystal ball that no-one else possesses.

    Like or Dislike: Thumb up 1 Thumb down 1 (0)

  15. Impossible to know unless of course you have a crystal ball that no-one else possesses.

    So how can people claim the opposite, then?

    Like or Dislike: Thumb up 3 Thumb down 2 (+1)

  16. Russel’s claim that those who will buy shares are the only ones who can afford them, is either nonsense, or plain dishonest.

    Similarly dishonest is his claim that it is a transfer of wealth, as it totally omits to acknowledge that shareholders will pay a billion plus dollars, and the government will receive a billion plus dollars.

    And equally dishonest is his insinuation that Kiwis benefit from returns from the power stations, but will “gain nothing” from the billions the government receives from the sale.

    Like or Dislike: Thumb up 7 Thumb down 8 (-1)

  17. So is Russel just playing loose with the facts for political purposes or, more worryingly, doesn’t understand the deal?

    Like or Dislike: Thumb up 6 Thumb down 5 (+1)

  18. Gregor says “Its apples and oranges – selling the family silver wasn’t the defining factor of Labour’s recent election or governing strategy>

    When Labour sold Spring Creek mine to an overseas investor without even asking the NZ public, I didn’t hear much protest from the Greens.

    Like or Dislike: Thumb up 4 Thumb down 1 (+3)

  19. Arana worries, frets and nail-chews over Russel’s understanding of the deal. I suppose you are better placed, somehow, Arana, than Russel, with his team of researchers and staff with access to the Parliamentary resources and advice from MPs of all stripes.
    The pool of knowledge you draw from is, again?

    Like or Dislike: Thumb up 3 Thumb down 10 (-7)

  20. Greenfly – after talking the assets up for years, now you’re talking them down.

    Could it be that you’re so bitter and twisted that you’d prefer to see the sale go really badly, even if it meant taxpayers lost hundreds of millions?

    Like or Dislike: Thumb up 4 Thumb down 1 (+3)

  21. No transfer of wealth, photonz1? How deliciously duplicitous of you to say so.
    The investors are not going to make profits over and above those received by the non-investing New Zealander?
    Wowsers! Photonomics, raw and unchained!

    Like or Dislike: Thumb up 1 Thumb down 5 (-4)

  22. So how can people claim the opposite, then?

    By looking at other examples of NZ asset that have been privatized (e.g Telecom, AirNZ, Contact Energy, NZ Rail) and determining historically over time and currently:

    (i) how much of the joint stock is held by offshore interests
    (ii) how much dividend flows offshore as a result of said joint stock ownership

    Like or Dislike: Thumb up 5 Thumb down 0 (+5)

  23. Photo, Solid Energy was one of those splendid assets, yes?
    Can’t really talk it down, can I. Any lower and it’d be subterranean…hang on!
    This Government, and the previous, failed in their duty to manage SE well. A responsible Government would manage SOE’s to the benefit of the people, and therein lies the value of a state owned asset. That they failed doesn’t disprove the idea, it just shows up the faulty ideology of both of them. A good Government would do the job properly, hence the need for the Greens to assume responsibility for fixing up what has been a c*ck-up by National and Labour.

    Like or Dislike: Thumb up 4 Thumb down 3 (+1)

  24. When Labour sold Spring Creek mine to an overseas investor without even asking the NZ public, I didn’t hear much protest from the Greens.

    (a) Spring Creek mine was not a strategic asset.
    (b) The Labour government of the day did not position an election manifesto based on selling Spring Creek mine.
    (c) The GP is on ideologically opposed to coalmining as a viable private enterprise, let alone maintaining an SoE.

    QED, the GP didn’t make a fuss.

    Like I say, apples and oranges.

    Like or Dislike: Thumb up 3 Thumb down 3 (0)

  25. Arana, than Russel, with his team of researchers and staff with access to the Parliamentary resources and advice from MPs of all stripes.
    The pool of knowledge you draw from is, again?

    An understanding of basic accounting.

    Like or Dislike: Thumb up 8 Thumb down 3 (+5)

  26. If Russel and his researchers think all Kiwis benefit when the govt gets $50m but gain nothing when they get 2000% more than that, then their advice and research is less than worthless.

    Like or Dislike: Thumb up 5 Thumb down 2 (+3)

  27. Gregor says “The Labour government of the day did not position an election manifesto based on selling Spring Creek mine”

    National did.

    And won.

    Like or Dislike: Thumb up 5 Thumb down 1 (+4)

  28. Your “understanding of basic accounting” trumps a Parliamentary research team et al?

    Dream on.

    I suppose your having flown a kite when you were a girl means you believe you can pilot a 747?

    Like or Dislike: Thumb up 1 Thumb down 9 (-8)

  29. No disagreement from me, photonz1.

    However, winning the election with the lowest voter turnout in 120 years (1,058,638 popular votes of 3,070,847 registered voters – 34.47% of the electorate) doesn’t mean the sell-off is not fundamentally short sighted, premised on false assumptions and outright falsehoods and, contrary to advice received from the governments own public officials.

    It merely means that an apathetic electorate was successfully sold a pup – one that is fundamentally against their own (and their country’s) long term economic and strategic interests.

    Like or Dislike: Thumb up 5 Thumb down 3 (+2)

  30. Actually I got the turnout wrong.

    It would have been simpler to say less than 50% of the vote acquired from less that 75% of the electorate.

    Like or Dislike: Thumb up 2 Thumb down 1 (+1)

  31. Your “understanding of basic accounting” trumps a Parliamentary research team et al?

    It would appear so, yes, as they seem fixated on only one side of ledger.

    Like I say, it’s basic accounting.

    Like or Dislike: Thumb up 6 Thumb down 2 (+4)

  32. New Zealanders – sold a pup by National. Elegant expression, “sold a pup”. Sad story though. Looks like they’re spending a million dollars on selling their latest pup to the same audience.
    Where’s the “waste of taxpayer money” wheedling from Arana and Photonz1 about that?
    Turning the blind eye?

    Like or Dislike: Thumb up 4 Thumb down 2 (+2)

  33. How is it a waste of money?

    The vendor, the taxpayer, tries to get the most money they can by raising awareness and ensuring all potential buyers are suitably informed. This leads to increased interest, and a higher likely price.

    You may be familiar with real estate advertising. It works the same way. If you don’t advertise, you’ll likely get fewer interested buyers.

    Like or Dislike: Thumb up 4 Thumb down 2 (+2)

  34. greenfly says “Where’s the “waste of taxpayer money” wheedling from Arana and Photonz1 about that?

    Turning the blind eye?”

    The pricing for Mighty River IPO is likely to be in a band of about 10% of expected value (i.e. +/- $100m depending on how many people want shares.

    Not spending just $1m on advertising to ensure top value for taxpayers, would be insanely stupid.

    Like or Dislike: Thumb up 2 Thumb down 0 (+2)

  35. It’s a waste of money because government propaganda to date has been telling NZers this is the best thing than sliced bread.

    If the deal is that sweet – so sweet that the govt. feels the need to gives shares away thereby weakening the IPO price – why spend money pitching it?

    Like or Dislike: Thumb up 3 Thumb down 2 (+1)

  36. Gregor says “so sweet that the govt. feels the need to gives shares away thereby weakening the IPO price – why spend money pitching it?”

    Why spend $1 million when it will likely get the taxpayer an extra $100 million?

    Why encourage New Zealanders to invest in the productive sector rather than housing?

    Let me answer that with a question.

    Why do we let children go through our education system without the ability to grasp even the simplest economic concepts?

    Like or Dislike: Thumb up 2 Thumb down 3 (-1)

  37. It’s a waste of money because government propaganda to date has been telling NZers this is the best thing than sliced bread.

    I’d argue Norman has been telling NZers how lucrative it is. The government hasn’t been talking it up much, until now.

    Remind us why we had to spend $6.3m on the monumentally stupid “Buy NZ Made” campaign? Increased awareness, perhaps?

    Like or Dislike: Thumb up 3 Thumb down 2 (+1)

  38. greenfly says “A good Government would do the job properly, hence the need for the Greens to assume responsibility for fixing up what has been a c*ck-up by National and Labour.”

    Unfortunately though, the Green Party hasn’t got a clue about running businesses. How many Green party MPs have ever run a business, employed people, been a company director, etc. Any at all?

    Hell – most have never even owned shares, and a lot have never even worked in the private sector.

    Is it any wonder you get a failure to understand even the most basic accounting fundamentals.

    Like or Dislike: Thumb up 3 Thumb down 6 (-3)

  39. Why don’t you poke me in the eye again ShonKey – spending taxpayer’s money on a propaganda campaign that is effectively trying to sell me something I already own. No amount of lipstick on the pig will change the fact that it’s still a pig! These assets that you and I already own are being extricated from our hands, slowly [ partially ] but surely [ eventually foreign owned ] into the greedy hands of private capitalist pig dogs. Power prices will dramatically increase, while services will deteriorate even further. Spread that lipstick real good John after all it’s only our money. . .

    ShonKey needs to stop and seriously consider what he was democratically elected to do in his role as prime minister, and whom exactly as prime minister does he actually represent? Our beloved president, I mean prime minister, is not the CEO of some corporation. He is not bequeathed the holy right to make executive decisions or change the law willy-nilly to ultimately suit & serve his special interests.

    ShonKey has seemingly gone AWOL in what can only be described as dereliction of duty as prime minister of this sovereign nation. He should be tried for treason then fired. Nothing I’m witnessing at the moment shows he’s operating in the best interest of all New Zealanders.

    Like or Dislike: Thumb up 5 Thumb down 3 (+2)

  40. “the monumentally stupid “Buy NZ Made” campaign”

    Aren’t you a charmer!
    Like the dinner party guest that leaves a floater in the bowl.

    Grow up, Arana.

    Like or Dislike: Thumb up 0 Thumb down 6 (-6)

  41. photon says:

    Unfortunately though, the Green Party hasn’t got a clue about running businesses, unlike us right wingers who have lots of experience running them into the ground.

    There, FIFY.

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  42. “Hell – most have never even owned shares, and a lot have never even worked in the private sector.”

    Hilarious from a guy who dismisses education professionals who say National Standards are trash, yet lauds the non-educationalists who champion them! Hilarious! Charter Schools! John Banks! Photonz1, you ditzy hypocrite, you!!
    Ha ha ha ha ha ha ha ha ha ha ha ha ah, oh me, oh my!
    Must have a wee lie-down.

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  43. Like the dinner party guest that leaves a floater in the bowl.

    Sounds like the voice of experience.

    So, $6.3m was spent to achieve what end, hmmm? Generate awareness? So, if you understand and endorse that, then you’ll understand why the government is spending $1m advertising part floats.

    And, unlike that ridiculous campaign, there is a lot to sell.

    Like or Dislike: Thumb up 2 Thumb down 0 (+2)

  44. the asset sales program is about a transfer of wealth from the public of NZ to a few.

    This was very clear.

    With many initial comments by our resident wingnuts clearly misrepresenting it.

    I haven’t tracked through the whole thread yet but I expected nothing sensible from them and unfortunately they did not disappoint me.

    Like or Dislike: Thumb up 5 Thumb down 3 (+2)

  45. Vaughan says “ShonKey needs to stop and seriously consider what he was democratically elected to do in his role as prime minister”

    Well, he said if you vote for me I’ll partially sell the assets.

    And he got voted in. Pretty simple.

    If he doesn’t sell them, he’ll be breaking an election promise.

    Like or Dislike: Thumb up 4 Thumb down 2 (+2)

  46. “Gouged on power in order to fund politicians pet projects, more like”.

    Gouged by extra dividends demanded by our right wing Governments, National and Labour, so the already private power companies can compete/look good, more like it.

    Like or Dislike: Thumb up 2 Thumb down 2 (0)

  47. greenfly says “Hilarious from a guy who dismisses education professionals who say National Standards are trash”

    That’s hilarious from a guy who dismisses other education professionals who say National Standards will work.

    And who dismisses education professionals who say we need to get back to teaching. children basic maths.

    Like or Dislike: Thumb up 2 Thumb down 1 (+1)

  48. Bored with your argument, I retire for an evening of frivolity and fun.

    Like or Dislike: Thumb up 1 Thumb down 2 (-1)

  49. “Hell – most have never even owned shares, and a lot have never even worked in the private sector”.

    Yeah right Photo. I’ve done all of that. Though I refrained from buying shares in the 80′s, because it was patently obvious the crash was coming. Caused, in NZ, by your hero’s deregulation, exposing NZ to US stuffups.

    Tell us again how well Government by business people is working?

    How many in National have started a business from scratch. Not from pinching tax payer dollars. A real business, not a money juggling exercise?

    “Is it any wonder you get a failure to understand even the most basic accounting fundamentals”.

    I am sorry, Photo, our education system failed you in this regard. No wonder why you hate Teachers. In their defense, though, I do not think it is the job of a primary school Teacher to explain the difference between accounting for a family or small firm and macro-economics at Government level.

    Asset sales are pure and simple theft. As was the whole, turning power generation into a business.

    Against the wishes of the majority of owners.

    Like or Dislike: Thumb up 4 Thumb down 2 (+2)

  50. “That’s hilarious from a guy who dismisses other education professionals who say National Standards will work”.

    Who?

    Like or Dislike: Thumb up 2 Thumb down 3 (-1)

  51. “If he raises GST, he’ll be breaking and election promise.”
    “If we don’t catch up with Australia, he’ll be breaking an election promise.”
    “If we wave goodbye to our loved ones, he’ll be breaking an election promise.”

    Oh dear. Dear oh dear, oh dear!

    Like or Dislike: Thumb up 4 Thumb down 1 (+3)

  52. bj says “the asset sales program is about a transfer of wealth from the public of NZ to a few.

    This was very clear. ”

    That’s as stupid as saying when I buy Fletcher shares there’s a massive wealth transfer in my favour.

    Because you’d have to totally ignore the fact that THEY HAVE TO BE PAID FOR!!!

    Completely ignore one side of the ledger – that’s Green economics for you.

    No wonder no one has ever run a business, or been a director.

    Like or Dislike: Thumb up 3 Thumb down 4 (-1)

  53. “That’s hilarious from a guy who dismisses other education professionals who say National Standards will work”.

    Who?”

    Lord Monckton?
    John Banks?
    Lesley Longstone?
    Who, who, who who and whooooo?

    Like or Dislike: Thumb up 0 Thumb down 4 (-4)

  54. Photonz1, uncomfortable on his less-than-a-teacher-earns wage, lectures Russel Norman, successful politician and Good Earner, on financial matters.

    Ha ha ha ha ha ha ha ha!

    An evening of mirth, for free!

    Like or Dislike: Thumb up 1 Thumb down 6 (-5)

  55. Kiwi saver buying shares in power companies, shows how stupid the whole “we cannot afford super/welfare etc, in future” argument is.

    It still means super is pay as you go, but paid for by poor and middle incomes by increased power bills, to pay dividends, to the already rich.

    Like or Dislike: Thumb up 2 Thumb down 4 (-2)

  56. Kerry says “No wonder why you hate Teachers.”

    Another case of Kerry jumping to an extreme conclusions, and being wrong, yet again.

    Most teachers are very good. A minority are not very good. A few are terrible.

    However ANY efforts to measure and improve teacher performance is met by simplistic nonsense about hating teachers.

    Again proving the inability to think beyond right is bad, left is good.

    Like or Dislike: Thumb up 4 Thumb down 0 (+4)

  57. As for basic arithmetic, not maths.

    I have worked in engineering, yacht design/building, building and shipping.

    All of which require excellent math skills.
    Even so, it is so long since I have had to do long division in my head I have forgotten how.

    Similarly. I havn’t hand written anything for years, except brief log entries, including two years at University.

    Tell me again which skills should have priority in future.

    I will back someone with understanding, against some one with rote skills, and no idea how to apply them! any day.

    A few of my fellow engineering students memorised the whole three page derivation, of a diffusion calculus, to pass the exam. Scary to think of them let loose. Same with students who can rattle of the times table, but have no idea how to relate it to their monthly mortgage payments.

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  58. This was very clear.

    It’s a clear load of bo**ocks, BJ.

    If you sell me your PC, and I give you your asking price, then it’s zero sum. You get my wealth, and I get yours.

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  59. Asset sales are pure and simple theft.

    For the love of God would SOMEONE in the Green organisation take a basic accounting course and learn what a ledger is.

    Like or Dislike: Thumb up 6 Thumb down 4 (+2)

  60. Photo. I have no problem with measuring Teacher performance.

    Provided you can come up with a fair and accurate measurement.

    Something which private companies have also found is fraught with difficulty, especially for anything more complicated than a production line. National standards are a shit way of measuring general Teacher, or school, performance. Even a superficial study of the literature on performance measurement will tell you that. As we have been trying to tell you.

    And I am happy to be rid of the, very few, that are terrible.
    In reality they tend to get such a hard time from the kids they remove themselves.
    Provide we have a method that doesn’t also get rid of good Teachers whose face, or style are different/don’t fit.

    Another problem is unfortunately most schools, especially in low decile areas find it too hard to replace the ones they loose. Which would be helped by again making Teaching an attractive career.

    I would be even happier if we could get rid of the, not so few, terrible, managers in our Government and private sector.
    The whole generation who have no management skills, apart from cost cutting and fiddling the books to ensure their bonus. Another dysfunctional use of too narrow performance measurement.

    Simplistic comments like Teachers get three times more holidays than me. Well, they don’t. Ever looked at a school car park in the holidays.

    Though. With that job they should. And then we would not have so many good Teachers who burn out.

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  61. Arana. What would you call it if you owned a house with 100 other people. At least 70 of you say don’t sell it, and you went ahead and sold.

    Theft!

    You could also be sued for the loss of future rentals.

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  62. Another David,

    You’ve also loaned against them for WFF, free student loans, and all the rest, hence all the state borrowing. If National hadn’t made the cuts LabGreen have been fiercely opposing, the borrowing would be far worse.

    National do not want to extend our debt position further than necessary and they want to deepen capital markets, a much needed step to the make a knowledge economy possible.

    You enjoy none of the benefits of ownership. In fact, it’s even worse. You get to pay for them, over and over again. You have no vote, no say in the board members, and you collect no dividends.

    And that’s those who pay net tax. Those who pay no net tax haven’t paid for anything.

    They’ve sold you a bill of goods. An utter fabrication. The political class owns them, not you. You just pay for them.

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  63. Arana. What would you call it if you owned a house with 100 other people. At least 70 of you say don’t sell it, and you went ahead and sold.

    A bad analogy.

    Try again and keep the concept of democracy in mind.

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  64. If National were concerned about borrowing they would not have made those tax cuts we couldn’t afford.

    Now they are sneakily taxing middle income earners again, like the new charge for your business annual return, instead of admitting a fuckup and reversing them.

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  65. Arana.

    Why?

    If you believed in Democracy you would go with the majority.

    If the majority are opposed then Democracy says no.

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  66. Tax cuts have been revenue positive.

    When the government takes tax off you, they churn it. They take two dollars off you, burn $1 in administration, and hand one dollar back. Fantastic for Wellington property owners, not great for you.

    It would be better if they left you with $2 and you could save it, spend it, or invest it how YOU see fit. Do that economy wide, and the tax take grows. Overtax, and it shrinks.

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  67. Why?

    Because we vote a government in under MMP, we don’t vote policy by policy. National went into the election saying what they were going to do, they won, and now they’re doing it.

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  68. And, I have done papers in Accounting, and economics. Have you.

    Then you’ll understand what a ledger is, yes? Explain to me how a ledger works (both sides, as a few here seem to think there is only one side to it)

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  69. We are not overtaxed.

    The wrong people pay too little tax.

    Half of the wealthiest people in NZ pay little or no tax. According to the IRD. Which is ridiculous.

    Tax paid stays in the local economy. Tax dodged by the rich is taken offshore, never to be seen again.

    There is a point where too much tax can kill an economy, but the successful economies which have a much larger, dollars per capita, state sector than ours show we are far from that point.

    Conversely, if like NZ, the private sector is risk adverse, greedy and complacently holding too much poorly utilised capital, the State needs to step in, take it off them, and restart business and employment.

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  70. Even if that was true, how many fat cats do you think there are in NZ?

    SFA.

    This isn’t Saudi Arabia. The only viable target for tax in NZ is the middle class. If you’re a teacher, that’s you, mate.

    Every government has to target YOU. The poor don’t have any money, and the number of rich people is insignificant.

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  71. And. Explain why, if private debt is New Zealand’s problem. Why you would be so keen on asset sales which may decrease Government debt in the short term, but will certainly increase New Zealand’s private debt short term, and Government debt long term.

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  72. Explain why you would sell an income earning asset. Which was paid for in full, long ago.

    I’ve sold plenty. You sell them when the money is better used elsewhere.

    When it comes to the state, they get the best of every world. They get to take 30% of every successful business in NZ with NO capital requirement AND they get regulatory control AND in the case of power companies they have a controlling interest.

    When you’ve got all that power, why the hell would you lock-up 100% of capital in **anything**?

    The important part is control.

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  73. The number of rich is insignificant, but the share of our wealth they have is not!

    I am not the one complaining about paying taxes.

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  74. but the share of our wealth they have is not!

    It is, and even if it wasn’t, how on earth do you think you’re going to get at it? Tax it too highly and it takes flight.

    Do you want 30% of something or 100% of nothing?

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  75. I am not the one complaining about paying taxes.

    So, if we taxed you 90%, you’d be fine with that? At what point is too much, Kerry? How many months of the year do you wish to work for nothing?

    As it is you’re probably working the first five months of the year for nothing. How many more?

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  76. Shows how caring and patriotic they are.

    It would be nice to get 15% off them.

    In fact we, middle class, were better off when taxes were much higher.
    I was paying half my income in tax, but at the time tertiary education, health care etc was free, for a start.
    My discretionary income was higher because many more services were State funded. They seemed to be able to provide them cheaper than our present privatised businesses. Funny that!

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  77. Yes! That’s the real stupid thing about selling our most profitable assets, the added government debt that New Zealand will incur in the long run.

    It appears the right wingers ledger is pretty short sighted indeed.

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  78. They’re taking five months of your pay and return you 2 1/2 moths worth of services.

    They are churning it.

    Great for me, as I own houses fat-cat state sector employees want to buy. They love Khandallah, mate. That’s my hedge. Bad for you as they’re destroying your wealth.

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  79. Not for nothing Arana. Taxes are payment for services provided by the State.

    Except for RW Governments who waste them on paying back their mates for supplying the funding. Or in Keys case, for that million dollar position when he leaves politics, as a reward for selling us out.

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  80. They destroy wealth, Kerry. They needlessly destroy your wealth.

    They could take less off you and provide more services. The only way to sustainability grow services is to grow the productive sector. Now, it;s not just tax rates, it’s only part of the problem.

    National aren’t doing anything. Labour were wreckers. The Greens are starting to circle around the right questions, but I fear they are letting ideology get in the way.

    The answers are in that video that was on here a week or so ago. Try and put ideology aside and really listen to what Sir Paul Callaghan was saying. He’s one of the few people in the country who understood the problem, and a viable solution.

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  81. Kerry says “Simplistic comments like Teachers get three times more holidays than me. Well, they don’t.”

    No – they get closer to six times what I get.

    Kerry says “Ever looked at a school car park in the holidays.”

    Yes. Empty except for a FEW cars the last one or two days before term.

    I have teachers in my family, and several as friends. Unless they’ve just starting out, they very seldom need to use holidays to prepare for term.

    Well, they don’t. Ever looked at a school car park in the holidays. “

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  82. Kerry asks “Explain why you would sell an income earning asset. ”

    I’ve regularly sold income generating assets (including power companies), for many reasons –
    - to pay down debt
    - to buy business equipment
    - to do some work on the house
    - to buy assets with a better return
    - to diversify investments
    - because they became overvalued
    - to have cash in hand for future investment opportunities

    etc
    etc

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  83. Arana

    They could take less off you and provide more services.

    You mean cut backs and deregulation just to give the rich another tax break that they don’t really need Arana?

    Tell us, how well did that work to incentives businesses or to grow the economy? Answer: not one iota. Instead we’re seeing higher unemployment, a stagnant economy and some of our largest companies folding or going offshore.

    At the moment we’re seeing even more privatisation of the state sector while still having to pay more than we should for less services because of the failed historic privatisation of companies like Telecom and Tranz Rail.

    We still have a dilapidated and inadequate rail network and some of the worst and most expensive internet and cellphone services in the world thanks to privatizing some of our key strategic infrastructure.

    Since then, New Zealand has fallen from having one of the best living standards in the world to being on par with many third world countries, all thanks to the neoliberal policies you’re trying to promote here on a left wing blog Arana.

    The only way to sustainability grow services is to grow the productive sector.

    Did you mean “sustainably grow” Arana?

    You could do that by having the government invest more through higher tax rates… They could also invest more in the productive sector if we properly taxed things like property speculators, and farmers for that matter… The average farm pays less tax than a couple of pensioners don’t you know, which just goes to show how unfair the current system is.

    It all really comes down to who’s better at managing where tax money is being spent, and in New Zealand we have a huge increase in inequality because of an unfair distribution system under an ideologically blinded National government. Because of a lack of proper oversight, we have things like Don Elder mismanaging Solid Energy while giving all his mates cushy jobs and huge amounts of taxpayers money. Why don’t you go tell them that there’s no rich people in New Zealand Arana?

    Contrary to what you might believe Arana, that example of gross negligence isn’t an isolated case of a right winger mismanaging a state owned company into the ground. But it also happens when SOE’s are privatised, which just goes to show that there’s no evidence that private ownership is more commercially adept than government ownership.

    There’s also no evidence to show that privatisation provides better services cheaper Arana, but don’t let that fact get in the way of your salivating about buying shares in something all New Zealanders used to own. I guess you’ll be able to use some of that return on your investment to pay your increased electricity bills, if there’s a return at all.

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  84. Jackal says “That’s the real stupid thing about selling our most profitable assets………………..It appears the right wingers ledger is pretty short sighted indeed.”

    What you fail to understand, is that Albanians could own 100% of Mighty River Power, and the govt would STILL receive the vast majority of benefit they currently receive.

    They would still get
    - ALL the GST
    - ALL the company tax
    - ALL the PAYE

    Which combined, brings in substantially more for the govt than the dividend ever did, or ever will.

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  85. If you continue staring into your crystal ball and talking about Albanians photon, we’re going to have to call the men in white coats to get you checked out. Besides, we’ve already had the debate about short and long term profitability for the government… You lost!

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  86. Jackal says “There’s also no evidence to show that privatisation provides better services cheaper Arana, ”

    And talks about a failed telecom privatisation – but FAILS to say phone prices plummeted as soon as telecom was privatised.

    Under the govt, it cost a weeks wages to call the far end of the country for 1 minute, calling overseas was out of the question except for the rich, you had to APPLY AND GO ON A WAITING LIST – just to buy a phone.

    If your phone broke down, is took SEVERAL DAYS for someone to come out and look at it.

    And under the government the railways was how you transported goods if you wanted to have half of them pilfered, end up lost, or on the wrong island (although that only happened when the ferries weren’t on strike). If you were REALLY lucky, your goods would actually arrive at their destination, only a week or two late.

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  87. Jackal says “Besides, we’ve already had the debate about short and long term profitability for the government… You lost!”

    You’ll always think you win jackal when you only count one side of the story.

    Like wiping from your mind how bad telecom and railways actually were when they were government run.

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  88. Jackal says “Since then, New Zealand has fallen from having one of the best living standards in the world to being on par with many third world countries”

    Wrong again. Our plummeting status in the OECD happened in the 1970s.
    We dropped nine places from 9th to 18th.
    In the 80s and 90s when we privatised, the freefall stopped and we only dropped ONE place per decade.

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  89. Photon

    And talks about a failed telecom privatisation – but FAILS to say phone prices plummeted as soon as telecom was privatised.

    Phone prices didn’t plummet as soon as telecom was privatised photon, stop making shit up.

    Under the govt, it cost a weeks wages to call the far end of the country for 1 minute, calling overseas was out of the question except for the rich.

    You’re exaggerating again photon. Claiming that such cost reductions was because of privatising Telecom instead of advances in technology is simply dishonest. Besides, you’ve provided no evidence to show that such a dynamic wouldn’t have also occurred if the government had retained ownership.

    you had to APPLY AND GO ON A WAITING LIST – just to buy a phone.

    That must have been well before my time photon, and probably back in the day when phones were just starting to be widely manufactured.

    My recollection of the time when the government still owned Telecom was that a phone was usually a chattel of the house and a new phone was sent in the post free of charge if one wasn’t at the house when you moved in. Standard postal times usually applied and it didn’t matter whether you owned the property or not, the phone was still free.

    If your phone broke down, is took SEVERAL DAYS for someone to come out and look at it.

    Actually, the policy concerning call outs hasn’t changed since Telecom was privatised. Your argument seems to be based on organizational and infrastructure advances… Such things don’t prove that privatisation is better, because they would have occurred anyway if the government had retained the asset.

    We would have also had those billions of dollars in revenue to spend on things here in New Zealand, instead of it all being lost offshore.

    And under the government the railways was how you transported goods if you wanted to have half of them pilfered, end up lost, or on the wrong island (although that only happened when the ferries weren’t on strike).

    As usual, no evidence to support your claims photon… Just waffling about your unfounded beliefs like the good RWNJ that you are.

    If you were REALLY lucky, your goods would actually arrive at their destination, only a week or two late.

    And now we don’t even have rail lines to many areas that require them. There’s also a lot to be said for modern day logistics, which don’t often allow for things to fall off the back of a truck so to speak. However I’m not aware of any statistics to show that people stoll more goods back in the day.

    You got anything to back your obviously deluded claims up with photonz1… Or are you just all blather?

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  90. Jackal, you’re blaming me for Solid Energy?!? A state-owned coal company??!

    In case it has escaped your notice, I do not think the state has any business owning a coal company. Or any company. Who on earth thinks a coal company is a great hold in the 2000′s?

    I’ll tell you who.

    Ideological fools who can’t tell an asset from a liability. They’re STILL banging on about it in the form of a referendum. Had Labour not been so ideologically blinkered, they would have unloaded the Solid Energy pup years ago. National have been too slow.

    The rest is history.

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  91. We still have a dilapidated and inadequate rail network

    Sadly, yes, because the fools brought it back. There is no better way to torch future tax revenue than owning an utterly useless rail network in a country not suited to rail.

    Some lines make sense. Bulk goods to port. Everything else is a complete waste of time and should be ripped up, scrapped and sold off. Rail is 18th century technology.

    The future is road “trains”.

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  92. Jackal says “Phone prices didn’t plummet as soon as telecom was privatised photon, stop making shit up.”

    Yes they did. Toll prices dropped to LESS THAN HALF the previous cost under government control.

    And service improved dramatically.

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  93. It wasn’t just households who had to wait days or weeks for telecom service when the govt ran it.

    From the encyclopedia of NZ “Delays in the installation of new telephones affected more than residential customers. In 1984 Treasury, at the forefront of the push for re-organisation of the Post Office, waited two months for existing telephone jacks to be shifted.”

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  94. Jackal says “And now we don’t even have rail lines to many areas that require them.”

    The overwhelming majority of lines were ripped up under government ownership – NOT private owners.

    I know – part of my job was checking progress on the contracts. Very few tracks have been uplifted since then.

    As Wiki says “At the network’s peak in 1952, about 100 branch lines were operating. Large-scale closures of branch railway lines began in the 1960s and 1970s.”

    Another fact that won’t fit into your narrow view of the world is freight traffic went up significantly under private ownership compared to when the govt owned the railways.

    But regardless of who owns it, NZ remains just about the most difficult country on the planet to run a railway –
    - steep topography
    - cook strait
    - small population and markets
    - no land borders with neighbours
    etc etc.

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  95. Photon

    Wrong again. Our plummeting status in the OECD happened in the 1970s.
    We dropped nine places from 9th to 18th. In the 80s and 90s when we privatised, the freefall stopped and we only dropped ONE place per decade.

    Could you link to your data concerning the OECD living standards photon?

    Historic asset sales can be considered to have started in 1988 and continued until 1999, with most of the privatisation occurring between 1990 and 1995.

    Within that time frame, inequality grew dramatically in New Zealand, as shown by the GINI coefficient.

    Toll prices dropped to LESS THAN HALF the previous cost under government control.

    And service improved dramatically.

    Do you have anything at all to back up your claims with photon… Or is this a bit like your cherry picking OECD stats while ignoring the GINI coefficient that clearly shows our inequality increasing with asset sales? It seems the only ones who are blind to one side of the ledger are the RWNJ’s.

    Arana

    Ideological fools who can’t tell an asset from a liability. They’re STILL banging on about it in the form of a referendum.

    Are you trying to say that the assets National are planning to partially privatise are a liability for the government? That’s clearly wrong, with electricity prices and demand set to increase. Renewable energy sources are a growth industry, that’s why National wants them privatised.

    Had Labour not been so ideologically blinkered, they would have unloaded the Solid Energy pup years ago. National have been too slow.

    The initial large decline in coal prices occurred between June and November 2008, which means Labour didn’t have time to react. National and their mates over at Solid Energy on the other hand failed to adjust to that fall in commodity prices or the fact that they didn’t recover properly before declining again between March 2011 and August 2012.

    But if that wasn’t bad enough, to add insult to injury, they advocated for increased investment and expansion of Solid Energy, still obviously relying on outdated prices in the hope that they would recover… How stupid can you get? That is the clearly incompetence on the part of Don Elder and the National government.

    Sadly, yes, because the fools brought it back. There is no better way to torch future tax revenue than owning an utterly useless rail network in a country not suited to rail.

    You’re ignoring the fact that Tranz Rail was asset stripped while it was in private ownership Arana… They also failed to undertake any proper maintenance or development of the asset. That’s why the government had to purchase it back, because if they hadn’t, we wouldn’t have any rail network at all.

    Such a thing would benefit people like trucking magnate Owen Glenn I suppose, who just so happens to be mates with many of the right wingers who have decided to waste billions on roads of little significance, which is another example of taxpayers money and increased debt benefiting private interests.

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  96. That’s as stupid as saying when I buy Fletcher shares there’s a massive wealth transfer in my favour.

    Not as stupid as imagining that we all own a bit of Fletcher to start with as you just did.

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  97. Jackal – I’ve already previously linked to OECD stats a week or so ago, and also toll call prices.

    Try taking you head out of the sand for a few minutes and google the info.

    Inequality will ALWAYS keep growing.

    Even if you (and the whole country) get EXACTLY the same income as me, I’ll choose to save and invest $1000 while you spend it.

    The gap between our wealth and income will grow from that day forward for the rest of our lives. If we do nothing different from that day on, it will still grow forever.

    If you’re more interested in what you can get out of the government, rather than what you can do for yourself, you’re ALWAYS going to be on the wrong side of the inequality divide.

    One last thing – read the previous sentence again.

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  98. So, if we taxed you 90%, you’d be fine with that? At what point is too much, Kerry? How many months of the year do you wish to work for nothing?

    Where does that rate kick in? That marginal rate wouldn’t bother me a bit if I got the first 200K on 35% and the next 200k on 50%… unless I had to buy a house to live in, in Auckland.

    More than that isn’t really earned in any case. You can refer to the “money is work done” meme if you want… the bonus value assigned to the work of some people with extraordinary skills is often irrational and they are very lucky.

    No, it isn’t the way YOU think about it… IS it :-)

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  99. bj says “Not as stupid as imagining that we all own a bit of Fletcher to start with as you just did.”

    But you don’t own a bit of it the state assets, any more than you directly own the debt that the sale will cancel out.

    And if you think you own it, have you actually paid for it?

    On average, $18,000 is spend by the government on services for every person in the country, every year. The vast majority of people don’t pay anything like that much in tax, so they’re not even covering their own costs, let alone contributing to building up infrastructure.

    The funny thing is, the people who contribute the least, always complain about those who contribute the most.

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  100. Inequality will ALWAYS keep growing.

    Even if you (and the whole country) get EXACTLY the same income as me, I’ll choose to save and invest $1000 while you spend it.

    There we have it. The myth. The notion that somehow it is simply their virtuous hard work and values that make the wealthy… wealthy. That the people who weren’t as fortunate as they were at some point, couldn’t possibly do the same as they do with the same resources.

    Photonz, that is such an absolute crock of shit that if it were diluted sufficiently to cover the entirety of the country, the farmers could forego fertilizing for the rest of the fucking year.

    ———————————–

    The reason inequality keeps growing is that if you couple honest free market capitalism (which we don’t even have, the fraudulent thing we are using instead is actually much less efficient and a lot less honest), coupled with the fraud of fractional reserve banking… has the inevitable result of forcing inequality to grow.

    The only ways to control are is a strongly progressive tax and wealth transfer system (Which works only as long as the public is smart enough to smack down the efforts of the bankers and their wealthy clients to change the rules. Not all that long)…. or to take control of the money supply away from the banksters.

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  101. But you don’t own a bit of it the state assets, any more than you directly own the debt that the sale will cancel out.

    I pay taxes Photonz. Unlike a RWNJ I recognize that the state is the means by which we as citizens manage the things that we as individuals cannot. That it is a TOOL for the use of us citizens, and a means by which we collectively own things that no individual can own or be responsible for… like rivers and air.

    You think the sale will cancel debt… and yet you distrust the management of the state in everything else. You have the disease bad mate. I think it is a hopeless case.

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  102. Jackal,

    Are you trying to say that the assets National are planning to partially privatise are a liability for the government?

    I think it was clear I was talking about Solid Energy.

    The initial large decline in coal prices occurred between June and November 2008, which means Labour didn’t have time to react. National and their mates over at Solid Energy on the other hand failed to adjust to that fall in commodity prices or the fact that they didn’t recover properly before declining again between March 2011 and August 2012.

    You don’t sell something when it’s tanking, you’ll get no money for it. The “owners” and “managers” should have seen their vulnerability and the direction of their markets and sold out well before 2008.

    But it was never on the cards to sell a “state asset” was it? The result: taxpayer wealth has been destroyed. And what on earth for? When it was profitable, the government got to tax it at 30% – with no risk to the taxpayer at all!

    If the state has power of regulation, why on earth does the state need to own anything? Why expose the taxpayer to the downside risk when there is absolutely no need? The state benefits from upside profit by way of taxation. The higher the profits, the higher the tax revenue.

    You’re ignoring the fact that Tranz Rail was asset stripped while it was in private ownership Arana… They also failed to undertake any proper maintenance or development of the asset. That’s why the government had to purchase it back, because if they hadn’t, we wouldn’t have any rail network at all.

    Because it wasn’t worth doing. Rail isn’t competitive.

    Such a thing would benefit people like trucking magnate Owen Glenn I suppose, who just so happens to be mates with many of the right wingers who have decided to waste billions on roads of little significance, which is another example of taxpayers money and increased debt benefiting private interests.

    Who cares? You’ll still taxing him at 30%. If you sense the market is locked up by a monopoly, then you regulate it to ensure competition.

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  103. Where does that rate kick in? That marginal rate wouldn’t bother me a bit if I got the first 200K on 35% and the next 200k on 50%… unless I had to buy a house to live in, in Auckland.

    No, BJ. That pool is far too small to make any difference.

    Kick it in at 20K. And why not? The glorious state will supposedly be better funded to churn…sorry redistribute to all those in “need”.

    So at what point would you think you’re better off being someone “in need” of a transfer rather than working when rates are set so high? Does the economy really grow by taxing at higher and higher rates? What happens when there are far more “in need” that there are working?

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  104. Look at the big state Eurozone. Unemployment sitting at 11.9 percent. Youth unemployment in Spain sitting at 49%. Has high taxation and high levels of state largess worked in these countries?

    High taxation and big state bureaucracies suppress enterprise.

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  105. BJ says “I pay taxes Photonz.”

    Do you cover the $18,000 per person the govt spends on you?

    Your problem is you feel continually entitled to things that are paid for with someone elses money.

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  106. Yes… but WHY DOES THAT MATTER???

    Your discourse degenerates… and I had thought my respect for you could not sink any lower.

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  107. Photon

    I’ve already previously linked to OECD stats a week or so ago, and also toll call prices.

    Then it shouldn’t be a problem for you to link to them again?

    Try taking you head out of the sand for a few minutes and google the info.

    I have looked, but cannot find any information that supports your assertions photon. That’s why I’m asking for you to supply a link to it.

    I’m making such a request because you’ve previously misrepresented statistics to try and support your defunct arguments photon. You need to actually link to things… Otherwise it just looks like you’re making shit up again.

    Inequality will ALWAYS keep growing.

    Rubbish! Inequality doesn’t have to keep increasing, as shown in other developed countries that have proper social consciences and develop community based policy.

    New Zealand has had the fastest growing inequality in the world specifically because of the neoliberal agenda. Get rid of the neoliberal agenda and rely on honest capitalists and social policy that works to develop people into independence and we will see inequality reduce.

    If you’re more interested in what you can get out of the government, rather than what you can do for yourself, you’re ALWAYS going to be on the wrong side of the inequality divide.

    Actually, I do pretty well financially considering the policy changes various New Zealand governments have made to specifically inhibit my generation from achieving. I was for instance one of the first generations who had to pay for my education… When I started my working life, apprenticeships were no longer available… When I started my first business, there was no longer any government incentives etc etc.

    But I don’t want to get too caught up in your ad hominem diatribe photon.

    What we are actually discussing is what the already wealthy expect to get from the government in the form of the publics profitable assets at the expense of the poor who already can’t afford to heat their homes properly.

    Higher electricity prices, which will surely occur with the partial privatisation of our power companies will transfer more wealth off the poor to the already wealthy. That will mean more cases of third world diseases, malnutrition, reducing educational achievement and increased health costs… Have you factored those expenses into your side of the ledger photon?

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  108. “You think the sale will cancel debt… and yet you distrust the management of the state in everything else.”

    The “Chip” uppercut meets the “Photon” glass-jaw.

    It’s a K.O.

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  109. Key, English, Joyce and Brownlee gleefully big-noted Solid Energy’s potential to enrich us all beyond our wildest dreams.
    Oops!
    Now they say that they were not involved and that Don Elder was reckless and out of control.

    Liars.

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  110. BJ says “here we have it. The myth. The notion that somehow it is simply their virtuous hard work and values that make the wealthy… wealthy. ”

    All my well-off friends have one thing in common – they work really hard. Unlike their backgrounds, which are quite different. Although a surprising number started in underprivileged families.

    As the saying goes, the harder I work, the luckier I get.

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  111. Arana

    But it was never on the cards to sell a “state asset” was it?

    Who said anything about selling Solid Energy because coal prices were tanking? It didn’t need to be sold Arana… All that really needed to happen is that its management and the current National government should have halted their expansion and not increased their investment plans. That’s what has caused Solid Energy’s demise.

    If the state has power of regulation, why on earth does the state need to own anything? Why expose the taxpayer to the downside risk when there is absolutely no need? The state benefits from upside profit by way of taxation. The higher the profits, the higher the tax revenue.

    Higher tax revenue from increasing costs for the general public.

    In my opinion, it’s easier for the government to regulate companies that the public owns… It’s also easier for the public to regulate their own assets as well, because they have access to relevant information through things like the Official Information Act. That Act doesn’t apply to privately owned companies that are often difficult to properly regulate.

    Rail isn’t competitive.

    Where is your evidence for that assertion Arana? Granted, rail is not as competitive as it could be because it has been badly degraded through privatisation.

    The fact of the matter is that rail is one of the most efficient and cost effective means of transporting bulk goods around New Zealand. Even the governments think tank believes that around 10% of goods could use rail instead of trucks to increase efficiency… Fix the rail network and that percentage will increase.

    Who cares? You’ll still taxing him at 30%.

    That’s if he doesn’t exploit the various loopholes in our tax system and actually pays his way Arana… Many wealthy people don’t. In fact New Zealand is now viewed as one of the best tax havens in the world.

    If you sense the market is locked up by a monopoly, then you regulate it to ensure competition.

    Regulation costs money and because we’re a small isolated nation there’s often no natural competition developing. Instead we have natural monopolies. Anyway, weren’t you arguing just the other day for less regulation? Talk about mixed messages Arana.

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  112. Key, English, Joyce and Brownlee gleefully big-noted Solid Energy’s potential to enrich us all beyond our wildest dreams.

    Wasn’t your man Russel telling us what an asset it was and we should not sell it off?

    Here, in fact:

    http://www.greens.org.nz/koa

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  113. BJ says ““You think the sale will cancel debt… and yet you distrust the management of the state in everything else.”

    greenfly says “The “Chip” uppercut meets the “Photon” glass-jaw.
    It’s a K.O.”

    First, BJ makes up a dishonest and false position that has never been stated or even implied – that I “distrust the management of the state in everything else”.

    Secondly, greenfly is so intent on personally demonizing people, that he’s failed to comprehend his ignorance of the facts.

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  114. Where is your evidence for that assertion Arana? Granted, rail is not as competitive as it could be because it has been badly degraded through privatisation.

    The fact of the matter is that rail is one of the most efficient and cost effective means of transporting bulk goods around New Zealand. Even the governments think tank believes that around 10% of goods could use rail instead of trucks to increase efficiency… Fix the rail network and that percentage will increase.

    It’s got little to do with maintenance and everything to do with suitability.

    Rail makes sense when you’ve got flat terrain and you’re moving a lot of raw material and bulk goods to port.

    It makes no sense in NZ. In most cases, you must load a truck, unload the truck to a train, and then unload the train again to truck at the other end. Our topography is not suited to rail. It makes development and maintenance very expensive.

    We can have road “trains”. We don’t need an inflexible, expensive steel track. If you’re still fixated on state ownership, you’d be much better off owning Comrades Trucking Inc.

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  115. Photonz

    For every person who is well off because of their hard work there are 5 or more who have worked just as hard but are still poor.

    For every person who is well off because of their hard work there would (on my experience) 3 other folks who are equally well off but who gained that status through some dishonest (my rules, not a lawyer’s) manipulation.

    You have the disease badly, trying to JUSTIFY ever greater inequality on the backs of the unfortunate.

    The GINI in countries that are regarded as having a high quality of life is significantly lower than ours. The people there work hard too.

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10644470

    The notion that we are so broke that we have to sell the family silver when we are one of the lowest taxed nations in the OECD, is impossible to even state clearly without its obvious error hitting you between the eyes.

    Of course to hit someone between the eyes, there would have to be two, and you clearly only have one my lopsided cyclopian friend.

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  116. Arana

    Wasn’t your man Russel telling us what an asset it was and we should not sell it off?

    Solid Energy would be a better asset to retain if National hadn’t promoted its expansion and increased investment when coal prices had tanked… That’s like buying a brand new car or house just after you’ve lost your job with no realistic way of paying off that debt… Stupid in other words.

    Now Solid Energy is effectively worth nothing because of their mismanagement.

    I expect there to be further cases of profitable SOE’s going under because of Nationals stupidity before they lose the next election.

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  117. Arana

    Our topography is not suited to rail. It makes development and maintenance very expensive.

    That’s why the governments own think tank has said efficiency would increase if rail was used instead of trucks to transport more bulk goods eh Arana?

    You’re so clearly deluded by your own rhetoric that I actually feel a bit sorry for you Arana… Poor little RWNJ.

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  118. Jackal’s correct. National mismanaged their responsibilities toward the SEO and the public and prompted SE to stuff up their previously sound position. The Greens would manage a SOE differently, better, successfully, being driven by ideology that has integrity. It’s impossible for you to grasp, photonz1, what with your glass-jaw and tin-ear.

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  119. Apart from the sheer stupidity, from a short term accounting view, of selling assets, there is also what happens to the value of renewable power long term.
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10869145
    The reason is arguably much more important than both of these concerns.

    “The Government has grossly underestimated the value of hydro-energy assets to New Zealand citizens. The assets are likely to be worth at least double the amount the Government is prepared to accept. This is because the valuations have apparently ignored the implications of clear signals that global energy costs and prices will increase greatly and permanently within the next 7 to 10 years”.

    I would argue that it is going to take longer than 7 to 10 years for fossil fuel prices to hit the roof, the USA is still prepared to spend trillions on wars to keep them low, but, it will happen.

    Selling power companies is daft. And still, theft!

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  120. Arana. The only reason why rail is losing money in NZ is because trucks are heavily subsidised. Another RW, croniest, misuse of tax dollars. Take away the amount we pay for infrastructure for trucking firms and the balance changes.

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  121. apparently ignored the implications of clear signals that global energy costs and prices will increase greatly and permanently within the next 7 to 10 years

    Red herring. The state hasn’t lost control of energy markets. It has a stake in them in the form of taxation. It can regulate as required.

    There is simply no need for the state to carry the downside risk or sink capital.

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  122. “Wrong again. Our plummeting status in the OECD happened in the 1970s.
    We dropped nine places from 9th to 18th.”

    Was that when National were borrowing like wounded bulls for social welfare for sheep, by any chance?
    See the similarities with National now? Also borrowing for social welfare for the wealthy.

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  123. Bullshit Arana. Our Government is about to sign an agreement that they will not legislate in any way, to reduce private profits of offshore corporates.

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  124. Arana. The only reason why rail is losing money in NZ is because trucks are heavily subsidised.

    No, it’s because it’s a solution looking for a problem.

    If you started from scratch in this country today, the last thing you’d build is rail. It’s not suited for purpose. Road is. Rail is useful when you’re running a lot of raw materials long distance across flat terrain to ports i.e. USA, Australia

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  125. That’s why the governments own think tank has said efficiency would increase if rail was used instead of trucks to transport more bulk goods eh Arana? You’re so clearly deluded by your own rhetoric that I actually feel a bit sorry for you Arana… Poor little RWNJ.

    Whatever, Comrade.

    They agree with me. That is the one rail application that makes sense. So, some lines will make sense i.e. when you’re physically near the line and you’re running straight to destination.

    Most don’t.

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  126. Let’s turn rail into shares. Give 100% away, free, to all taxpayers, divided evenly. Then kiwis really do own rail. Those who want to hold them, and sink even more funds into them to prop them up year after year, can do so.

    People like myself can dump them at the first opportunity and use the money to buy something useful.

    Everyone is happy. The LWNJs have their trainset. The RWNJs have their baby eating machine, or whatever it is these evil RWNJs invest their filthy money in these days.

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  127. BJ says “For every person who is well off because of their hard work there are 5 or more who have worked just as hard but are still poor. ”

    It goes without saying that if you work hard, but not hard enough to bother getting a qualification or skill, or if you make stupid decisions with your money, you’re never going to get ahead.

    Anyone who is not sensible with their money will NEVER be well off, no matter how much they are given.

    As proven by the fact that most lottery winners have no money a few years later.

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  128. Greenfly has turned commedian “The Greens would manage a SOE differently, better, successfully, being driven by ideology that has integrity.”

    That’s with a group of people who all the experience of running a coffee caravan? (or not even that).

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  129. Kerry says “Arana. The only reason why rail is losing money in NZ is because trucks are heavily subsidised. ”

    Railways lost EVEN MORE when it was subsidised, and it was illegal for a truck to travel more than 150km.

    It was bankrupt. The govt had to pay off $1200 million in railways debt, even though the company was only worth $400m.

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  130. he Greens would manage a SOE differently, better, successfully, being driven by ideology that has integrity

    Ho ho. Yes, because the Green MPs have such vast experience, and success, running corporations in competitive international markets. Do you have any MPs that have run a business of some kind?

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  131. Turned comedian?
    Try to keep up, photo.
    What is funny is that you believe you can make smarmy, ill-informed, anti-Green comments here at Frogblog (“That’s with a group of people who all the experience of running a coffee caravan? (or not even that).”)
    yet whine piteously when a regular calls you for being an *rse.
    Arana’s no different, lacing her commentary with demeaning slights on the party and the MPs who are supported on Frogblog.
    Again, I see floaters, two of them this time and two guests pointing at them gleefully as though they were gold-bars.
    You are the worst of house-guests, arrogant and constantly critical of your hosts.
    You can hardly expect, therefore, to be showered with praise for being here, can you?

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  132. energy costs and prices will increase greatly and permanently within the next 7 to 10 years

    Only if governments are stupid enough to “invest” in windmills.

    But hey, good call! He’s telling us our investment will double in value in seven years? Plus dividends? God damn, brother! I’m selling one of my baby eating machines and doubling down on Mighty River!

    I could use a bigger yacht.

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  133. It must be that Rightwingers are excellent business people, given the comments of our float-makers.
    Let’s explore, for the moment, the history of Jenny Shipley, shall we?
    Or the case of Lesley Longstone, paid off at a rate of $200 for every miserable hour she worked, over and above her salary, due to the shameful mismanagement of Tolley/Parata/Key/National. The field for exploring Rightwing incompetence in business is broader than Brownlee’s *rse (to keep to the theme).

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  134. Arana’s no different, lacing her commentary with demeaning slights on the party and the MPs who are supported on Frogblog.

    Well, have any of them successfully run multi-nationals in competitive international markets? If not, and it would seem not, then what makes you think they can run them successfully having no experience of doing so?

    Could someone teach University level physics if they knew nothing about physics?

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  135. It must be that Rightwingers are excellent business people, given the comments of our float-makers.

    No, your politics don’t mean you’re good at running a business.

    The only thing that tells us if you’re good at running business is your track record of success at doing so.

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  136. Arana says “Yes, because the Green MPs have such vast experience, and success, running corporations in competitive international markets.”

    When they can’t even distinguish the primary roles of a business (they regularly think the government is management when it’s the shareholder), it’s a pretty frightening thought.

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  137. A Government is not a business. This one is being run like one though. Hence the smell.

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  138. A Government is not a business.

    Correct. They have no business owning business.

    Their job is to regulate and create the environment for business to prosper. For the last 20 years, they can’t even get that right. Why do we have so many politicians who fail to do their job?

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  139. greenfly resorts to simpleton thinking “It must be that Rightwingers …”

    Right wing bad, left wing good….Blah blah blah

    And chips in earlier with some general personal abuse, like a thousand times before.

    Yawn.

    I suppose that’s all he could do when asked what business experience the Green Party has.

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  140. I love how the left, the media, and now the government are all on-message for the sales process. They’re all talking about how valuable Mighty River is!

    Talk about ramping share demand.

    You just couldn’t make this up. No one would believe it.

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  141. Arana

    You’ve contradicted yourself again Arana… First you write:

    If you started from scratch in this country today, the last thing you’d build is rail. It’s not suited for purpose.

    Then you write

    So, some lines will make sense i.e. when you’re physically near the line and you’re running straight to destination.

    Rail is still more efficient in some circumstances to transport certain bulk goods in New Zealand, which makes it a worthwhile asset for the government to maintain properly. Privatising Tranz Rail meant it was run into the ground, which caused the use of less efficient trucks to transport bulk goods.

    Unfortunately, the infrastructure trucks use is heavily subsidized by the taxpayer, while most of the profits go to private shareholders.

    photon

    Railways lost EVEN MORE when it was subsidised, and it was illegal for a truck to travel more than 150km.

    It was bankrupt. The govt had to pay off $1200 million in railways debt, even though the company was only worth $400m.

    More made up nonsense without any relevancy from the resident right wing troll. Pathetic! You should try harder Photonz1… Arana is doing well at promoting her delusions and looks set to take over your title.

    What’s this… The government website and 0800 number to gain the details of people who are interested in obtaining shares in Mighty River Power have only just launched, and already we’re seeing a serious breach of privacy.

    Don’t worry though Arana and Photon, you can ignore that example of criminality by your National party just like you ignore all the others… Rest assured your delusions that right wingers are better business managers isn’t likely to change anytime soon, no matter how many examples are provided to categorically prove otherwise.

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  142. photonz1 “It was bankrupt. The govt had to pay off $1200 million in railways debt, even though the company was only worth $400m.”

    Jackal says “More made up nonsense”

    wiki says “By 1989 large operating losses and interest had generated a debt of $1.2 billion” and “NZRL was sold for NZ$400 million to a consortium ”

    Jackals response when the real world doesn’t fit his blinkered ideals, is dig a hole and put his head in it.

    Todd – perhaps you should have named yourself ostrich instead of jackal.

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  143. Is this wiki you talk of your imaginary friend photon… Could you link to it to show that it actually exists please?

    Here’s what Wikipedia actually says:

    On 28 October 1990 the New Zealand government removed core rail transport and shipping operations from the New Zealand Railways Corporation, creating a separate entity called New Zealand Rail Limited. The government wrote off NZ$1.3 billion in debt acquired by the company from the Railways Corporation (mainly for the electrification of the North Island Main Trunk, a Think Big project), and injected a further $300 million in capital. Despite this capital injection the company remained only marginally profitable, reporting after-tax profits of $36.2 million in 1992 and $18 million in 1993.

    Nothing new in the government injecting a large amount of money into an SOE just before it’s hocked off. Keeping profits low so that there is also a low asking price is also not out of the ordinary for dishonest right wingers… All of which doesn’t quite mesh with your inanities there photon.

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  144. Jackalk – after saying nonsense, you yourself prove that the railways needed $1.6 billion injected into it so it could be sold for just quarter of that.

    Just shows how bankrupt it was.

    Why do I bother countering your arguement, when you do it for me.

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  145. “High taxation and big state bureaucracies suppress enterprise”.

    Ah. Now we have the Laffer curve fallacy.

    All the evidence says, within reason, the opposite is true.

    Good State provided infrastructure, services, health care and education allows small business to thrive. This is even more essential during a recession.
    Nationals tax cuts worked so well to stimulate the economy, didn’t they?
    Where the State does not provide these properly the country goes down the tubes.

    Of course the current state of Greece and Spain have nothing to do with their previous decades of repressive right wing Governments, people working the longest hours for the least money in Europe, and too high an effective exchange rate from the Euro zone. Of Course! LOL.

    Countries that spend much more on State services per capita, and had socialist Governments all along, are still doing nicely, as they have done for decades.

    Why don’t you, Photo and all the other mean spirited and antisocial right wing twits go to your ultimate right wing libertarian fantasy country, Somalia. No taxes, no effective State, you can do anything you like, if you already have wealth of course. Your idea of paradise.

    You won’t because you like all the benefits of a stable and functioning society, that socialists provide.

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  146. You’ve contradicted yourself again Arana

    No, the last thing you’d build is rail. There are some specialist applications where rail makes sense, if you’ve got existing infrastructure.

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  147. Arana is doing well at promoting her delusions and looks set to take over your title.

    I’ve got nothing on you, mate. You think the only reason rail isn’t working is because it isn’t subsidised enough.

    The irony escapes you, I’m sure. As I said, let’s float the entire thing, give the shares away to all taxpayers (even to the poor who contribute nothing to the tax pool and therefore never pay for any infrastructure), and then people like me can sell them.

    Everyone is happy. If you want the turkey, you pay for it.

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  148. “A Government is not a business.

    Correct. They have no business owning business.”

    In a democracy, a government’s role is to do as they are told. If people want them to own businesses, they should own businesses. Citing religious dogma about what a government should do is rather irrelevant.

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  149. All the evidence says, within reason, the opposite is true.

    Kerry’s string of stuff he just made up. Those European governments you love so much are all big spending statists and they’re screwed. Even Sweden has had enough of the left and realises they need to change.

    Why don’t you go to Venuzuela, mate. That useless Communist has just vacated his spot leaving soaring inflation, plummeting productivity, growing debt and fiscal deficits even though he had massive oil reserves to fall back on.

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  150. Kerry – If you use Somalia as the example of extreme right, then Zimbabwe and North Korea would be good examples of extreme left.

    Of course no one here has actually ever argued for extreme right wing policiies.

    Except the people you argues against in his head.

    Unfortunately for you, they’re not the same people who exist in the real world here.

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  151. Photon

    after saying nonsense, you yourself prove that the railways needed $1.6 billion injected into it so it could be sold for just quarter of that.

    So the government spent around $1.3 billion for the electrification of the North Island Main Trunk line just before selling the asset to it’s rich mates, and photonz1 claims that selling New Zealand Rail Limited for a quarter of that invested money supports his argument that privatisation is a good thing… LOL!

    It’s no wonder you’re still the king right wing troll here on frogblog Photon.

    Arana

    There are some specialist applications where rail makes sense, if you’ve got existing infrastructure.

    Ipso facto… Where we have existing infrastructure there are applications where rail makes sense, which directly contradicts your initial argument Arana. Keep digging, one day you might make it to China.

    I’ve got nothing on you, mate. You think the only reason rail isn’t working is because it isn’t subsidised enough.

    Wrong! I’ve argued that rail isn’t doing as well as it should because it was privatised, asset stripped and run down. The subsequent government investment to remedy the problem hasn’t been enough to revitalize the industry. I’ve also argued that trucking is subsidized far too extensively by the taxpayer and can therefore undercut rail.

    If you really want to take the title off photonz1, don’t let those facts get in the way of your delusions though Arana… God knows photon never does.

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  152. photon

    Except the people you argues against in his head.

    Unfortunately for you, they’re not the same people who exist in the real world here.

    Are you talking to your invisible friend wiki again there photon? With such bad grammar, I’m having a hard time understanding your trolling today.

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  153. Ipso facto… Where we have existing infrastructure there are applications where rail makes sense, which directly contradicts your initial argument Arana. Keep digging, one day you might make it to China.

    No, you’re simply twisting my words to fit your initial misconception.

    Again, if you want rail, YOU can fund it. Give me a way to opt out – i.e. float it all and hand out the shares, free, to all taxpayers – and you can subsidise as much rail as you like.

    I’ll grow richer and you’ll go bankrupt.

    Then you’ll blame me for being a privileged rich pri*k, or something.

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  154. Jackal shows his economic pedigree by trying to tell us that electrifying the NI Main Trunk (which cost $250m), was the reason the Railways was $1.3 BILLION in debt.

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  155. BJ says:
    “For every person who is well off because of their hard work there are 5 or more who have worked just as hard but are still poor. ”

    Photonz says:
    “It goes without saying that if you work hard, but not hard enough to bother getting a qualification or skill, or if you make stupid decisions with your money, you’re never going to get ahead.

    Anyone who is not sensible with their money will NEVER be well off, no matter how much they are given.

    As proven by the fact that most lottery winners have no money a few years later.”

    Did you somehow imagine that I said that everyone who was poor worked hard?

    Or that everyone who somehow comes into money can handle it? Invests wisely?

    Your logical inversion is as impenetrable as the fog it produces.

    I am not arguing that everyone who is poor deserves to be rich OR that all people are equally capable/willing to work and earn money.

    I am simply observing that wealth is far more a matter of luck than it is the capability/willingness to work and earn money.

    Attempts to justify wealth or more to the point here, the “right” of the wealthy to keep everything they earn and increase inequality, are based on more than one false premise… this one being a key self-deception – that the inequality is somehow a necessary result of the superior qualities of the wealthy and so they should not have to move a share of the burden proportionate to the leverage their wealth provides.

    There are others, equally invidious and spurious, involved in your ideology.

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  156. BJ asks “Did you somehow imagine that I said that everyone who was poor worked hard? ”

    No.

    Again – you jump to some sort of extreme conclusion.

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  157. BJ says “Attempts to justify wealth or more to the point here, the “right” of the wealthy to keep everything they earn and increase inequality,”

    BJ – you’re howling at the moon.

    Nobody anywhere here has argued that the wealthy should keep “everything they earn”, or even anything closely similar.

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  158. Arana

    No, you’re simply twisting my words to fit your initial misconception.

    You said that rail wasn’t viable in New Zealand Arana, and then said it was viable if there was existing infrastructure, which is a contradiction.

    Again, if you want rail, YOU can fund it. Give me a way to opt out – i.e. float it all and hand out the shares, free, to all taxpayers – and you can subsidise as much rail as you like.

    I’ll grow richer and you’ll go bankrupt.

    That makes no sense… Are you saying that people should be able to opt out of paying taxes for things they don’t directly benefit from? Talk about another right wing idea that’s sure to fail.

    Let’s expand on your defunct idea shall we Arana… I’ve never used a jail and so shouldn’t pay taxes to build them, I’m also physically able to defend myself so don’t need the services of the police, I’ve never needed a lawyer so shouldn’t pay taxes to build universities where lawyers learn their trade, I use the road less than most people preferring to ride a bike so shouldn’t pay as much taxes to build roads of little significance and I’m not currently using a rest home or a school so don’t want my taxes being spent on looking after old people or teaching kids… The list goes on.

    If implemented, your idea would assuredly mean the collapse of modern society.

    Then you’ll blame me for being a privileged rich pri*k, or something.

    I have nothing against wealthy people as long as they pay their fair share… Shirkers on the other hand only deserve scorn. Do you pay your taxes Arana?

    photon

    Jackal shows his economic pedigree by trying to tell us that electrifying the NI Main Trunk (which cost $250m), was the reason the Railways was $1.3 BILLION in debt.

    “The government spent $250 million for the electrification of the North Island Main Trunk line just before selling the asset to it’s rich mates on the cheap,” doesn’t read much better photon.

    Besides, Railways Corporation struggled to retain market share duing the 80′s because of increased competition from trucking which was being subsidized by the taxpayer… That’s another reason it wasn’t making a profit.

    If you right wingers truly want a free market, you should stop subsidizing industries like trucking so that there’s real competition between it and more efficient ways of transporting bulk goods like rail.

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  159. “Why don’t you go to Venuzuela, mate”.

    Why don’t you go to the right wing paradise, next door, Columbia. You know, the one Key is visiting.
    The one that has a dictatorship.
    The one that shoots trade unionists and any other dissidents.
    The one that is way behind Venezuela.

    Notably Sweden, like NZ has gone down in all indicators since they bought into the Meo-liberal religion.

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  160. Photo. You are on here every day arguing for extreme right wing policies.

    In fact I wonder if there is ANY right wing fuckup you do not support.

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  161. Photonz

    You read what I wrote, and then read what your answer actually was. The two discussions are practically orthogonal, and yours made assumptions.

    …but if you can’t see that it did, I am not surprised.

    That lopsided cyclops thing is very difficult to deal with.

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  162. Kerry says “Photo. You are on here every day arguing for extreme right wing policies.”

    In your view, anything not extreme left wing is extreme right wing.

    You are so blinkered, you continually make up nonsense, like NZ plummeted in OECD figures because of 80s privatisation, when in fact the plummet was in the 70s during protectionism, and think big socialist policies.

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  163. BJ – like the others, you continually read extreme things in your head that have never been said, or even inferred.

    It’s almost as ridiculous as your continual labeling and juvenile name-calling.

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  164. Photonz… your inference was QUITE clear.

    I made a statement about how wealth is more a matter of luck than hard work.

    You countered with a statement about how not working hard enough always leads to poverty.

    As though that was a meaningful response. It WAS a meaningful response. It means your thought process is distorted.

    …but it doesn’t speak to the degree of good fortune that goes into good fortune. “The harder I work the luckier I get” … as though a bumper sticker slogan were going to produce meaningful and decent paying jobs for the majority of people who can’t find work in either flavor today. I’ve pointed out before that the foundation on which the protestant work ethic relies is crumbling. You need a new model and you can’t be punishing people for not finding “their place”. The musical chairs keep getting taken away.

    Now this response, that it is all in my head? YOU wrote that non-sequiter sloganistic wingnut response… and I quoted it in its entirety to remind you of exactly how little it spoke to the point I was making.

    It is simply self-justification for your positions about taxation, asset sales and increasing inequality… and it fails.

    … nor do you have to “justify” your wealth, rights or good fortune.

    What you have to do is make an effort to not blame others for not being as fortunate, and accept that the society has accepted some responsibility for seeing that they are not held in perpetual disadvantage.

    The “I’ve got mine Jack” attitude that is on display now really has to go.

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  165. This is what “recovery” looks like under the assumptions that the Right Wing holds. Keep growing that income disparity. The wealthy will create jobs and prosperity.

    The only trickle down that happens is a golden shower.

    What would it look like if there were instead, good jobs and decent pay?
    ….and as a result, actual customers for the global production capacity?

    http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/03/Job%20wages%20recession.jpg

    Actually that wouldn’t help much in New Zealand. At the behest of the wingnuts we exported all our production and industry.

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  166. You said that rail wasn’t viable in New Zealand Arana, and then said it was viable if there was existing infrastructure, which is a contradiction.

    No, it may make sense on some lines, as I’ve always stated i.e. bulk goods to port. If we’re starting from scratch, it would be hard to justify any rail being built when you can build a road instead.

    et’s expand on your defunct idea shall we Arana… I’ve never used a jail

    No, law and order I’m happy to pay for. I’m not happy I’m forced to take a stake in a competitive business the state has decided to buy.

    have nothing against wealthy people as long as they pay their fair share… Shirkers on the other hand only deserve scorn. Do you pay your taxes Arana?

    Yes, I’m in the top tax bracket. I’m happy to pay a fair level of taxes, but like anyone, I’m not happy to pay unfair amounts. We have a lot of people in NZ who pay no net tax, whatsoever.

    That isn’t fair.

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  167. The one that has a dictatorship.
    The one that shoots trade unionists and any other dissidents.

    Not sure what that has to do with classic liberalism. So, no.

    Whereas Chavez enacted the far-left philosophy you often espouse. Result: an economic mess, even with vast oil wealth. A perfect example of how high levels of redistribution and state control doesn’t work.

    Why?

    Poor spending decisions made by bureaucrats. For modern, diverse economies to prosper, they appear to need to be free to respond to market signals.

    You also need a group of highly motivated, smart and well resourced entrepreneurs to lead into areas of greater efficiency and opportunity. Most of the public simply aren’t capable of doing this as most people lack the vision and skills necessary.

    That sector is stiffled under socialism. Again, watch that Paul Callaghan video.

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  168. Yeah right Arana. Ignoring the fact that Chavez reduced poverty by nearly 50% in Venezuala amongst other things.

    And authoritarian capitalist Indonesia, Mexico, Columbia and similar countries are in a much worse state, and are much more repressive than Venezuela.

    The proportion of people in poverty, including workers, and having to murder your citizens to stay in power doesn’t count, I suppose.

    Photo. The steep GDP per capita lose in OECD rankings occurred in the Muldoon era, straight after the oil price shocks. http://www.treasury.govt.nz/publications/research-policy/wp/2002/02-14/01.htm That National Government, like this one, gave away too much of our wealth to wealthy cronies. Borrowing for social welfare for the rich. Not exactly socialist.

    More notable is the RATE of GDP growth. Always less under more RW/mostly National Governments. Including 1984 Labour.

    Since 1984, despite all the promises to the contrary, there has been a steady decline, especially against similar small Western economies.

    In other measures such as the GINI, poverty and real balance of payments, our decline is accelerating.

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  169. “We have a lot of people in NZ who pay no net tax, whatsoever”.

    We have a lot of people who are so underpaid by their employers that tax payers have to top up their income so they can live.

    Fixed it for you.

    WFF, AND being able to pay less than the cost of living, is a A subsidy for employers, which is borne by employers and employees who do get/pay decent wages..

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  170. And authoritarian capitalist Indonesia, Mexico, Columbia and similar countries are in a much worse state, and are much more repressive than Venezuela.

    So your argument is they are not as bad as some really bad states. Compelling.

    Meanwhile, Brazil has overtaken the UK. Why? Market reforms, particularly privatization and getting state spending under control.

    http://us.bnymellonam.com/core/library/documents/knowledge/brazil_pr5.pdf

    The left have kept these reforms, much like Labour (Clark) kept….Labours (Douglas) economic reforms here.

    Meanwhile, Chavez is handed economic prosperity on a plate – in the form of oil wealth – but his failed socialist ideology leaves the country in an economic mess

    http://www.businessweek.com/articles/2013-03-05/hugo-chavez-rip-he-empowered-the-poor-and-gutted-venezuela

    You cannot get prosperity from churning.

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  171. Funny how there is this great storm of criticism of Chavez from RW publications. Why are they not so critical of the obviously much worse off, neighboring followers of RW neo-liberalism.

    You can ascribe Brazils success to market reforms, Others ascribe them to such reforms as raising wages, stopping corruption and lending and exchange controls

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  172. We have a lot of people who are so underpaid by their employers that tax payers have to top up their income so they can live.

    And why do you think pay is low, hmmm?

    It’s because New Zealanders have low productivity. We have plenty of people who work hard, but they tend to work in activities that aren’t productive.

    New Zealand has a relatively large proportion of the workforce in low value-added sectors, such as agriculture, tourism and low-level service. New Zealand also has relatively low capital intensity, compared to our trading partners. Private investment in research and development is also linked to productivity, and is low in New Zealand. The global trend is towards the concentration of capital and skilled labour in major cities, yet we’re small and geographicly isolated.

    Employers can’t just “pay more”. That just makes more employers to the wall and drives inflation.

    The problem can only be solved by engaging in highly productive industry. That requires deeper capital markets, attracting foreign investment, and a more targeted education system.

    Then wages will rise on the back of higher productivity.

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  173. Arana.
    We have low productivity for two reasons. Lack of investment as a consequence of low demand, caused by low wages (Workers are also customers) and lack of investment caused because business are able to drop wages, instead of having to invest in productivity.

    That wages are low because of low productivity by workers is bullshit. Worker productivity has been increasing at a much greater rate than workers wages for decades. If wages had risen at the same rate as productivity they would be on par with Australia.

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  174. Basic tenant of capitalism. Any business that cannot pay the true costs of their inputs is an economic drag and should be allowed to fail.

    Are you saying we should subsidise your business, if there is not sufficient demand for your product to pay the true costs of your workers.

    How socialist of you!

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  175. We have low productivity for two reasons. Lack of investment as a consequence of low demand, caused by low wages (Workers are also customers) and lack of investment caused because business are able to drop wages, instead of having to invest in productivity.

    Oh dear.

    The internal economy? That’s your answer? We’re an exporting nation. There is nothing to be gained from focusing on the internal economy if your aim is to increase prosperity as it is far too small. There is unlimited global demand, some of which we meet, but we could meet a lot more.

    That wages are low because of low productivity by workers is bullshit.

    Wrong again.

    http://www.eastonbh.ac.nz/2002/08/productivity_and_employment_nzs_postwar_economic_growth_performance/

    Those figues show work high hours and we have low productivity.

    Basic tenant of capitalism. Any business that cannot pay the true costs of their inputs is an economic drag and should be allowed to fail.

    One thing we agree on. Start with rail.

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  176. Any business that cannot pay the true costs of their inputs is an economic drag and should be allowed to fail.

    Not quite true; there are some things that we think are more important than just the numbers, and we (through taxation) subsidise them.

    There are not many worthy examples though.

    To be frank, allowing bad businesses to fail is capitalism 101. Its how we get better businesses. Quite why the government is not allowing Solid Energy to take its natural course is a bit perplexing.

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  177. No nation has ever succeeded long term from exports alone. A healthy internal economy is required.

    Workers productivity, I said, Arana. It is capitals contribution to NZ productivity that is falling down.

    Rail is essential infrastructure, like roads, power, police and education, not a business.

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  178. It’s because New Zealanders have low productivity. We have plenty of people who work hard, but they tend to work in activities that aren’t productive.

    I hate the word “productivity” because it is overloaded, and thus subject to misunderstanding.

    Almost always the word is used in its economic sense, like “New Zealand has low productivity”. This has nothing to do with how hard or long the workers work, which is what a factory manager or a socialist might infer.

    The reason why New Zealand has such low productivity is that we have bad businesses. Bad businesses can only survive because the minimum wage is so low. Fix the minimum wage, and Capitalism 101 as mentioned above will fix the bad businesses.

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  179. “And why do you think pay is low, hmmm?”

    Classic.

    The generous comment would be that Arana is ‘tone-deaf’, but I’m betting most would plump for, ‘she’s an *rse’.

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  180. Workers productivity, I said, Arana. It is capitals contribution to NZ productivity that is falling down.
    Rail is essential infrastructure, like roads, power, police and education, not a business.

    No, as you can see from Eastons figures, productivity per worker is low. It’s not because they don’t do “the hard yards”, it’s because the activities they undertake aren’t productive in an economic sense. Easton is hardly a right-wing economist, either.

    It’s easy to point the finger at business, but it would be better to ask “why is business here like that?”

    I’ll tell you why.

    Scaling here is very hard to do due to low population, distance to markets and a shallow investment capital base. The risk jumps significantly moving from a small operation to a mid sized operation. As a result, we simply don’t get the productivity benefits of economy of scale.

    We do need a circuit breaker and not one of the political parties have the answer.

    They’re not even asking the right questions.

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  181. No nation has ever succeeded long term from exports alone. A healthy internal economy is required.

    Straw man. You need an internal economy, but that is not where you’re going to get the productivity gains needed given a small population.

    Productivity gains, for New Zealand, come from high value exports.

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  182. This has nothing to do with how hard or long the workers work, which is what a factory manager or a socialist might infer.

    Exactly. It’s about getting a lot more value out than hours we put in. It comes from a combination of smart workers, working in growing sectors, and smart capital utilization.

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  183. Kerry says “We have low productivity for two reasons. Lack of investment as a consequence of low demand, caused by low wages (Workers are also customers)”

    A great example of how screwed up “Green” economics are.

    If simply increasing wages worked, all of NZ could simply double or triple wages, and we’d all be rich.

    Then the whole world could do it, and everyone would be rich.

    Except we’d be producing exactly the same as we did before, so prices would have to go up, and we’d be in exactly the same position, but with out of control inflation.

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  184. We do need a circuit breaker

    I am of the opinion that raising the minimum wage aggressively could be that circuit breaker. I’m not talking about a tweak or slight raise, I’m talking about a big jump.

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  185. dbuckley says “I’m not talking about a tweak or slight raise, I’m talking about a big jump.”

    Rod Oram recently advocated much higher wages and pointed to two very similar American mail order companies. One paid much higher wages (30-40% more), had much happier and more motivated staff, and they were significantly more productive.

    So despite paying much higher wages, for a similar output, it’s overall wage bill was about the same.

    That’s because they did the same work with 40% fewer workers.

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  186. How, dbuckley? All that does is “stimulate” the tiny internal economy.

    It zero sum, too, as it means corporate revenues decrease (higher wage costs, inflation), which leads to a lower company tax take in return for a higher GST take.

    The internal economy is not the answer to higher productivity. Higher productivity that leads to a higher standard of living comes from increased export earnings i.e. putting in the same hours for higher return.

    Minimum wage manipulation is just cutting the same size pie in a different direction. It doesn’t grow it.

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  187. That’s because they did the same work with 40% fewer workers.

    Heh heh. A productivity increase.

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  188. No nation has ever succeeded long term from exports alone. A healthy internal economy is required.

    Workers productivity, I said, Arana. It is capitals contribution to NZ productivity that is falling down.

    Though I agree we pay too much to non productive people and businesses. Starting with Don Elder.

    Rail is essential infrastructure, like roads, power, police and education, not a business.

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  189. Kerry says “No nation has ever succeeded long term from exports alone. A healthy internal economy is required.”

    That’s like saying “No person has ever succeeded long term from a big pay packet alone. A place to spend it is required”

    Healthy exports will ensure a healthy domestic economy.

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  190. Workers productivity, I said, Arana. It is capitals contribution to NZ productivity that is falling down.

    That’s what productivity means – workers productivity, unless we have an automated nation.

    I’ve told you the reason business has difficulty being more productive. You can sit there and whine about it or address the underlying causes – which I’ve outlined.

    Generally, It’s not the fault of business people themselves, any more so than it’s the fault of the teenager who can’t get a job even though she tries hard. The underlying conditions are the problem. There are exceptions in both cases, but the main problem is structural.

    Though I agree we pay too much to non productive people and businesses. Starting with Don Elder.

    Couldn’t agree more. Had Labour sold that turkey off, it would have been shareholders loses, not yours. Hope you were happy paying for him.

    Rail is essential infrastructure, like roads, power, police and education, not a business.

    It’s no more essential infrastructure than a donkey track is essential infrastructure.

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  191. Healthy exports will ensure a healthy domestic economy.

    I would have said the other way around, photonz1.

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  192. Arana said: “Meanwhile, Chavez is handed economic prosperity on a plate – in the form of oil wealth – but his failed socialist ideology leaves the country in an economic mess”

    Much of the BBC, CNN, ITV, Sky News, CBS, FOX News et al. propaganda that you subscribe to and parrot are lies – put there and repeated over time & again to escape the failings and downfalls of a dilapidated and crumbling western capitalist system. Except of course if you reside in the oxygen depleted dizzying heights of the top 1%, things look pretty rosy. The unregulated crooks on Wall Street have created the only economic mess of any great significance. Initiated by the banksters that control the Pentagon [ military industrial complex ] and subverted governments under their control. Banks “too big to fail” bailed out [ socialism ver 2.0 for the rich ] with taxpayers coin, while austerity and job losses for the masses & many homeless on foodstamps.

    On the contrary, Venezuela has managed to lift many of its citizens out of poverty through policies initiated under Chavez. Two distinct areas with massive change over the past 10 years have been in poverty levels and household consumption.

    What the Statistics Tell Us about Venezuela in the Chavez Era: http://venezuelanalysis.com/analysis/7513

    Quote: “There are two important indices that are essential starting points for understanding the larger context of what has happened in Venezuela in recent years. These are poverty, and household consumption. . .

    With extreme poverty also falling from 23 percent in 1999 to 8 percent in 2011. . .

    But perhaps more important is the remarkable increase in household consumption – The sharp increase in consumption began in 2003 once the Chavez government had survived the 2002 coup attempt and 2003 oil strike, and was finally able to carry out its social and economic policies without interruption. In the decade that followed, per capita consumption in Venezuela reached an historic high, even surpassing the 1970s oil boom that is remembered by many Venezuelans as the country’s greatest time of prosperity. This significant decrease in poverty and the massive increase in household consumption, along with the continual growth in population (which grew by 23 percent from 1999 to 2011), translated into significant increases in demand for basic goods and services. Sectors of society that before had been marginalized and submerged in poverty were now suddenly rising out of poverty and consuming greater and greater quantities of food and consumer goods.”

    Chavez is a great man, and a great loss to humanity. A constant thorn in the side of US hegemony – and I thank him. RIP El comandante.

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  193. Gregor – healthy exports will pump money into the domestic economy.

    But the health of our domestic economy has very little bearing on how much dairy, timber, wool, manufactured goods etc – are exported.

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  194. Vaughan says “repeated over time & again to escape the failings and downfalls of a dilapidated and crumbling western capitalist system.”

    Unlike the enormously prosperous eastern communist system.

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  195. But the health of our domestic economy has very little bearing on how much dairy, timber, wool, manufactured goods etc – are exported.

    Only if you discount all the costs of sale and production (i.e. good transport infrastructure, good energy infrastructure, skilled workforce etc.) all of which are supported and maintained by a healthy domestic economy.

    I don’t think you can have one without the other unless you go the way of Saudi Arabia, an in-source all your expertise to extract/develop your exports.

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  196. Good synopsis btw Vaughan M.

    I think Arana’s comments show a complete and utter lack of understanding (to be fair, not unexpected) of Venezuela’s history and politics.

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  197. Much of the BBC, CNN, ITV, Sky News, CBS, FOX News et al. propaganda that you subscribe to and parrot are lies – put there and repeated over time & again to escape the failings and downfalls of a dilapidated and crumbling western capitalist system.

    Ho ho. It’s all a big conspiracy. They are all lying and you, a poster on FrogBlog, is telling the truth.

    Let’s measure performance, shall we:

    http://www.economist.com/blogs/americasview/2013/03/venezuela-after-chávez

    “Faced with shortages of many goods, including hard currency, Mr Maduro devalued the currency by 32% in February. Venezuela comes towards the bottom of just about every league table for good governance or economic competitiveness.”

    I guess you’ll add that to the sources that are just “making it all up”.

    And this:

    http://www.tradingeconomics.com/venezuela/inflation-cpi

    A 22% inflation rate. But obviously, that’s just a “VRWC”.

    And let’s remember, the clown managed to “achieve” this when he had massive oil wealth.

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  198. He hasn’t delivered anyone from poverty. He’s put a temporary bandage on a festering cancer. Their reprieve from poverty will be short lived as inflation and non-productivity unwind everything.

    Good riddance, El Presidente.

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  199. Don’t know much about Venezuela, but I note that the link Arana gives shows inflation as much higher before Chavez got into power and is currently below the historic average: “The inflation rate in Venezuela was recorded at 22.18 percent in January of 2013. Inflation Rate in Venezuela is reported by the Central Bank of Venezuela. Historically, from 1973 until 2013, Venezuela Inflation Rate averaged 26.4 Percent reaching an all time high of 115.2 Percent in September of 1996 and a record low of 3.2 Percent in February of 1973.”

    And much as I love The Economist, I wouldn’t trust their views on what constitutes competitiveness or good governance.

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  200. “Healthy exports will ensure a healthy domestic economy”.

    The fallacy of every country is going to export its way to prosperity by out exporting every other country.
    The religious belief we will beat all other countries in exporting so long as we have “free trade”.
    It cannot happen, there must be winners and losers, and the losers are the small countries without much power.

    http://www.stats.govt.nz/browse_for_stats/industry_sectors/imports_and_exports/global-nz-jun-11/key-points.aspx
    “The trade deficit with China was $1.5 billion (26 percent of exports) and the trade deficit with the United States of America was $1.1 billion (29 percent of exports)”.
    And Photo thinks we are going to be better off with more trade with China and the USA.

    Isn’t it costing us enough already?

    The excuse exports would not be competitive if we paid more wages is wearing a bit thin, when that claim comes from millionaire Kiwifruit exporters, dairy farmers who holiday overseas every year, and firms that gave their executives 20% pay rises last year.

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  201. Arana has been reading way to much of the sort of commentator who reckons Pinochet, and Friedman were good for Chile, austerity is working in the UK and other pieces of neo-liberal propaganda.

    Not surprised if it is the Economist. The same magazine that said Charter school were big improvement to Sweden’s education. ON THE SAME PAGE with a graph showing their educational achievement had dropped.

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  202. Not to mention an article on the plight of Mexico’s working poor, but that is OK because GDP is rising. ( Just that not many Mexicans are seeing any of it).

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  203. So, BBC, CNN, ITV, Sky News, CBS, FOX News, and now The Economist are all in on it, lying through their teeth, in order to cover-up how brilliant Chavez was?

    Well, that’s plausible.

    Meanwhile, because of gross mismanagement, corruption and incompetence, they’ve run down the golden goose that’s paying for all this wealth transfer to the poor.

    “I think Chavez will be remembered for politicizing a once professional national oil company and managing to increase control but decrease production, miss the [liquefied natural gas] boom, and open the U.S. refining sector for Canadian oil,” Goldwyn said. Referring to Canada’s rival oil industry center, Goldwyn said, “He should be a hero in Calgary”

    Chavez did not deliver a revolution, social or otherwise. Just another South American dictator who made noises the left loved.

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  204. the losers are the small countries without much power.

    The losers are the countries with high overhead and who have little to offer.

    NZ is well placed near Asia, we’re well educated, and we grow protein well. Grow 100 IP companies of merit, and we’ll enjoy Australia’s standard of living again.

    It’s going to take a while, though.

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  205. Maybe, but will never happen with current policy.

    In case you hadn’t noticed our skilled people are leaving.
    Because our run down infrastructure, high costs, low local demand, high interest rates, and low wages mean we are no longer attractive to the people who can make this happen.

    And. What happens when the USA and China pinch your IP. as they will.

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  206. IP based business. Google runs one, but the Chinese can’t steal it.

    Agree it won’t happen with current policy.

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  207. Kerry says “And Photo thinks we are going to be better off with more trade with China and the USA.”

    Before the FTA, we imported $3.5b of goods from China, and exported $1b.

    After the FTA, exports have skyrocketed by 350% and we now export $3.5 billion. Imports are just under $4b.

    If the trend continues, we will soon be exporting more to China than we import. Imagine that – having an export SURPLUS with the world’s top exporter.

    Kerry – thanks for a great example of how completely out of touch your world is from the real one.

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  208. I forgot. They already have!

    Everyone has a search engine. Only Google has a Google.

    IP can be locked up in a number of ways. Google does it by embedding it in infrastructure. Search is almost entirely an infrastructure problem in that you need a lot of processing, distributed architecture and fat pipes to make it work well.

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  209. All those who didn’t support a FTA with China supported billions in lower social spending. That is the cost of anti-trade idiocy.

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  210. Kerry says “In case you hadn’t noticed our skilled people are leaving.”

    And Russel Norman wants to devalue the dollar so there is an even bigger gap between our NZ and Australia – then in the next breath complains about people leaving for more pay in Australia.

    It’s scary that someone with such a lack of basic economic fundamentals aspires to be in charge of government finance.

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  211. The Greens say the govt needs to do more for exporters, then they go against the China FTA which led to a 350% export increase – an increase in exports of BILLIONS per year.

    Such a big increase, that exports increased more in just a few months after signing than they had in the previous TEN YEARS.

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  212. Kerry says “As opposed to Photo, who cannot even make a business work.”

    Huh? How do you figure my business is not working?

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  213. If all you export are commodities, and you import everything you consume, you messed up.

    Not so long ago that Brazil told big Pharma to piss-off. As a result they have a domestic industry and do NOT export a lot of their money to foreign pharmaceutical companies.

    http://www.wharton.universia.net/index.cfm?fa=viewArticle&id=2024&language=english.

    Do Greens talk some about exports? Sure, but it is domestic production where the gains for this country have to be made. We cannot keep importing every damned thing we need.

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  214. Kerry says “ne of the reasons why Countries like Chile and Brazil are starting to get ahead. They do not just support extractive commodity exporters.”

    Do you mean the same Chile where mining is a major pillar of the economy, where copper alone is over 50% of ALL exports?

    Or is there another Chile in your world?

    My business (which on Planet Kerry apparently isn’t working), gave me working trip to Chile a couple of years ago.

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  215. Even Kerry’s strategy consultant
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10869145
    hasn’t realised the true value of our hydro-electric assets. The electricity supply industry is all about control, and associated with that contingencies and reserves, in the face of large uncontrolled and not always predictable variations in demand. Since most generation can only be ramped up at a limited rate, some generation needs to be held in reserve ready to take up any increases in demand or to make up for any sudden losses in supply. This is expensive, but hydro is a lot cheaper for this than almost any other generation because hydro can be put into a state of spinning reserve and kept there with very little energy input. If the demand increases, the gates are opened and the power generation increases practically immediately. Output can be dropped about as quickly without significant loss.

    As we increase our use of renewables and in particular intermittent renewables like wind and solar photovoltaic, the ability to absorb variations in supply and demand becomes even more valuable.

    And all this is before adding the capability to perform pumped storage, i.e. to pump the water back from lower lakes to higher lakes in times of low demand and high output from intermittent renewables and must-run generation.

    This just makes selling off our strategic assets even less sensible. If National follow this path, I don’t see how New Zealand is going to achieve its 90% electricity generation from renewable sources goal.

    Trevor.

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  216. bj says “We cannot keep importing every damned thing we need.”

    Yes we can.

    On a world scale, were are just like a farmer who is very efficient at producing milk, but not so good at building a tractor.

    Even with some things he may be able to produce himself, like wooden fenceposts, his time and money may be more efficiently doing what he is good at – producing milk.

    At the end of the day, just because he has to buy EVERY SINGLE THING except milk, doesn’t indicate that he’s about to go broke any time soon.

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  217. “NZ is well placed near Asia”

    We aren’t near Asia – Seoul is almost exactly half the world away, Bangkok just slightly less. Most of Asia even further.

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  218. Yes we can.

    On a world scale, were are just like a farmer who is very efficient at producing milk, but not so good at building a tractor.

    This is as clear a point of disagreement as we can have. I reckon you to be ABSOLUTELY wrong about this…. and you me.

    Fatal flaw in the analogy. Farmer is ONE person and the limitations on the individual are not the same as the limitations on the society (more on this below).

    The difference between the individual and the society is ALWAYS the place where the libertarian philosophical fantasies come to grief.

    Take his FARM now… and we might have something here… because he produces milk but if he imports all his feed his “economy” sucks.

    He doesn’t hire contractors to make repairs he can do himself.

    Sometimes 3 or 4 farmers get together to build/buy something they all use… “creeping socialism”

    Things he can build himself he does. Just as I at home, do home improvements myself rather than hiring someone to do them. Even if someone else could do them better and more efficiently. I can often better spend my time, than my money, to get them done.

    —–

    The degree of complexity and scale of things that we as individuals can do… (it is not just that the Farmer cannot build a tractor, no INDIVIDUAL can build an entire tractor… you have to have a whole set of industries working together to produce steel and rubber and engines and control systems) is important.

    There ARE limits to what a country our size can make. The range of products and the scale/scope of industry means we HAVE to choose our targets for effectiveness in reducing our import costs and degree of difficulty of us creating the productive capacity. That’s similar to the limitations on what I can DIY at home.

    However, as a society, a NATION, if we just sell Milk and buy everything else from people who can “produce it more efficiently”, we are COMPLETELY FUCKED!

    Ricardo, who INVENTED the concept, knew that.

    You are misunderstanding him to such a degree that if we could hook a generator up on him in his grave the rolling could power a major city.

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  219. We aren’t near Asia

    We’re near enough physically, we have a FTA with China (and pushing for more in the region), we’re not far off their time zones, and Asian influence is moving down through the Pacific. They have an emerging middle class and global power is shifting East.

    We can make all that work for us, if we choose to do so.

    I couldn’t disagree more with the Greens position on trade. It is as wrong as it’s possible to be.

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  220. Farmer is ONE person

    BJ completely disregards economic multiplier effects. There is an entire distribution chain that spreads the farming wealth and multiplies it.

    Also, the world wants the type of food we grow. We’re good at producing it. Tick.

    Now add other types of industry.

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  221. BJ says “However, as a society, a NATION, if we just sell Milk and buy everything else from people who can “produce it more efficiently”, we are COMPLETELY FUCKED!”

    No one, anywhere, ever, has suggested we ONLY sell milk.

    You are arguing against an extreme position. But YOU are the only person who has ever come up with this extreme position.

    As I’ve said numerous times, we should produce everything that we can efficiently produce.

    But if you install a siege mentality and enclose ourselves in barriers, were going to go backwards really fast.

    The protectionism you suggest is EXACTLY what has been tried before. It failed. In the modern age with new technology and globalisation, and incredibly efficient mass production elsewhere, it is even more doomed to fail.

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  222. bj says “We cannot keep importing every damned thing we need.”

    Photonz replies:
    Yes we can.

    Were you exaggerating?

    and buy everything else from people who can “produce it more efficiently

    DOES accurately represent the extreme position you stated mate. If you want me to be less annoyed by your extremes – don’t use ‘em.

    we should produce everything that we can efficiently produce.

    Yup, and I AGREE with that… when said that way… but then you invariably follow that up by mis-understanding it to be everything we can profitably produce, or export, and that is a point of real contention.

    The protectionism you suggest is EXACTLY what has been tried before.

    Not just doubtful, but extremely doubtful. If a Union is running the show the protections will be purely about jobs, not about productive or efficient work… and that WILL fail. That isn’t the basis for making decisions about what to protect or support.

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  223. we can profitably produce, or export, and that is a point of real contention

    We’re really good at agriculture.

    Not just doubtful, but extremely doubtful.

    Nah. We’ve tried protectionism before and it was rubbish. You weren’t here then, but the place made Poland look enterprising. Visitors used to come to NZ and asked why is was closed.

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  224. BJ says “Not just doubtful, but extremely doubtful. ”

    When we had protectionism, travel writers visiting NZ repeatedly said it was like visiting a time-warp from thirty years ago.

    We had to apply and go on a waiting list (for months) just to buy a phone.

    Protectionism led to very high prices, low quality, and old designs. Companies could charge whatever they wanted for inferior products, because there was no competition. There was no need for innovation and R&D, hence NZs reputation for being in a time-warp.

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  225. I remember I wanted to buy a book from overseas. I had to go into the bank and get approval to buy US currency.

    Spent 15 minutes in the BNZ explaining to a skeptical bank manager why I wanted foreign funds. I was a teenager at the time.

    Living under protectionism and a closed economy was awful.In this day and age, it would kill off many exporters, including me.

    But then I’d just move to Australia.

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  226. Meanwhile, because of gross mismanagement, corruption and incompetence, they’ve run down the golden goose that’s paying for all this wealth transfer to the poor.

    Arana – you really do type some absolute poppycock.

    The golden goose was killed by PDVSA in what was essentially a counter-revolutionary attempt to oust Chavez by locking out workers and increasing social unrest.

    Investment has principally not recovered because (primarily US) companies have been asked to pay a fair premium for extraction and US government policy has sent clear signals to those companies that it would look dimly on any investment even if the premiums were lower and investment were more attractive. The investment gap has had to be filled by South American and Chinese interests – both of which have been actively courted since 2007.

    Further, while mmbl/day production has fallen since 2001 buy about 20%, this is as a result of not opening up new fields for extraction. They don’t need to because of current prices which has seen oil revenue as a component of GNP double in the last 10 years.

    Efforts to diversify the Venezuelan economy away from oil dependence have also consumed large amounts of capital traditionally allocated to the sector, hence the perception of underinvestment.

    In terms of mismanagement and corruption, forming a view of post 2002 without looking at the previous decades is ludicrous.

    An Oxford Institute for Energy Studies comment from 2001 states that from 1993 to 2000 64% of PDVSA’s income was kept by the company and not remitted to the Venezuelan government as opposed to 29% over the preceding 8 years.

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  227. bj says “bj says “We cannot keep importing every damned thing we need.”

    Photonz replies “Yes we can. ”

    And you think this is an extreme position.

    Its blatantly obvious we don’t need to import milk. Or timber. Or wool. Or meat. Or most food. Or all the things we produce here.

    We do need to import cars, and some fuel, steel, copper etc.

    So as long as we continue to earn enough in exports, we will continue to import everything we need.

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  228. Arana

    The internal economy? That’s your answer? We’re an exporting nation. There is nothing to be gained from focusing on the internal economy if your aim is to increase prosperity as it is far too small.

    You’re talking about an outdated solution Arana… Here’s what the Productivity Commission says:

    Economic historians refer to a period when New Zealand generated some of the highest living standards in the world on the back of a highly efficient, innovative pastoral agricultural base.

    Recent decades have, however, delivered a more challenging environment for New Zealand, in which old formulae have run their course and new ones have been difficult to develop and apply.

    Other government advice also states that a vibrant internal economy is important to our nations prosperity and simply relying on our exporting infrastructure will not work.

    In fact our total agriculture, seafood and forestry export revenue increased by 16% or $4,378 million to $31.5 billion in the year to June 2011, yet our standard of living continued to declined.

    Arana Says:

    Productivity gains, for New Zealand, come from high value exports.

    Photon says:

    Gregor – healthy exports will pump money into the domestic economy.

    Exports have been increasing and yet we’ve seen no real increase in productivity… That clearly indicates that the RWNJ solution of relying on exports alone to increase productivity and subsequently our standard of living is no solution at all.

    Arana then has an epiphany:

    …but the main problem is structural.

    I totally agree. The main problem is a political and structural one because not enough of those export earnings are getting put back into increasing New Zealands productivity.

    Increasing workers wages would somewhat address the problem… Along with higher top rate and business taxes whereby the government could then reinvest those funds into more productive sectors of society. Believe it or not, increasing peoples wellbeing through better housing and proper health care are also good ways to increase productivity.

    Having a group of invariably dumb wealthy people sitting on piles of money and unproductive investments is not a solution to increasing our standard of living to ensure our best and brightest decide to stay here in New Zealand. Without a change to ensure more investment goes into productive enterprises, we will continue to wave goodbye to more of our loved ones in the mass migration out of New Zealand that’s increased under Nationals mismanagement.

    With higher minimum wages and a proper tax system the government could reduce if not halt subsidizes to foreign owned businesses. Ensuring they paid their workers a living wage has other benefits to the country as well, and could potentially mean a reduction in overall taxes once the internal economy was functioning properly.

    The Productivity Commission also states:

    The lag in relative productivity matters a lot over time – when low productivity countries find that they cannot provide the quality or extent of services that more productive countries are delivering. Such comparisons by individuals can diminish their sense of wellbeing and, ultimately, risk people migrating to find better opportunities elsewhere. New Zealand has witnessed this change over recent years, with about 700,000 New Zealanders now choosing to live abroad for the wellbeing offered in other countries (such as lower tax rates, higher incomes or the quality of social services).

    Low productivity rates are also linked to the publics inability to currently save enough money, which is one of New Zealands biggest issues. People can only save and then potentially invest in things that increase productivity if their wages are high enough in the first place Arana… Our low waged economy is therefore clearly one of the main reasons for our low rate of productivity.

    All those who didn’t support a FTA with China supported billions in lower social spending. That is the cost of anti-trade idiocy.

    So why with the increased amount of exports to China, which were due to their increased demand for milk products because of an increasing population more than any single agreement, has our spending on many social services declined Arana? The contradictions within your and photon’s defunct arguments are astounding!

    PS Increasing exports to China has not increased our productivity.

    There is an entire distribution chain that spreads the farming wealth and multiplies it.

    Are you talking about the average farm paying its workers minimum wages and less tax than a couple of pensioners receive Arana? How exactly is that spreading farming wealth?

    Then you have the real kicker whereby the government is spending around half a billion dollars of taxpayers money on increasing farming irrigation systems… Not to mention the increased pollution further intensification will cause, which again will be a cost that the taxpayer will be expected to bear the majority of.

    Also, the world wants the type of food we grow. We’re good at producing it. Tick.

    Are you now talking about organics Arana? Something photon has previously tried to tell us was not a growth industry.

    We’re really good at agriculture.

    Which is an industry that’s at the mercy of climate change… Which begs the question why if we rely so heavily on agriculture is the government not doing anything substantial about climate change?

    photon

    We had to apply and go on a waiting list (for months) just to buy a phone.

    Repeating a lie doesn’t make it any truer photon… The scarcity of phones back in the day had nothing to do with protectionism.

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  229. Jackal says “That clearly indicates that the RWNJ solution of relying on exports alone to increase productivity”

    You’re howling again jackal.

    I haven’t seen anybody here, at any time, ever, at all, at any time, say we should be “relying on exports alone”.

    It makes as much sense to ring fence New Zealand from the world, as it does to ring fence Hamilton from the rest of New Zealand, or Bluff, or Masterton.

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  230. Arana writes:

    The internal economy? That’s your answer? We’re an exporting nation. There is nothing to be gained from focusing on the internal economy if your aim is to increase prosperity as it is far too small.

    Photon writes:

    I haven’t seen anybody here, at any time, ever, at all, at any time, say we should be “relying on exports alone”.

    There are none so blind as those who choose not to see.

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  231. photonz ” We had to apply and go on a waiting list (for months) just to buy a phone.”

    Jackal “Repeating a lie doesn’t make it any truer photon… The scarcity of phones back in the day had nothing to do with protectionism.”

    It was illegal for everybody (except the govt) to wire up, repair, or even sell a telephone.

    And jackal thinks this is not protectionism.

    From the Encyclopedia of NZ “Toll prices came down by 60% between 1987 and 1992. After 1987 anyone in New Zealand could wire up, repair or sell telecommunications equipment”

    Don’t lift your head out of that hole or real world facts will destroy your blinkered extreme ideals.

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  232. Jackal says “There are none so blind as those who choose not to see.”

    Except those with their head down a hole.

    To prove you’re not just making up nonsense, please show me where someone said we should be, quote “relying on exports alone”.

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  233. “We aren’t near Asia”
    “We’re near enough physically…”

    Well, we are on the same planet. The majority of the world’s landmass and population centres are closer to Asia than we are.

    “we’re not far off their time zones,”

    Five hours differnce to China, 7.5 to India. Seems fairly differnt. Quite close to Kamchatka though.

    We’ve got to stop pretending that we have some sort of trading advantage in being closer than other countries to Asia when we simply aren’t.

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  234. In the fifties, as the Productivity Commission (who I had never heard of) notes, as have I, many times, we had one of the highest standards of living in the world. We did so because our productivity (ie what we got out for what we put in) was, by global standards, high.

    About the only bit of that page that Jackal didn’t quote was this:

    Rather, the rate of increase in productivity [in New Zealand] has been behind other countries and our income growth has been slower.

    And this is one of the most important bits, and again, is a drum I have been banging on for ages. We continue to be a farming nation, a commodity supplier to the world, and as an economic activity, it is really poor. Its always been (by today’s OECD average) poor, but back in the early fifties, it was an economic activity that was better than most, which were poor or poorer. Everyone else has found activities to undertake that have better productivity. Except for New Zealand, stuck in a timewarp.

    Photo and Jackal are debating whether it was the 70s or the 80s when the rot set in, presumably to allocate blame to the blues or the reds; the decline started in the fifties, and has continued (albeit with minor and short lived recoveries from time to time) to the present day. Both the blues and the reds have failed over successive generations and decades to address the issue.

    Parties of other hues have also failed to provide an argument as to why they have a solution.

    Depressing.

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  235. photon

    It was illegal for everybody (except the govt) to wire up, repair, or even sell a telephone.

    When telecom was still state owned, the government would supply a telephone to any household that required one free of charge. That’s not protectionism, that’s providing a service that would undoubtedly increase peoples productivity.

    To prove you’re not just making up nonsense, please show me where someone said we should be, quote “relying on exports alone”.

    I’m not quoting anybody (namely Arana) directly photon, and have already linked to one of the comments where he/she implies that our export sector should take precedence over our internal economy.

    Bleating on about me having to prove my point further just makes you look more deluded today than usual.

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  236. Jackal – so someone say exports should take precedence, and you read that as them saying we should rely on exports ALONE.

    That’s almost as ridiculous as saying the govt banning any one else from selling telephones, is not protectionism.

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  237. Jackal, you are arguing a straw man. I never said we should “rely on exports alone”. Yes, the external economy is where the money is, and therefore should take precedence, and you quote regarding the 50s shows it’s always been this way.

    We can’t get enough scale internally for us to earn a living from it, unless by “living” we mean “third world fishing village”. The internal economy supports the export economy, nothing more.

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  238. dbuckley, excellent post.

    It is indeed depressing that politicians, of all hues, can’t provide a solution.

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  239. Photo.
    I see where a lot of your bullshit comes from. You think what works between two neighbors works between two countries.

    The Chinese are importing prime dairy cows to start their own herds! FFS.

    I would have thought we learned our lesson with the EU about relying on commodity exports. Remember butter mountains and milk lakes.

    Our reliance on dairy (Farming) alone is going to end in tears, just as it did then.

    Because we are destroying the rest of our economy for temporary and often illusory gains for farming exports.

    It would have been better long term if we had no extractive commdities. Then we would have had to evolve a real functioning internal economy. And exports that other actually want!

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  240. “We can’t get enough scale internally for us to earn a living from it, unless by “living” we mean “third world fishing village”. The internal economy supports the export economy, nothing more.”

    Arana figures out, finally, what is lacking.

    And it will remain that way so long as wages are artificially suppressed, so the benefit of export reciepts largely goes offshore or to a very few New Zealanders.

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  241. We’re not going to prosper selling things to ourselves, Kerry. There aren’t enough people here so we can’t get the scale needed to keep prices reasonable.

    We’ll prosper developing high margin industry and exporting it, and by growing food for export. The internal economy benefits from the economic multiplier effects of the export earnings.

    Wages can’t go higher just because you wave a wand. If that were the solution, we’d do it today, as would every other country. Make all wages at least $100 an hour.

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  242. Kerry says ‘Our reliance on dairy (Farming) alone is going to end in tears, just as it did then.”

    No one, anywhere, at any time, is suggesting we rely on dairy alone.

    Kerry says “And exports that other actually want!”

    If we want to export say dishwashers, we’d need to work much cheaper than the Chinese JUST to cover the freight component.

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  243. Then we would have had to evolve a real functioning internal economy.

    We have a real, functioning internal economy. Just how many billions do you think 4m New Zealanders are capable of buying from each other each year?

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  244. Arana

    We’ll prosper developing high margin industry and exporting it, and by growing food for export. The internal economy benefits from the economic multiplier effects of the export earnings.

    Arana and photon once again ignore the elephant in the room, in that we’ve been undermining our internal economy in favour of developing our exporting industries for a very long time now, and yet the majority of New Zealanders aren’t any better off at all.

    Their trickle down theories are about as believable as Santa Claus.

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  245. photon

    Jackal – so someone say exports should take precedence, and you read that as them saying we should rely on exports ALONE.

    You’re just playing with semantics now because you’ve lost the debate photon.

    Arana was arguing that our internal economy was too small to ensure prosperity for everybody… However prosperity, which is directly linked to productivity, requires a functioning and vibrant internal economy to properly develop.

    Without it, all the increases in exports in the world isn’t going to give the majority of New Zealanders better living standards, which is what has been proven by our continued increases in export earnings year after year while our quality of life continues to decline.

    That’s almost as ridiculous as saying the govt banning any one else from selling telephones, is not protectionism.

    The government banned people from selling telephones photon, because it was giving them out for free. I actually never heard of anybody trying to con people into buying phones that they got from the government for free, but it probably did happen on a few occasions.

    Are you so bent out of shape about this issue because it was perhaps one of your get rich quick schemes that didn’t pan out?

    Now you’re on frogblog day after day advocating for the destruction of other things the public generally gets for free from the government like education and health insurance… “Crony capitalism is the only way” screams photon, feverish in his attempts to ignore the fact that history tells us otherwise.

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  246. We haven’t been better off since the 1950s, Jackal. dbuckley outlines why.

    Please detail how you think we’re going to get prosperous off an internal economy when we only have 4m people? Are you going to build cars in Hamilton and sell them to people in Auckland? Pianos in Dunedin? How about a hard disc factory in Twizel?

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  247. Arana

    Please detail how you think we’re going to get prosperous off an internal economy when we only have 4m people? Are you going to build cars in Hamilton and sell them to people in Auckland? Pianos in Dunedin? How about a hard disc factory in Twizel?

    To an extent I already have Arana. You’re basically arguing that there’s nothing we can produce here that we cannot import more cheaply, but have already contradicted that argument by saying we’re competitive in the agricultural sector.

    That hasn’t made agricultural products cheaper here in New Zealand though, and we’re currently paying more for them in New Zealand than they do in most of the countries we trade with.

    There’s also the fact that the distance to other markets makes it more cost effective and efficient for us to produce many products for our own consumption here in New Zealand Arana, which would be a fact you would accept if you had any idea about the distance to Asia and our other markets.

    Some of these products are in short supply in New Zealand… Houses for instance. In your comment above you imply that we should continue forgoing the jobs such industries create just so we can focus on our exporting sectors, which is one of the reasons why we don’t have enough healthy homes to accomodate those 4 million kiwis you claim is an insignificant number.

    There’s in fact around 4.5 million Kiwis in New Zealand, which just goes to show how inaccurate your assertions are. Only in a truly deluded RWNJ’s mind would 500,000 people not matter.

    Should we for instance continue exporting most of our logs along with thousands of jobs just so we can then pay for the importation of the products they create that we need to build our houses with when we could increase productivity by making many of those items here in New Zealand ourselves? We’ve already seen the failure of such policy through the increased cost to build houses here, with building houses being 30% more expensive than in Australia.

    In fact such a dynamic is one of the main reasons New Zealand continues to go backwards… The free market dogma that you and photon often promote Arana so that a few middle men can increase their profit margins at the expense of jobs and productivity in New Zealand is a lose lose situation for the majority of us… Fix the problem caused by right wing neoliberalism and the issue of having a smallish population is irrelevant.

    We can trade more products made in New Zealand amongst ourselves and the world and our nation will once again become wealthy, or we can focus on exports to the detriment of an internal economy and the environment, and our quality of life will continue to degrade… It’s as simple as that.

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  248. bj says “bj says “We cannot keep importing every damned thing we need.”

    Photonz replies “Yes we can. ”

    And you think this is an extreme position.

    Again, your CLARIFIED position was that

    “we should produce everything that we can efficiently produce.”
    vs
    “we can import every damned thing we need”

    Those two things are VERY different.
    The second is vastly more extreme than the first.

    Particularly for someone who does not equate monetary profits with efficiency.

    You go on with a non-sequiter about the phone system. What was the point I made back there?

    That the protections I support are not the protections that were used “when it was tried before”.

    If a Union is running the show the protections will be purely about jobs, not about productive or efficient work… and that WILL fail. That isn’t the basis for making decisions about what to protect or support.

    So you then repeated a result of what was tried before… without considering that I really WAS NOT talking about doing the same thing.

    Funny how actually getting these points across is so difficult. I feel like I am explaining a simple joke to someone exceptionally obtuse. Not stupid, just… too rigid.

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  249. Farmer is ONE person

    BJ completely disregards economic multiplier effects. There is an entire distribution chain that spreads the farming wealth and multiplies it.

    Arana.. the argument was that the Farmer has to buy in a TRACTOR.

    The point I was making was that if you are an individual you cannot build a tractor yourself NOBODY can. Not even close.

    Go mine the ore, smelt it, make the iron, cast the engine block, forge the pistons, synthesize the rubber… lot of STUFF. Individual can’t, larger organizations can and do.

    “Wealth-multiplier” is like throwing in a comment about the fishing in the Mediterranean.

    If you want to argue about the benefits of doing stuff ourselves… here… then lets, because that IS a different argument and one of the points I keep having to explain to Photonz. The issue is not that we EXPORT more to make more money, but that we import LESS.

    Why do we import wood furniture when we export the wood and we have people in NZ unemployed?

    Why did we import Railcars when we had shops that could do it here, that we put out of business as a result, unemploying the skilled workers and doing without all the economic multipliers associated with that.

    Why do we import so many ALuminium products when we have a smelter that produces high grade Al here?

    The list is long enough. We have markets that COULD be served domestically but CANNOT be served by domestic manufacturers who have to compete based on an elevated (relative to just about any other nation’s manipulated and artificially devalued) currency.

    So then a niche manufacturer wants some quantity of something but our domestic market is too small, so he has to buy a larger lot, or from overseas, to “efficiently” manufacture his own product. Because we’ve destroyed the domestic market / production of just about everything.

    Pursuing a distorted chicago-school interpretation of Ricardo’s principle of comparative advantage… one that Ricardo himself NEVER supported or proposed. Pursuing that interpretation with respect to our CURRENCY, in ways that no other nation on the planet is willing to suffer.

    If someone set out to destroy the nation on purpose they could hardly do it better than the way our successive NZ governments (of both major colors) have done.

    The asset sales may be incredibly stupid and short sighted of National, but the larger issue is larger than that single party…

    From the viewpoint of someone NOT born here, it is as clear as crystal.

    Only in NZ could this even be an argument.

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  250. BJ – if building things yourself was the path to prosperity, North Korea, Cuba and Zimbabwe would be the richest countries in the world.

    You really don’t get that everything you propose has been done before….and FAILED.

    Then you ask really dumb questions like “Why did we import Railcars when we had shops that could do it here, ”

    The reason we didn’t do them here is they cost way over $100m more – that’s over $1m per worker.

    Your approach is that no amount extra is too much to pay. Your argument is so ridiculous, that’s you’d pay $100,000, $1m, or $10m per worker to keep the jobs here.

    You are so far detached from the real world that you have no limit to what you’d pay.

    Either I’m right, or you have a limit. If so, what is it?

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  251. You really can’t help yourself CAN you Photonz, and I am no longer feeling polite.

    Trotting out irrelevant examples of countries that produce nothing at all for export as if THAT was what I proposed.

    The reason we didn’t do them here is they cost way over $100m more – that’s over $1m per worker.

    What the fuck makes you think that this is about the 50 or 100 direct employees of the rail yard or whatever numbers you are pulling out of your shorts? What part of spending however many hundred million dollars they actually cost us overseas which has no amplifying effects at all here (you should have a chat with Arana) is good?

    You are an ideologically driven xxxxx if you think that we who HAVE the capacity to build things here should give that capacity away because someone who actually has had a protected and now has a subsidised economy, can build them cheaper overseas.

    You haven’t worked out yet that the rules to what I propose have never been employed here in NZ. The previous examples were run “for the workers” not for the COUNTRY.

    You seem to think that protecting and nurturing industries will always fail because it failed here once, even though the examples where it has succeeded in other countries are numerous.

    You do not understand that this isn’t all about the profit-loss statement. It is about the health of the society. OF COURSE there is a limit, but it isn’t attached to any individual job saved… that was what the Unionists of the 70′s and 80′s might well have used as the rule. It is NOT all about jobs, and it is NOT all about money and it is NOT as simplistic as you keep telling me it is and it has NOT been done here before.

    http://www.jessescrossroadscafe.blogspot.co.nz/2013/03/the-middle-class-death-by-thousand-cuts.html

    Your poitical-economic lunacy is destroying civilization. Here and overseas. Worse, it is a COMMON lunacy here in NZ because so many people here remember some total failures on both Right and Left back when NZ got cut adrift. It is to me, almost unbelievable, how completely sanity free both major parties manage to be when it comes to “how to get NZ going”.

    Lower taxes? Well if they worked we’d be at the top of the heap cause ours are pretty near the lowest in the OECD.

    Lower wages? Again we can’t really make any less.

    Selling off our assets to pay for stuff we want? You can only sell the silver once Photonz, and then it is GONE. Thats a REAL good thing to be doing to our children at bargain basement prices (given the actual value of electrical generating capacity that doesn’t emit CO2).

    Digging big holes in the ground and selling off whatever minerals we find there? Another thing that can only be done ONCE and then its gone, and worse, you leave a very damaged Aotearoa behind. If you follow the coal seams you further damage the entire PLANET and then when the ocean rises there will be even LESS available land near Auckland.

    Producing even more milk/wool/timber? When we are hitting the environmental limits of the land and water already, destroying the country for the money we “have to have” to pay for our ridiculous notion that if it can be built ANYWHERE more efficiently or cheaper, we should buy it there instead of building it here.

    So what is your actual ANSWER Photonz? Because you and Key and English are looking pretty fucking stupid with all that economic wizard power and those non-answers are the only ones in evidence.

    The bankers, biggest thieves on the entire planet, don’t get a look from you.

    Fractional-Reserve-Banking… not going to be addressed.

    The housing mess – I hear this “one note” where orchestration of many instruments is required.

    Using the power of the Sovereign State to deal with the monetary issues… “Oh NO, we can’t get that power back to the State, that would be “printing money”” – as though the fucking bankers aren’t doing exactly that – and as if THEY deserve the handout of interest payments on our whopping debts.

    Greens address real problems Photonz. National and Labour… don’t. You don’t. They differ to the degree that they create new ones… but Orcs have nothing on National for destroying the environment.

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  252. Sometimes I don’t know whether Photo is being deliberately thick or is it that he is paid to stick to the party line.

    He talks about our successful farming export industry.
    It did not start out successful, but as rather inefficient farms at the end of a several thousand mile supply line.
    It is successful because we nurtured it, subsidised it, paid for good supporting infrastructure and protected it. We still do.

    Photo claims that approach has failed. Well we have the evidence of farming to show he is talking shit.

    Reductio ad absurdum seems to be a favourite technique of our two resident RWNJ’s.
    We suggest giving other industries the same chance as farming, and Photo reckons we are suggesting closing the borders. Not to mention the constant prattling about phones in the 70′s. Is relevant, How?

    We suggest giving ourselves a “drink of water” with QE, lending to ourselves, which worked extremely well for us in making us prosperous originally, why do you think we did so well in the 50′s, FFS, and Photo thinks of drowning.

    We suggest raising wages enough so that money stays in New Zealand and people have enough to live on, instead of subsidising inefficient business, and Arana blethers on about $100 an hour.

    We suggest some import substitution, especially with services and manufacturing, to prevent the hemorrhage of money offshore, and give us some sovereignty and Photo goes on about Phones, again!.

    As for Hillside.
    How much is repairs to the Chinese made stock, and replacement after its short working life, and the losses of skills forever, costing us?

    And power companies. Fake competition private business style has meant big increases for domestic consumers, to subsidise prices for big customers. Not to mention the huge dividends Government extracted from the SOE’s to make private power companies look comparably efficient.

    And Directors like Don Elder, whose bonus depended on “growing the company” trying to do exactly that. Which is why National has paid him to shut up.

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  253. All this debating about an internal economy is fatuous, because the problem is being looked at from the wrong end.

    It matters not a jot what someone or some group of someones choose to manufacture here. What matters is what Kiwi consumers (at all levels, from governments and corporations down to you and me) choose to spend our money on.

    Consumers make buying choices on many factors, including, obviously, price, value, quality, coolness of brand, desire, and level of desperation for that thing. Also obviously, for almost all of that massive group of potential purchasers, the supply of money is not infinite, and for almost all of them, constrained, and in far too many cases, severely constrained.

    Thus, it doesn’t matter what we choose to manufacture locally, what matters is what comsumers choose to buy of local products.

    So we don’t have a local flat screen telly plant, and even if we did, it won’t have the cool of the big Japanese manufacturers. We locally make some of the best repiritory support products in the world (F&P Healthcare), this is good manufacturing. Yet the Canterbury DHB has chosen to purchase foreign product rather than that of F&P Healthcare.

    One of the nicest stories is that of Sistema, makes of clip-together plastic boxes that addorn ones fridge. Made in New Zealand. Sure, you can buy cheaper clip-together plastic boxes, but the quality isn’t a patch on the Kiwi item, so they have a market that works, and they export too. But although it keeps a bunch of Aucklanders in work, its not high value, high profit stuff paying multiples of minimum wage to the workers…

    The bottom line is that in a competitive world with free flow of goods, there are limits to what we can usefully manufacture here. And in general, such work does not pay well enough to shift our people up the ladder. We need smarter work. We need smarter businessess.

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  254. BJ

    You seem to think that protecting and nurturing industries will always fail because it failed here once, even though the examples where it has succeeded in other countries are numerous.

    Did it really fail BJ? I seem to recall our lifestyles being considerably better when we had some sort of incentives in place to keep businesses operating here in New Zealand. That was before deregulation and the loss of thousands of jobs when companies went overseas to take advantage of countries that retained those incentives and also had cheaper labour.

    Our quality of life has degraded ever since.

    It really makes a mockery of Nationals claims that they will grow the economy by putting in place policy that helps businesses when they’re actively undermining our hugely important manufacturing sector. Last year, 17,000 jobs were lost in manufacturing alone, mainly because National don’t take into account any additional benefits to keeping production here.

    Instead, they simply look at a couple of figures on a bit of paper and totally fail to account for any other costs their decisions cause. That’s like buying a car without taking into account how long it will last or its running costs… The problem is that they’re buying it for us, and it’s clearly a lemon.

    So what is your actual ANSWER Photonz? Because you and Key and English are looking pretty fucking stupid with all that economic wizard power and those non-answers are the only ones in evidence.

    I couldn’t agree more BJ… Well said. It appears that photon has no answers apart from the same rubbish that got us into this mess in the first place.

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  255. Bob Lawton … Posted March 5, 2013 at 12:35 PM … I guess that’s what dbuckley and other Key supporters are happy …

    Me – a Key supporter – now thats just hilarious! ‘Tis a good job I’d just put the can of Diet Coke down or I’d be cleaning up the keyboard…

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  256. A couple of days ago I posted that a useful “circuit breaker” to the current problem of low value businesses would be a step change in the minimum wage, and Arana, amongst others, enquired how this would help.

    Heres the theory, and for this, lets assume the minumum wage increased by 50% today.

    If you manage a business like the Police Force, or a chamber of solicitors, a university, make high value goods with small labour content, or have any business where most employees are “well paid”, then this will have almost zero effect on your operating costs.

    If, on the other hand, you operate a business that has the majority of its staff on minimum wage or thereabouts, then that business will experience a massive increase in its cost structure, possibly in the range of a 60% increase.

    Such a business will have to dramatically increase its price to customers in order to survive. Given that cost to customers will for some goods almost double, customers will re-evalue the value of that purchase.

    In many cases, customers will decide that paying that much for a good is not justified. This will cause a large number of low value businesses to cease to exist. It’ll also cause a significant increase in unemployment, but bear with me a minute.

    Now a whole bunch of business people will then have to readjust their thinking. These are the people who make a difference, the people who make progress possible, the nasty people, the greedy people, Bernard-Shaw’s “unreasonable men”, and so they wont just sit back and collect the dole. They will start again, and build businesses that can work when people dont get paid a pittence. Thus higher value businesses will result.

    We’ll lose people to abroad, thats for sure. And perhaps we’ll start to address some of those terrible OECD indicators, and start to value people with qualifications. Its hard to do that when you need a degree to get a job at Maccas.

    Is this the complete plot? Nope, but its a start.

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  257. Big quote, but it needs it, with my added emphasis…

    Did it really fail BJ? I seem to recall our lifestyles being considerably better when we had some sort of incentives in place to keep businesses operating here in New Zealand. That was before deregulation and the loss of thousands of jobs when companies went overseas to take advantage of countries that retained those incentives and also had cheaper labour.

    Our quality of life has degraded ever since.

    Yes, see the OECD graph, but note that we’ve stood still whilst other countries haven’t.

    So there have been winners and losers. So “deregulation and the loss of thousands of jobs when companies went overseas to take advantage of countries that retained those incentives and also had cheaper labour” hasn’t been bad for every country, perhaps especially for those that (perhaps paradoxically?) haven’t had cheap labour.

    What we need to do is to figure out how we’ve lost so badly at this, perhaps more than any of those other countries we like to think of as our OECD peers. We’ve failed to gain the benefits of the global changes that our peers have benefitted from. How have we fucked up quite so badly? Over fifty years? Consistently? No matter who is at the helm? Whats wrong with us?

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  258. Until the 50′s we backed ourselves.

    For 50 years other countries, ones like Finland, Norway, Singapore even China, have been supporting and developing their local economy.

    NZ has been fixated on farming exports. And, since the 70′s, not even innovative farming exports.

    Without a local base to incubate new ventures there will be no new export ventures.

    However this is only part of the problem and raising wages may well be a circuit breaker, forcing business to work smarter instead of trying to succeed by seeing who can pay the least. It also keeps money in NZ. Lower income people spend on local products.

    The level of real corruption also needs addressing. Like the present theft of assets.

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  259. Jackal, I’m not sure why you’re creating straw-man arguments in order to “trap” me in supposed contradiction?

    Arana. You’re basically arguing that there’s nothing we can produce here that we cannot import more cheaply, but have already contradicted that argument by saying we’re competitive in the agricultural sector.

    No, I’m saying there are few things we make here that would be worth making vs importing. It’s not that we can’t physically make them, it’s that it is not worthwhile to do so.

    Example: Let’s say you erect trade barriers. Implement hard import controls. Let’s say we reason we can build electric guitars, because doing so isn’t particularly difficult.

    What’s the internal NZ market for new electric guitars? 100 per week? It wouldn’t be worth investing too much capital in a streamlined production line as the volume isn’t high enough. Consequently, each guitar that came off the line would have a high price tag attached as we can’t achieve the economies of scale of existing large guitar factories offshore.

    Anyone who bought one would have their purchasing power in other areas reduced. We couldn’t export them, as we aren’t price competitive – the reason we don’t export generic electric guitars now.

    Now apply this reasoning across your internal economy. Buying power of consumers hasn’t increased, but most consumer goods are now expensive. This means people buy fewer things in total. How does this lead to prosperity?

    We don’t have consumer scale in NZ, either in terms of production or ability to consume at high prices. There aren’t enough people and we don’t earn enough from exports.

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  260. We also have to face the fact that in a future, “sustainable” economy we can produce all that we need, and a lot of what we want without full employment.

    One requirement for a “sustainable economy” is more local production.

    Cheap hydrocarbon energy will soon be a thing of the past.

    If we do not master the changes required now, then we may never recover.

    That is where shorter working weeks and UBI come in.

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  261. Cheap hydrocarbon energy will soon be a thing of the past.

    That is an assumption, not a fact. It also doesn’t take into account constant changes in energy efficiency i.e. a car or truck in the 50s used twice as much oil as a car or truck now, and had considerably less performance.

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  262. How have we fucked up quite so badly? Over fifty years? Consistently? No matter who is at the helm? Whats wrong with us?

    I think we lack the “killer instinct”.

    I noticed it when I lived in Europe. When there are crowded marketplaces worth winning, you’ve got to be able to sell hard, with confidence and spirit. Many Kiwis seem to think that showing someone a good idea is enough. That people will instantly recognise it, and leap at you. And you’re from NZ? Why, it’s beautiful down there. Here, have $1B!

    In reality, you need to ram a good idea down people’s throats until they are made to see it. There are many good ideas floating around, but there is limited attention.

    The personality of people from small, isolated communities isn’t really like that – we’re a bit self-satisfied. We also don’t have existing networks we can leverage, so its difficult to develop new industry. Another reason we need a lot more foreign investment – the contacts alone are worth a fortune.

    And governance has been, for the most part, appalling.

    My two cents.

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  263. Is this the complete plot? Nope, but its a start.

    I can see where you’re coming from, and there is some merit in it, but won’t this just lead to higher unemployment and more importing?

    The “unreasonable men” will start businesses that aren’t as labour intensive but do retain margins. They’ll leave those “cheap” sectors to the importers.

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  264. All true, but slightly misses the point of the measure: it is a price signal to the unreasonmable men that it is no longer possible to run a busienss that can only be sustained by having very low labour costs. Yep, I don’t argue that there would be collateral damage.

    The real problem with low wages is that because the government has all sorts of masures to help those in need, this support is actually a taxpayer subsidy to those business owners. So not only low value businesses bad for our economy generally, they reap an unfair advantage over other businesses that pay wages that don’t require government subsidy. This gaming of the table is bad capaitalism.

    The idea of a step-change is similar to that of the boiling frog anecdote; if we increase minimum wage by a buck a year over ten years, then all that happens is prices slowly rise. Do $10 in one fell swoop then the rise cant be hidden, and has to be reacted to.

    Many on the frogblog call for increases in minimum wage for what I will (with apologies) call “left wing” reasons, to do with social causes. I’m calling on the increase in minimum wage for good capitalism reasons.

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  265. No, on this planet. You make an assumption then proceed as if it were fact.

    We’re not short of energy. We’re not short of the imagination necessary to harness cheap energy. The trajectory of history is that we get better at harnessing energy, not worse.

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  266. BJ – you ideology is so removed from the real world, you have no limit of subsidy to keep jobs in NZ.

    The Hillside wagons were over $1m of taxpayer dollars to save each job (but only temporarily).

    You have FAILED to come up with any amount that you think would be too high – despite being asked more than once.

    All you reply with is meaningless vague statements about job multipliers.

    The lunacy of your ideology is shown by the fact that the SAME amount you want to spend to save one job at Hillside, could generate 20 jobs elsewhere.

    If your ideology has any relevance in the real world, you’d know at what point spending taxpayer dollars on job subsidies became a big waste of money.

    Is it $500 per job? $5000? $50,000? $500,000? $5,000,000?

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  267. BJ says “Your poitical-economic lunacy is destroying civilization.”

    Your extremism is destroying your sanity.

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  268. Arana

    What’s the internal NZ market for new electric guitars? 100 per week? It wouldn’t be worth investing too much capital in a streamlined production line as the volume isn’t high enough. Consequently, each guitar that came off the line would have a high price tag attached as we can’t achieve the economies of scale of existing large guitar factories offshore.

    Electric cars are currently intentionally overpriced, which means there is no great demand. That’s to ensure we use petrol powered cars that cost a lot more over their lifetimes.

    Why are you fixated with competing with larger countries to mass produce things Arana? Your example of producing electric cars in New Zealand on a grand scale is one that’s currently not practicable, but there are many products that are.

    Your example of guitars is already being played out and all you’re really doing is arguing to determine the degree of your ignorance. New Zealand already exports guitars.

    Guitars are already built in New Zealand and they’re internationally sort after products because they’re specialized and well made… That’s after all where New Zealanders really excel… In specialized and well made products.

    Granted there’s added expensive, but expense is not usually a question when it comes to quality and people will pay more to ensure they have the best.

    This means people buy fewer things in total. How does this lead to prosperity?

    Because less waste is produced. If people buy less things but they’re well built and last longer, less rubbish will be produced Arana. Our growing waste is a problem that needs addressing in any future economy, because without any proper system to deal with waste, we’re ensuring our own demise.

    I think we lack the “killer instinct”.

    Rubbish! New Zealanders aren’t the problem, our system is… We have allowed our political and economic system to be highjacked by an ideological fallacy that has proven itself on numerous occasions to be completely wrong! In other words our political system has been highjacked by liars and the corrupt to benefit their own selfish interests at our expense, and they have no real concern that our quality of life has degraded so badly.

    Remove that corruption from political and businesses institutions and whatever takes its place will assuredly be better for New Zealand than keeping the current status quo.

    photon

    The Hillside wagons were over $1m of taxpayer dollars to save each job (but only temporarily).

    Could you link to the figures to back up your claims photon… Or are you just talking shit again?

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  269. NZ Herald headline “NZ quality of life amongst the best ”

    Jackal “Our quality of life has degraded ever since.”

    It’s like you guys are competing for a prize to be New Zealand’s most negative, fatalistic, bitter and twisted person.

    Is the Green Party label just a cover for a doomsday cult?

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  270. Guitars, not cars.

    Electric cars are currently intentionally overpriced, which means there is no great demand. That’s to ensure we use petrol powered cars that cost a lot more over their lifetimes.

    Go build a cheaper one, then. You and your intelligent (so we hear) green mates get together and build them. What’s that? You’re waiting for me to do it? You’re waiting for some nebulous “other” to do it? Why? Too much effort? Risk? Is it really beyond you and your intelligent mates? What’s the reason for your inaction, Jackal.

    New Zealand already exports guitars

    Correct! Specialist, high margin guitars that fill a gap in the export market. Which has been my recommendation all along, not the commodity items that would be necessary if we returned to a protected economy.

    I was giving you an example of why your beloved INTERNAL economy won’t lead to prosperity i.e. if we’re forced to provide for ourselves due to import controls and trade barriers.

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  271. photon

    It’s like you guys are competing for a prize to be New Zealand’s most negative, fatalistic, bitter and twisted person.

    Is the Green Party label just a cover for a doomsday cult?

    The quality of life in New Zealand has degraded in comparison to other countries, and only a person with a cognitive defect would say that people who acknowledge that undeniable fact belong to a cult.

    It would be cultish to not accept the reality of the situation, which brings me to your belief is neoliberalism photon… If anything around here is cultish, it’s your belief in right wing ideology.

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  272. Because less waste is produced. If people buy less things but they’re well built and last longer, less rubbish will be produced Arana

    Who says they will be well-built and last longer? Given the lack of competition that would exist in a closed economy of 4 million people, the incentive would be to produce high-priced goods of “just good enough” quality. Where else are your customers going to go?

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  273. Rubbish!

    Truth. We don’t want to win badly enough.

    When I first started in Europe, I had to change my hick Kiwi ways. There’s a lot of networking involved, focusing on the close, playing the game hard.

    Come back here and it’s like a time-warp. It’s so passive when it comes to business and enterprise.

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  274. Jackal says “The quality of life in New Zealand has degraded in comparison to other countries,”

    Perhaps in your world.

    Meanwhile, back in the real world, New Zealand regularly comes in the top few countries in the world, in numerous different quality of life surveys.

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  275. Kerry says “Says Photo who suggests we all give up and let the USA or China take us over.”

    When you make up extremist nonsense, that I’ve never said, suggested or inferred, anywhere, ever – it just shows how far off balance you are.

    Kerry – either you are totally full of crap, or you will show us the quote where I’ve suggested “we all give up and let the USA or China take us over.”

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  276. I’ve noticed many on the far left are stuck-fast in the mid-80s. They really do think they can unwind history and make it just like it was before than nasty Mr Douglas came along.

    That’s their solution. Go back to the past.

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  277. Arana

    Go build a cheaper one, then. You and your intelligent (so we hear) green mates get together and build them. What’s that? You’re waiting for me to do it? You’re waiting for some nebulous “other” to do it? Why? Too much effort? Risk? Is it really beyond you and your intelligent mates? What’s the reason for your inaction, Jackal.

    Somehow I doubt you would know the first thing about building an electric car Arana.

    Lots of green minded individuals build electric cars in New Zealand already… Once again you’re simply trying to convince us that you’re ignorant about those you’re debating. Why bother?

    Correct! Specialist, high margin guitars that fill a gap in the export market. Which has been my recommendation all along, not the commodity items that would be necessary if we returned to a protected economy.

    Contradict yourself much Arana?

    Some businesses that specialize is such products would benefit from more government incentives to expand. At present, there are none under a defunct and backwards National government, which would prefer those entrepreneurs to go out of business to promote their belief that globalisation will provide… It hasn’t, end of story.

    I was giving you an example of why your beloved INTERNAL economy won’t lead to prosperity i.e. if we’re forced to provide for ourselves due to import controls and trade barriers.

    You were saying that we don’t produce guitars for export Arana, which is clearly wrong!

    Your example doesn’t show that focusing on increasing the efficiency and size of our internal economy would fail to increase our prosperity… Your waffling is simply an example of your ignorance about the real world Arana.

    If New Zealand increases wages, reduces subsidies for foreign owned companies and diversifies our business interests we will make more money and our living standards will increase.

    We would of course have to ensure tax avoidance was reduced and our funding for social services was increased before seeing any proper recovery… But without such things, the degradation of what used to be one of the best countries in the world to live in will continue.

    Who says they will be well-built and last longer? Given the lack of competition that would exist in a closed economy of 4 million people, the incentive would be to produce high-priced goods of “just good enough” quality. Where else are your customers going to go?

    Nobody here is arguing that we should have a totally closed economy Arana… You’re arguing an extremist point of view that’s nothing more than a straw man. In many ways you are the best argument against right wing idealism.

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  278. photon

    Meanwhile, back in the real world, New Zealand regularly comes in the top few countries in the world, in numerous different quality of life surveys.

    Like what photon? You seem to want to only acknowledge certain measures while ignoring the majority that show things are getting worse for the majority of New Zealanders. Why do you think the mass exodus has continued to increase under the National government? Things have definitely not been getting better.

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  279. I’ve noticed many on the far right are stuck-fast in the mid-1890s. They really do think they can unwind history and make it just like it was before that nasty socialism came along.

    That’s their solution. Go back to the past.

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  280. Jackal (like Kerry just did) makes up totally absurd statements that nobody anywhere, ever, has made ““Crony capitalism is the only way” screams photon,”

    What is it about you guys that you keep making up extreme fake positions – then ascribing them to people who have never made them.

    It just makes you look like a complete fool – and a dishonest one.

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  281. photon

    What is it about you guys that you keep making up extreme fake positions – then ascribing them to people who have never made them.

    You mean like Arana saying that we want a closed economy?

    It just makes you look like a complete fool – and a dishonest one.

    Actually I was asking you to provide evidence that shows New Zealand “regularly comes in the top few countries in the world, in numerous different quality of life surveys”.

    What’s dishonest about that photon?

    I can certainly provide information that shows New Zealand is going backwards, and at a faster rate under the current National government as well. Could you perhaps explain why you support such a defunct regime?

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  282. Jackal asks “Why do you think the mass exodus has continued to increase under the National government? ”

    Because they are going to mining jobs.

    But the Greens don’t want mining jobs here.

    And they want to devalue the dollar to make it even more attractive in Australia.

    Both policies will make more people leave, then they complain about people leaving.

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  283. Contradict yourself much Arana?

    FFS. I have no idea why you can’t follow a line of argument.

    1. You stated prosperity would come via an internal economy
    2. I gave you an example of how import replacement might look (a local guitar factory)
    3. This internal economy relies on import controls (no imported guitars allowed)
    4. Due to poor economies of scale, your production cost of each guitar is high due to a limited internal market (100 new guitars p/w. Their quality is no worse or no better than commodity imported guitars)
    5. People who buy these guitars have less to spend on something else
    6. Apply this scenario across your import-controlled internal economy

    OR

    We do what we do now:

    1. Import commodity guitars (cheap)
    2. We build specialist, high margin guitars for export to fill a niche

    Those are two different markets. The former we are hopeless at (requires economies of scale and labour costs we will never have) the latter is a specialist niche market of the type I advocate.

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  284. Jackal “:Actually I was asking you to provide evidence that shows New Zealand “regularly comes in the top few countries in the world, in numerous different quality of life surveys”.”

    Here’s half a dozen that took just seconds to find – obviously you’ve familiar with something called google.

    “Quality of Life Still rated highly” (Feb 2013)

    http://www.3news.co.nz/Quality-of-life-still-rated-highly—survey/tabid/423/articleID/288107/Default.aspx

    “NZ quality of Life among the best”

    http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=10769622

    Mercer Quality of Living Survey

    http://en.wikipedia.org/wiki/Mercer_Quality_of_Living_Survey

    “Migrants rank New Zealand as top living destination”

    http://www.workingin-newzealand.com/live-and-settle/life-in-new-zealand/top-living-destination#.UTq06DeDl8E

    “Quality of life on the rise in Auckland” February 2013

    http://www.voxy.co.nz/national/quality-life-rise-auckland/5/148419

    “New Zealand cities among world’s best” 2012

    http://www.mercer.co.nz/press-releases/Quality-of-Living-rankings-NZ-2012

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  285. There is a massive difference between those quoted surveys that show that New Zealand remains one of the nicest places to live, and the numerical facts of the OECD that shows our standard of living has declined since the early fifties, when we had the third highest standard of living, to now where we are 28th or something.

    Do not confuse the two, or try to obfuscate the difference.

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  286. Jackal notes:

    Rubbish! New Zealanders aren’t the problem, our system is… We have allowed our political and economic system to be highjacked by an ideological fallacy that has proven itself on numerous occasions to be completely wrong! In other words our political system has been highjacked by liars and the corrupt to benefit their own selfish interests at our expense, and they have no real concern that our quality of life has degraded so badly.

    Remove that corruption from political and businesses institutions and whatever takes its place will assuredly be better for New Zealand than keeping the current status quo.

    Is our system systemically worse for over fifty years than the now twenty something countires that have not stood still and have surpassed us?

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  287. photon

    Because they are going to mining jobs.

    52,000 Kiwis who permanently moved to Australia last year are all now employed in the mining industry photon? Pull the other one.

    Here’s some excerpts from those links:

    Urban New Zealanders continue to feel good about their quality of life, even though more than half are either just scraping by or don’t have enough money, a survey has found.

    You can’t seriously be that stupid photon? The surveys consider how people feel, not the statistics that indicate peoples standard of living.

    Hartley says New Zealand’s high rankings could lure international talent to our shores, bringing business and filling skills shortages.

    And yet we’re losing around 52,000 Kiwis per year to Australia alone and struggling to find skilled people. That shows people are considering the real statistics that show our quality of life isn’t very good in comparison to other OECD countries.

    New Zealand cities fare well in terms of worldwide quality of living standards, making them attractive destinations for migrants.

    However most of our impoverishment is in small towns and rural areas where the two surveys you linked to didn’t look. They therefore don’t indicate whether the majority of New Zealanders feel their quality of life has improved or declined.

    Why you had to link to multiple articles about the same survey I don’t know… That’s the kind of thing a complete tool of a person would do photon. I’m actually starting to feel a bit sorry for just how absolutely pathetic your RWNJ drivel has become.

    dbuckley

    Is our system systemically worse for over fifty years than the now twenty something countires that have not stood still and have surpassed us?

    Like those promotional feel good surveys photon thinks are the only evidence that matters, I wouldn’t put much scope on claims that New Zealand has simply stood still while other countries have progressed. As far as I’m aware, that’s not what the OECD has said.

    Take just three examples that clearly indicates that things are worse… Our falling home ownership levels, the advent of third world diseases and the amount of children living in poverty increasing from 20% to 25% since 2009. Clearly New Zealand has been going backwards, not just standing still.

    Selling our assets isn’t going to stop the rot either, in fact it’s going to make it worse.

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  288. So, Jackal, we make you King for the next six years.

    What’s your plan for NZ?

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  289. We’re not short of energy. We’re not short of the imagination necessary to harness cheap energy. The trajectory of history is that we get better at harnessing energy, not worse.

    Arana… the cheap energy of the future is available if we first get cheap access to space, or somehow develop “Mr Fusion” power sources.

    I hadn’t noticed the price of petrol going down a lot.

    Cheap energy is no longer available by digging it from the ground and burning it, because we count the cost of the CO2 emitted, and that makes your cheap energy more expensive than fully renewable sources… and THOSE aren’t as cheap as your business as usual has had it for the past 50 years.

    I suspect the optimism is misplaced.

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  290. So, you’re King for six years and all you do is wind back to New Zealand circa 2007? You agree with ftas, a floating currency, no capital gains tax, GST, and the rest?

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  291. You have FAILED to come up with any amount that you think would be too high – despite being asked more than once.

    More than once? I’m pretty busy… I only saw one such meaningless request. How much a year? How much in a one time payment? Is it an industry or an individual? You have a really stupid fixation with details here Photonz, and I don’t have any reason to feed your insanity. No, I am NOT going to “give you a number” because THAT would be stupid without working up the full parameters of a situation. You are already lying to us about the railcars by omitting the things mentioned below.

    You ignore the multipliers, you ignore the overseas debt NOT incurred. Paying NZ companies in NZ dollars which the Sovereign Nation of New Zealand has a perfect right to provide WITHOUT paying interest to foreign banks works just fine thanks. You ignore the ongoing maintenance of the cars HERE with parts and expertise HERE. Basically you ignore everything that doesn’t match your ideologically lopsided lunacy.

    So don’t trouble yourself to ask again. My question of you was a lot less nit-picking. I want to know what YOUR answer to fixing the economy is, because as enumerated above, none of the things that National favors have worked at all.

    So what is your actual ANSWER Photonz? Because you and Key and English are looking pretty fucking stupid with all that economic wizard power and those non-answers are the only ones in evidence.

    ==============================================

    Who says they will be well-built and last longer? Given the lack of competition that would exist in a closed economy of 4 million people, the incentive would be to produce high-priced goods of “just good enough” quality.

    Depends how “closed” the economy is… and HOW that is done. The proposal I offered long ago was to take the NZ dollar back into the hands of the government, back it (make it redeemable) in KwH of energy (work) delivered at specified points in NZ. Can be delivered elsewhere at a price (lines charges like we are familiar with). Now instead of loaning money at interest, the loans are “free”… but the money is subject to demurrage. Hold it long enough and it becomes valueless. Eliminate the fractional reserve idiocy.

    That money will achieve significant velocity and it will also be stable internally. The economy will not however, be driven by “consumption”.

    You think through the dynamic of that arrangement and the purchase of things that are made well enough to last, quality, becomes MUCH more important than ever increasing consumption as is driven by the fraud of fractional reserve. Quality goods that can be kept and maintained lose value far more slowly than money. Vastly different from buying things with borrowed money and paying interest and debt with inflated money.

    Hard for people brought up in the past century to think about though.

    The reason for that is the almost total control exercised over the world by the bankers through the fractional reserve system and their control of the worlds money supply. The vast majority of people are still deluded that this is a good deal. Not so, many Greens.

    The closing in that case comes out of the requirement that importing and exporting MONEY now involves importing and exporting ENERGY. We go from arbitrage and speculation at the speed of light to the same at the speed of ships.

    Hard to work out whether it would turn net plus or minus in investing terms as people could hold NZ account government bonds here (which never lose their value in NZ) and have them backed by something… which is the attraction Gold has for some. The downside is the difficulty of buying in and extracting any wealth thus preserved. Me, I think we’d have less foreign dough chasing Ponsonby addresses, and more of our money put to productive use… but the conceptual change is quite “large”. :-)

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  292. “atter is a specialist niche market of the type I advocate”.

    Well. We do agree on something, but your conclusions on how to get there are flawed.

    http://www.nzmusician.co.nz/index.php/ps_pagename/article/pi_articleid/1564

    Like almost all niche NZ manufacturers he started out with a good apprenticeship under our old apprenticeship system. Cabinetmaking.
    The one that was gutted by the neo-libs and the closing of big local State industries.

    And. FIRSTLY BY SELLING IN THE LOCAL MARKET, until he had made a reputation.

    High end composite boat building, a New Zealand success story, started with a few small firms, among them Maarten marine, Southern spars and high modulus supplying the LOCAL MARKET for 12 foot cherub racing yachts.
    They gained their skills with the many small and medium size boat builders which were around in the early 70′s. Before Muldoon and later, Douglas, killed the industry.

    Government support. Especially for the America’s cup, and for apprenticeships in boat-building Another thing that is anathema to the right wing, helped keep our high end boatbuilding in the public eye overseas.

    Have a look around. Where are our opportunities up and coming designers and builders now. Most people in the industry are in their 50′s.

    Apart from repairs, all medium size and price boat building has disappeared from NZ. Not because we did not have the capability.
    But, Because successive short sighted Governments killed it.

    I remember when the boat tax started. Muldoon era. From taking several dozen Farr 6000′s to OZ every week, to taking the molds to Australia. Who then sold to the US and European markets that were just starting to develop.
    Then. Just as the industry was starting to grow again it was hit with a triple whammy of rising exchange rates, rising interest rates, and unfettered importing of French yachts. The idiocy of the Douglas era, who, like Photo, thought if making the market a bit free-er worked then holding all our manufacturing naked in the gale would work even better.

    France, who started behind us, we had a much better reputation for quality yachts, with much higher wages and production costs than us, dominate that market, medium size sail yachts. now!

    What could have been, is shown by a thriving local and export small power boat industry, at the low, but still quality, end of the market.

    Have a look around at our successful export businesses.
    Not one of them started out as an exporter.

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  293. Arana – That was a flip answer from Jackal and we all know it. The carefully considered answers involve a lot more detailed changes. Much larger ones. You have a PART of a part of mine.

    There’s one thing I’d do without hesitation, immediately, and that is to change the drug laws… PARTICULARLY surrounding Cannabis. The removal of the enforcement costs, reduction of harm to individuals, harnessing of the market system to control its distribution, removal of the monetary lifeblood of the gans and the ability to tax it would all be plus.

    The minus is that it would piss off the far right and the gangs.

    A $70/tonne tax on CO2 rising to $150 within 7 years. Solid Energy can sell wood-pellets.

    The negative gearing for houses would go too. Capital gains introduced. Changes in the way councils control land and building and development.

    Open up a Constitutional Convention with the Maori represented properly per their treaty rights and get this country to actually unite?

    Those are what came first to mind… and I haven’t even touched on the industrial side except indirectly through the changes in the monetary system.

    … the problem is that most of that isn’t what this thread is about. So maybe we ought not go there. ??? :-)

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  294. BJ, Makes sense.

    We more than pay our way in the world with the export of real goods. Real trade has always been in surplus.

    Our deficit is because of paying for services and interest, profits and tax losses, offshore.
    Financial services, we can certainly do ourselves. Without ticket clipping by offshore banks.

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  295. No other energy source is capable of mobile storage with the same energy density for weight as hydrocarbons. Simple physics.

    Most new sources of hydrocarbons have three times the extraction costs of the ones that are now running out.

    Demand from developing economies, like China can only rise.

    Increasing efficiency of hydrocarbon engines is limited by the possible heat efficiency. Also simple physics.

    We have failed to invest in developing alternative energy sources.

    The price of energy will go up.

    Even if you do not believe in AGW it makes sense to try and insulate NZ from future price rises by substituting renewable/local energy whenever possible.
    Muldoon did have the right idea there, just too soon. But then he could not have predicted the USA massively subsidising the oil industry, mostly through the military and CIA coups, to keep prices low.

    With over 7 billion a year of oil imports, that is a lot of dairy products we do not have to sell.

    This is the wrong time to lose control of our renewable energy production.

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  296. None, of the more than 100 people I know who have moved to Australia, a fair sized sample, are employed in mining. Though I admit my sampling may be slightly skewed because i mostly know people in my own trades.

    They are employed in skilled trades, such as house building, boat building, shipping, local government, teaching and engineering.

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  297. Arana quotes Kerry:
    “Cheap hydrocarbon energy will soon be a thing of the past.”
    and says this is only an assumption, and when challenged, forgets the word “hydrocarbon” in the statement.

    It takes a lot more work to create renewable hydrocarbon energy sources than to harness other forms of renewable energy. Yet none of these other sources have the convenience of hydrocarbons – high energy density, high energy to weight, low cost containers in the case of the liquid hydrocarbons, easy and quick filling, conversion systems (engines) that are small and light but with a high output and all the infrastructure is developed.

    We have a lot of work to do to wean our economies off fossil hydrocarbons. Losing control of our existing renewable energy utilities isn’t going to help.

    Trevor.

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  298. BJ fails again to come up with any figure he would spend to save each job – that’s because no price is too much in lala land.

    BJ asks “I want to know what YOUR answer to fixing the economy is,”

    The economy isn’t broken. We’re actually on track to get into surplus again a couple of years. We’ve got growth, and much lower unemployment than most countries.

    We’ve got massive increases in exports to China. We’ve got the first govt in decades that’s put measures in place to make investing in housing less desirable.

    They’re trying to get people interested in investing in the productive sector, rather than housing, so that’s very positive as well.

    More jobs, and better paying jobs, come down to ONE factor. Businesses making good profits.

    So the improvement to the economy will only continue if anti-profit anti-business parties are kept out of power.

    The improvement in society will only happen when people plan for themselves and work themselves into a stable position to have families.

    There are many problems we do have to fix. 40% of children are not even planned, and many of those were never wanted. Thousands of students spend years studying for qualifications that will be useless to them. Yet over 50% of companies struggle to find qualified people.

    And we have far too big a part of our population who do nothing to sort their own lives out and think it’s the governments job to do that.

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  299. BJ says “There’s one thing I’d do without hesitation, immediately, and that is to change the drug laws… PARTICULARLY surrounding Cannabis. ”

    Yeah – that’s the number one thing to fix NZ. That will get our economy going.

    If that’s the first thing you’d do, it indicates you’re off your tree.

    It might explain why your reasoned and relatively logical posts from past years have been replaced by extremism and expletives.

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  300. Kerry says “Increasing efficiency of hydrocarbon engines is limited by the possible heat efficiency. Also simple physics.”

    My one year old car uses half the petrol that the old car I used – HALF!!!

    And even compared to the previous model, it’s 20% more efficient. And already there’s a new diesel model which is another 20% more efficient again.

    Petrol prices may have gone up but I’ve never paid less for the miles I do (a 500km road trip and a week of city driving for $75).

    A CVT gearbox alone can give a 20-30% gain (now that they’re starting to become more reliable).

    Low resistance tires can give 5-10% – not many cars have them.

    Lighter materials also make a big difference.

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  301. Photonz: The economy isn’t broken.

    The stunning disconnection between Photonz and Reality is revealed in 4 words.

    I won’t even expand on the point. It sort of speaks for itself all on its own. :-)

    The second point of course is that I refused to answer a nonsense question. Posed twice or maybe 3 times and I am not going to count.

    Doesn’t matter. It is vastly different from a “fail”. I pointed out several times that you cannot make up numbers and I won’t. You have to work with the numbers you have and the choices you have in specific contexts. It is NOT about “buying” jobs with money the way you imagine it is. It may have once been, but it isn’t. Sorry, but protecting our productive industries isn’t what you think it is, and your logic is incompatible with human societies.

    National and its supporters are getting close to achieving their goal…

    …if their goal is to reduce the bulk of NZ to tenant farming on the burned out husk of a once beautiful country that they USED to have a right to call their own.

    We’ve got the first govt in decades that’s put measures in place to make investing in housing less desirable.

    I will grant that. I was very pleased to see it… given that I fought with Cullen for years to get him to even consider it and his government got booted before he might have acted… if he was ever going to. Pleased that English picked up on the idea.

    However this –

    “More jobs, and better paying jobs, come down to ONE factor. Businesses making good profits.”

    …is way too simplistic.

    First: “more jobs and better paying jobs” isn’t the sole measure of the health of the economy. Not any more than the GDP. You really have to expand your focus.

    Second: Business doesn’t make jobs. If we are lucky it makes products. Its intent is to make profits. It hires people when it has no choice at the lowest possible price… and to make profits in NZ given our disadvantages so often listed here… you have to have some help.

    We’ve got growth, and much lower unemployment than most countries.

    We’ve got drought, and much lower wages than most countries. We’re fortunate to be an underpopulated exporter of food. The only thing that has “recovered” is the rise in prices of houses in Auckland.

    Yet over 50% of companies struggle to find qualified people.

    At the pay that is on offer, anyone young enough to travel and possessing the qualifications to be gainfully employed would have be a chump NOT to go.

    I DO like your emphasis on family plannning, but that’s not unique to National… we want it too. Wow… we’ve found something besides insulation! Now if we can only work out how to implement it without hurting people… hmmm… maybe WE could do it but I have to say that National’s policy approaches always seem to involve hammers.

    The Cannabis law change is there quickly because it is EASY. It is possibly the lowest cost and fastest effect single action we can take.

    Not the most important.

    Did I order things by importance? No.

    Not most important but the lowest-hanging-fruit.

    Why is it you don’t get that I think of whole problems and whole answers yet? I almost never look at just one thing because it is impossible to actually DO “just one thing”. Surely it has to be obvious that our brains ARE wired differently. No?

    As for reasoned and logical… I don’t think I’ve changed that much, but I know I have gotten grumpier about the inaction of some and the fraud and theft by others, and the lies told about the Greens. People like you have to be confronted Photonz. Your misconceptions are an incredibly evil thing. When you think about things and offer real answers there can be some agreement.

    And we have far too big a part of our population who do nothing to sort their own lives out and think it’s the governments job to do that.

    Do you resent the neighbors with the ordinary IQs, being paid not to work because there isn’t anything for them to do? Their beer parties and bad habits? Do you talk with them? CAN you?

    I am grumpy because I don’t have the time, power or money to give my kids the sort of childhood they ought to have or the future they ought to have.

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  302. Photonz, Is your point that the efficiency of the CAR is not the same as the efficiency of the ENGINE?

    That’s true but Kerry is still correct…. AND it is still subject to the laws of thermodynamics, and the increased costs of materials and complexity of manufacture are driven by the increased price of fuel.

    “A CVT gearbox alone can give a 20-30% gain (now that they’re starting to become more reliable).”

    I have one. I don’t think there’s more than 4 to 8% in it. Significant but you can’t pull the same trailers, and the repair and rebuild was still beyond most transmission shops a couple years ago.

    ==========================================

    Since we were discussing the future cheapness of energy or lack thereof this isn’t entirely on topic though… the point was not the efficiency of engines but the availability of cheap energy.

    ==========================================
    On waking I realized something else:

    As to why my posts have been laced with expletives, more than before, one only has to look to the government in power and what it is doing to my country and my children.

    It is far to easy to conclude from his actions, that Key is a treasonous liar… though lying is common and unremarkable in politics the treason is something new. Who is he working for?!!!

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  303. Some more links for guitars made in NZ.

    Looks like I’ll have to take a few steps back.

    My example, regarding guitars, uses trade barriers to favour an internal economy by blocking low-priced imports. Am I to understand people here support FTAs and free trade?

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  304. BTW:

    “Now there are tools and machines for just about anything you would ever want. And good wood is only a mouse click away, even if it is in Alaska.
    “For the soundboard I’ve always used a quality spruce. I’m not fussed about what I use for the sides and back. And there are more luthiers – three alone in Dunedin now, as well as more than that in Christchurch, Wellington and Auckland. Plenty of people to talk to, says Madill. Ideal. Back then he remembers only Tom Warren in Palmerston North, who made guitars, violins, violas, and “great mandolins.”

    So, there are MORE Luthiers now than there were then. The know-how, machines and wood all flow freely across borders these days.

    However, this is confusing the issue. This is exactly the type of approach I advocate i.e. specialist manufacturing, not commodity manufacturing. The internal market today for high end guitars isn’t enough to sustain any guitar builder as there aren’t enough NZ guitar players with that much money buying each day. To thrive, scale and prosper, they must cater to global demand for high end guitars.

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  305. BJ says “The second point of course is that I refused to answer a nonsense question.”

    That’s because you know your answer will make you look insane.

    You’re already happy spending $1m per job, when the same money could generated TWENTY TIMES that many.

    And the fact that you refuse to have any limit of tax payer dollars you’re prepared to spend to save each job, shows what a total disconnect there is between your ideology and the real world.

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  306. photonz ““More jobs, and better paying jobs, come down to ONE factor. Businesses making good profits.”

    BJ says “…is way too simplistic. ”

    No – it’s not rocket science – it’s EXACTLY what drives wages and jobs.

    There are however many factors that will influence good profits.

    But if I’m not making a good profit I certainly won’t be taking on more staff or giving big wage increases.

    BJ says “First: “more jobs and better paying jobs” isn’t the sole measure of the health of the economy. ”

    Who said it was?

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  307. Bj says “It is far to easy to conclude from his actions, that Key is a treasonous liar… ”

    BJ – this is an example of what I was saying – it just sounds like the words of an extremist nutter. I may not have agreed with you previously, but at least you had logical reasoned arguments in the past.

    There are few countries anywhere on the planet who have come through the financial crisis as well as NZ. Considering our handicap of distance from markets compared to all other countries, that’s astonishing.

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  308. BJ

    However this –

    “More jobs, and better paying jobs, come down to ONE factor. Businesses making good profits.”

    …is way too simplistic.

    It’s not just too simplistic BJ, photon is once again unsurprisingly wrong!

    Kiwis are being laid off left right and centre while many of the companies they worked for continue to post huge profits.

    What about Solid Energy that’s laying off hundreds of staff because it was mismanaged and lost us millions of dollars you might ask… While Don Elder sits at home twiddling his thumbs he’s receiving enough taxpayer money to instead employ numerous productive workers. That clearly shows that policy and funding decisions can create jobs, and they can lose them as well.

    In fact it’s a part of the crony capitalist ideal that people like photonz1 often tries to promote, and the reduction of staff to increase profit margins is nothing new. In fact it’s been used for decades to undermine society both here and abroad.

    Increasing business profits doesn’t usually increase jobs or how much is being paid because it’s all about supply and demand. That’s one of the reasons why there was only 0.1% growth last year, because people have less money to purchase the things they actually need. That raises another issue… scarcity. We see that unfair dynamic to drive up prices all the time.

    Housing for instance is making lots of money for investors, while scarcity through the high cost of building and complicit governments that have undermined our public housing stock means there’s not as much job growth in that sector as there could be. That’s mainly because the average New Zealander is delaying the purchase of their first home, because they don’t have enough money through low wages and the increased cost of living. The ramifications of such a destructive dynamic should not be underestimated.

    The simplest way to increase the amount of jobs is to ensure the public has enough money to purchase the things they require and that the supply of those things is fairly priced. Unfairly priced items not only remove the ability of some people to purchase them, they mean the supplier doesn’t have to produce as much to make more money. That’s why businesses making huge profits, a lot of which now goes offshore, doesn’t equate to increases in better paid jobs here in New Zealand.

    But if I’m not making a good profit I certainly won’t be taking on more staff or giving big wage increases.

    Yes! Businesses need to make a profit in order to employ people… Way to state the obvious photon. However that’s very different to them “magically” increasing wages and the amount of people they employ simply because they’re making profits. Most businessmen will try to get away with paying their staff the lowest wages they can, and even the current government is now undercutting workers by getting prisoners, who are paid nothing, to take over peoples jobs. That’s no longer a free market, that’s slavery!

    You’re already happy spending $1m per job, when the same money could generated TWENTY TIMES that many.

    And the fact that you refuse to have any limit of tax payer dollars you’re prepared to spend to save each job, shows what a total disconnect there is between your ideology and the real world.

    I would be happy with the government spending an amount up to what it would cost to keep a person unemployed. However I don’t think there should generally be subsidies for foreign owned businesses in what is meant to be a free market. Government welfare for companies that don’t supply any social benefit here in New Zealand should also not be allowed.

    However once again you’ve failed to show that purchasing rolling stock from New Zealand instead of China would have cost $1 million per job photon… It appears that you’re simply making shit up again.

    There are few countries anywhere on the planet who have come through the financial crisis as well as NZ. Considering our handicap of distance from markets compared to all other countries, that’s astonishing.

    That’s not true… New Zealand was in a better position prior to the GFC than most other countries and we’re now in a worse condition than they are after it. In fact National is still blaming the GFC like it’s still happening even though it ended four years ago.

    Considering our handicap of distance from markets compared to all other countries…

    It’s astounding that you and Arana continue to argue that exports should take precedence over a functioning internal economy by ensuring people have enough money to purchase the things they require. Clearly the RWNJ’s are the only extremist nutter’s around here.

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  309. While Don Elder sits at home twiddling his thumbs he’s receiving enough taxpayer money to instead employ numerous productive workers. That clearly shows that policy and funding decisions can create jobs, and they can lose them as well.In fact it’s a part of the crony capitalist ideal that people like photonz1 often tries to promote

    Huh? You’re the one who wants to told state “assets”, not us. This is exactly the reason why – the state holds the downside risk, unnecessarily.

    If this had been a private company, the shareholders would have taken a bath. Yet, the government shares in any upside by way of taxation with no money down.

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  310. It’s astounding that you and Arana continue to argue that exports should take precedence over a functioning internal economy by ensuring people have enough money to purchase the things they require

    Where does this money come from? You make out like it’s sitting in some money bin somewhere, being held away from people. It isn’t. Surplus money is invested.

    Are you going to print some? How much would you give each person per hour?

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  311. The problem with Solid Energy is that the government isn’t willing to see the company collapse. That would be the correct outcome.

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  312. The problem with Solid Energy is that the government isn’t willing to see the company collapse. That would be the correct outcome.

    Yep.

    But government being government, they make us pay for a bailout. Brilliant.

    It’s an “asset”, don’t you know. Greenbour have spent the last few years telling us this is so.

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  313. Arana

    Huh? You’re the one who wants to told state “assets”, not us. This is exactly the reason why – the state holds the downside risk, unnecessarily.

    I presume you mean hold? The government should hold onto assets that make a profit and are projected to continue making a profit. The government should not have increased investments and expanded Solid Energy at a time when profits were projected to decline and not recover.

    If this had been a private company, the shareholders would have taken a bath. Yet, the government shares in any upside by way of taxation with no money down.

    You’re waffling a bit Arana… Elder staying on the pay roll has more to do with National being complicit in the demise of Solid Energy and them not wanting him to inform the public further that they had encouraged Solid Energy to invest and expand at an inappropriate time. Hush money in other words.

    Where does this money come from? You make out like it’s sitting in some money bin somewhere, being held away from people. It isn’t. Surplus money is invested.

    Money comes from lots of places Arana… In this case it would come from the huge profits companies make, most of which currently goes offshore. That money isn’t being reinvested into New Zealand, which is the main problem. So the money would come from the private sector to increase the wellbeing of the public so that the private sector can once again make more money.

    You don’t make money from having 270,000 children living in poverty.

    Are you going to print some?

    The government could help that process through quantitative easing, which would basically give Kiwis more money to save and/or invest with. That would increase economic activity and mean the government might be able to service the debt National has accrued.

    With 0.1% growth last year and such high levels of government debt, it is unlikely that we will see any surpluses Bill English and photon go on about.

    How much would you give each person per hour?

    I would increase the minimum wage, and also implement performance pay for any upper management government employees, who would be paid considerably less than $1.3 million per anum. Politicians would also have their currently disproportionate incomes and benefits linked to their performance and actual hours worked… Wages, super and benefits would all be linked to inflation to ensure the standard of living in New Zealand didn’t decline further.

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  314. The government should hold onto assets that make a profit and are projected to continue making a profit.

    Interesting. Because a lot of the rhetoric so far has been we should hold them regardless, as they are “strategic” and we don’t want them “falling into the hands of foreigners”.

    Elder staying on

    You won’t hear me defending Solid Energy. I’m against the state owning such companies. And didn’t Labour appoint Elder? It’s their contract he remains “working” under.

    In this case it would come from the huge profits companies make, most of which currently goes offshore. That money isn’t being reinvested into New Zealand, which is the main problem.

    Hmmm……so what about the profits coming inbound from Kiwi holdings offshore? Look at the makeup of the Cullen Fund, for starters. Doesn’t it all balance out? How are you going to block foreign companies here whilst maintaining export earnings and dividends returning here?

    The government could help that process through quantitative easing, which would basically give Kiwis more money to save and/or invest with

    No, it wouldn’t. That just drives inflation, means you’ll destroy savings. If that was such a great idea, then why not undertake QE, all the time? Short of money for something? Hey – just print more of it!

    I would increase the minimum wage,

    To how much?

    All for performance pay, across the board. We business owners are on 100% performance pay. We fail to make a profit, we lose.

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  315. Solid energy, although State owned, was run. like all our SOE’s, like a private business.

    Which means managers and directors pay depends on making more and more profits and/or expansion year on year.

    They make these gambles, which should not be part of an SOE’s business, because “running it like a business” gives them greater rewards.

    Similarly, power companies, run like a business, gouge domestic small customers so they can attract big ones, port companies do it to. Again because that is the performance measures used to set management pay.

    It is the performance measurements and top heavy overpaid management types inherent in our flawed private sector model which are fucking up.

    And the reason why National are paying solid energy executives to shut up and go away. It raises questions about the whole infrastructure privatisation process.

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  316. Arana. Where do you think the money you borrow from the bank comes from? Clue, They do not have billions sitting in private accounts waiting to be lent.

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  317. Solid Energy could have made money in an environment with a real CO2 tax with a refocusing on wood pellet and other biofuel assets.

    Solid Energy could have made money if there were not cheap gas to compete with their coal while the CO2 tax remained risible.

    This result would have been obvious to anyone in policy who had a working brain rather than an ideological fixation on the free market. It was always obvious to me.

    Given that the government decided not to restrict or regulate fracking, is dedicated to risible charges for CO2 and is dedicated to the cheapest nastiest energy sources that it can find, they had to figure it was a good bet, but they missed out on the gas production and price figures (which aren’t going to last).

    Assuming Greens were in charge the coal plants would be shuttered fairly fast and the CO2 charge would be sufficient to make people and companies change the way they think about energy. Which is after all, the way it is supposed to work.

    That, and the gas finds/fracking, mean that Solid Energy had EXACTLY one way to actually prosper, and that was with biofuels and a CO2 tax.

    Their coal cannot compete with cheap Gas. Their coal cannot be burned to profit in a high CO2 tax environment. Why was Elder paid as much as he was, being unable to see that this was happening?

    Epic fail. Who was actually running this company?

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  318. Arana. Where do you think the money you borrow from the bank comes from? Clue, They do not have billions sitting in private accounts waiting to be lent.

    It’s linked to value. It is a direct reflection of actual value in the economy. This is why when we inflate currency artificially, the value/buying power of each dollar decreases.

    I think you’d get a lot out of this book:

    http://www.youtube.com/watch?v=78a84qbT5-w

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  319. Epic fail. Who was actually running this company?

    The state. It’s a State Owned Enterprise.

    It’s an “asset”, apparently. Your own Green site is telling us what an “asset” it is, and how we should sign a petition not to sell it.

    I don’t think there’s much chance of that. It’s now worthless. In fact, less than worthless.

    And I’m still paying for it.

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  320. Arana. Where do you think the money you borrow from the bank comes from?
    Clue, They do not have the billions sitting in private accounts waiting to be lent.

    I sort of knew you wouldn’t get the message of the guitar maker going out of business in the 87 recession. Caused by Neo-liberals de-regulation.

    And swapping goods and services between ourselves, and others, is exactly how an economy works.
    A totally external economy does not work. A beef farmer still keeps a couple of house cows and a garden.
    A functioning economy is entirely possible without a medium of exchange. It is just more convenient to carry dollars around than a list of who swapped what services for which product.

    Photo. As the States show recently it is DEMAND not profit which makes jobs. No wages= no demand=no profit=no jobs.
    The US Government has poured trillions into the supply side. Unfortunately it hasn’t had the desired effect because it went to banks and the wealthy, who are hoarding it. Or lending it to New Zealanders at 100% profit to push up existing asset prices so they make more profit..

    Money is a token for swapping resources, the major resource being work.

    Where it becomes a problem is when it is also a store of value.
    I hope you can see the likely problems with a store of value that has no intrinsic value?

    Our finance system has made it possible to earn more money, without increasing work or resources, just by sitting on it.
    Causing real problems when this “ghost” money tries to buy real resources that haven’t been paid for by real resources.

    The frequent system crashes show that we cannot advance society just by swapping money around.

    For economic efficiency. and this is capitalist economics still, if too many people sit on money without spending it on something productive then we have to get the value back in the system.
    Monetary methods include raising wages for the lower income brackets, (minimum wages, UBI and welfare) who spend almost all they earn, taking it back by raising taxes for State investment, (The successful model of the 50′s) the Government printing money into the system, (which worked in getting all major Nations, including us, out of the 30′;s depression) allowing higher inflation (Cuts the value of hoarded money giving owners of capital an incentive to invest in the real world) or any combination.

    Solutions do not include giving them more existing assets to financialise, over price, gouge the rest of the economy, and run into the ground.

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  321. Jackal – if the answer to everything is to pay significantly more to your workers, and still keep your products reasonably priced to people can afford them, why don’t you start you own business and do that?

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  322. Kerry says “Arana. Where do you think the money you borrow from the bank comes from? Clue, They do not have billions sitting in private accounts waiting to be lent.”

    Wrong – there’s not just a billions, but around $100 billion in term deposits.

    From Reuters “With about NZ$100 billion sitting in term deposits, along with many billions of dollars more in KiwiSaver funds, other investment funds and iwi (indigenous tribe) investments, New Zealanders are placed strongly to invest in the mixed ownership companies”

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  323. Do you really think that putting that capital in existing infrastructure. THAT WE HAVE ALREADY PAID FOR. is good investment?

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  324. Kerry asks “Do you really think that putting that capital in existing infrastructure. THAT WE HAVE ALREADY PAID FOR. is good investment?”

    That’s a nonsense argument, because government funds sell and buy billions of dollars of assets every year, without comment from anywhere, and all of those are assets “THAT WE HAVE ALREADY PAID FOR”.

    Whether it’s a good investment depends on what sort of investment people want. The generation companies are likely to have low returns, low growth, but are low risk.

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  325. Arana

    Interesting. Because a lot of the rhetoric so far has been we should hold them regardless, as they are “strategic” and we don’t want them “falling into the hands of foreigners”.

    Some industry is strategic Arana, and natural competition is not available. The electricity and telecommunications industries here are perfect examples of this, with high prices inhibiting businesses, especially small innovative ones.

    The natural lack of competition in a small market means companies that have cornered the market can generally charge what they like, and because of deregulation and selling off assets, this includes some essential services. Essential service are required cheaply to ensure a healthy a vibrant population and innovative businesses.

    Doesn’t it all balance out?

    Clearly not!

    How are you going to block foreign companies here whilst maintaining export earnings and dividends returning here?

    Who said anything about blocking foreign companies? I mean honestly! You criticize others for straw men arguments while throwing up numerous ones yourself.

    You can’t honestly be arguing that protecting our manufacturing industry will reduce the export earnings from dairying for instance? The sooner New Zealand wakes up and realizes the worth of what we produce the better.

    We would maintain export earnings and dividends through more aggressive trade negotiations and producing more of what the world wants… Clean tech and organics once again springs to mind.

    That just drives inflation.

    Only if inflation isn’t linked to wages… We would see a lot less inflation if wages had to increase at the same rate.

    means you’ll destroy savings.

    No! Because people will have more expendable money, and are therefore more likely to save or invest. It will also mean the impoverished will have enough to survive on. That would also increase economic wellbeing and productivity to ensure the New Zealand government can service its foreign debt.

    This is pretty basic stuff Arana, and your argument against it is clearly wrong!

    Without such measures, it’s unlikely we will be able to service that huge and growing government debt National has got us into. Can you tell me what happens if we can’t service that debt Arana… Is that what you want to happen?

    photon

    Jackal – if the answer to everything is to pay significantly more to your workers

    The answer to everything is 42… Lol!

    and still keep your products reasonably priced to people can afford them, why don’t you start you own business and do that?

    I’ve started a number of businesses… In fact I had one fold a while ago because it was too expensive due to the high dollar.

    The issue here is increasing peoples quality of life, which has been declining in New Zealand for a long time. One way to do that is to increase peoples incomes, and you would ensure those incomes matched any inflationary pressures by linking wages and other incomes to inflation.

    Besides, isn’t globalization meant to mean things are cheaper photon? Because we import most of the products we use, increasing wages will not have much effect on the affordability of items here in New Zealand? How exactly will increasing wages, super and benefits effect products that are produced overseas? Devaluing the dollar takes time and in the interim we can reap the social and economic rewards that such policy, which is utilized by most developed countries, will create.

    Another dynamic that should be mentioned again is that many of the products we already produce and sell here in New Zealand are overpriced by international standards… Take cheese for instance, whereby we are paying on average twice as much for the same product as people in other countries.

    It’s not about increasing wages, it’s about ensuring there is proper competition, and where there is none available legislating so that New Zealanders are not price gouged by those who are taking advantage of that lack of competition.

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  326. Jackal – you’re all over the place.

    “One way to do that is to increase peoples incomes,”
    “It’s not about increasing wages, ”

    “Because we import most of the products we use, increasing wages will not have much effect on the affordability of items here in New Zealand”

    Then you suggest devaluing the dollar, which WILL make things more expensive.

    You want to shut out competition from overseas, then you say you want more competition so Kiwis aren’t price gouged.

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  327. Photon

    I wouldn’t expect a RWNJ like yourself to understand photon… So let me explain…

    One way to increase the quality of life is to increase peoples incomes, or more importantly what they are able to purchase. It’s therefore not really about increasing wages in the long term, it’s about ensuring the things people need are affordable.

    Devaluing the dollar will eventually make imported goods more expensive, however while we are exporting more than we import, it’s a good idea. Because we import most of the products we use, increasing wages will not have much effect on the affordability of items here in New Zealand in the short term, meaning that the delay between our dollar being devalued as a result of quantitative easing will increase peoples quality of life.

    Ensuring companies pay their employees enough to survive on will not shut out competition from overseas, it will however mean less funds going offshore. That will increase competition from New Zealand based firms, which is a good thing.

    If the only thing you have photon is to cherry pick bits of my argument, then you’ve clearly lost this debate.

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  328. Jackal says “Devaluing the dollar will eventually make imported goods more expensive”.

    No – not eventually – immediately. Petrol would go up in days.

    So would most prices. Companies aren’t going to sell say a computer for $2000, when it costs them $2200 just to replace the same item.

    There are advantages of devaluing, but there are also huge loses for many people.

    Anybody who doesn’t get a major pay rise will be a loser, including superannuatants, people on benefits, and most on low wages.

    And of course you’d increase the brain drain that you complain about, by making NZ wages even further behind the rest of the world.

    Devaluation is a boost for exporters, but effectively a pay cut for everyone else.

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  329. photon

    No – not eventually – immediately. Petrol would go up in days.

    So what you’re saying is that prices are not governed by actual costs of production, but instead by middle men who are setting the value of commodity prices? That’s not exactly adhering to a free market ethos there photon.

    Let’s look at the alternative to what I propose then… Continuing to subsidize wages in order to ensure mainly foreign owned businesses make a profit the majority of which then goes offshore. How exactly does that benefit New Zealand photon?

    There are advantages of devaluing

    Could you please acknowledge them then photon?

    but there are also huge loses for many people.

    Anybody who doesn’t get a major pay rise will be a loser, including superannuatants, people on benefits, and most on low wages.

    So linking wages, super and benefits to inflation would mean those people would be worse off… I think not photon. In fact it would increase internal economic activity and ensure people were able to purchase the things they require.

    For starters, we would increase the uptake of New Zealand made products within New Zealand because they would be more competitive, which is a good thing… It would also reduce unemployment and increase economic activity. You can’t seriously be arguing against such things?

    And of course you’d increase the brain drain that you complain about, by making NZ wages even further behind the rest of the world.

    How on earth would ensuring wages increased with inflation increase the brain drain? You’re argument is so ludicrous it’s not funny. People leave for a brighter future in other countries because they can earn more there.

    Devaluation is a boost for exporters, but effectively a pay cut for everyone else.

    Only if they’re not properly taxed and that money used to promote social services and other productive industries that benefit all New Zealanders.

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  330. Jackals says “So what you’re saying is that prices are not governed by actual costs of production, but instead by middle men who are setting the value of commodity prices? That’s not exactly adhering to a free market ethos there photon.”

    Of course not. Factors like hedging, new development costs etc – all come into play.

    I’ve never ever advocated only free market policies – they’re useful in some circumstances – not in others.

    Jackal says “mainly foreign owned businesses make a profit the majority of which then goes offshore.”

    No – they’re not mainly foreign owned, and the majorityn of profits don’t go offshore. Foreign ownership of NZ listed companies has nearly halved in the last 15 years – and continues to fall.

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  331. So are the prices hedged or is the rise immediate? ? ? Sorry, that is just an irrelevant nit.

    The point is that WE have to consume LESS from overseas or export MORE.

    I think that on this point we all are able to agree.

    The exports we can actually make money on are quite limited… farm products basically, and it takes a lot of milk powder to equal an iPhone or a car. Anything else is going to be a break-even proposition at best. Our share of world beating innovation based products is going to look a lot like our share of the global population. We might get one once in a while.

    We have already reached the point where we can’t increase our farm production without causing serious environmental damage. We are hitting a drought. We ARE going to get hurt by climate change, but probably not as badly as most, but overall the limits are simply what they are. So many cows and sheep per hectare. So many hectares to farm.

    So buying stuff from overseas has to be NOT easy.

    But it gets worse Photonz, because the most important thing we buy from overseas, is money… nor is it the GOVERNMENT that is making those debts.

    I won’t even try to work out what folly leads you to the conclusion that bankers loan money that they have somewhere stashed away. You KNOW that isn’t how it works. Money in the current world is all someone else’s DEBT Photonz. ALL of it. The banks actually meet their reserve requirements out of DEBT. It is not working the way the Chicago School theorists imagine.

    Nor as you imagine, if that statement is an example of what you are thinking.

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  332. I would have to take issue that “increasing the brain drain” is a result of a lower dollar… not if wages rise so that within this economy there is an ability to afford houses in this country and if local production of some things becomes more prevalent, keeping some skilled jobs here.

    I just don’t think that THAT SPECIFIC result that you expect, is all that expectable.

    It IS a nice country, was nicer before Key got his meathooks into it, but it is still nicer than a lot of others.

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  333. BJ says “We have already reached the point where we can’t increase our farm production without causing serious environmental damage.”

    Many farms have substantially increased production, and are more environmentally friendly than they’ve been in their history.

    You have have your preferred banking system, but if you can only borrow on 100% deposits most businesses and people could never afford the high interest rates to ever buy a house or expand a business – you’d cripple the economy.

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  334. bj says “I would have to take issue that “increasing the brain drain” is a result of a lower dollar…”

    If we devalue by 10%, then ALL income has to go up by 10% PLUS whatever Australian income increases by – JUST TO GET BACK TO WHERE WE ALREADY ARE TODAY.

    The currency difference is already the main reason for the difference between NZ and Aus wages.

    BJ says “It IS a nice country, was nicer before Key got his meathooks into it,”

    In reality, we’ve had some minor tax changes, but the current governments policies are not hugely different to the previous Labour government. We still have WFF, Cullen Fund, same inflation adjusted rates for super, benefits, minimum wage etc.

    The asset sales are probably the first major divergence, but as they provide much less than 1% of the governments income, they don’t have anything like the importance people place on them.

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  335. Jackal notes:

    For starters, we would increase the uptake of New Zealand made products within New Zealand because they would be more competitive, which is a good thing…

    Yeah, can really see the market for Kiwi made flat screen tellys increasing.

    The consumers of goods in New Zealand want foreign made goods, it really is that simple. So make them less affordable will not improve the lot of New Zealand manufacturing, becasue we dont make the goods that people want.

    It really is that simple.

    And while we are being simple; cost of production has almost nothing to do with cost of sale. Goods are sold for the maximum price the market will bear.

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  336. photon

    No – they’re not mainly foreign owned, and the majorityn of profits don’t go offshore. Foreign ownership of NZ listed companies has nearly halved in the last 15 years – and continues to fall.

    Is this yet another claim without any verifying information photon? It’s not necessarily the amount of companies that are foreign owned that matters, it’s the size of the profits that those foreign owned companies make.

    dbuckley

    Yeah, can really see the market for Kiwi made flat screen tellys increasing.

    Oh no! You sound a bit like photon dbuckley.

    There are some things (not including flat screen TVs) that are made in New Zealand that would be more competitive. Why was that such a hard thing to understand?

    And while we are being simple; cost of production has almost nothing to do with cost of sale. Goods are sold for the maximum price the market will bear.

    To a degree you’re correct, and it’s the amount somebody is willing to pay that often sets the price more than the cost to produce a product. However when there’s no real competition it’s the producer who sets the price.

    Personally I’m more interested in knowing why photon believes keeping wages low will increase our quality of life?

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  337. Many farms have substantially increased production, and are more environmentally friendly than they’ve been in their history.

    I think you are missing two things.

    First – That the point I was making is that there is no more. You can’t grow the exports any more. They may become WORTH more as the rest of the planet gets hungrier, but you can’t count on it.

    Second – Farmers are now importing all manner of feed supplements for “intensive” farming, and that is both energy intensive and waste intensive. The only reason they’ve changed their behaviour with respect to polluting rivers and using water is because we started forcing them to do so. The only reason they aren’t destroying this country further is that they are paying someone else to destroy THEIR country. That isn’t likely to work all that well all that long either.

    Mostly though, my point is that further growth in our exports is a matter of conjecture and unlikely to be anything large enough to make OUR paychecks better.

    That inability to grow the export side means that to keep things in balance we have to shrink the import side.

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  338. Jackal says “Personally I’m more interested in knowing why photon believes keeping wages low will increase our quality of life?”

    Again – something NOBODY has ever said.

    What will improve wages is if companies make good profits.

    They will also increase if people become more qualified so all the skill shortages are filled. (businesses struggle to find suitable employees for 50% of all vacancies).

    If you REALLY want to improve your quality of life, you need to do something about it YOURSELF. If you’re waiting on the government to make a big difference, you’ll go to your grave still waiting, regardless of whether the government is left or right.

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  339. BJ says “First – That the point I was making is that there is no more. You can’t grow the exports any more.”

    I’d bet my house that you’re wrong. Export volumes have steadily been going up for 150 years, and we’ve only 1/20th the population density of some similar sized countries.

    BJ says “That inability to grow the export side means that to keep things in balance we have to shrink the import side.”

    I disagree, but I do think a lot more people could use this theory on an individual level. Our family lives comfortably on one average wage. Which means we have a second wage that most years gets invested – 100% of it.

    We’ve done that long enough that the annual investment return is nearly equivalent to another average wage – i.e. a third wage.

    We can either start spending up large, or if we keep reinvesting returns for another five years we’ll get a fourth wage.

    And you don’t even need a lot of money to do it – less than the average teacher gets.

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  340. If we devalue by 10%, then ALL income has to go up by 10% PLUS whatever Australian income increases by – JUST TO GET BACK TO WHERE WE ALREADY ARE TODAY.

    And your point is ??

    You say this as though it is a bad thing. So paying off debt in devalued dollars is bad. Bringing the price of a house back into shouting distance of a middle class income is bad.

    How did you propose to do it? We’ve already gone over all the things that aren’t working and aren’t ever going to work.

    ————————

    True… we’ve stopped some of the rape and pillage attempts. The effort to mine the national parks, some of the offshore oil and gas drilling.

    The effort to stop this government from tearing up the landscape in search of stuff it can sell out from under our children’s feet is an ongoing one. It takes is a massive effort and it raises questions about who that government is actually working for.

    We should not have to tell our government to quit acting like Saruman’s Orcs at every turn.

    I personally resent the gutting of the ETS. The way it was made into a state handout to polluting industries.

    I am disgruntled by the degree of difficulty to get Auckland a sane commuter rail layout.

    I am appalled by the asset sales. That they are to be sold at all and then the absurdly low price for these crown jewels. Who is this government working for?

    _________________________________

    You have have your preferred banking system, but if you can only borrow on 100% deposits most businesses and people could never afford the high interest rates to ever buy a house or expand a business – you’d cripple the economy.

    Lessee… how DID my preferred banking system work? You borrow from the state or one of its banking proxies, at zero interest rate, money that has demurrage associated with it.

    Being of sound mind you spend it all immediately on the things you need. You use your EARNED money to pay off the debt and buy things you need, and if you have extra you deposit it with the state bank or proxy and there it does not suffer demurrage, but does not increase. You can withdraw it again but as soon as you do it starts losing value.

    You don’t earn money by having money, you earn money by producing things or providing services. Inflation and deflation are I think, whacked quite squarely on the head.

    I don’t think most people can even IMAGINE that sort of re-arrangement so I am not disappointed in your missing that “interest rates” aren’t a feature.

    The economy WOULD be transformed. If you have money you HAVE to spend it or re-deposit it… which gives someone else access to it. The velocity of money is now a large thing. The dynamics change. The accumulation of wealth by being wealthy is no longer happening the same way. Maybe gone for good.

    The places this sort of money has been tried (on a small scale) it has worked well. Scaling it up is going to take a bit of work.

    Also, I think you’d be valuing the things you buy differently… because money WOULD be something you have to work to earn, not in general borrow.

    The hardest problem with creating this system is figuring out how to make the transition to if from the mess we have now. The second hardest has to do with making demurrage work on actual currency.

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  341. bj says “You say this as though it is a bad thing. So paying off debt in devalued dollars is bad. Bringing the price of a house back into shouting distance of a middle class income is bad. ”

    So you want to heavily reward all the property speculators with multiple properties on low deposit, and absolutely screw those people who have done the right thing – saved hard – all those average people who between them have over $100 billion in term deposits.

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  342. BJ says “First – That the point I was making is that there is no more. You can’t grow the exports any more.”

    I’d bet my house that you’re wrong.

    Is it a nice house?

    I should have made it clearer that I am talking about the long run. I was talking about not doing further damage. The damage being done is just barely where we can sustain it now. If you think we can export significantly more under those conditions I’d think really hard about taking you up on it… because there is no way that we are going to get much more out of the land under cultivation now, without destroying it.

    To export more means we have to have more of the country de-forested and turned into farmland (which counts as environmental destruction) and I don’t think there is that much more GOOD farmland possible here in any case. So we’d HAVE to intensify further, but that means that the land and water are damaged more.

    Then there’s the changing climate. You’d best count on more droughts and floods. We COULD do well with some seasonal desalinization capacity.

    The energy hit is pretty brutal.

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  343. I am sort of boggling with the “100 billion in term deposits” (for New Zealand alone??? It seems somewhat outrageous) but at the same time as we are doing that with the money Photonz, we are also stomping heavily on those house values with the removal of the negative gearing and the imposition of capital gains taxes that actually get applied, and, if I have my way, something like a lockout of foreign money from our housing market. The speculator will have his own set of problems.

    I haven’t planned a transition like this, not my job. So I am feeling my way here, but while I would want to protect people’s savings in the process I am also damned sure that the monetary distortions that have made some people in NZ wealthy have been a whole lot less ethical than a one-time 10% hit on the value of savings. Retired folks might get some compensation. Working folks get a bigger paycheck.

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  344. BJ asks “Is it a nice house? ”

    Average house – million dollar view.

    If you have a good look around NZ there’s massive amounts of farmland that’s barely utilised.

    Look at Central Otago – 20 years ago much of it was considered about the lowest grade farmland you could get. Some of it held less than 1 sheep per hectare. Now there’s a hundred vineyards producing the worlds best Pinot.

    And it still only covers 1000Ha. If it grows to 30x bigger than it is now, it will then cover 1% of Otago.

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  345. Stomping on the housing market would be a recipe for disaster. Thousands of people would lose their homes.

    We need to just slowly deflate the bubble to stagnate house prices – just like has happened here since 2008, rather than like the disaster in the States where house prices plummeted by 35%.

    The $100b in term deposits is an amount that has been regularly used by economists, financial commentators and Bill English.

    The inflation you’ll cause by a 10% instant devaluation will cause you all sorts of problems – and likely have some effects that are opposite of what you think (there always are).

    There was high inflation here in the late 1980s. Mortgage rates hit 20%, and a lot of people couldn’t afford their houses. You’d think it would have put a lid on property prices but the opposite happened.

    Those who could afford it, put everything they could INTO housing as it was one way to hold value in your money.

    So many were shut out of the housing market, and those who could afford it jumped onto a very fast moving housing ladder.

    SO if you devalue, and cause significant inflation, it will very likely drive money INTO the housing market – not away from it.

    Similarly, property investors I’ve talked to believe a CGT will make house prices go up – not down – just like it did in Melbourne and Sydney.

    It’s the mansion effect. Personal house are exempt, so everyone puts more money into their personal home, and prices go up.

    As 60=70% of houses are owner occupied, ALL houses prices go up – there’s no ringfence around rental properties, they go up too.

    We need to get people shifting money out of property into the productive sector – that’s where I believe the biggest benefit from the asset sales will come from.

    All the assets combined don’t even provide 1% of the govt income, so the line that we’re losing some significant income stream is nonsense.

    Here’s an article with stats you might find interesting. How much we’ve invested in housing. How much in the sharemarket. How our sharemarket has stayed static while Australia have grown theirs by 400%.
    http://www.milfordasset.com/kiwisaver-investors-miss-nz-market-gains/

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  346. BJ says “I am sort of boggling with the “100 billion in term deposits” (for New Zealand alone??? It seems somewhat outrageous)”

    Here’s English’s quote on Reuters “With about NZ$100 billion sitting in term deposits, along with many billions of dollars more in KiwiSaver funds, other investment funds and iwi (indigenous tribe) investments, New Zealanders are placed strongly to invest in the mixed ownership companies,” he said
    see
    http://www.reuters.com/article/2011/12/15/newzealand-mightyriverpower-idUSL3E7NF00Y20111215

    I’ve also seen The Ministry of Business, Innovation and Employment use the figure (definitely for just New Zealand).

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  347. Oh no! You sound a bit like photon dbuckley.

    Perish the thought :)

    There are some things (not including flat screen TVs) that are made in New Zealand that would be more competitive. Why was that such a hard thing to understand?

    I was playing devils advocate really; there are things made in New Zealand that New Zealand consumers want to purchase, often in competition to foreign made goods, particularly when he Kiwi product is superior.

    I’ve already mentioned the excellent Sistema plasticware as an example, that sits beside the relatively cheap Chinese made stuff in your local supermarket, and the local mob sell every day, not because it’s Kiwi made (which most people wont know or care about) but because it is superior quality, is affordable, and, and this is perhaps the important bit, people remember the value long after they have forgotten the price.

    You can’t usefully game the marketplace. Thats called protectionism, and leads to bad outcomes, as protected industries optimise for the wrong things. Provide the right conditions and incentives, and the locals will rise to the occasion. We can’t produce tellys or cars economically, but there is stuff we can produce.

    Heck this thread is long.

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  348. photon

    If you REALLY want to improve your quality of life, you need to do something about it YOURSELF. If you’re waiting on the government to make a big difference, you’ll go to your grave still waiting, regardless of whether the government is left or right.

    Another incorrect argument photon… The government has a direct impact on our quality of life through setting things like the minimum wage, taxes and building infrastructure.

    It would seem you’re just trying to distance the current governments responsibility because National is failing so miserably to increase the standard of living for the majority of Kiwis.

    And you don’t even need a lot of money to do it – less than the average teacher gets.

    That all depends on your costs photon… Most people aren’t able to save or invest on the average wage, which is something even National acknowledge. That our level of savings is a real problem is no secret… Your personal example effectively means nothing.

    If you have a good look around NZ there’s massive amounts of farmland that’s barely utilised.

    There are usually good reasons for that photon… Often it’s because the soil is deficient and cannot sustain agriculture and the cost to rectify that problem is prohibitive.

    It would be much better for New Zealand to diversify away from further intensification of agriculture, not just for the environment, but also for our economic stability… Putting all your eggs in one basket is not a good idea.

    BJ

    I should have made it clearer that I am talking about the long run. I was talking about not doing further damage.

    Which is something photon must have known and dishonestly chose to ignore… It’s a pity he/she has slipped back into right wing troll mode ever since losing the debate.

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  349. The government has a direct impact on our quality of life through setting things like the minimum wage, taxes and building infrastructure.

    As a country average, yes, but to an individual, much less so. An individual can make life choices, and determine how their own individual tradeoffs of their life in the world they find temselves in.

    There are plenty of “rags to riches” stories, plenty of self-made men and women. But “self made” isn’t for everyone. For example, I’m risk averse and thus, at this part of my life, have chosen the life of an employee. Am I underpaid and under-valued? Sure, but my stress level and committment is low. I’m making my own choices on the quality of my life.

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  350. Kerry,

    I sort of knew you wouldn’t get the message of the guitar maker going out of business in the 87 recession. Caused by Neo-liberals de-regulation.

    Caused by inability to adapt to meet international market demand. As I demonstrated, there are MORE trading luthiers than there were then. Why? Lower trade barriers (they can get into overseas markets more easily), lower cost of imports (machines are much cheaper) and they can source appropriate wood from offshore.

    As for your and Jackals contention that we can just print more money, hand it out, and this leads to prosperity, that is plain bonkers. No economist, anywhere, advocates it, as currency must be linked to value. When it isn’t, you get Zimbabwe dollars.

    Your understanding of what money is beggars belief.

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  351. Arana says “When it isn’t, you get Zimbabwe dollars.”

    Just seen it first hand, and came home with a Z$100,000,000,000 note ($100 trillion).

    A wheelbarrow load of them wouldn’t buy a beer.

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  352. “print more money, hand it out, and this leads to prosperity, that is plain bonkers.”

    Economists. Steve Kean. Ha-Joon Chang and many others

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  353. photonz1 “‘low returns, low growth, but are low risk’.”

    Kerry says “Not talking about their value for an individual shareholder, Photo!”

    Those facts don’t change – it’s irrelevant whether you are a minor private individual shareholder or a goverment with 100%.

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  354. Photonz1 ” If you REALLY want to improve your quality of life, you need to do something about it YOURSELF. If you’re waiting on the government to make a big difference, you’ll go to your grave still waiting, regardless of whether the government is left or right.”

    Jackal says “The government has a direct impact on our quality of life through setting things like the minimum wage, taxes and building infrastructure.”

    So you’re going to REALLY improve your quality of life because you get $15 per hour instead of $13.75?

    Or would doing something yourself like getting a qualification that gets you $25 per hour or $35 per hour make more of a difference?

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  355. We got out of the 30′s depression and became prosperous, earlier than most other countries, by the way, by doing just that, PRINTING MONEY.
    So did the USA. Mostly for public works. Tennessee valley authority etc.

    Zimbabwe is utter bullshit as an example.
    Their Government destroyed their productive capacity, and then printed money. No parallels with NZ at all. Our productive capacity is underutilised.

    Germany got out of their hyperinflation, post war, by printing new money, “backed by all of us” to restore confidence in their currency.

    Arana and Photo. Your economic ignorance is only exceeded by your ignorance of education.

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  356. Where are all the jobs for $35 an hour qualifications Photo? Australia!

    NZ employers want to pay $15 an hour for $35 an hour skills, while paying a jumped up accountant promoted beyound their skill level, $1000 a day, and then bleat they cannot get skilled workers.

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  357. Steve Kean. Ha-Joon Chang and many others

    If they advocate the same approach Zimbabwe took (delinking currency from value and simply printing a lot more of it), then what have they to say about the results in Zimbabwe?

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  358. Kerry now wants to print money, thereby giving the biggest windfalls to the biggest property speculators.

    And destroying the wealth of anybody who has done the right thing and saved.

    And creating a much larger gap between NZ and Australia.

    Now watch him complain about the brain drain.

    And high prices for things that will hit the less well off more than anyone.

    And the high interest rates for houses, which means they are even LESS affordable for the poor, and even MORE essential that well off people put their money into property so their money is inflation proof.

    And then laughably he talks of economic ignorance – nice irony.

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  359. We got out of the 30′s depression and became prosperous, earlier than most other countries, by the way, by doing just that, PRINTING MONEY.

    They needlessly prolonged the despression by doing so.

    There is no such thing as free money. Print as much as you like, but your buying power doesn’t increase. Only the numbers change.

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