There is a problem with pursuing a fiscally-neutral approach to climate change spending and investment when the rainy 'day' is already here and likely to turn into a century
I dispair. We continue to kick the can down the road. What future are we creating for our grandchildren.
Climate assembly for the country to defuse the politics - like Ireland with abortion debate. There are already local assemblies in NZ, if bipartisan commitment occurred it could help.
Well said Bernard, 👏 actions and consequences on the self same day even! Now seem detached from reality.
New Zealand has since the 1980s pursued a fiscally conservative policy around government debt. Intuitively, this feels wrong, given the infrastructure crises we now have, and where the gap between the amount governments, and "swing" voters are willing to spend, and what is required; is going to just get wider and wider. But the other side of the argument (minimise government spending to keep inflation down), has been discussed over at 'Stuff' today, with the article: 'Have economists misunderstood inflation?'
Speaking as an Auckland based, white, male boomer with a business background I can see 3 'advantages' to come from the weather events since last Friday: 1) Only a complete dick head would still argue that climate change doesn't exist, 2) that white, middle aged men with a business background are uniquely ill equipped to be central or local government politicians, (think Luxon, Brown etc.), 3) Our decision to give tax cuts to the wealthy rather than invest in infrastructure, (stormwater, etc.) over the last 35 years, is now biting us in the arse. Everything Bernard writes on the 'rainy day' topic is right on the money.
I'm actually with Hipkins on this. Net climate change impact of PT v fuel subsidies is probably neutral.
Now's the time for a big push on improving PT, cycling, walking, EV infrastructure - which is happening, but needs expanding. As things stand, many (poorer) people have little option than driving fossil fueled cars. The subsidies effectively address the short-term cost of living crisis, whilst still encouraging people to stick with PT during this very challenging transition.
2024/25 for the sustainable transport revolution! 👊
I'm so sorry - have just discovered I contributed to our misery at govt inaction over huge things. This morning I read Richard Shaw's piece in the Conversation NZ - 'the election will be about more than "bread and butter" issues', and suddenly a penny dropped. If nothing is happening how much does MMP contribute to that? That is a suggestion in the article. I remember voting for MMP and being so furious at 1984 Labour govt turning our country upside down, that we were making darn sure no government could do that again. To ensure it we put shackles on future governments. Might it in effect have come back to bite us?
Taking out an insurance policy is a classic example of paying now for a future rainy day.
But just setting the money aside now doesn't achieve the same thing. An insurance payout could be higher than the premiums you've paid.
By squirreling away the ETS revenues into a Climate Emergency Relief Fund and not doing anything with that money to alleviate the cost of a future event is because there is a second factor at play. The Relief Fund can be used in calculating a lower net debt.
Watch now how the explanations will come out as for why the Relief Fund should not be used.
An example from the Canterbury earthquakes was the government not paying out residents whose houses were munted who didn't have insurance. "Why should these people get government money when they wouldn't even insure their own house?"
"Studies show the pain of losing something now is twice as large in perceived terms as the actual same amount of gain in the future. It’s called ‘loss aversion’ and it’s a key problem in the political economy."
So we're actively fighting deeply set human instincts with this policy?
What policy prescriptions are out there that directly work *with* human tendencies?
A fiscally-neutral climate change approach makes about as much sense as skipping the dental check up or cancelling the gym membership to save up for a potential root canal or heart surgery in the future. Our crises aren't unpredictable - we've known for decades that we can expect earthquakes and flooding and pandemics. Shouldn't be a hard sell to say maybe we spend a little constantly to build up infrastructure that can handle a disaster better than our current half-assed and ad-hoc buildings and drainage systems, rather than a lot occasionally (or in actuality, monthly at this rate).
I'm tired of our left-wing party ceding ground to this inane belief that govt finances should be run like a household or a business, without pushing back and saying, "Hey, households take on large debts all the time to invest in themselves. Is it fiscally irresponsible to take out a mortgage or a student loan? Large, responsible businesses take out loans all the time to invest in their future growth. Why shouldn't a government, who has access to loan terms the average person could only dream of?" Saddest thing is we lost a decade of investment when interest rates were unusually low that could've funded plenty of upgrades to our various systems - and created plenty of jobs which stimulate further jobs - without our debt levels even coming close to worrying.
Instead we had a conservative party full of people who don't run real businesses, but are currency traders, property investors, and seat moisteners atop government-owned 'private' businesses, leeching profits off of essential services and infrastructure. They certainly don't talk or think like people who are concerned about growing NZ the way you would a business or a household.
Please make this one public. It crystallises the paradox we are living through.
Thanks again Bernard,
If this is the sort of B...S..T we get from Labour about Climate Change I cannot wait until the right is in power. "The economy again TRUMPS the Climate". Even while we are waist deep in water!
I am rapidly losing faith in politics. "Westminster" type parliamentary democracy is unsuitable for dealing with the climate emergency as is capitalism. The gist of my essay when I did "Climate Change and New Zealand Democracy" at V.U.W before Xmas.
More contradiction between words (bread and butter issue) and actions - the what I would argue are crucial portfolios for a bread and butter approach are assigned to Ministers outside cabinet.
Commerce -- important when a big factor behind inflation is excess profits, something the 1975 Commerce Act had provisions preventing, but the current Commerce Act is light on.
Consumer Affairs -- which is where lots of policy initiatives addressing the 'bread and butter' concern over the cost of living should be coming from.
Hey Bernard - I think you are only partly on the right trail. Unfortunately, NZs Emission Trading Scheme has not saved many CO2 emissions - over its history it has been gamed and played by a host of stakeholders which largely has not changed consumer and industrial behaviour regarding carbon emissions from fossil fuels. Futhermore, to date I would suggest that neither the Climate Emergency Response Fund or the Clean car subsidary have made much difference to the global CO2 emissions, which ultimately is what the climate sees. NZ's whole climate change response is poorly informed and quite misguided by secular interests. The investment you so urgently would like to see invested in infrastructure - would probably be best directed to NZ stopping the export of emissions offshore and considering options for domestically sourced carbon needed for our modern society. There are many options which can be considered in this space now!
Thanks again for pointing again at the self imposed limits on borrowing and taxation by successive recent governments.
I am very angry that they do this for short term political gain so they may stay in power, or gain power, to keep doing the same stuff.
I’m sure it’s not easy but might you produce a few unchallengeable graphs comparing personal taxation in NZ with a few similar OECD countries. And comparison with healthcare, education, performance eg?
I’d love to witness a real public debate about the probable huge benefits of more taxes to pay higher salaries for teachers and Doctors, nurses and associated medical staff with the spin off of higher salaries across the public and private sectors.
Correct me if I’m naively ignorant, but isn’t the main reason these people get paid way more in Oz because the Australian government gets more tax money to pay them more? In addition to business and corporate tax of course.