Luxon defends budget-cutting approach to growing economy that isn't working, either to grow jobs or reduce inflation; He says NZ must 'double down' on these 'immutable laws of economics'
I'm all for us moving to another path, I can't recall ever hearing a politician using the word neoliberal or mentioning an alternative. But I am an ignoramus.
I've heard a few use the word "neoliberal", but none that used it to describe their chosen ideology. I've also never heard a (modern) politician use the word fascist to describe their views...
that's the problem, no one is talking about it or the effects it's had over the last 30+ years. I think for a politician to talk about it they'd in effect be admitting some pretty terrible mistakes, they will never do it. And it suits all those people that are going to be rich 'one day' to keep on believing in the trickle down.
As the man said, something like : ” the only thing that trickles down is horse dung” ( substitute whatever word works for you) after all the value has been extracted further up.
Maybe if we moved away from fossil fuels ((oil tanker) as an analogy for our economy to something greener and more agile we might get better outcomes… perhaps more like a Toyota-type ferry. Oh wait…
How much is the Overseas Investment Amendment Bill, now with the Select Committee, a straw that the Coalition is clutching at, to save their vision of "growth"? In my view it is a step in another wrong direction, as it merely leads, subsequently, to more sucking of profits and other payments out of the country.
Agree. And thinking about those overseas owned forestry companies and slash, also Rio Tinto etc. We are doing a verbal on Tuesday to the select committee. Welcome some more examples.
That's interesting, Kathy, that you have been notified of a time for your oral submission. I have not been contacted. I want to talk about trends in the current account balance, emphasis on the services deficit. Then to give examples of successful NZ owned enterprises which export. No need for the overseas investors. Forestry companies are certainly an excellent example of the negatives. Also some of those oil exploration companies (forgotten the name) in Taranaki. Gold miners. How much benefit to NZ from Macraes?
That's the big thing, isn't it?... In the future, NZ will be sending more and more money overseas to get a quick fix now. A wealth drain to follow our people drain. Sad, and irresponsible money management.
The issue for me is it's the same, Labour or National. National are standing out like a sore thumb because they are blindingly refusing to look at evidence and have a leader who says the most stupid things like 'I don't care what the evidence says we are doing it anyway' (bootcamps).
Top work Bernard as always. I think the only ‘immutable law’ in evidence at the moment is Luxon hasn’t got a f**king - excuse my French - clue what he is talking about. Oh, and Willis confirms she has had the ‘Atlas’ implant, demonstrating beyond a shadow of a doubt that butter wouldn’t melt in her mouth.
Exactly, ‘immutable law of economics’, you just have to laugh, economics isn’t bloody thermodynamics. There are no immutable laws in economics. What a fool.
Luxon is a genuine dumb ass. He appears to be unable to apply analysis or critical thinking to anything. Hooton was correct to point to his ‘B’ grade results in high school, even though he was a diligent student. He just didn’t have the intellectual horsepower to get on the ‘A’ list, which is more than fair enough, but he really should stop pretending. We can all see he isn’t the sharpest tool in the box. Sadly, he turned out to be a perfect ‘empty vessel’ for Unilever to institutionalise and programme, and it has to be said, boy oh boy, didn’t they do a number on Luxon.
This government, like the ones before it, continues to flail around neglecting the private sector debt elephant in the room. We live in a money system where nearly all new money is created as private bank debt, yet the policymakers keep leaving this factor out of their formulas, rendering them hopelessly flawed.
What they call responsible fiscal management, slashing public budgets and cutting services, is in fact complicit participation in a structurally extractive racket. Our so-called “economic growth” is underwritten not by real productivity, but by exploding private debt, mostly tied up in inflated land prices thanks to the deliberate exclusion of land from the CPI. That lets the Reserve Bank and Treasury pretend inflation is under control, while house prices rocket and mortgage debt piles up. It's the oldest trick in the dirty dog loan shark playbook, only this time, it’s the whole damn society getting fleeced, not just a few little old ladies.
New Zealanders have been lulled into believing we’re living off the generosity of foreign savers. But we're not borrowing their savings, we've gifted the credit reserves of our own land, water, minerals and energy assets to private investment banks, often foreign-owned, banks who create the money out of thin air and sell it back to us as compounding interest bearing loans(All a matter of public record if you care to look).
This is not investment. It’s not responsible stewardship. It’s monetary colonisation. We are being charged rent to live in our own home.
And the cruel irony? We have the constitutional and legal capacity, as admitted by the Treasury, to issue our own public credit, free of compounding interest, in service of the public good, infrastructure, homes, jobs, climate resilience. But we don’t, because successive governments have been ideologically captured or willfully ignorant of how sovereign money actually works.
If the public ever understood that the ‘loans’ underpinning our economy are literally conjured from the collateral of Aotearoa/New Zealand itself, and that we could do the same in the public interest, then yes, maybe this whole scam would finally be up for radical debate.
Until then, governments will keep doubling down on their deluded dogma, while our people sleep in cars and our kids freeze in campgrounds.
Please search out the New Zealand Economic Stabilisation And Public Wealth Restoration Bill being advocated by the Uniting Public Credit Movement NZ.
It takes into account all the previous failings of both private bank and state administration of the credit and currency of nations, and has come up with a state controlled system, because the private bankers have blown their opportunity and proven they are even less trustworthy than the state, with all the necessary belts and braces to prevent past inequality causing failures.
Although, I do wonder sometimes: In a (near) perfect world, you would expect the number of new laws introduced would reduce over time; Targeting (close to) zero new laws at some point. For example, Belgium "survived" nearly two years without a government. So sometimes it appears new laws are introduced for new laws sake.
On the other hand, it appears many countries get more and more polarised resulting it a huge flood of laws, revoking previous government laws etc., moving to more extreme positions, at least towards the right spectrum (US, UK, NZ for example).
Same with The Netherlands. All the good stuff was done in the 80s and since then, very little has changed except the populist Geert Wilders anti immigrant rhetoric has gained ground and now Keir Starmer doing the same! Heavy, heavy sigh. Winston doing a Farage but the new British political party Our Party has in a few days gained 500,00 members. Now, that's hopeful!
The new J. Corbyn / Z. Sultana yet-to-be-named party is an interesting development in the UK. Signing up hundred thousands of members in a matter of days is impressive (although Keir Starmer is helping them every time he opens his mouth at the moment).
It will be critical to transform this support into a long-term sustainable political movement though. If the pendulum swings from the (far) right to the left... how far is it going to go?
Willis did a degree in Arts, which I thought was about rejoicing in the creativity in society, not about immutable laws of economics. I know I studied economics a long time ago, so perhaps "immutable" laws have been developed by neo-liberals since then.
The PMs advisor is Matt burgess. Who certainly does believe in immutable economic laws. The govt has diagnosed the problem as debt. In fact the problem is tax.
I have decided to double down on my assessment of the government: witless, heartless and hopeless X2
Also, how fitting that Nicola Willis chose an oil tanker as a symbol of her difficulties: yesterday’s energy for yesterday’s ideas. It would have been more fitting if she had referenced the Titanic, given the course her government is so fixated on.
I don't understand the headline -the strategy is not failing; it is being implemented quicker and more completely than forecast. Impediments to oligarchic and corporate power are being dismantled. Regulations are rewritten (or removed) and government services gutted so private profits can be maximised. Exploitation of the impoverished and disempowered is to be made easier.
Taking what Luxon, Willis and Seymour say at face value is allowing oneself to be mislead. You need to look behind the words to see the agenda.
Neoliberal governments are not for the people.
Instead, trickle-up should be sped up. So, of course we must 'double down' on those 'immutable laws of economics'.
I agree: "Neoliberal governments are not for the people."
They are the enablers or caretakers for the ruling capitalist class.
No surprise the National government leaders are mainly ex-CEO, managing directors and similar: They have proven to the capitalist class (shareholders) that they are capable of maintaining their assets / interests. So it's a logical step to move them into a caretaking role of the country to the benefit of the capitalist class.
Re PM Luxton’s reference to the immutable laws of economics: Well, here’s one I think the PM should focus on: Standard GDP is the sum of private consumption, investment, government expenditure and exports minus imports. The standard formula being Y(GDP) = C + I + G + (X-M).
So, if private consumption, investment and government expenditure are all declining, then surprise surprise GDP will stall or decline.
The inconvenient truth of mathematics! Well said Mzee wa kazi.
It is often said that capitalism is the only system known that has delivered distributed wealth - fair to say that expanding the money supply has as much or these days more to do with growth including wealth growth - who knew?
Mainstream economics doesn't aim to advance knowledge but to advance business interests. Real science adjusts to evidence; orthodox ideology doubles down despite it. We have definitive official documentation proving orthodox thinking wrong:
The Reserve Bank (RBNZ) explicitly states government spends first, independent of tax revenue or bond sales.
RBNZ also confirms inflation stems from resource capacity limits, not government 'over-spending.'
Treasury's own research shows government infrastructure investment delivers fiscal multipliers of 1.4-2.6 - yet orthodox theory claims 'crowding out' keeps multipliers below 1.
We’re slashing public spending despite losing over 20,000 jobs and sitting on massive unused capacity - then complaining about slow growth. There’s nothing immutable about economic failure. It’s a choice and this government made it.
I find the hypocrisy of this government astounding.
We can afford $200 million a year to promote a smoking device that is highly likely to lead to lung disease, when we can't afford a health system that looks after the basics and fails to provide affordable primary care.
Claiming that allowing 12-month prescriptions for some drugs saves people money when they have reinstated the fee on ALL drugs, which puts the barrier to access drugs back for many people.
Increasing fees for Government Board members by up to 80% because we need good people in these roles, and this increase compensates for the historically lower increases. But we can't afford pay equity for women or pay increases that at least match inflation across our nurses, police and many other public servants. Is this Government saying that we don't need good people in these front-line roles?
Thinking about it, when was the last time our leading triumvirate referred to investing in our front-line workers? Government boards are about as far from the front line as you can get.
There's no money left, yet we can extend tax breaks for tobacco products, we're back on course and it's all Labours fault. Got it.
Oversimplification
... propaganda to cover for corruption and cronyism
Definitely Labour's fault. If Lange and Douglas hadn't taken us down the neolib path, we'd be a lot better off.
I'm all for us moving to another path, I can't recall ever hearing a politician using the word neoliberal or mentioning an alternative. But I am an ignoramus.
I've heard a few use the word "neoliberal", but none that used it to describe their chosen ideology. I've also never heard a (modern) politician use the word fascist to describe their views...
that's the problem, no one is talking about it or the effects it's had over the last 30+ years. I think for a politician to talk about it they'd in effect be admitting some pretty terrible mistakes, they will never do it. And it suits all those people that are going to be rich 'one day' to keep on believing in the trickle down.
As the man said, something like : ” the only thing that trickles down is horse dung” ( substitute whatever word works for you) after all the value has been extracted further up.
if it wasn't them it would have been someone else and it would have happened soon after.
Cluxon and Nicoliar make Jacinda and Grant Robertson look extremely competent. The current position reflects extremely badly on NZ main stream media.
Thanks for the focus on the government "doubling down", Bernard.
"It's not about the frickin targets" - Chris Luxon, S.M.R.T
Also the new format is great! I mostly listen in podcast format but the extra charts add a bit of visual interest too
Maybe if we moved away from fossil fuels ((oil tanker) as an analogy for our economy to something greener and more agile we might get better outcomes… perhaps more like a Toyota-type ferry. Oh wait…
How much is the Overseas Investment Amendment Bill, now with the Select Committee, a straw that the Coalition is clutching at, to save their vision of "growth"? In my view it is a step in another wrong direction, as it merely leads, subsequently, to more sucking of profits and other payments out of the country.
Agree. And thinking about those overseas owned forestry companies and slash, also Rio Tinto etc. We are doing a verbal on Tuesday to the select committee. Welcome some more examples.
That's interesting, Kathy, that you have been notified of a time for your oral submission. I have not been contacted. I want to talk about trends in the current account balance, emphasis on the services deficit. Then to give examples of successful NZ owned enterprises which export. No need for the overseas investors. Forestry companies are certainly an excellent example of the negatives. Also some of those oil exploration companies (forgotten the name) in Taranaki. Gold miners. How much benefit to NZ from Macraes?
Search up Tamarind Resources, which went bust leaving the taxpayers a $500 million bill. This was roughly what they generated in royalties.
That's the big thing, isn't it?... In the future, NZ will be sending more and more money overseas to get a quick fix now. A wealth drain to follow our people drain. Sad, and irresponsible money management.
The issue for me is it's the same, Labour or National. National are standing out like a sore thumb because they are blindingly refusing to look at evidence and have a leader who says the most stupid things like 'I don't care what the evidence says we are doing it anyway' (bootcamps).
Top work Bernard as always. I think the only ‘immutable law’ in evidence at the moment is Luxon hasn’t got a f**king - excuse my French - clue what he is talking about. Oh, and Willis confirms she has had the ‘Atlas’ implant, demonstrating beyond a shadow of a doubt that butter wouldn’t melt in her mouth.
Exactly, ‘immutable law of economics’, you just have to laugh, economics isn’t bloody thermodynamics. There are no immutable laws in economics. What a fool.
Luxon is a genuine dumb ass. He appears to be unable to apply analysis or critical thinking to anything. Hooton was correct to point to his ‘B’ grade results in high school, even though he was a diligent student. He just didn’t have the intellectual horsepower to get on the ‘A’ list, which is more than fair enough, but he really should stop pretending. We can all see he isn’t the sharpest tool in the box. Sadly, he turned out to be a perfect ‘empty vessel’ for Unilever to institutionalise and programme, and it has to be said, boy oh boy, didn’t they do a number on Luxon.
Morning Bernard,
This government, like the ones before it, continues to flail around neglecting the private sector debt elephant in the room. We live in a money system where nearly all new money is created as private bank debt, yet the policymakers keep leaving this factor out of their formulas, rendering them hopelessly flawed.
What they call responsible fiscal management, slashing public budgets and cutting services, is in fact complicit participation in a structurally extractive racket. Our so-called “economic growth” is underwritten not by real productivity, but by exploding private debt, mostly tied up in inflated land prices thanks to the deliberate exclusion of land from the CPI. That lets the Reserve Bank and Treasury pretend inflation is under control, while house prices rocket and mortgage debt piles up. It's the oldest trick in the dirty dog loan shark playbook, only this time, it’s the whole damn society getting fleeced, not just a few little old ladies.
New Zealanders have been lulled into believing we’re living off the generosity of foreign savers. But we're not borrowing their savings, we've gifted the credit reserves of our own land, water, minerals and energy assets to private investment banks, often foreign-owned, banks who create the money out of thin air and sell it back to us as compounding interest bearing loans(All a matter of public record if you care to look).
This is not investment. It’s not responsible stewardship. It’s monetary colonisation. We are being charged rent to live in our own home.
And the cruel irony? We have the constitutional and legal capacity, as admitted by the Treasury, to issue our own public credit, free of compounding interest, in service of the public good, infrastructure, homes, jobs, climate resilience. But we don’t, because successive governments have been ideologically captured or willfully ignorant of how sovereign money actually works.
If the public ever understood that the ‘loans’ underpinning our economy are literally conjured from the collateral of Aotearoa/New Zealand itself, and that we could do the same in the public interest, then yes, maybe this whole scam would finally be up for radical debate.
Until then, governments will keep doubling down on their deluded dogma, while our people sleep in cars and our kids freeze in campgrounds.
Cheers
How do we get our country back from the corporate raiders?
To get NZ back for all. Every day talking with one person who has never considered THAT they could be THAT person homeless & unheard.
Please search out the New Zealand Economic Stabilisation And Public Wealth Restoration Bill being advocated by the Uniting Public Credit Movement NZ.
It takes into account all the previous failings of both private bank and state administration of the credit and currency of nations, and has come up with a state controlled system, because the private bankers have blown their opportunity and proven they are even less trustworthy than the state, with all the necessary belts and braces to prevent past inequality causing failures.
It's a wonder we need politics to make decisions at all when it all runs on immutable laws anyway
Nice one 😊
Although, I do wonder sometimes: In a (near) perfect world, you would expect the number of new laws introduced would reduce over time; Targeting (close to) zero new laws at some point. For example, Belgium "survived" nearly two years without a government. So sometimes it appears new laws are introduced for new laws sake.
On the other hand, it appears many countries get more and more polarised resulting it a huge flood of laws, revoking previous government laws etc., moving to more extreme positions, at least towards the right spectrum (US, UK, NZ for example).
Same with The Netherlands. All the good stuff was done in the 80s and since then, very little has changed except the populist Geert Wilders anti immigrant rhetoric has gained ground and now Keir Starmer doing the same! Heavy, heavy sigh. Winston doing a Farage but the new British political party Our Party has in a few days gained 500,00 members. Now, that's hopeful!
The new J. Corbyn / Z. Sultana yet-to-be-named party is an interesting development in the UK. Signing up hundred thousands of members in a matter of days is impressive (although Keir Starmer is helping them every time he opens his mouth at the moment).
It will be critical to transform this support into a long-term sustainable political movement though. If the pendulum swings from the (far) right to the left... how far is it going to go?
And there is money for whopping fee increases for directors of Crown Entities yet no money to give nurses a decent pay increase.
As for 'the immutable laws of economics'? Luxon and Willis know nothing.
Fee increases ensure the "inquiries" lead to the desired outcome (as Sir Humphrey Appleby explains nicely in "Yes, Minister").
Willis did a degree in Arts, which I thought was about rejoicing in the creativity in society, not about immutable laws of economics. I know I studied economics a long time ago, so perhaps "immutable" laws have been developed by neo-liberals since then.
The PMs advisor is Matt burgess. Who certainly does believe in immutable economic laws. The govt has diagnosed the problem as debt. In fact the problem is tax.
I have decided to double down on my assessment of the government: witless, heartless and hopeless X2
Also, how fitting that Nicola Willis chose an oil tanker as a symbol of her difficulties: yesterday’s energy for yesterday’s ideas. It would have been more fitting if she had referenced the Titanic, given the course her government is so fixated on.
Love it Neil!
I don't understand the headline -the strategy is not failing; it is being implemented quicker and more completely than forecast. Impediments to oligarchic and corporate power are being dismantled. Regulations are rewritten (or removed) and government services gutted so private profits can be maximised. Exploitation of the impoverished and disempowered is to be made easier.
Taking what Luxon, Willis and Seymour say at face value is allowing oneself to be mislead. You need to look behind the words to see the agenda.
Neoliberal governments are not for the people.
Instead, trickle-up should be sped up. So, of course we must 'double down' on those 'immutable laws of economics'.
'Let them eat (a) cake (of butter).'
I agree: "Neoliberal governments are not for the people."
They are the enablers or caretakers for the ruling capitalist class.
No surprise the National government leaders are mainly ex-CEO, managing directors and similar: They have proven to the capitalist class (shareholders) that they are capable of maintaining their assets / interests. So it's a logical step to move them into a caretaking role of the country to the benefit of the capitalist class.
Re PM Luxton’s reference to the immutable laws of economics: Well, here’s one I think the PM should focus on: Standard GDP is the sum of private consumption, investment, government expenditure and exports minus imports. The standard formula being Y(GDP) = C + I + G + (X-M).
So, if private consumption, investment and government expenditure are all declining, then surprise surprise GDP will stall or decline.
The inconvenient truth of mathematics! Well said Mzee wa kazi.
It is often said that capitalism is the only system known that has delivered distributed wealth - fair to say that expanding the money supply has as much or these days more to do with growth including wealth growth - who knew?
Mainstream economics doesn't aim to advance knowledge but to advance business interests. Real science adjusts to evidence; orthodox ideology doubles down despite it. We have definitive official documentation proving orthodox thinking wrong:
The Reserve Bank (RBNZ) explicitly states government spends first, independent of tax revenue or bond sales.
RBNZ also confirms inflation stems from resource capacity limits, not government 'over-spending.'
Treasury's own research shows government infrastructure investment delivers fiscal multipliers of 1.4-2.6 - yet orthodox theory claims 'crowding out' keeps multipliers below 1.
We’re slashing public spending despite losing over 20,000 jobs and sitting on massive unused capacity - then complaining about slow growth. There’s nothing immutable about economic failure. It’s a choice and this government made it.
If only someone had taken the next step/asked the next question, where has austerity worked?
I think the response would be a flat denial of anything like austerity, and a doubling down on their messaging.
I find the hypocrisy of this government astounding.
We can afford $200 million a year to promote a smoking device that is highly likely to lead to lung disease, when we can't afford a health system that looks after the basics and fails to provide affordable primary care.
Claiming that allowing 12-month prescriptions for some drugs saves people money when they have reinstated the fee on ALL drugs, which puts the barrier to access drugs back for many people.
Increasing fees for Government Board members by up to 80% because we need good people in these roles, and this increase compensates for the historically lower increases. But we can't afford pay equity for women or pay increases that at least match inflation across our nurses, police and many other public servants. Is this Government saying that we don't need good people in these front-line roles?
Thinking about it, when was the last time our leading triumvirate referred to investing in our front-line workers? Government boards are about as far from the front line as you can get.
This drop kick government always takes the short term saving instead of the long term gain. Despite the drivel about supporting social investment.