Treasury Secretary Iain Rennie, Public Service Commissioner Brian Roche & Finance Minister Nicola Willis detail their views, but nothing on affordable homes, healthier people or emissions reduction
Pretty disappointing to hear the level of discussion and debate by some of our most powerful public servants. The lack of new ideas and resistance to move away from the neoliberal consensus is disturbing.
Yes. Fits with the point Bernard makes about early neoliberal influence on their careers. Jeepers how many generations do we have to wait until those with the power catch up to today's world?!
Chris Hipkins said before the last election he believed the rising tide lifted all boats and he chose not to pursue a capital gains tax. He hasn’t talked about taxing wealth for months.
Why do we pay NZS to everyone and why isn't it means tested. Is this so older people with experience will work longer because we are not replacing ourselves or because young people are leaving for Australia, or some children go through school not getting their needs meet and not supported in employment if they have a specific need that isn't created for in a workplace. If the government doesn't want to invest with $s what about invest in people. And what will happen to our water? What happened to our electricity. We need to collect the dots.
If one accepts means-testing, why not then apply this logic to all 'free at point of delivery' public services though?
Notwithstanding it means 'double handling' in the sense that there's a disbursement then a tax applied, given that these are automated processes, progressive taxation is still by far the simpler mechanism to redress this imbalance, not means-testing.
When i hear the suggestion to means test for super I think of all the resources required to make sure beneficiaries are not cheating. Think of the resources required to keep abreast of who is sleeping with who when they're over 65 and realize that means testing belongs back in the bottom drawer.
We already pay different rates for single NZS clients and married clients so they will be checking married status or not currently. We could mean test like we attribute income now to the individual not the couple.
Compulsory contributory private super instead of gov't age-pension is another dog that barks from time-to-time. Australian economist Cameron Murray wrote about it here:
if a superannuitant's other income is twice or more than their amount of superannuation then they should no longer receive any superannuation. a consequence of this is that it will result in a lot of oldies (I am one) from working more than a few hours per week and each financial year will result in a large number of superannuitants with a total income of 3 times the amount of superannuation they receive. this will free up a lot of jobs for younger people. if a superannuitant has other income of twice or more than their superannuation, from sources other than working then they don't need to receive superannuation.
Exclude the top half of income earners (those who hold power and influence) and they will allow it to degrade and phase it out. It was a stupid idea by Muldoon who destroyed our self funded retirement fund in 1975.
Frustrating to see another conference of the movers and shakers of our economy come and go without the question being asked if there is not something systemically wrong with the money supply method of our nation.
That for 200 odd years now our national income has not been able to overcome the ever increasing foreign privately owned investment bank money supply national debt.
Have the foreign privately owned investment banks, the non deposit taking, credit money creating as debt bond instruments banks, a layer above all other banks, whose debt is demonstrably our money supply, been acting in a systemically entrapment manner toward our economy?
Surely it must be investigated before we allow them another foreign owned corporate carve up as is happening?
for every $1,000,000 that a bank in NZ holds in deposits in NZ it is allowed to create/fabricate/generate/invent $8,000,000 out of nothingness. this is criminal !!! justice and morality require that this money belongs to ALL New Zealanders. the NZ government must commence/set-up a ring-fenced system that creates this money and loans it to the banks at an interest rate that covers the administration cost of the system (or more if the government wants to).
Yup - "nail on head" again Bernard - old prescription, reflecting old thinking and a fundamental mis-diagnosis of our ailing economic system. More growth might work when there are few binding constraints on the horizon. But the increasingly binding constraints (demographics and workforce expertise, climate mitigation and adaptation, equity and eroding social licence, and fractious geo-political climate) mean more and more growth (even if we get said growth) won't get us anywhere.
Public servants are not encouraged to take risks with new thinking as they are not encouraged to "serve the public" when their primary task is to "protect and retain the confidence of the Minister".
New thinking requires a questioning of the growth prescription, a questioning of the diagnosis, a questioning of the status quo. Is an investment prescription different from a "more growth" prescription? Is an export prescription different from a "more growth" prescription? And, critically, what is the prescription supposed to achieve? What is the ailment we are supposed to remedy? Is it just more and more? Is more "better"? Who gets the "more"? Can we get "better" without 'more"? How do we re-construct our ailing economic system so that it can operate (and, yes, prosper) within the constraints that are increasingly binding?
Pity this "NZ Economic Forum" - as it has been marketed in recent years - continues to front and platform the same industry groups and same vested interests dispensing the same short term prescription every year.
Profounds overwhelming support for my contention that we should not leave economics and the economic prescription to economists alone.
Am waiting for a university economics department (school?, faculty?) to fulfil it's fundamental 'critic and conscience of society' role.
Who gets the "more"? Can we get "better" without 'more"?
I think these are key.
Its been shown that the benefits of more go to those who already have wealth. For any government that truly wants to help the squeezed middle and those at the bottom the answer is not more but better distribution. Some type of CGT/ wealth tax and income tax/ GST changes that will mean less for those at the top but a better economy overall.
Surely the most obvious move to return some virtuous circle economics to our present bleeding to foreign debt death economics would be to move the government accounts from the demonstrably foreign privately owned Westpac Bank to our own Kiwibank?
The future looks a bit bleak if our ‘leaders’ subscribe to such narrow thoughts and dreams, Willis must feel comforted to be backed up by kindred spirits in such important positions. And again they pretend eternal growth is possible…
I also couldn't help but notice Maria English & Matt Bolger both involved in past & present economics forums, and both who are children of former PM's.
This so called economics forum seems more like (excuse the coarse language) a circle jerk of Kiwi nepotism.
It's like there are two New Zealand branch meetings of the World Economic Forum where the Uber wealthy of the world and their puppets meet to discuss how to market what is going to be bad for the world but good for them, one is Shane Jones Waitangi day party and the other this Waikato University Economic Forum.
Max Rashbrook, Bernard Hickey, Nana Ganesh, Bryan Bruce and many others who have published about the flaws of neo liberalism. Every speaker to the select committee who submitted to the social security amendment bill was well versed and quoted research about the effects on society of the Willis et al economics.
Because of Waikato Uni. Vice-Chancellor (i.e. CEO) Neil Quigley.
Quigley is the son of ACT co-founder Dennis Quigley. He's also got his hook into the Reserve Bank of NZ as the Chairman of its Board of Directors. He's also involved in what looks like backdoor-dealing concerning a promise of $380million from gov't to found a new med school at Waikato following payment of $1million to Steven Joyce's firm 'Joyce Advisory' act as consultant on behalf of the uni. Waikato Uni was subsequently criticised for the non-competitive nature of the procurement of Joyce's firm.
This government seems to be full of hopes and prayers and magical thinking. They agree we absolutely need a third supermarket but just hope that it will magically happen. The government also are contradictory. They want more efficient public servants who use technology better but demand public servants work in offices. Surely cutting out the cost of offices for public servants is government bloat that actually makes sense to cut. You save money and lose none of the services.
OMG, Waikato is letting us down allowing this to be unchallenged. Appreciate this is mediated through Bernard’s lens but this is classic a bridging strategy that is always going to fail. We are not going to deal with domestic investment incentives but more than happy to facilitate offshore investment to take our assets and extract more rent from NZers. We dont invest in productive economy and as such our physical exports are low value intermediary goods. We are price takers for goods sold per kg, so can’t even benefit from shrinkflation. I’m disappointed in Roche I thought he was a bit more serious.
More than their constrained economic ideas, they are definitely not working for us or this country. The self interest and treatment of those with altruistic beliefs is wilful and malevolent in intent. The "Yes" campaign. What happens if you disagree? I think we guess that those will be culled, and finally we will have a "Yes" group. Democracy? Autocracy anyone?
There is a thing called totalitarian democracy apparently where you have to agree with the ruling party or be ditched. As in the US. Is that what we've got?
What an ignorant and insulting comment from Brian Roche - likening public servants to dust/rubbish in a vacuum cleaner bag. Constant, chronic job insecurity through endless restructuring does not make people risk takers. It is more likely to have the exact opposite effect. Honestly, if this is the calibre of the ideas from the so called thought leaders I despair. The early 1990's called and they want they their policies back.... I agree with Ganesh, the politicisation of the public service over the last 40 years and movement away from serving the public to serving the Government of the day and having to implement their policies regardless of how nutty/bad/inefficient/failures to address the actual issues they are is the real issue. The current government is literally ignoring the public service's advice and normal policy/parliamentary processes.
I fully agree with your sentiments Bernard. While I guess that a CGT is the long term answer in NZ, the main problem is that it raises only limited amounts of tax in its first few years. That is why I favour a limited wealth tax to be raised on property values' which are very easy to obtain, to be implemented immediately along with a CGT on a change in government. The wealth tax (or more properly a property tax) can perhaps be phased out as the CGT becomes a major taxation earner.
How about an investment mandate instead (to start) that mandates Aus banks mortgage profits be (petroleum dollar style) reinvested in infrastructure and recycled out afterwards as bond type payments; instead of just being a constant blood rush?
There is so much just plain wrong about what these three said.
A very partial list:
- all three are pretending that the public economy is like a household economy. This is intellectually very dishonest as we are a sovereign currency issuing country. The mindless ideological fetish with ‘return to surplus’ ignores the well-supported facts that public deficit = private surplus, and that the government is better than the private sector at providing many of the universal basic services and in guiding the direction of the economy (on this latter point see for example The Entrepreneurial State by Mariana Mazzucato)
- their advocacy for a smaller public sector is just fact-free ideological thinking. The starting point for a “right sized” public sector has to be an assessment of what do we want the state to do, and what resources and staff does that require. I would for example argue that the state should provide a full range of universal public services and infrastructure (Jason Hickel gives a good overview of this https://www.jasonhickel.org/blog/2023/3/18/universal-public-services )
- the emphasis of foreign investment is being made with no consideration of the implications for the balance of payments or for our sovereignty
- pretending we are living on Planet Key instead of on an earth which has planetary resource overshoot, climate breakdown, breaching of at least 6 of 9 basic global biophysical thresholds, increasing inequality and poverty, the collapse of internal rules and laws, and so on is irresponsible in the extreme (capitalism is broke, we urgently need to change to an economy of enough)
- yes, they are blinded over tax deficiencies and inconsistencies - to comment on the example given by the Treasury Secretary on a person on a pension earning $80,000 per annum as well - why then does he ignore using a more progressive income tax structure for those on pensions (essentially this is what happens for those with student loans)? A starting point here would be what are the purposes of tax, given that the way the public economy really works is spend money into existence, tax later, not the reverse.
I see neoliberal brain washing at play. Small government gets it out of the way of the "private business is more efficient" narrative. MMT tells us government debt is not an issue. In fact the preferred settings by the core MMT proponents are not to sell government bonds at all. Funding Superannuation is also not an issue, the real problem is whether the real resources will be available in the economy for the super-annuitants to purchase ( I paraphrase Alan Greenspan).
As we have a currency issuing government, why do we need foreign ( profit seeking) investors to address infrastructure. These speakers haven't talked policy, just ideology.
Pretty disappointing to hear the level of discussion and debate by some of our most powerful public servants. The lack of new ideas and resistance to move away from the neoliberal consensus is disturbing.
Yes. Fits with the point Bernard makes about early neoliberal influence on their careers. Jeepers how many generations do we have to wait until those with the power catch up to today's world?!
On second thoughts - do we know what the members of the Opposition are thinking? It is them we need to be educating and pushing.
Chris Hipkins said before the last election he believed the rising tide lifted all boats and he chose not to pursue a capital gains tax. He hasn’t talked about taxing wealth for months.
Oh no! Not the rising tide thing. Oh help! What on earth can he and they be reading? Nothing?
Why do we pay NZS to everyone and why isn't it means tested. Is this so older people with experience will work longer because we are not replacing ourselves or because young people are leaving for Australia, or some children go through school not getting their needs meet and not supported in employment if they have a specific need that isn't created for in a workplace. If the government doesn't want to invest with $s what about invest in people. And what will happen to our water? What happened to our electricity. We need to collect the dots.
Well said TJH!
If one accepts means-testing, why not then apply this logic to all 'free at point of delivery' public services though?
Notwithstanding it means 'double handling' in the sense that there's a disbursement then a tax applied, given that these are automated processes, progressive taxation is still by far the simpler mechanism to redress this imbalance, not means-testing.
When i hear the suggestion to means test for super I think of all the resources required to make sure beneficiaries are not cheating. Think of the resources required to keep abreast of who is sleeping with who when they're over 65 and realize that means testing belongs back in the bottom drawer.
We already pay different rates for single NZS clients and married clients so they will be checking married status or not currently. We could mean test like we attribute income now to the individual not the couple.
That’s where the ‘fun’ comes in - who says what’s a couple rather than 2 separate souls who are friendly?
Compulsory contributory private super instead of gov't age-pension is another dog that barks from time-to-time. Australian economist Cameron Murray wrote about it here:
https://treasury.gov.au/sites/default/files/2020-02/murray290120_0.pdf
NZS must be income tested !!!
if a superannuitant's other income is twice or more than their amount of superannuation then they should no longer receive any superannuation. a consequence of this is that it will result in a lot of oldies (I am one) from working more than a few hours per week and each financial year will result in a large number of superannuitants with a total income of 3 times the amount of superannuation they receive. this will free up a lot of jobs for younger people. if a superannuitant has other income of twice or more than their superannuation, from sources other than working then they don't need to receive superannuation.
Administratively it is more efficient to have a more progressive income tax system for those receiving pensions.
Exclude the top half of income earners (those who hold power and influence) and they will allow it to degrade and phase it out. It was a stupid idea by Muldoon who destroyed our self funded retirement fund in 1975.
I think the reason why means testing is not popular is because it is seen as a disincentive for being frugal during the younger years.
I personally am also opposed to it.
Frustrating to see another conference of the movers and shakers of our economy come and go without the question being asked if there is not something systemically wrong with the money supply method of our nation.
That for 200 odd years now our national income has not been able to overcome the ever increasing foreign privately owned investment bank money supply national debt.
Have the foreign privately owned investment banks, the non deposit taking, credit money creating as debt bond instruments banks, a layer above all other banks, whose debt is demonstrably our money supply, been acting in a systemically entrapment manner toward our economy?
Surely it must be investigated before we allow them another foreign owned corporate carve up as is happening?
for every $1,000,000 that a bank in NZ holds in deposits in NZ it is allowed to create/fabricate/generate/invent $8,000,000 out of nothingness. this is criminal !!! justice and morality require that this money belongs to ALL New Zealanders. the NZ government must commence/set-up a ring-fenced system that creates this money and loans it to the banks at an interest rate that covers the administration cost of the system (or more if the government wants to).
Yup - "nail on head" again Bernard - old prescription, reflecting old thinking and a fundamental mis-diagnosis of our ailing economic system. More growth might work when there are few binding constraints on the horizon. But the increasingly binding constraints (demographics and workforce expertise, climate mitigation and adaptation, equity and eroding social licence, and fractious geo-political climate) mean more and more growth (even if we get said growth) won't get us anywhere.
Public servants are not encouraged to take risks with new thinking as they are not encouraged to "serve the public" when their primary task is to "protect and retain the confidence of the Minister".
New thinking requires a questioning of the growth prescription, a questioning of the diagnosis, a questioning of the status quo. Is an investment prescription different from a "more growth" prescription? Is an export prescription different from a "more growth" prescription? And, critically, what is the prescription supposed to achieve? What is the ailment we are supposed to remedy? Is it just more and more? Is more "better"? Who gets the "more"? Can we get "better" without 'more"? How do we re-construct our ailing economic system so that it can operate (and, yes, prosper) within the constraints that are increasingly binding?
Pity this "NZ Economic Forum" - as it has been marketed in recent years - continues to front and platform the same industry groups and same vested interests dispensing the same short term prescription every year.
Profounds overwhelming support for my contention that we should not leave economics and the economic prescription to economists alone.
Am waiting for a university economics department (school?, faculty?) to fulfil it's fundamental 'critic and conscience of society' role.
Indeed, what happened to critical thinking at university?
Yes, you have asked great questions
Who gets the "more"? Can we get "better" without 'more"?
I think these are key.
Its been shown that the benefits of more go to those who already have wealth. For any government that truly wants to help the squeezed middle and those at the bottom the answer is not more but better distribution. Some type of CGT/ wealth tax and income tax/ GST changes that will mean less for those at the top but a better economy overall.
Great point Ganesh. We need to write a new ‘Economic Management’ 40 years on from the 1984 version for any new Government that actually wants a blueprint for real change. https://www.treasury.govt.nz/sites/default/files/2007-10/big84i-1.pdf
I suppose Roche thinks he should be exempt from such a clean out and reset as he outlined.
Surely the most obvious move to return some virtuous circle economics to our present bleeding to foreign debt death economics would be to move the government accounts from the demonstrably foreign privately owned Westpac Bank to our own Kiwibank?
The future looks a bit bleak if our ‘leaders’ subscribe to such narrow thoughts and dreams, Willis must feel comforted to be backed up by kindred spirits in such important positions. And again they pretend eternal growth is possible…
The question is: Why does the university only invite right wing speakers? Where are the critical voices?
Yes, good point.
I also couldn't help but notice Maria English & Matt Bolger both involved in past & present economics forums, and both who are children of former PM's.
This so called economics forum seems more like (excuse the coarse language) a circle jerk of Kiwi nepotism.
Round Table ideas.
It's like there are two New Zealand branch meetings of the World Economic Forum where the Uber wealthy of the world and their puppets meet to discuss how to market what is going to be bad for the world but good for them, one is Shane Jones Waitangi day party and the other this Waikato University Economic Forum.
There are few "Lefty" speakers, in there; James Shaw, Andrew Little(sort of) & Nanaia Mahuta.
Max Rashbrook, Bernard Hickey, Nana Ganesh, Bryan Bruce and many others who have published about the flaws of neo liberalism. Every speaker to the select committee who submitted to the social security amendment bill was well versed and quoted research about the effects on society of the Willis et al economics.
Yup, I noted this bias when the programme was first released. My cutting comment posted on FB at the time clearly had no effect 😩
Because of Waikato Uni. Vice-Chancellor (i.e. CEO) Neil Quigley.
Quigley is the son of ACT co-founder Dennis Quigley. He's also got his hook into the Reserve Bank of NZ as the Chairman of its Board of Directors. He's also involved in what looks like backdoor-dealing concerning a promise of $380million from gov't to found a new med school at Waikato following payment of $1million to Steven Joyce's firm 'Joyce Advisory' act as consultant on behalf of the uni. Waikato Uni was subsequently criticised for the non-competitive nature of the procurement of Joyce's firm.
https://democracyproject.substack.com/p/political-roundup-waikato-med-school
Conflict of interest, no clever student should even bother with this university.
thankyou for this enlightening information.
Thanks for the info
This government seems to be full of hopes and prayers and magical thinking. They agree we absolutely need a third supermarket but just hope that it will magically happen. The government also are contradictory. They want more efficient public servants who use technology better but demand public servants work in offices. Surely cutting out the cost of offices for public servants is government bloat that actually makes sense to cut. You save money and lose none of the services.
Not to mention cutting 50% of the IT staff in Health.
OMG, Waikato is letting us down allowing this to be unchallenged. Appreciate this is mediated through Bernard’s lens but this is classic a bridging strategy that is always going to fail. We are not going to deal with domestic investment incentives but more than happy to facilitate offshore investment to take our assets and extract more rent from NZers. We dont invest in productive economy and as such our physical exports are low value intermediary goods. We are price takers for goods sold per kg, so can’t even benefit from shrinkflation. I’m disappointed in Roche I thought he was a bit more serious.
What is up with Waikato generally? does anything leftish ever come out of it?
Talk is cheap.
I am appalled at the vacuum cleaner metaphor for public servants
These are people doing their best in constrained circumstances and they are mostly well intentioned
To even think they could be tossed aside as so much unwanted dirt is insensitive and cavalier
More than their constrained economic ideas, they are definitely not working for us or this country. The self interest and treatment of those with altruistic beliefs is wilful and malevolent in intent. The "Yes" campaign. What happens if you disagree? I think we guess that those will be culled, and finally we will have a "Yes" group. Democracy? Autocracy anyone?
Yes indeed Patricia!
There is a thing called totalitarian democracy apparently where you have to agree with the ruling party or be ditched. As in the US. Is that what we've got?
Yes. I was surprised it wasn’t picked up more aggressively by other media.
What an ignorant and insulting comment from Brian Roche - likening public servants to dust/rubbish in a vacuum cleaner bag. Constant, chronic job insecurity through endless restructuring does not make people risk takers. It is more likely to have the exact opposite effect. Honestly, if this is the calibre of the ideas from the so called thought leaders I despair. The early 1990's called and they want they their policies back.... I agree with Ganesh, the politicisation of the public service over the last 40 years and movement away from serving the public to serving the Government of the day and having to implement their policies regardless of how nutty/bad/inefficient/failures to address the actual issues they are is the real issue. The current government is literally ignoring the public service's advice and normal policy/parliamentary processes.
I fully agree with your sentiments Bernard. While I guess that a CGT is the long term answer in NZ, the main problem is that it raises only limited amounts of tax in its first few years. That is why I favour a limited wealth tax to be raised on property values' which are very easy to obtain, to be implemented immediately along with a CGT on a change in government. The wealth tax (or more properly a property tax) can perhaps be phased out as the CGT becomes a major taxation earner.
I prefer a progressive tax on residential zoned land values to fund new infrastructure.
How about an investment mandate instead (to start) that mandates Aus banks mortgage profits be (petroleum dollar style) reinvested in infrastructure and recycled out afterwards as bond type payments; instead of just being a constant blood rush?
Public Service Comments
There is so much just plain wrong about what these three said.
A very partial list:
- all three are pretending that the public economy is like a household economy. This is intellectually very dishonest as we are a sovereign currency issuing country. The mindless ideological fetish with ‘return to surplus’ ignores the well-supported facts that public deficit = private surplus, and that the government is better than the private sector at providing many of the universal basic services and in guiding the direction of the economy (on this latter point see for example The Entrepreneurial State by Mariana Mazzucato)
- their advocacy for a smaller public sector is just fact-free ideological thinking. The starting point for a “right sized” public sector has to be an assessment of what do we want the state to do, and what resources and staff does that require. I would for example argue that the state should provide a full range of universal public services and infrastructure (Jason Hickel gives a good overview of this https://www.jasonhickel.org/blog/2023/3/18/universal-public-services )
- the emphasis of foreign investment is being made with no consideration of the implications for the balance of payments or for our sovereignty
- pretending we are living on Planet Key instead of on an earth which has planetary resource overshoot, climate breakdown, breaching of at least 6 of 9 basic global biophysical thresholds, increasing inequality and poverty, the collapse of internal rules and laws, and so on is irresponsible in the extreme (capitalism is broke, we urgently need to change to an economy of enough)
- yes, they are blinded over tax deficiencies and inconsistencies - to comment on the example given by the Treasury Secretary on a person on a pension earning $80,000 per annum as well - why then does he ignore using a more progressive income tax structure for those on pensions (essentially this is what happens for those with student loans)? A starting point here would be what are the purposes of tax, given that the way the public economy really works is spend money into existence, tax later, not the reverse.
I see neoliberal brain washing at play. Small government gets it out of the way of the "private business is more efficient" narrative. MMT tells us government debt is not an issue. In fact the preferred settings by the core MMT proponents are not to sell government bonds at all. Funding Superannuation is also not an issue, the real problem is whether the real resources will be available in the economy for the super-annuitants to purchase ( I paraphrase Alan Greenspan).
As we have a currency issuing government, why do we need foreign ( profit seeking) investors to address infrastructure. These speakers haven't talked policy, just ideology.