In our first TKP 26/50 post, we outline NZ’s problems and opportunities, take some lessons from history, ask six questions in polls for framing & sense-checking purposes, & suggest a set of solutions
Bernard, two brief comments. The first is that your proposals do not include remedying NZ's appalling productivity levels and growth rates. I realize you may not want to overload the discussion with proposals but surely the low productivity problem is a key to tackling the other problems. In particular what needs discussion is what sort of industrial policy the govt should pursue in partnership with business to develop high levels of hat is not being discussed on NZ at the moment is he second is that
I shall open the obligatory can of worms by asking whether the measurement of productivity (as an analogy for "success") can also be discussed. GDP ain't all that, so if we're talking system change this absolutely needs to be reconsidered.
I think it'd be interesting to see what shifting the incentives away from residential capital gain and rental based income to employment income would do to the productivity stats. In my mind it would make employment more attractive to more of the population.
The issue of the desirable level of population growth and the infrastructure deficit are closely linked and as you point out the last few decades has seen the benefits of population growth banked and the cost of the related infrastructure kicked down the road. So perhaps the target population growth should be determined by the actual level of infrastructure investment?
Yes. That was my issue with deciding on suitable population growth. In theory, economies of scale should suggest a larger population would spread the costs of many things, making them more affordable. But infrastructure might challenge that concept. It's clearly insufficient now (should be no surprise) and needs a costly step-change to bring it up to par, so we'd be playing catchup and then some. So, my thinking is: we can't have a steady state of population growth, but rather, we need stepped growth aligned to infrastructure. Until we get ahead of current issues. ...Although, we could consider building an entirely new city north of Auckland, with strong road and rail links. That would be less disruptive. ...and, I might be crazy, but otherwise where are 19 million people going to squeeze into existing cities? Giant conurbations cannot be an attractive proposition in a country that values green space.
I am 100% on board with this approach. It's time to actually have this conversation. And I particularly like the fact that you're bringing facts and data to the conversation - hopefully our suite of politicians will do the same.
It may well be worth creating some sort of glossary somewhere, I suspect that as this project gathers steam, more and more people will join. And some of those people may not know the terms: Off the top of my head:
- nominal GDP
- Size of Government under 30% of GDP
- Government debt under 30% of GDP
There will be more, these ones popped out at me today.
Agree Sis, I am in favour of Bernard reducing(even further) the news type stuff & getting nerdy & dirty with this. Deep dive interviews & analysis etc!
Yup a glossary would also be helpful to us mere mortal's LOL
I also really appreciate Bernard giving historical context for us Kids(I'm 36) who were literally raised with this way of thinking from our parents/grandparents(one can definitely see how generational trauma works when learning about this). It helps us kids to understand why things are the way they are which is the 1st step in working out how to bring about change.
Thoughts on population growth: one component of the conversation is the rate of growth - the other surely is the type of growth? There is the thought that some people come to NZ, only to hop over to AU - presumably because despite their climate and desert conditions, the proverbial grass is greener there. Do we want to keep bringing low wage workers into NZ? Do we want to bring super wealthly people who want to build their bunker and not really contribute? Or perhaps this conversation dove tails better with the other questions.
I agree. I read that 'By 2100, the world is expected to have just six countries where births outweigh deaths – Samoa, Tonga, Somalia, Niger, Chad, and Tajikistan. The other 97% of nations are projected to have fertility rates below replacement levels (2.1 children per woman).'
Whyever would we want a New Zealand with a greater population than we have now, most of them cramming into Auckland plus Hamilton and Tauranga? The only immigrants we need are enough young and skilled to boost the working-age cohort to support the non-working old.
Quite simply, there has never been a notable or succesful non-consunption led economy in modern history (potentially ever). New Zealand is not placed at all to figure out what this could look like to be successful. Best we can hope for when we do reach a point where population is restricted in growth, that other countries suffering a degrowth fate have figured out things NZ can copy.
1.5 percent (compounding) annual growth is extremely excessive.
I did not and would not argue for degrowth.
when all NZ residents are properly homed and all infrastructure is sufficient then allow growth that does not exceed the dwellings and infrastructure required to service the population growth/increase.
Like Carolyn I would like the population growth question to include the type of growth. I am ashamed that Aotearoa ‘steals’ skilled workers from countries like The Phillipines while exporting our own. The immigration I can accept is almost exclusively for ‘refugees’ - be they political or climate. I think as a nation we are too blessed to just pull up the drawbridge even though the selfish part of me thinks that’s a good idea…
Great start to the conversation. I'd love to hear from a demographer about what the NZ population is going to look like by 2050 based on current trajectories. Are we going to be overwhelmed with oldies with little population replacement as no one seems to want to have kids anymore (possibly can't afford to?). I'm positive about immigration as I see the hard work and immense contribution that migrants are making around me today. I know we are potentially going to be deluged by climate refugees and I'd like to think that we open our arms to migrants with homes already built and well paid jobs ready for them to step into. Housing people in garages to work as temporary kiwifruit or forestry workers or Uber drivers is a very sad introduction to NZ and we must do better.
If you’re interviewing people, Geoffrey Palmer should be on your list. His legislative agenda extended beyond just the economic reform of the 80s, and everything good we still have from that period of reform, he was the architect of (and took the poisoned prime ministership to see through to the end). The crisis we need to get through is beyond economic, it is also political and constitutional, as Palmer has just recently pointed out in his latest call out of this government. Since he oversaw the last upheaval and is still floating around, I think it would be very interesting to hear his thoughts on how this economic change might work alongside other political policy reform that we desperately need.
I subscribed to make this comment (lol) but also since I’m here: I’m always down for anything that might bring about the death of Rogernomics and I’ll add that completely agree about it being far more important to pick a population growth target and actually plan for it than whatever number we pick as a growth rate. What doesn’t make sense is to not plan for the growth rate that we have allowed and are allowing. We can do this a lot smarter than we currently are.
Start with population growth as that drives a lot of the things.
I voted 0.5% because for now we must catch up on the infrastructure deficit.
And immigration needs to be tightened up and not used as the quick easy answer to problems. Say we need 20,000 rest home nurses. Instead of the current method of just opening immigration slots to 20,000 migrant nurses we allow 5,000 in and get our polytechs training many more nurses (including paying them a good wage).
A technical question: - how many of the emigrants are immigrants who having got their citizenship are off to Oz, or wherever?
And coming back to immigrants. What mechanism can be put into place to stop a government just changing the numbers allowed in and how easily.
As we can see with the current coalition government a bipartisan deal by Labour and National is meaningless if a minor coalition partner can insist on something different as the cost of putting the big boy into power.
Bang on. The tail wagging the dog of the current coalition government is significant. Bipartisan actually requires ALL flavours of political parties to agree and accept a future-focussed view.
Love the Kaka Project, and loved the history lesson/context in the podcast. Please keep that up as past is important in understanding how we are where we are.
If I may offer a thought Bernard - I wonder if asking what % NZ should grow at year on year is too abstract? I see what you're getting at, but the average Kiwi probably wouldn't have much of an informed opinion.
Perhaps we should be asking more values led questions around what do we want Aotearoa to look like?
Just my two cents which can be taken or left.
I.e. - Do we want a country that views housing as a right or as a privilege? Do we want ourselves (and our children) to live in a polluted, ever more unstable climate or a clean, thriving one? Do we want a country where everyone has the opportunity to live a healthy, productive, happy life regardless of the circumstances of their birth, or are we ok with a system that (sometimes intentionally and sometimes unintentionally) locks generations into poverty?
Start with the vision, then lead into how things like population growth, tax settings, cutting emissions etc can help us achieve the future for Aotearoa that matches our values.
New Zealand needs to revive the state housing zeal of the 1935-1949 Labour Government. We need a government that will build, own, and manage hundreds of thousands of homes for secure, lifetime, income-moderated rent by all who want them. That would mean a repudiation of the attitude of both National and Labour governments of the past few decades, which have treated state housing as something they provide very reluctantly for the poor.
'What do we want Aotearoa to look like.?" What do we want life to be like for a citizen of Aotearoa? What "values" (ie what we value) do we want in Aotearoa?
If we could agree on this we would, together, be able to map out the the work needed to get there.
I'm enjoying reading "The Invisible Doctrine....the secret history of neoliberalism" by George Monbiot and Peter Hutchinson. I thought i knew all about neoliberalism, but boy this book is brilliant. It traces everything and the techniques used to cement it into our financial systems and world. One suggestion, in addition to what you have written is one thing which appealed to me in the book was that to convince people what you are trying to say needs to be embedded in stories. During this process you are proposing, Bernard, we need to collect stories to be passed on by our appointed story tellers.
Thanks Garry, I've just added yet another book to my list of must reads LOL
Yes agree regarding the stories embedded in the economics. These can come from teachers, Parents, social workers, police officers, GPs etc. People in general who were affected by the economic changes. Hopefully Barnard does not mind me name dropping, but someone who is really good at this type of thing is Bryan Bruce... Collab...perhaps???
To me, the story must start with who we are and who we want to be. I think there’s far more consensus on this than our current political discourse would suggest. The other critical part is to align our story with our behaviours and blow up some myths in the process.
Lots of ideas re tax including a levy of .5% on occupied residential land ($5k a year for me, I could just afford it but many asset rich income poor others couldn’t I I prefer a CGT) and a reduction in GST. Maybe we need a tax working group? Very complex arrears needing expert advice and a wholistic approach.
'Agreeing a broad-based and low-rate annual Aotearoa by 2050 levy on the value of residential-zoned land of 0.5% for occupied land, 1.0% for unoccupied homes on residential-zoned land and 1.5% for residential-zoned land that is not built on.'
'Agreeing that capital gains on real business values and non-residential-zoned land remain tax free.'
I'm puzzled that nonresidential land is off the hook for any taxes in Bernard's scenario.
In particular, land within commuting distance of towns should surely be liable for windfall taxes if rezoned residential, to avert land banking and speculation.
Bernard, I congratulate you on this brilliant project! Your foresight & your willingness to do the hard mahi to guide 26/50 through to a successful conclusion puts us all in your debt. Reinforcing 26/50 are a number of other parallel projects that can only add to the effectiveness of 26/50 & confirm your view that after 40 years of greed driven neoliberalism, we are due for a sea change. I'm referring to the CTU's 'Reimagining Aotearoa Together' covering the topics of 'Good Work', Ending Inequality', 'Rebuilding Aotearoa', 'Securing our Future'; the Fabian Society/VUW 'Poverty by Design' seminar series covering Poverty, Unaffordable Housing, Hunger in our schools, The Living Wage & Racialised Poverty & the appearance in NZ of Torrens University's programs 'Economics for Sustainable prosperity', incorporating Modern Monetary Theory & Ecological Economics. Progressive, humane proposals are on the move!
As in a sentence from Costas Lapavitsas in an article "The financialization of capital: 'Profiting without Producing'"...
.... 'Financialization cannot be reversed without re-establishing the command of the social and collective over the private and individual for the modern era."
Bernard, two brief comments. The first is that your proposals do not include remedying NZ's appalling productivity levels and growth rates. I realize you may not want to overload the discussion with proposals but surely the low productivity problem is a key to tackling the other problems. In particular what needs discussion is what sort of industrial policy the govt should pursue in partnership with business to develop high levels of hat is not being discussed on NZ at the moment is he second is that
I shall open the obligatory can of worms by asking whether the measurement of productivity (as an analogy for "success") can also be discussed. GDP ain't all that, so if we're talking system change this absolutely needs to be reconsidered.
People can’t be productive when they are in survival mode. We should first ensure everyone has enough + some. Then you can look at what is productive
At the moment we only count paid work when about 40% of work is unpaid
I think it'd be interesting to see what shifting the incentives away from residential capital gain and rental based income to employment income would do to the productivity stats. In my mind it would make employment more attractive to more of the population.
The issue of the desirable level of population growth and the infrastructure deficit are closely linked and as you point out the last few decades has seen the benefits of population growth banked and the cost of the related infrastructure kicked down the road. So perhaps the target population growth should be determined by the actual level of infrastructure investment?
Yes. That was my issue with deciding on suitable population growth. In theory, economies of scale should suggest a larger population would spread the costs of many things, making them more affordable. But infrastructure might challenge that concept. It's clearly insufficient now (should be no surprise) and needs a costly step-change to bring it up to par, so we'd be playing catchup and then some. So, my thinking is: we can't have a steady state of population growth, but rather, we need stepped growth aligned to infrastructure. Until we get ahead of current issues. ...Although, we could consider building an entirely new city north of Auckland, with strong road and rail links. That would be less disruptive. ...and, I might be crazy, but otherwise where are 19 million people going to squeeze into existing cities? Giant conurbations cannot be an attractive proposition in a country that values green space.
New towns, though hopefully fewer roundabouts than Milton Keynes!
Haha! I've heard those references!!!
I am 100% on board with this approach. It's time to actually have this conversation. And I particularly like the fact that you're bringing facts and data to the conversation - hopefully our suite of politicians will do the same.
It may well be worth creating some sort of glossary somewhere, I suspect that as this project gathers steam, more and more people will join. And some of those people may not know the terms: Off the top of my head:
- nominal GDP
- Size of Government under 30% of GDP
- Government debt under 30% of GDP
There will be more, these ones popped out at me today.
"Muldoonism" could be another for the glossary, with Bernard's footnote.
Financial capitalism and the subordination of industrial capitalism. Who knew there are various forms of capitalism? Not me.
Agree Sis, I am in favour of Bernard reducing(even further) the news type stuff & getting nerdy & dirty with this. Deep dive interviews & analysis etc!
Yup a glossary would also be helpful to us mere mortal's LOL
I also really appreciate Bernard giving historical context for us Kids(I'm 36) who were literally raised with this way of thinking from our parents/grandparents(one can definitely see how generational trauma works when learning about this). It helps us kids to understand why things are the way they are which is the 1st step in working out how to bring about change.
Thoughts on population growth: one component of the conversation is the rate of growth - the other surely is the type of growth? There is the thought that some people come to NZ, only to hop over to AU - presumably because despite their climate and desert conditions, the proverbial grass is greener there. Do we want to keep bringing low wage workers into NZ? Do we want to bring super wealthly people who want to build their bunker and not really contribute? Or perhaps this conversation dove tails better with the other questions.
I am horrified that 45 percent of the current votes want 1.5 percent (compounding) annual population increase.
I agree. I read that 'By 2100, the world is expected to have just six countries where births outweigh deaths – Samoa, Tonga, Somalia, Niger, Chad, and Tajikistan. The other 97% of nations are projected to have fertility rates below replacement levels (2.1 children per woman).'
Whyever would we want a New Zealand with a greater population than we have now, most of them cramming into Auckland plus Hamilton and Tauranga? The only immigrants we need are enough young and skilled to boost the working-age cohort to support the non-working old.
https://theconversation.com/global-population-growth-is-now-slowing-rapidly-will-a-falling-population-be-better-for-the-environment-235781
Quite simply, there has never been a notable or succesful non-consunption led economy in modern history (potentially ever). New Zealand is not placed at all to figure out what this could look like to be successful. Best we can hope for when we do reach a point where population is restricted in growth, that other countries suffering a degrowth fate have figured out things NZ can copy.
1.5 percent (compounding) annual growth is extremely excessive.
I did not and would not argue for degrowth.
when all NZ residents are properly homed and all infrastructure is sufficient then allow growth that does not exceed the dwellings and infrastructure required to service the population growth/increase.
Like Carolyn I would like the population growth question to include the type of growth. I am ashamed that Aotearoa ‘steals’ skilled workers from countries like The Phillipines while exporting our own. The immigration I can accept is almost exclusively for ‘refugees’ - be they political or climate. I think as a nation we are too blessed to just pull up the drawbridge even though the selfish part of me thinks that’s a good idea…
Great start Bernard
Patrick Medlicott
Maybe also consider the length of the political term. It takes a long time to make positive improvement.
Also, what are the precursors of population growth? Housing, infrastructure, health and education infrastructure too.
We are only 5.5m people.
Great start to the conversation. I'd love to hear from a demographer about what the NZ population is going to look like by 2050 based on current trajectories. Are we going to be overwhelmed with oldies with little population replacement as no one seems to want to have kids anymore (possibly can't afford to?). I'm positive about immigration as I see the hard work and immense contribution that migrants are making around me today. I know we are potentially going to be deluged by climate refugees and I'd like to think that we open our arms to migrants with homes already built and well paid jobs ready for them to step into. Housing people in garages to work as temporary kiwifruit or forestry workers or Uber drivers is a very sad introduction to NZ and we must do better.
If you’re interviewing people, Geoffrey Palmer should be on your list. His legislative agenda extended beyond just the economic reform of the 80s, and everything good we still have from that period of reform, he was the architect of (and took the poisoned prime ministership to see through to the end). The crisis we need to get through is beyond economic, it is also political and constitutional, as Palmer has just recently pointed out in his latest call out of this government. Since he oversaw the last upheaval and is still floating around, I think it would be very interesting to hear his thoughts on how this economic change might work alongside other political policy reform that we desperately need.
I subscribed to make this comment (lol) but also since I’m here: I’m always down for anything that might bring about the death of Rogernomics and I’ll add that completely agree about it being far more important to pick a population growth target and actually plan for it than whatever number we pick as a growth rate. What doesn’t make sense is to not plan for the growth rate that we have allowed and are allowing. We can do this a lot smarter than we currently are.
Totally agree with everything you just said and would love to hear such an interview.
Start with population growth as that drives a lot of the things.
I voted 0.5% because for now we must catch up on the infrastructure deficit.
And immigration needs to be tightened up and not used as the quick easy answer to problems. Say we need 20,000 rest home nurses. Instead of the current method of just opening immigration slots to 20,000 migrant nurses we allow 5,000 in and get our polytechs training many more nurses (including paying them a good wage).
A technical question: - how many of the emigrants are immigrants who having got their citizenship are off to Oz, or wherever?
And coming back to immigrants. What mechanism can be put into place to stop a government just changing the numbers allowed in and how easily.
How do you get a bipartisan agreement?
As we can see with the current coalition government a bipartisan deal by Labour and National is meaningless if a minor coalition partner can insist on something different as the cost of putting the big boy into power.
Bang on. The tail wagging the dog of the current coalition government is significant. Bipartisan actually requires ALL flavours of political parties to agree and accept a future-focussed view.
Love the Kaka Project, and loved the history lesson/context in the podcast. Please keep that up as past is important in understanding how we are where we are.
If I may offer a thought Bernard - I wonder if asking what % NZ should grow at year on year is too abstract? I see what you're getting at, but the average Kiwi probably wouldn't have much of an informed opinion.
Perhaps we should be asking more values led questions around what do we want Aotearoa to look like?
Just my two cents which can be taken or left.
I.e. - Do we want a country that views housing as a right or as a privilege? Do we want ourselves (and our children) to live in a polluted, ever more unstable climate or a clean, thriving one? Do we want a country where everyone has the opportunity to live a healthy, productive, happy life regardless of the circumstances of their birth, or are we ok with a system that (sometimes intentionally and sometimes unintentionally) locks generations into poverty?
Start with the vision, then lead into how things like population growth, tax settings, cutting emissions etc can help us achieve the future for Aotearoa that matches our values.
New Zealand needs to revive the state housing zeal of the 1935-1949 Labour Government. We need a government that will build, own, and manage hundreds of thousands of homes for secure, lifetime, income-moderated rent by all who want them. That would mean a repudiation of the attitude of both National and Labour governments of the past few decades, which have treated state housing as something they provide very reluctantly for the poor.
Quite agree, John. Sam Stubbs has a model for lower cost, higher quality housing which could be expanded and makes economic sense.
Alongside the state houses, were state advances loans to help buy a home. That is what gave me a secure home all my growing years.
https://natlib.govt.nz/records/23153397
Great link. Thanks John
Uhhh, good point!
'What do we want Aotearoa to look like.?" What do we want life to be like for a citizen of Aotearoa? What "values" (ie what we value) do we want in Aotearoa?
If we could agree on this we would, together, be able to map out the the work needed to get there.
I'm enjoying reading "The Invisible Doctrine....the secret history of neoliberalism" by George Monbiot and Peter Hutchinson. I thought i knew all about neoliberalism, but boy this book is brilliant. It traces everything and the techniques used to cement it into our financial systems and world. One suggestion, in addition to what you have written is one thing which appealed to me in the book was that to convince people what you are trying to say needs to be embedded in stories. During this process you are proposing, Bernard, we need to collect stories to be passed on by our appointed story tellers.
Thanks Garry, I've just added yet another book to my list of must reads LOL
Yes agree regarding the stories embedded in the economics. These can come from teachers, Parents, social workers, police officers, GPs etc. People in general who were affected by the economic changes. Hopefully Barnard does not mind me name dropping, but someone who is really good at this type of thing is Bryan Bruce... Collab...perhaps???
The power of Story to convey meaning and motivate changed attitudes is crucial.
To me, the story must start with who we are and who we want to be. I think there’s far more consensus on this than our current political discourse would suggest. The other critical part is to align our story with our behaviours and blow up some myths in the process.
Lots of ideas re tax including a levy of .5% on occupied residential land ($5k a year for me, I could just afford it but many asset rich income poor others couldn’t I I prefer a CGT) and a reduction in GST. Maybe we need a tax working group? Very complex arrears needing expert advice and a wholistic approach.
'Agreeing a broad-based and low-rate annual Aotearoa by 2050 levy on the value of residential-zoned land of 0.5% for occupied land, 1.0% for unoccupied homes on residential-zoned land and 1.5% for residential-zoned land that is not built on.'
'Agreeing that capital gains on real business values and non-residential-zoned land remain tax free.'
I'm puzzled that nonresidential land is off the hook for any taxes in Bernard's scenario.
In particular, land within commuting distance of towns should surely be liable for windfall taxes if rezoned residential, to avert land banking and speculation.
Windfall taxes on land going residential occur in Australia - ACT is at a tax rate of 75% of the windfall gain, as I understand it.
Bernard, I congratulate you on this brilliant project! Your foresight & your willingness to do the hard mahi to guide 26/50 through to a successful conclusion puts us all in your debt. Reinforcing 26/50 are a number of other parallel projects that can only add to the effectiveness of 26/50 & confirm your view that after 40 years of greed driven neoliberalism, we are due for a sea change. I'm referring to the CTU's 'Reimagining Aotearoa Together' covering the topics of 'Good Work', Ending Inequality', 'Rebuilding Aotearoa', 'Securing our Future'; the Fabian Society/VUW 'Poverty by Design' seminar series covering Poverty, Unaffordable Housing, Hunger in our schools, The Living Wage & Racialised Poverty & the appearance in NZ of Torrens University's programs 'Economics for Sustainable prosperity', incorporating Modern Monetary Theory & Ecological Economics. Progressive, humane proposals are on the move!
Yes, yes, yes.
Yes, yes, yes also
As in a sentence from Costas Lapavitsas in an article "The financialization of capital: 'Profiting without Producing'"...
.... 'Financialization cannot be reversed without re-establishing the command of the social and collective over the private and individual for the modern era."