Bernard Hickey talks with Productivity Commission Chair Ganesh Nana about a big 2022, and how to fight inflation in the long run by improving our society's productive capacity
We’ll done for this piece BH. The observation that higher interest rates discourages investment (including investments that improve supply) is probably the Achilles Heel in the whole argument for raising interest rates at all as response to excess demand in the economy. That and higher prices being the cure for high prices.
Plenty of sage words from Ganesh as always, tough gig for both the Productivity and Infrastructure commissions when the Govt seems to ignore their mahi
Coffee stockpile... Yes I recall running around clearing shelves of coffee beans while others were panicking about toilet paper, strange days, stranger priorities
Nice ideas but the time delay in implementing any of these policies would be substantial - and inflation might have got to 20% while we waited....... I'm not against improving infrastructure, but we need more action. What infrastructure is going to be developed with the resources freed up as the home building industry grinds to a halt in 2023/24? Would those resources be enough?
What Nana is saying is common sense. The 30-30 “rule” only partially explains The Beehive’s poor performance. Regardless of how much is spent, the more important issue is where the money goes. Over their term, this government has acted like drug addicts, spending the country’s money to get their short-term kicks, without thought of the long-term consequences. They haven’t looked after the basics, making sure their citizens are well housed and fed, nor planned for our future. All their talk is to make themselves look good, and they lie.
> encouraging deeper integration with the global economy by increasing the share of the economy competing overseas firms and increasing the amount of overseas investment in local businesses;
Seems like one small way the Government has tried to boost supply has been to loosen immigration settings a smidge, since it's a deeper integration with global labour markets. Not as good as integrating with overseas firms (firms don't need houses), but it's something.
Adding construction workers to the green list seems like a good idea. The extra capacity they add would hopefully balance out the short-term pressure on existing infrastructure.
If you’re going to calculate productivity then you HAVE to count and invest in the INPUTS cost and needs pretty basic stuff missed out to get bad stuff done badly then half measure it! 😂
Let’s be honest the Nazis actually won the war and now we all live to work on inadequate rations like a concentration camp that we have to pay for the privilege of existing in with the weakest being knocked off and neglected. Progressive stuff. Merry Christmas 🎄
This was a great email Bernard. What a wise man Nana is. If Labour listened to the Productivity Commission they would gain the thinking voter.
Regarding Nana's comments on under-investment in infrastructure and R&D leading to stagnation in output per hour worked ... and then it's effect on our social cohesion, I have two real time examples. I am sure readers can come up with others from their own experiences.
Firstly housing. Yep. Where I live, family homes are being demolished (and the whole lot put in landfill, no attempt at rescuing tawa floors, beams, etc. That's another issue). The replacement apartments, are tiny, sunless, viewless and very hard to access in many cases. Narrow streets are lined with cars for blocks around, making them one-way. (Buses remain empty as they are unreliable - leave early, arrive late or are cancelled. It is a nightmare getting the teenagers to school and I often have to drive them.) So families are de-housed and the tenements that have gone up are unsuitable unless you are single or a couple and can pay quite a high price for your meagre square footage with no land. Did R&D in the form of community surveys happen? No. Rider: there are a few 3 bedroom flats, but only a few and priced out of reach for most families. Most (not all) developers want the maximum profit per square inch, rather than quality housing. Effect on social cohesion: families renting far from their chosen communities, schools, work, neighbourhood links, built up over years. Having to commute basically. Usually by car. Kids bussing to school (if the bus arrives or hasn't left early). Appropriate R & D (just ask!) into what a growing community actually needs would have avoided this. Also, not handing over to private enterprise without checks and balances. Rider: Housing NZ developments are better quality when they are new. After a few years they look neglected. One was even burnt down.
Secondly, half-cocked ideas to correct deficiencies in Primary Health. My daughter is a Clinician working in a GP clinic to take up the slack that Doctor's don't have the time/specialist knowledge to give to patients with complicated (often mental or behavioural health problems). She spends more time, listens more, digs deeper and usually gets the whole picture which she then starts treating, and begins the support process using the GP and outside services to wrap around the patient. This was a brilliant idea by government to start an adjunct service for overworked GP's. But, there is a mis-communication between the Ministry and the actual service which middle managers are powerless to change. It results in GP's constantly mis-understanding the role and referring wrongly, putting the Clinician and patient in jeopardy. Despite advice from front-line workers, the message about this disconnect never reachers the change enablers. So GP's refer inappropriately or not at all, and the numbers of patients being referred don't reach the pre-instituted levels per Clinician. This results in stalled career progression as targets are not met, and Clinicians are constantly leaving. In other words, a brilliant idea is sabotaged because no on-going R & D is done to see if there is a stumbling block that prevents the initiative actually working. Effect on social cohesion? People at risk of acute mental health decline, are not rescued, are lost to the system and GP's are left trying to do the whole job in their allotted 15 minute consultations.
Finally, population growth. Surely government's first responsibility to their voters is to establish what levels are acceptable, and what kind of population change is conducive to a thriving nation? Maybe they are afraid to ask what we want because they know that they have no intention of providing the infrastructure necessary even for the present population, and hope voters don't notice the strain on present infrastructure as people flood in to suit government's fiscal short-term plans. Result in social cohesion? Suspicion and blaming the immigrant. Not their fault.
💯 we need to invest way more in R&D and not just the “hard” sciences either (Disclaimer: I’m a scientist researching the “softest” of topics, vulnerable energy users & behaviour change). Aotearoa has been a disgrace compared with most of the OECD in terms of investing in the knowledge economy.
We’ll done for this piece BH. The observation that higher interest rates discourages investment (including investments that improve supply) is probably the Achilles Heel in the whole argument for raising interest rates at all as response to excess demand in the economy. That and higher prices being the cure for high prices.
Plenty of sage words from Ganesh as always, tough gig for both the Productivity and Infrastructure commissions when the Govt seems to ignore their mahi
Coffee stockpile... Yes I recall running around clearing shelves of coffee beans while others were panicking about toilet paper, strange days, stranger priorities
Nice ideas but the time delay in implementing any of these policies would be substantial - and inflation might have got to 20% while we waited....... I'm not against improving infrastructure, but we need more action. What infrastructure is going to be developed with the resources freed up as the home building industry grinds to a halt in 2023/24? Would those resources be enough?
What Nana is saying is common sense. The 30-30 “rule” only partially explains The Beehive’s poor performance. Regardless of how much is spent, the more important issue is where the money goes. Over their term, this government has acted like drug addicts, spending the country’s money to get their short-term kicks, without thought of the long-term consequences. They haven’t looked after the basics, making sure their citizens are well housed and fed, nor planned for our future. All their talk is to make themselves look good, and they lie.
> encouraging deeper integration with the global economy by increasing the share of the economy competing overseas firms and increasing the amount of overseas investment in local businesses;
Seems like one small way the Government has tried to boost supply has been to loosen immigration settings a smidge, since it's a deeper integration with global labour markets. Not as good as integrating with overseas firms (firms don't need houses), but it's something.
Adding construction workers to the green list seems like a good idea. The extra capacity they add would hopefully balance out the short-term pressure on existing infrastructure.
If you’re going to calculate productivity then you HAVE to count and invest in the INPUTS cost and needs pretty basic stuff missed out to get bad stuff done badly then half measure it! 😂
Let’s be honest the Nazis actually won the war and now we all live to work on inadequate rations like a concentration camp that we have to pay for the privilege of existing in with the weakest being knocked off and neglected. Progressive stuff. Merry Christmas 🎄
This was a great email Bernard. What a wise man Nana is. If Labour listened to the Productivity Commission they would gain the thinking voter.
Regarding Nana's comments on under-investment in infrastructure and R&D leading to stagnation in output per hour worked ... and then it's effect on our social cohesion, I have two real time examples. I am sure readers can come up with others from their own experiences.
Firstly housing. Yep. Where I live, family homes are being demolished (and the whole lot put in landfill, no attempt at rescuing tawa floors, beams, etc. That's another issue). The replacement apartments, are tiny, sunless, viewless and very hard to access in many cases. Narrow streets are lined with cars for blocks around, making them one-way. (Buses remain empty as they are unreliable - leave early, arrive late or are cancelled. It is a nightmare getting the teenagers to school and I often have to drive them.) So families are de-housed and the tenements that have gone up are unsuitable unless you are single or a couple and can pay quite a high price for your meagre square footage with no land. Did R&D in the form of community surveys happen? No. Rider: there are a few 3 bedroom flats, but only a few and priced out of reach for most families. Most (not all) developers want the maximum profit per square inch, rather than quality housing. Effect on social cohesion: families renting far from their chosen communities, schools, work, neighbourhood links, built up over years. Having to commute basically. Usually by car. Kids bussing to school (if the bus arrives or hasn't left early). Appropriate R & D (just ask!) into what a growing community actually needs would have avoided this. Also, not handing over to private enterprise without checks and balances. Rider: Housing NZ developments are better quality when they are new. After a few years they look neglected. One was even burnt down.
Secondly, half-cocked ideas to correct deficiencies in Primary Health. My daughter is a Clinician working in a GP clinic to take up the slack that Doctor's don't have the time/specialist knowledge to give to patients with complicated (often mental or behavioural health problems). She spends more time, listens more, digs deeper and usually gets the whole picture which she then starts treating, and begins the support process using the GP and outside services to wrap around the patient. This was a brilliant idea by government to start an adjunct service for overworked GP's. But, there is a mis-communication between the Ministry and the actual service which middle managers are powerless to change. It results in GP's constantly mis-understanding the role and referring wrongly, putting the Clinician and patient in jeopardy. Despite advice from front-line workers, the message about this disconnect never reachers the change enablers. So GP's refer inappropriately or not at all, and the numbers of patients being referred don't reach the pre-instituted levels per Clinician. This results in stalled career progression as targets are not met, and Clinicians are constantly leaving. In other words, a brilliant idea is sabotaged because no on-going R & D is done to see if there is a stumbling block that prevents the initiative actually working. Effect on social cohesion? People at risk of acute mental health decline, are not rescued, are lost to the system and GP's are left trying to do the whole job in their allotted 15 minute consultations.
Finally, population growth. Surely government's first responsibility to their voters is to establish what levels are acceptable, and what kind of population change is conducive to a thriving nation? Maybe they are afraid to ask what we want because they know that they have no intention of providing the infrastructure necessary even for the present population, and hope voters don't notice the strain on present infrastructure as people flood in to suit government's fiscal short-term plans. Result in social cohesion? Suspicion and blaming the immigrant. Not their fault.
💯 we need to invest way more in R&D and not just the “hard” sciences either (Disclaimer: I’m a scientist researching the “softest” of topics, vulnerable energy users & behaviour change). Aotearoa has been a disgrace compared with most of the OECD in terms of investing in the knowledge economy.