Biden pulls out of Presidential contest; Chasing our tails inside our housing, water, health, and education infrastructure crises; Includes Bernard’s Dawn Chorus podcast plus some fun things
However I think you need to have our population policy (or lack of!) as the #1 issue as that is what is at the root of all of the other problems. It also needs to be asked why we have so many former Minsters of Immigration acing as Immigration consultants?? Does that not suggest that our immigration system can be "worked" by those with money and influence?
Immigration does nothing for NZ but keep the ever inflating property bubble alive and well and provide low cost desperately poor cheap migrant labour - at great cost to the greater part of NZ society. It means our children cant afford to buy homes and raise families - without state financial assistance - and we increasingly cant afford to maintain that at adequate levels.
We also need to look hard at the role of property price inflation for its impact on the economy - the increases in property values over the past three decades has had the same effect as money printing to the extent of about $1Trillion of fake wealth being introduced to the domestic economy - we now have a large class of people who have substantial "wealth" earned simply by sitting still and doing nothing - and who get to spend that unearned "wealth" on fast cars and expensive overseas holidays all still paid for by foreign exchange earned though farm exports - meantime the stupid people in the reserve bank have upped interest rates to curb the inflated property market but that has mainly severely impacted the profitability of farmers and other productive activities while providing super profits to our now foreign owned banks and over seas "investors" - our productive economy is a sick old beast being feed on by parasites and predators.
This has nailed why we are where we are; and how we have got here. I really liked the political framing element you noted too. As an ex-employee of a large SI local authority, I can absolutely say there is no fat left, and everything is stretching to breaking point. NZrs (whether in private enterprise or in public sector) just never seem to want to invest in anything over a long term. We want to have it all on the cheap. We don't plan - or want to plan more than a few years on. I don't know how we get the conversation to move but it needs to.
Congratulations on the views expressed on Dawn Chorus today. We have long been stymied on the "need" to keep taxation low, and our refusal to allow either a wealth tax or a capital gains tax to be past of our taxation structure.
To my mind we won't get either unless a major party at the next election undertakes the need for major reform of our taxation system. That would entail-
1. Immediate taxation of property based on Council valuations with regard to unoccupied and farming use. This will supply income to the Government while the income from other forms of taxation will take longer. This is especially true of a capital gains tax that is realised by sale of assets , but it is also significant as regards to a wealth tax where other assets other than land could come into the equation.
2. The voters know in detail what they will expect, much the same as voters were promised specific tax cuts by the present Government prior to the election. Hence voters prior to the election can see what effect the change in taxation will make on their rates of income tax, and what the rates of the new tax are. I believe this to be really important both to stop governments being handed a blank cheque for change, and also to stop any future government chickening out of commitments after the election.
Thanks Bernard. Yes, we are clearly in the shit - thanks to not-fit-for-purpose assumptions. Desperately looking forward to the upcoming solution-focussed discussions :)
It always gets me with this expectation that the government share of GDP does not exceed 30%. Isn't this an indictment of "The Market" which cannot grow the other 70%? Gee, if the market could just grow by, say, 10% that would allow government to grow by 3% (forgive my maths).
I'm also assuming local government isn't part of the 30%, because that allows central government to pass on some of its share. If the council's unfunded mandates that are imposed on it were paid for by central government that would impact the 30%.
Excellent piece Bernard. Reading between the lines you/we may have (politically/economically) reached the point of no return that Michael Douglas highlighted in the movie “Falling Down”
It's hard to keep positive, tho... Noam Chomsky's words have guided me throughout my years in the not-always-hopeful world of fisheries: "We have two choices: abandon hope and ensure that the worst happens, or take advantage of the opportunities that exist and contribute to a better world. It is not a difficult decision."
You continue to be almost a lone voice crying out against the illusions that structure the consensus of our political economy. This emperor has no clothes.
A point of feedback:
“It is of course a good thing for the Government to have lower debt **in order to allow households to have higher debt with lower interest rates, in order to buy and leverage more residential land for tax-free capital gains**;”
My anecdotal experience is that most people who think it is good for the government to have low debt simply regard low government debt as an intrinsic good. Not because it means low interest rates for them (that involves more economic theory knowledge than they typically possess), but because they equate low debt with values of good governance, and the prudent spending of “their” money.
As such, I’m not sure this part of the account necessarily captures the mentality of debt-concerned voters; it assumes a level of economic literacy which I’ve yet to encounter.
The 2017 budget responsibility rules were exactly about signalling such “principles” (as Little said). It was never said “and this will keep mortgage rates low”. If parties believed voters understood the relationship between govt debt and interest rates, I’m sure they would signal it in electioneering. But they don’t. I’ve never seen it.
Interesting. I agree it's not regular and overt. But I've heard it regularly, if only as the last point made when the logic of the thinking is challenged at every point.
Under the what do we do now bullet points we should include the implications of being a sovereign currency issuing nation - maybe look to a formal way to provide for overt monetary financing of infrastructure and public housing. Spend the money into existence on infrastructure and housing, remove excess (=inflationary) $ from circulation with user charges and taxes.
This is not new stuff - refer to Keynes on how to fund the war or Abby Leaner's functional finances. Modern monetary theory also.
This definitely needs to be opened widely. Excellent summary of where we have we got to, and where we need to move urgently on from
I agree this excellent summary says it all so simply. Open it up Bernard.
Agreed
You need to open this one up Bernard
However I think you need to have our population policy (or lack of!) as the #1 issue as that is what is at the root of all of the other problems. It also needs to be asked why we have so many former Minsters of Immigration acing as Immigration consultants?? Does that not suggest that our immigration system can be "worked" by those with money and influence?
Immigration does nothing for NZ but keep the ever inflating property bubble alive and well and provide low cost desperately poor cheap migrant labour - at great cost to the greater part of NZ society. It means our children cant afford to buy homes and raise families - without state financial assistance - and we increasingly cant afford to maintain that at adequate levels.
We also need to look hard at the role of property price inflation for its impact on the economy - the increases in property values over the past three decades has had the same effect as money printing to the extent of about $1Trillion of fake wealth being introduced to the domestic economy - we now have a large class of people who have substantial "wealth" earned simply by sitting still and doing nothing - and who get to spend that unearned "wealth" on fast cars and expensive overseas holidays all still paid for by foreign exchange earned though farm exports - meantime the stupid people in the reserve bank have upped interest rates to curb the inflated property market but that has mainly severely impacted the profitability of farmers and other productive activities while providing super profits to our now foreign owned banks and over seas "investors" - our productive economy is a sick old beast being feed on by parasites and predators.
This has nailed why we are where we are; and how we have got here. I really liked the political framing element you noted too. As an ex-employee of a large SI local authority, I can absolutely say there is no fat left, and everything is stretching to breaking point. NZrs (whether in private enterprise or in public sector) just never seem to want to invest in anything over a long term. We want to have it all on the cheap. We don't plan - or want to plan more than a few years on. I don't know how we get the conversation to move but it needs to.
Agree with everyone. This needs to be shared far and wide!
Congratulations on the views expressed on Dawn Chorus today. We have long been stymied on the "need" to keep taxation low, and our refusal to allow either a wealth tax or a capital gains tax to be past of our taxation structure.
To my mind we won't get either unless a major party at the next election undertakes the need for major reform of our taxation system. That would entail-
1. Immediate taxation of property based on Council valuations with regard to unoccupied and farming use. This will supply income to the Government while the income from other forms of taxation will take longer. This is especially true of a capital gains tax that is realised by sale of assets , but it is also significant as regards to a wealth tax where other assets other than land could come into the equation.
2. The voters know in detail what they will expect, much the same as voters were promised specific tax cuts by the present Government prior to the election. Hence voters prior to the election can see what effect the change in taxation will make on their rates of income tax, and what the rates of the new tax are. I believe this to be really important both to stop governments being handed a blank cheque for change, and also to stop any future government chickening out of commitments after the election.
Thanks Bernard. Yes, we are clearly in the shit - thanks to not-fit-for-purpose assumptions. Desperately looking forward to the upcoming solution-focussed discussions :)
It always gets me with this expectation that the government share of GDP does not exceed 30%. Isn't this an indictment of "The Market" which cannot grow the other 70%? Gee, if the market could just grow by, say, 10% that would allow government to grow by 3% (forgive my maths).
I'm also assuming local government isn't part of the 30%, because that allows central government to pass on some of its share. If the council's unfunded mandates that are imposed on it were paid for by central government that would impact the 30%.
Excellent piece Bernard. Reading between the lines you/we may have (politically/economically) reached the point of no return that Michael Douglas highlighted in the movie “Falling Down”
Spread today's gospel far and wide please
Please do open up. As a young(ish) public servant in a place that has just announced redundancies the temptation to leave the country grows everyday…
I’d love to get to 100 likes and open this one up. A hint disguising a request. :)
Happy to open to the public .
Lynn's photo of the tent underneath a slippage structure says it all . 😞
Yeah, open wide please..
It's hard to keep positive, tho... Noam Chomsky's words have guided me throughout my years in the not-always-hopeful world of fisheries: "We have two choices: abandon hope and ensure that the worst happens, or take advantage of the opportunities that exist and contribute to a better world. It is not a difficult decision."
So, I use them in today's context,as well
Totally agree!!
Yes please, open please
and thanks
You continue to be almost a lone voice crying out against the illusions that structure the consensus of our political economy. This emperor has no clothes.
A point of feedback:
“It is of course a good thing for the Government to have lower debt **in order to allow households to have higher debt with lower interest rates, in order to buy and leverage more residential land for tax-free capital gains**;”
My anecdotal experience is that most people who think it is good for the government to have low debt simply regard low government debt as an intrinsic good. Not because it means low interest rates for them (that involves more economic theory knowledge than they typically possess), but because they equate low debt with values of good governance, and the prudent spending of “their” money.
As such, I’m not sure this part of the account necessarily captures the mentality of debt-concerned voters; it assumes a level of economic literacy which I’ve yet to encounter.
The 2017 budget responsibility rules were exactly about signalling such “principles” (as Little said). It was never said “and this will keep mortgage rates low”. If parties believed voters understood the relationship between govt debt and interest rates, I’m sure they would signal it in electioneering. But they don’t. I’ve never seen it.
Interesting. I agree it's not regular and overt. But I've heard it regularly, if only as the last point made when the logic of the thinking is challenged at every point.
Great analysis.
Under the what do we do now bullet points we should include the implications of being a sovereign currency issuing nation - maybe look to a formal way to provide for overt monetary financing of infrastructure and public housing. Spend the money into existence on infrastructure and housing, remove excess (=inflationary) $ from circulation with user charges and taxes.
This is not new stuff - refer to Keynes on how to fund the war or Abby Leaner's functional finances. Modern monetary theory also.