Trite Matters
The Herald concludes an editorial saying:
Its other major pursuit, the attempted flailing of Mr Key over relatively trite matters, serves no purpose. Labour’s criticism is disappearing into the ether because the public is not receptive to it. As much has been confirmed by this month’s polling. Labour’s poll support last year averaged just over 37 per cent. That, according to the three polls, has now slipped to as low as 32 per cent or, in the best-case scenario, 34 per cent. The big plus for Labour is that there remains time to buttress this position. It will have to use that well by presenting policies that make voters want to listen.
No one seriously thinks John Key has a serious plan to secretly lower wages for all NZ workers. Apart from the fact the PM doesn’t set wage levels (well not since Muldoon), it’s just silly to suggest Key want wage levels to drop when he is on the record as saying a major objective is to close the (real after tax) wage gap with Australia.
There is a real issue however, amongst the heat over Key’s comments to the Northland audience last year. His lack of clarity has generated a fuss where one could have been avoided. It reminds me a bit of the issue over his comments to the Herald over the trans-Tasman medicines regime – and that was an untidy affair.
Fixing the “problem” is not that easy though. One can train MPs up to speak entirely in soundbites and never say something unguarded. The problem is you get Hillary Clinton. Part of why people like Key is he does speak quite openly and freely. You don’t want to knock that out of him. On the other hand he will need to be very disciplined in election year not to say things which make him appear to be advocating something he doesn’t.
February 26th, 2008 at 9:46 am
No one seriously thinks John Key has a serious plan to secretly lower wages for all NZ workers.
Shhhh DPF, you know the old saying: Never interrupt your enemy when he is making a mistake.
Let them carry on with that line, so far it has gained as much traction as a boy racers bald tyre on a diesel slicked road.
February 26th, 2008 at 9:49 am
Yes, DPF , to err is human. (I can vouch for that!) You only have to look at the previous article about Clark who forgot her ‘spin’ line to see that politicians who over-rely on teh PR line will eventually trip themselves up, usually when the pressure is really on. Key if possible should seek to guard the rather precious freedom which is to occasionally get it wrong, occasionally have to apologise, occasionally be prepared to adapt to the changing needs of the moment. We’ve had too much of the robotic ideologically-driven ‘damn the torpedoes’ approach it lead to the anti smacking (anti parents) Bill the EFA (anti unions) Act the abolition of the Privy Council (anti constitution) and the shady back-room dealings with the likes of Glenn and Peters.
This is real life we are dealing with, not washing powder.
February 26th, 2008 at 9:50 am
For goodness sakes, DPF, you can’t call the matter “trite”! It is the basis for which the Standard exists at the moment. They have nothing but this issue to keep them alive and kicking. Where is your humanity?
February 26th, 2008 at 9:51 am
Apart from the fact the PM doesn’t set wage levels
No they don’t, but they can have a huge impact on the wage path through their industrial relations policies. National showed us that in the 1990s when they slashed work rights and opened up the wage gap from 20% to 30%.
You also can’t have it both ways. If the PM can’t influence wage levels then how do you explain Key’s claim that he will lift wages?
a major objective is to close the (real after tax) wage gap with Australia.
The after-tax claim is a device used to avoid the real question of how to increase wage growth. But you can’t cut taxes to close the wage gap so it’s time Key explained exactly how he would close it.
His lack of clarity has generated a fuss where one could have been avoided
It’s not just a lack of clarity. He made up multiple excuses, then lied and said he was talking about Australia. That was subsequently disproven by the transcript.
He’s still not given a credible explanation as to exactly what he said, and given National’s history – and current policy – on employment law I’m not so willing to give him a free pass.
February 26th, 2008 at 9:58 am
That’s right Tane.
Helen has used some of the best economic conditions NZ has ever seen to really lift wages.
You’ve certainly backed a winner but how come the cheque is still “in the mail”
February 26th, 2008 at 10:03 am
The after-tax claim is a device used to avoid the real question of how to increase wage growth. But you can’t cut taxes to close the wage gap so it’s time Key explained exactly how he would close it.
Tax relief is a way to give Kiwis a short term boost to their wages – it also sends the workers (you know, the guys you like to think you represent) a signal that the government is not just taking away the money they have worked their arses off to stash away to try and buy an election. The only way to increase wages is through increased productivity, that is REAL growth. You cannot force wage growth through legislation, it is a waste of time forcing wages up, if it is also going to force the cost of everything the wage earner needs to purchase.
February 26th, 2008 at 10:06 am
Tane wrote that “you can’t cut taxes to close the wage gap”.
Surely, cutting taxes will increase the disposable income of all NZers. Our disposable incomes will become closer to the disposable incomes of Australians (other things being equal). I would have thought that was significant. Sure, it won’t directly affect wages, but the additional spending (by consumers) will feed through into increased profits for firms and may well lead to higher wages in the long term. Of course, cutting taxes is just one method of raising disposable incomes and a pretty good method in the short term.
February 26th, 2008 at 10:09 am
Helen has used some of the best economic conditions NZ has ever seen to really lift wages.
I’ve written a lot recently about what I think the government could do to further increase wages, but through a combination of record low unemployment, fairer employment law and regular increases to the minimum wages we are seeing pretty solid wage growth. Employer groups are now complaining wages are rising too fast, and despite Australia’s mineral boom the wage gap has not widened during Labour’s eight years in government.
As I say, I’m still waiting for John Key to a) explain what he meant by his statement in Kerikeri, and b) explain exactly how he would lift wages.
February 26th, 2008 at 10:09 am
I think it a bit tough to give Tane bad Karma for an argument that is pretty well reasoned, boys however I would take issue with a couple of points.
“a major objective is to close the (real after tax) wage gap with Australia.
The after-tax claim is a device used to avoid the real question of how to increase wage growth. But you can’t cut taxes to close the wage gap so it’s time Key explained exactly how he would close it.”
Which taxes though Tane? Corporate tax rates for example where we could attract new investment from international sources, perhaps? Or allowing our business, mostly in the SME market, to develop further trade and R&D?
As for the question on real after tax income, the issue is about giving NZ workers more of their money to them to enjoy the Kiwi lifestyle in a time when commodity prices and the cost of living are going through the roof (the result of 81/2 years of Labour policy I might add)!
If you are going to wheel out that argument you need to start to look at personal tax and others such as the corporate tax rate, FBT etc as two distinct and separate issues. It’s just not as simple as you make it out to be and as the Standard smear campaign makes it out.
February 26th, 2008 at 10:15 am
Tane wrote that “you can’t cut taxes to close the wage gap”. Surely, cutting taxes will increase the disposable income of all NZers.
Yes, cutting taxes would raise incomes slightly in the short term, but it won’t meaningfully close the wage gap. Nor is it a sustainable way to increase wages – sooner or later you’re going to have to start cutting public services. You do the maths.
It also misses the key reason people head to Australia – it’s the fact they’ll be earning $19 an hour rather than $12 an hour, or $80,000 rather than $50,000 that makes them go. No one I’ve ever spoken to has left for Australia because of the small percentage they’ll save on income tax.
February 26th, 2008 at 10:25 am
“It also misses the key reason people head to Australia”.
Have you interviewed people as they hop on the plane to ask them why they’re leaving? There are myriad reasons why people are going to Aussie. I can only speculate but they might include the weather, the lifestyle, the lack of wrangling over Treaty issues (and other things Maori), and the perception that Australians’ quality of life if better than it is here.
Of course, plenty of people come to NZ to live. It may be because of our low wages, but I’m guessing that there are other factors which are persuading people to live here.
February 26th, 2008 at 10:26 am
I think it a bit tough to give Tane bad Karma for an argument that is pretty well reasoned, boys however I would take issue with a couple of points.
Sorry Brownie, but I think it is very appropriate. Tane just raises tired old point, especially regarding workers rights in the 1990′s, what he fails to mention though is that when the Nats took over in the 90′s the country was faced with financial ruin – he skips the context as if it didnt matter. Well reasoned my left testicle.
February 26th, 2008 at 10:28 am
I agree entirely, Tane that no one is leaving over the percieved increase in “clean income”. However the do want to be rewarded, at least in a gesture, by a government that has had years of significant surplus for very little net gain in social services and living (bear in mind cost of living when you reply).
JK is about lifting productivity with Nats review on Tax – not just income, mind -but all tax so that the gap between what a Warfie makes here and what a docksider makes over in Sydney can be closed. After 81/2 years, your average Kiwi battler whas a right to expect that the gap would have closed, it hasn’t and thats why he/she is taking their family to Australia to live and work.
Simple stuff really. Nice to see that you acknowledge the problem in your post.
February 26th, 2008 at 10:40 am
Labour has had absolutely no traction with Key’s comment. The Electorate has heard such claims from Labour and these have by and large, been found to have no substance, of have been blown out of all proportion to political ends. The personal attacks from Mallard look hollow in the face of his marital problems, whatever the reason for those might be. The “rich prick” comment from Cullen, the dodgy look of the Owen Glenn saga, the reaction to the Tame Iti hongi and other beat-ups of issues out of proportion to the issue itself.
This latest issue has been found to be a non-issue. This puts Labour in a difficult situation should they find an issue which may deserve genuine traction. The electorate is not listening to them.
Helen, get together with your strategists and read “The Boy who cried “Wolf!”"
February 26th, 2008 at 11:30 am
The arguments of the Tane brigade fail to allow for factors that are nothing to do with regulations and bargaining power. It’s as simple as this. A business doing well because it is providing goods and services that customers want, and expanding, and increasing in the profits it makes, can afford to pay its staff more than a business that is struggling and making not much of a profit, if any. Forcing the struggling business to pay its staff as well as the prosperous business will just force the struggling business out of business.
Countries are just the same thing on a much vaster scale. Surely it is obvious that you could not make Bangladeshis as well-off as Aussies just by forcing employers in Bangladesh to pay and treat their workers just as well. What you would do in fact, is collapse the Bangladeshi economy. Why then is it so difficult for the Tanes of the world to grasp that there might be a difference between Aussie and NZ, which though not as great as that between Aussie and Bangladesh, nevertheless exists, and exists for reasons that punitive action against employers will do nothing to address, but will rather make things worse?
February 26th, 2008 at 11:38 am
And it is obvious to me that John Key is far better at economics than Tane or Kullen or any Labour MP or any NZ MSM journalist, editor, newsreader, presenter, or all the deadheads that vote Labour.
But I would make the proviso that maybe Tane DOES understand but he is completely cynically recycling the rhetoric and propaganda that keep the ignorant masses in the pockets of Socialist government.
I am sick of reading phrases like “Labour’s support as LOW AS 32%”. That’s 32% of people around me out there every day, who are THAT STUPID, THAT IMMORAL, that they STILL support THIS government…………….IN-friggen-CREDIBLE.
February 26th, 2008 at 12:27 pm
Tane wrote that “you can’t cut taxes to close the wage gap”.
It’s not just about increasing disposable income in the short term (although that is great). What Key and National are trying to do is to put incentives into the economy. If I’m going to work my arse off to get a promotion to a supervisor or manager I want to think that I can keep more than 61 cents in the dollar of that extra money that I am paid. Employers get the benefit from better incremental performance from the money paid to an employee.
With this wacked out scheme that is currently in place there is a reduced incentive – particularly for WFF recipients. Why bother when you are going to get 30 cents in the dollar from your increase.
Its not just about handing back the current cash surplus. That’s why the lolly scramble this year doesn’t really mean anything – it’s what they are going to on an ongoing basis to taxes – and the above reason is the right reason for doing it. Ideologically Cullen just doesn’t believe in it, as referenced by his 4th condition on tax cuts.
February 26th, 2008 at 12:35 pm
Hey Brownie, yeah there’s quite a complex story behind the migration figures to Australia, all I’m saying is that claims tax cuts are solution are completely off the mark, especially when made in the context of the wage gap.
I’d be interested in seeing a real debate on this issue at some stage soon, including concrete policies from both parties about how they’ll raise incomes across the board and close the wage gap. Unfortunately it seems the media would rather focus on ‘the game’ than address the real issues. A pity, really.
February 26th, 2008 at 12:35 pm
Legislation to increase productivity, and to allow the productive worker to keep more of what he or she earns, coupled with an increase in properity for all. Might work better than funding a boatyard building superyachts and holding that up as an example for 6 years running!!
February 26th, 2008 at 1:07 pm
Someone currently taking home $1000 a week who, because of changes in the tax structure, is suddenly able to take home $1100 a week would certainly rate that as an important rise in income. And as that extra money cycles back through the economy, the employer might just do better – which could, in turn lead to another rise, this time one in hourly remuneration for that same employee. All this just by inching the taxman’s hand ever so slightly out of the worker pocket.
February 26th, 2008 at 1:36 pm
Hey Brownie, yeah there’s quite a complex story behind the migration figures to Australia, all I’m saying is that claims tax cuts are solution are completely off the mark, especially when made in the context of the wage gap.
Considering this is the attitude the Labour Party has, and that their poll result is plunging new depths, I think we can safely say that your opinion does not hold much water with the general public.
February 26th, 2008 at 3:19 pm
Tane, agree, real debate would be useful.
Which leads me to, have you got a copy of this transcript that shows that Key lied? I’d like to see that. I don’t see how you can credibly be running an argument that Key’s, and National’s, plan is to reduce wages for NZers. That is why you aren’t getting any traction, it is clearly ludicrous. At most you can make an issue about a mis-speaking, no more.
On the real debate, should we assume that Labour has shown us all their ideas over the last 9 years – if they had some real good ones they wouldn’t be hiding them away just waiting to bring them out this election? And would it also be fair to say that going into a “me-too” type election that it would be advisable for National to not announce all their policies a mile out from the election, giving Labour time to copy them with proper analysis? Seems to me that a better political tactic is to put them out in time for the electorate to understand them, but not so far out that Labour can copy them and look credible whilst doing it.
I can understand your desire for National to show their cards nice and early, but suggesting that they should do so is pure partisan politicing. You’re dressing it up as real concern, it isn’t.