Fran on Key
December 2nd, 2009 at 2:24 pm by David FarrarFran lets loose:
John Key’s celebrated faux pas at his first National Party conference as leader (“Under a Labour Government I lead … ) was portrayed as simply an inadvertent slip born out of nervousness.
But after Key’s outright panning of the Don Brash-led 2025 Taskforce report his 2007 slip-up is starting to look almost Freudian.
What I would like to know is how the Government thinks it will close the gap with Australia, if it does not adopt some of the recommendations of the 2025 Taskforce. The gap will not close by magic. Action is needed, not rhetoric.
Brash and his four taskforce cohorts: former Labour Finance Minister David Caygill, Wellington economist Bryce Wilkinson, Icebreaker CEO Jeremy Moon and Australian Productivity Commission part-time member Judith Sloan, were deliberately cute in delivering Key and English a ready rationale for cutting spending back to 29 per cent of GDP.
This after all was the level of core Government expenditure registered in 2004-2005 before former Finance Minister Michael Cullen opened the floodgates on social spending.
All it required was for Key and English to start taking the axe to some of Labour’s sacred cows, urgently review some major spending programmes, and get serious about setting measurable goals to turn this economy around.
No one is underestimating the political difficulties in making such substantial change. But unless substantial change is made, New Zealand will not catch Australia. Ever.
The 29% goal is not politically possible by 2012, but that is no reason not to have it as a longer term target. Or to have a slightly higher target. Or something. What is not acceptable is having no target. I want both National and Labour to say what their target is for spending as a % of GDP, and for them to offer different targets so we have a choice.
A factor which English seemed to concede yesterday by saying the 2025 goal was merely “aspirational”.
Aspirational means they did not mean it.
Problem is the top Government duo reckons its options are constrained because they don’t want to break National’s 2008 election pledge to keep Labour’s own big-ticket election bribes such as interest-free student loans and the expansion of Working for Families which Key had demonised as “communism by stealth”(before the 2005 election).
And I accept no breaking of election promises. But that doesn’t mean the other recommendations can’t be implemented, and it also doesn’t rule out National having a more flexible set of policies for 2011.
Related posts:
- Brash to chair 2025 Taskforce
- Goff says axe 2025 taskforce
- Fran on the economy
- Brash responds to George
December 2nd, 2009 at 2:42 pm
Those following and in support of John Key expect that at least some of these recommendations need to be accepted and put into place, when a business is going down the gurgler, this usually means that some tough decisions need to be made to enable the business to trade itself into a profitable position….
How long can the current over spending carry on for before the country is bankrupt?
JUst when will John Key get busy on it and start implementing some change that will enable the next 5 generations not to need to pay back the debt being generated?
Vote:December 2nd, 2009 at 2:45 pm
DPF what do you mean he is doing nothing?
He forced the ETS on us all.
Then, he is building a cycle track. This may cost more cash than it brings in .
While I’d like to see him encouraging companies to build stuff like this…
http://www.youtube.com/watch?v=SOESSCXGhFo
He seems to prefer the following business…
Vote:
December 2nd, 2009 at 2:46 pm
I don’t think there is much debate that welfare spending does tend to distort growth. Irrespective of whether you think 29% or 43% of GDP is optimal, much of the spending that was tacked on from 2005 has been very much around welfare.
I’d rather see a lot of ideas being put on the table for discussion, rather than this narrowing of scope (and ambition) to minor tinkering.
Vote:December 2nd, 2009 at 2:48 pm
Fran also said
“It’s fast getting to the point of saying if New Zealand wants to catch up with Australia it should get rid of the political middlemen and just apply to join the federation.”
We might as well after all Labour government policies are in place in both countries at present so nothing much would change.
However we would have a ballsy opposition with Tony Abbott as leader. Afterall he did get a 3 month postponement on the Austalian ETS just 2 hours after taking over the leadership
Vote:December 2nd, 2009 at 2:49 pm
I thought Natioanl was quite clear its promises were for the current term. there’s plenty of scope to campaign on different policy which reflects the need to reduce government spending for 2011 and beyond.
Treat voters as intelligent – explain the problem and how to solve it.
We’re spending too much on luxuries and if we don’t cut back now when we’ve got some choice it will be much mroe painful when we’re forced to do so.
Vote:December 2nd, 2009 at 2:52 pm
DPF’s
Targets, plans, committees, commissions … all a bit overdone and Soviet-era stuff isn’t it?
The object of every democratic government is (or should be) to improve the prosperity of the country and its citizens. Even the target of lowering Government participation in the economy is fudged by the bloated spending and expansion into the private sector of local governments and the slightly grey area of SOEs etc.
Shouldn’t broad targets such as just reducing the state’s role within the economy and increasing national wealth be sufficient broad economic targets? Then opposition parties can rake over performance at election time.
And what’s the obsession with passing Australia? This isn’t rugby union or rugby league or netball we’re talking about. We’re next to a resource-rich continent, and we’re a small mountainous archipelago. And before critics weigh in with our untapped mineral wealth, consider what the hypesters are talking about. Good on the Government for moving towards an attractive exploration regime, but let’s wait till geological structures (most of them on the sea floor) are proven economic reserves.
Vote:December 2nd, 2009 at 3:02 pm
“The 29% goal is not politically possible by 2012″
Yea! fuck whats good for the country! its not “politcally possible”
Vote:December 2nd, 2009 at 3:07 pm
The gap will not close by magic.
Funny you should say that: the Brash report doesn’t actually say very much about how to close the gap and increase worker or business productivity. The gist of the report is that if we implement Brash’s crackpot political agenda our productivity will magically improve.
Vote:December 2nd, 2009 at 3:11 pm
I agree that it is not just about passing Australia…. It is about making our country far better than it is now, which is about 2 foot deep in the steamy brown stuff….
Australia isnt as grand as many think, they need the extra income, it is not a cheap place to live, there is far more hidden taxes etc etc than people see…..
homepaddock – Politicians cant and dont know how to treat voters as intelligent…… Agree they should, but take into account that the last decade we had lefty frauds running the show and they created a population of voters whom didnt need to be intelligent nor did they want anyone thinking for themselves, or else they couldnt have fucked NZ so fast…..
Am still waiting for a Lefty to sell the concept to me that Labour didnt have excessive spending in the last 3 years, Cullen you fraudster!
Vote:December 2nd, 2009 at 3:21 pm
How long will our politicians continue to treat us all as like idiots?
Kiwis respond well when told the truth, our eyes glaze over and we loose interest quickly if the facts are ‘spun’ by politicians who are more interested in keeping power than doing what is right.
A direct appeal to the people (a presidential like address) from Neville outlining the facts and exactly how much of a mess we are in would be accepted by the vast majority of the people in NZ, yes the hard left would piss and moan but nobody really takes them seriously anyway.
Some might baulk at the prospect of a direct appeal to the people but the reality is that for Key to sell this message he needs to take the press out of the process, at the moment policy is announced in the house, very few people watch the house and this leave our left wing press free to put their selfish spin on the story.
If Neville came clean then he would be very pleasantly surprised by how well the people take it, those of us who are middle aged will well remember how well the nation dealt with the hard facts as laid out by the late David Lange, we quickly accepted what he had to say and gave him the green light to do whatever was required to repair the problems.
However, as John Ansell said yesterday there are far too many gutless wankers in the National party who are only interested in power.
Vote:December 2nd, 2009 at 3:21 pm
Key’s speech blunder looks more and more like a gigantic Freudian slip.
He has shown little or none of the decisiveness that supossedly made him a top currency trader for Merril Lynch. His passivity is astonishing, his reluctance to get involved puzzling, his aloofness incredible.
I understand the political and economic situation can not / will not change overnight, but I’d appreciate if our leaders had the DECENCY (in capital letters) to explain some of their decisions.
Why the rush to go with a flawed ETS? Why the selling-out to the racist Maori Party to pass such bad legislation? Why the inaction on taxation reform? Why the almost immediate dismissal of the Brash report? Why the lethargy on changes to the unsustainable welfare state?
Those are the tasks that should be taking the Prime Minister’s time, not inane meetings or photo opportunities.
One year into his term, what are the achievements of the Key goverment? Is the National Party so devoid of ideas?
It seems to me we jumped from the oven to the furnace.
Is Key fit to be the Prime Minister of New Zealand? That’s the question.
Vote:December 2nd, 2009 at 3:34 pm
I wish he was this keen to keep election promises back when he canned phase 2 & 3 of the tax cuts
Vote:December 2nd, 2009 at 3:40 pm
Don Brash has been treated shoddily by National, IMHO. From the curt dismissal of the task force report to the burial of the emails theft.
NZ may need to reach economic desperation before we get back on to the progress road. The populace has to be in the mood to buckle down. Then a variety of approaches may work, from the Brash-ACT-Roundtable strategy to empowering a Kiwi version of Lee Kuan Yew. Or we could beg to rejoin Australia, this time as a state, which would be about as popular with Aussie voters as re-admitting into NZ a broke Western Samoa would be with NZ voters.
We’re an example of the downside of welfare-statism: a vast sense of entitlement, a culture of whine and groan, a belief that gummint can fix anything from unlimited resources, and low-level corruption as tens of thousands, from workers and small-business owners to small magnates bludge off welfare off ACC and off taxpayers generally.
In the meantime, Danyl McLauchlan’s 3.07 post above is an example of the leftist view that there is somehow some easy, unrevealed way to put the economy right.
Vote:December 2nd, 2009 at 3:42 pm
That’s what being a politician is all about – how do you break your promises but still get the electorate to vote for you. Clark mastered it, but like all good things eventually it came to an end.
The problem is that if you just try to be all things to all people you end up being despised for having no backbone. And the punters will toss you out on your ear faster than you can say Peters and free dinners.
Vote:December 2nd, 2009 at 3:45 pm
There was also a pretty good editorial in the Herald yesterday (Fran must have locked Brian Rudman et al out of the building or some such). It concludes with:
Full editorial is here: http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10612615
Unfortunately, Rudman was back today, telling everyone that things were great prior to Rogernomics, and that Rogernomics was to blame for the gap opening up between NZ and Australia. I think he missed out on the fact that standards of living were only maintained under Muldoon by running rather large deficits, and as soon as we were forced to pay them back the gap became apparent.
I see Brash has an article in the Herald too. Its a pity he wasn’t able to delay it till tomorrow to get a right of reply against Rudman’s crap.
Vote:December 2nd, 2009 at 3:47 pm
Further on Danyl Mclauchlan 3.07
Well you tell us how, Danyl. Just raise wages by decree? Is that your magic solution?
Vote:December 2nd, 2009 at 3:54 pm
Building on Paradigm’s 3.45 post about the attack by Red Rudman, who I suspect may be a former Labour Party activist, on Don Brash in the NZ Hooerald.
Rudman goes on to say this:
Rudman is ignorant of the role of the Reserve Bank governor, which is chiefly to control inflation. To attribute the Rogernomic reforms to Don Brash is just pig ignorance, but IMHO an undeserved but rich accolade for Don Brash.
Vote:December 2nd, 2009 at 3:57 pm
Well you tell us how, Danyl. Just raise wages by decree? Is that your magic solution?
Why don’t we do what the Australians have done – highly progressive tax system, invest in research and technology, employer super, capital gains ect? Unlike Brash’s magical thinking we know that the Aussie model of conservative, incremental, sustained growth does actually work really really well, whereas the New Zealand model of running from one crackpot, radical get-rich-quick scheme to the next works really badly.
Vote:December 2nd, 2009 at 4:00 pm
Big Bruv is right….go straight to the people and tell them good and hard just whats what….Kiwis will respect that even if it stings.Bypass the lazy corrupt media who protrate themselves before there socialist masters in return for crumbs from the top table and become the peoples PM Mr Key…..you have the popularity….theres no better time than now.
Vote:December 2nd, 2009 at 4:07 pm
Danyl’s
Nothing to do of course with having world leading or near world leading resources of iron ore, coal, uranium, bauxite, gas; major reserves of gold; substantial reserves of rare earths and minor minerals; interesting reserves of oil. Nor with having a variety of climates in that vast continent that allow it to be a leading player in beef, wool, wine and agriculture products ranging from rice and pineapples to apples and apricots?
Countries without such resources can of course be highly successful economically, for example, Japan and Taiwan. But they have definitely not followed policies similar to NZ Labour. In both cases business, chiefly big business, has a much bigger say in strategy.
It’s very easy to say we need conservative, incremental and sustained growth, Danyl, but Labour has not shown in practice or even in theory, how NZ might achieve this.
Vote:December 2nd, 2009 at 4:21 pm
DPF, why don’t you just admit that John Key is an empty suit? We already knew Bill English was.
Vote:December 2nd, 2009 at 4:22 pm
…Howard was a heck of a lot more fiscally disciplined than Cullen as well.
At a long-term cycle thing, we got into a lot of trouble during the 70s and early 80s and our macro-imbalances (current account, budget deficit, inflation, debt) put us in a much worse starting position. We’ve been trying to play catchup for a long time.
The other problem is the size of the Government spend in NZ (and it’s composition). As a general trend, public sector spending tends to rise a little faster than GDP. So the percentage tends to rise. NZ’s unique problem, is that we have an economy (in per capita terms) that is smaller than the US and Australia but with a much higher level of Government spending. It is out of proportion (too large) for an economy of this size. It is starting to approximate many European economies, which again, have much larger per capita incomes.
So we’re pretending that we can afford a European-sized welfare state on an economy that is actually, too small for the job.
Vote:December 2nd, 2009 at 4:26 pm
Jack5, please give us the following numbers on Australia:
1. Mining as percentage of GDP.
2. People employed in mining as percentage of the work force.
Shocked when you found the numbers? That’s what I thought. Don’t repeat Michael Cullen’s nonsense here as we actually know the numbers. Mining has very little to do with a 50% wage gap between us and them.
Vote:December 2nd, 2009 at 4:26 pm
It’s very easy to say we need conservative, incremental and sustained growth, Danyl, but Labour has not shown in practice or even in theory, how NZ might achieve this.
I thought Notional was the government now. Neither the Notional govt or the Brash taskforce have shown how this might be achieved, either.
And while japan, taiwan, korea, singapore have done well without vast mineralr eserves, you’d run a million miles before adopting the corporatism that brought about their success.
Vote:December 2nd, 2009 at 4:28 pm
And for Danyl: in the last 30 years, in what period did our productivity increase by 3% or more, and when was it 1%?
Please post your answer here. One hint: it wasn’t during the Labour years.
Vote:December 2nd, 2009 at 4:32 pm
“DPF, why don’t you just admit that John Key is an empty suit?”
Hell may freeze over and Winston become a virgin first.
[DPF: I have criticised John Key on many issues, including the 2025 report. But that doesn't mean I don't think he is overall doing a good job - a view shared by most NZers.
I criticise MPs when I disagree with what they do, and support them when I agree. That goes for John Key, Trevor Mallard and Russel Norman. The only exception is Winston who is always wrong]
Vote:December 2nd, 2009 at 4:34 pm
I think you also have to bear in mind, that our exports are far narrower and more focused on agricultural goods. This is important because for most of the last 30 years, this is an international market where barriers to trade are much higher.
When the East Asian tigers took off, tariffs on manufactured goods were sinking fast- down from 40-60% on average globally in the 1960, to around 4% by the end of the decade.
We specialise in goods that are hard to sell, and where our trading competitors, spends hundreds of billions of dollars every year to lower our returns.
Vote:December 2nd, 2009 at 4:36 pm
Oh, and many of the East Asian Tigers also had much smaller welfare states, lower taxation and inflation, and much higher savings rates.
Vote:December 2nd, 2009 at 4:56 pm
Don Brash’s job isn’t over he has to report each year on what progress has been made towards reducing the gap.
DANYL:… the reason we couldn’t copy all the initiatives of Aussie was because we had a Liabour Government which collared all the money through high taxation.(and then wasted it)
Vote:December 2nd, 2009 at 5:14 pm
Berend posted at 4.26:
Save me looking them up, Berend post them please.
However, I quote the Wall Street Journal of 9 November: “…Minerals comprise 8% of Australian GDP but 48% of total trade…”
I think you will find services well under half that proportion.
As for Berend’s
Stupid me, Berend, I thought that was why hundreds of young Kiwis head for West Australia to make big money in the mines, alongside Aussies with trade and other qualifications who come for the wages.
Labour has long ago forgotten its founding constituency of miners and hard-work folk though. Otherwise I would have long ago been put right by a lefty.
Vote:December 2nd, 2009 at 5:35 pm
A large part of the problem is that our major exports have faced sustained and strong trade barriers, Grosser is strongly hinting that this era is coming to an end, will be interesting to see if he is right as he seems to be a very good man.
Also Oz is resistant to doing stupid stuff like getting offside with the biggest economy in the world or signing up to a ETS that they know will hurt their standard of living.
Vote:December 2nd, 2009 at 6:17 pm
New Zealand is not going to make it.
Vote:December 2nd, 2009 at 6:34 pm
I suppose some of you are waiting for John Key to change and hoping that because of his campaign promises he is keeping the status quo until after the next election. I doubt it. He didn’t have to rush the ETS bill through which will cost taxpayers. ACC levies are going up across the board raising the cost of living. Petrol just went up 5 cents. Wait till January 1st, when the oil companies and electric companies will gouge the public for more money than expected and blame it on the ETS. This has happened time and time again. How is this helping New Zealand move up the OECD? I can see keeping an election promise but in the meantime he has raised the cost of living. Why? I think John Ansell explained it and it makes perfect sense. They don’t have a plan and they feel that keeping the status quo will get them elected. Wait till inflation starts going through the roof when petrol prices go up 2.00 a litre. and electric bills go up 20 percent and government spending has gone up by 3 billion. John Key is a Helen Clark all over again. Get rid of him!!
Vote:December 2nd, 2009 at 7:20 pm
Don’t let it worry you jackp, just keep a good stock of ammo.
Vote:December 2nd, 2009 at 10:04 pm
Jack5, not every top hit in Google is your friend.
Vote:December 2nd, 2009 at 10:06 pm
Jack5, furthermore, there are not hundreds of Kiwis in Australia, but hundreds of thousands. What are they all doing?
Vote:December 2nd, 2009 at 11:29 pm
Its fairly tragic that National had the opportunity to change the way we do politics in NZ and has completely stuffed it. I don’t know why they go on about not wanting to break election promises considering the first thing they did is break the promise of further tax cuts – that we’d been waiting over 10 years for; of treating people and ethnic groups equally, of bringing back integrity into parliament by not tolerating snouts in troughs, secret deals, … Its just a different person signing the cheques – the crappy 90′s National government all over again.
Its now quite clear that things are never going to change while Labour and National play good cop bad cop with us but continue business as usual not even attempting to dodge the iceberg when they rearrange the deck chairs. I guess the real honest truth is that we are now in the third world but no-one will admit it, and we have had worse than third world governance out of our politicians for the whole post WWII period. It’s hopeless. This government was our last hope. The only good thing they’ve really done is confirm the truth – no-one speaks for us!
Vote:December 3rd, 2009 at 1:14 am
They better get a move on, more needs to be achieved by the next election than the construction of a cycleway.
Vote: