The 2025 taskforce recommendations
The 2025 taskforce made a total of 48 recommendations for initiatives that will help close the income gap with Australia. The media will probably only highlight half a dozen, so I thought it would be useful to list them all here, and add my thoughts to them.
1. Government operating spending (as measured by core Crown operating expenses) as a share of GDP should be reduced by 2012/13 to 29 percent, the same share as in 2004 and 2005.
I think a target of 29% of GDP for operating spending is an excellent target, and will probably do more than anything else to help lift national incomes. There is an overwhelming amount of evidence that countries with the state at 25% to 30% of GDP grow much faster than those with larger burdens.
It is worth noting that 29% is what we had in 2005, so it is not a level unknown to us. The problem is that as surplus grew, Dr Cullen grew spending even faster in his desire to avoid tax cuts.
However it is not politically possible to achieve it by 2012/13. I would think by 2017 (end of three terms) might be possible, without causing major disruption.
2. Beyond 2012/13, government spending as a share of GDP should be reduced materially further. To achieve this, the level of core Crown operating expenses per person should be capped in real terms.
I generally support a cap in crown spending in per capita inflation adjusted terms. However this may restrict options too greatly as new technologies in medicine (that are expensive) might become unaffordable.
What I would suggest is for spending per capita to increase no more than CPI+1%.
3. The Public Finance Act should be amended to require the Minister of Finance to specify publicly a medium-term target for core Crown operating expenses, either in real per capita terms or as a share of GDP. In each Fiscal Strategy Report, the Minister of Finance should be required to report publicly on steps being taken to ensure that that goal is met.
This is very sensible, and even if 1 and 2 are not adopted, we should require Governments to be transparent about their spending plans.
4. The Government should undertake an in-depth examination of the scope for further institutional changes to strengthen long-term spending discipline. Examples of such institutions could include a Taxpayer Bill of Rights and/or an independent Fiscal Advisory Council.
Agree, so long as they are effective in standing up for taxpayers, and adding to fiscal discipline.
5. Expert taskforces should be established to scrutinise each major area of government spending, with a view to proposing more effective models for delivering those services that the public sector will continue to fund.
To some degree this has already been happening.
6. Processes for evaluating government spending should be materially strengthened, including greater use of rigorous and transparent cost-benefit analysis for both new spending proposals and periodic reviews of the value that is being obtained from existing spending programmes. Enhancing the quality and rigour of such analysis should be a key priority for the Treasury.
Agree.
Specific
7. Ambitious welfare reform measures should be undertaken as a matter of priority to reduce the very large number of people of working age currently receiving welfare benefits.
I agree. At a minimum we should do what Bill Clinton, a Democratic US President, did.
8. Early steps should be taken to lower the actual and prospective costs (as a share of GDP) of New Zealand Superannuation. The eligibility age should be increased progressively, with increases linked to ongoing improvements in life expectancy, and for some years payments should be indexed to the CPI rather than to after-tax wages.
Firstly the Government has said it will not do this, and I don’t want the Government to become one of broken promises. But I certainly expect a future Government to increase the age of eligibility in line with age expectancy. I’ve not yet received the data I need to make a call on whether part of superannuation (maybe from age 65 to 70) should be linked to CPI instead of average wage.
9. Remaining KiwiSaver subsidies should be abolished.
I do support retaining KiwiSaver with matching employer contributions. That provides enough incentive for people to take it up, so direct state subsidies are not needed. I think KiwiSaver has worked well for encouraging a savings culture amongst younger NZers especially.
However again the current Government got elected on a series of promises, and as much as ACT voters may not like it, it is not going to break its word on current commitments. But such changes do not have to happen before 2011. There may be room to seek a mandate for some of these changes at the next election. If one does not get a mandate for such changes, then you will get wiped out at the election, and have them reversed anyway – a lose/lose.
10. Health:
a. A funder-provider model should be reintroduced in the hospital sector, allowing much greater
private sector involvement in the provision of taxpayer-funded services.
I support greater private sector involvement, but I don’t think the sector could handle another major reform. And again, there were specific election commitments here.
b. Universal (unrelated to income or health status) subsidies for doctors’ visits should be abolished.
This I strongly agree with. Subsidies should be targeted to those who most need it. It is ridiculous that Eric Watson gets subsidized doctors visits. And it is very inefficient to tax people to then just give them that money back in subsidies.
c. Subsidies for prescription pharmaceuticals should be substantially reduced, with those in generally good health and not on low incomes paying the full price up to a cap.
Again, I generally agree, but with a note of caution that middle income families can’t afford a big increase in the costs of medicines. But a total cap may help with that.
11. Education:
a. The substantial increases in subsidies since 2005 for early childhood education and day-care should be reversed.
Again this was an election promise, so I don’t see change there. As a general rule I much prefer spending in the area of early childhood than tertiary but I don’t know enough about whether the increased subsidies have just rewarded families already using day-care facilities, or has allowed lower income families to access day-care.
b. A funder-provider model should be adopted for the school sector, allowing new providers to enter, with all-up per student funding equivalent to that for existing state schools.
Yes.
c. In the meantime, governance and accountability structures in the school sector need to be reformed to provide better incentives for stronger performance and greater accountability for teachers, principals and schools.
Too generic to say aye or nae too.
d. Government-imposed fee caps on university fees should be abolished.
I have long advocated these should go.
e. Market-based interest rates should be reintroduced for student loans.
This won’t happen as again it was an election promise, but for the future it would be sensible to have a policy of at least charging enough interest to cover inflation. Otherwise we are effectively paying people to borrow money they don’t need.
f. Governance of the public tertiary sector should be reformed, including exploring the rationalisation of the non-university sector and the establishment of universities as independent foundations.
Possibly. Need more details.
g. A full review should be undertaken to identify, and recommend reform of, those areas in which various government education agencies (Tertiary Education Commission, Education Review Office, Ministry of Education) have become overly prescriptive, and to explore other, less intrusive, monitoring and accountability options to achieve policy ends that pass a cost-benefit test.
Again, need more details.
Taxation
12. Average tax rates should be substantially reduced, as ambitious expenditure restraint permits. Cutting core Crown expenses to 29 percent of GDP would, for example, allow the maximum personal tax rate, and the company and trust tax rates, all to be reduced to 20 percent.
The Government’s goal is to get the top tax rates down to 30%. Let’s do that first and then look beyond.
13. Serious reforms should be undertaken to reduce the high effective marginal tax rates facing many middle income taxpayers with dependent children as a result of the abatement provisions of the Working for Families tax credit scheme.
Absolutely.
14. Reductions in average tax rates should be achieved by reducing income taxes, and doing so having regard both to the importance of administrative simplicity and minimisation of tax avoidance on the one hand, and to the evidence that taxes on capital income can be particularly detrimental to economic performance on the other.
Agree.
Government assets
15. All businesses owned by central government which are operating in markets where competition is actual or feasible should be sold.
I agree, but note again the Government has a clear election policy. I just hope that for 2011 they have a more flexible policy. At a minimum I would like to see some SOEs take in minority private sector shareholdings, so they gain the discipline of being a listed company,
16. Local governments should be strongly encouraged to sell their trading enterprises.
Agree, but not always one size fit all.
17. To strengthen governance while businesses remain in public ownership, an independent Crown Commercial Appointments Commission should be established, to be responsible for making recommendations to Ministers for Board positions on all Crown commercial enterprises and for vetting and publishing suitability assessments of all appointees to such boards.
This seems a good idea, and should be under the OIA, so if a Minister refuses a recommendation this will be transparent.
18. The New Zealand Superannuation Fund should be wound up and its assets used to reduce gross government debt.
I agree, but again note the clear Government policy means this won’t happen.
19. Congestion charging should be introduced in central Auckland and in any other cities where a cost/benefit analysis supports doing so. Full road-user charging, differentiated by place and time of road
use, should be introduced as it becomes economically efficient to do so.
Strongly agree. Here I am with the Greens. Road users should pay for the costs of roads.
20. Rigorous and transparent cost-benefit analyses should restored to the prime place in guiding decisions on all public capital spending, including infrastructure spending. All such cost-benefit analyses for projects involving the outlay of more than $50 million should be formally reviewed by Treasury.
I would have thought this is already the case.
21. Mining:
a. A governance framework should be put in place to facilitate the best economic use of those mineral resources in which the Crown has a direct ownership interest (under both land and sea).
Not sure what is meant by such a governance framework but I support better economic use of our mineral base.
b. Mining developments on or under sensitive Crown land should generally be permitted provided that they pass a full cost-benefit analysis.
Agree, but recognizing that costs must include conservation, environmental and tourism costs. Applications should be decided on a case by case basis.
c. Development of mineral resources should be undertaken by private operators, with the Crown securing its financial interest through appropriate royalty-type arrangements.
Agree.
Regulation
General
22. A Regulatory Responsibility Bill should be enacted, based on the draft proposed in the recent report of the Regulatory Responsibility Taskforce.
Agree.
23. Property rights should be added to the list of rights specified in the Bill of Rights Act.
Also agree. It would be great to have Crown Law advising Parliament if proposed laws breach property rights of certain individuals or groups.
24. Substantially improving the quality of regulatory impact analysis being undertaken before legislation is introduced and/or government regulatory powers are extended should be treated as a matter of high priority by Ministers and central government agencies. Such analysis should be an integral part of all policy development and review processes, to ensure that the full costs and benefits, to all sectors, are appropriately and rigorously factored into government decision-making.
Agree, and I think Rodney has underway.
25. An independent Productivity Commission should be established as a centre of microeconomic and regulatory analytical expertise. The Commission should be authorised (and resourced) to undertake reviews of matters referred to it by Ministers, and of issues it identifies as requiring further in-depth analysis and research.
Have long advocated an independent Productivity Commission. The Australian one has performed well with bipartisan support.
Specific
26. A high quality independent taskforce should be constituted as a matter of urgency to review resource management law from first principles, including identifying the policy goals that should be served by such legislation and assessing the best ways of achieving those goals.
I am unsure how much this differs from the RMA reviews underway.
27. When determining the zoning of land for residential purposes, local authorities should be required by statute to take explicit account of any differences between the price of residential-zoned undeveloped land and the price of other undeveloped land in similar areas. These differences should be reported on by local authorities each year, with a strong presumption that scarcity of zoned land, as reflected primarily in price differences, should prompt action to increase the supply of residential land.
Sounds sensible. Land scarcity is what partly has led to a runway property market.
28. A system of tradable water rights should be established urgently.
Agree in principle.
29. Labour market:
a. Labour law should be amended to strengthen the freedom of negotiation between workers and their employers, including, for example, streamlining provisions governing dismissal of workers, and putting less emphasis on procedural matters.
Agree. The 90 day grievance free period for small businesses seems to be working very well with no horror stories about it.
b. Statutory provisions allowing enforceable mutually-agreed probationary periods for new employees should be extended, from the current maximum of 90 days for those working for small firms to a maximum of 12 months for employees of firms of any size.
That goes beyond my comfort level. Maybe 6 months for small firms, and 90 days for larger firms. Generally a dud employee can be detected fairly early on and 12 months seems too long to me.
c. For employees earning in excess of $100,000 per annum, employment relations should be governed by the standard provisions of contract law rather than by the Employment Relations Act.
That is what the situation was before the ECA for all non union employees. I would want to see data on how many employees over $100k are using the ERA provisions to see if there is a problem.
d. The youth minimum wage should be reinstated as a matter of urgency, and minimum wage rates should be reduced to the same ratio to average wages that prevailed in 1999.
I agree on reinstating the youth minimum wage. The abolition appears to have been a disaster with the blowout in youth unemployment through the recession. I do not support turning the clock back on the adult minimum wage but agree there should be a ratio of the minimum to the median wage.
30. Immediate notice should be given that from 1 January 2011 all remaining tariffs will be removed.
Agree, Disgraceful the Government has extended them to 2015.
31. Foreign investment restrictions should be further reviewed, starting with a strong predisposition that a much more liberal regime should be introduced.
I think this is underway and has been mainly implemented.
32. Emissions trading legislation and any future emissions reduction targets the Government adopts should be independently monitored and periodically reviewed. Such reviews should focus on monitoring the economic impact of any carbon abatement goals, and the impact of chosen abatement regimes (here and abroad) on prospects for achieving the 2025 goal.
I think this is in the ETS legislation.
33. A review of the Commerce Act should be undertaken, with a focus on restoring the primacy of economic efficiency considerations and long-term consumer interests in the design and conduct of competition policy.
Seems sensible.
34. The Government should strongly encourage the transformation of Fonterra into a conventional company structure with fully-traded outside capital, using any appropriate instruments at its disposal.
Don’t know enough to comment.
35. Zespri’s monopoly on the export of kiwifruit to markets outside Australia should be removed.
In principle I agree.
December 1st, 2009 at 11:45 am
Can you explain why there has been an increase in the number on sickness benefits under National.
For Labour 99-08 the increase was 3.7% while national has had a 14.8% increase this year.
These numbers arent adjusted for population growth
December 1st, 2009 at 11:46 am
yea whatever did happen to the “fire at will” horror stories? toad promised me!
December 1st, 2009 at 11:50 am
Most of them would be state service employees who are currently out protesting about 0% pay rise when those in the private sector have hardly had pay rises in recent years.
December 1st, 2009 at 12:00 pm
I think it’s a good idea, worth exploring. The general long term trend is for wages to rise faster than the rate of inflation, but in the short term (effect on current National Superannuitants), the impact would be imperceptible.
The gradual divergence in average wage and superannuation would tend to curb growth in these expenditures. More to the point, it would be broadcasted fare enough into the future that people could smooth their adjustment to it. The obvious step would be to increase savings more if you want to match a retirement income in line with average wages.
December 1st, 2009 at 12:04 pm
“Can you explain why there has been an increase in the number on sickness benefits under National.”
Problem #1 You are comparing a ten-year average with a single year one.
Problem #2 You seem to be implying that National is doing something to cause the increase but you havent provided any idea as to what
Problem #3 You ignore the most obvious possibility that people who have been laid off may be coming to the end of their easy unemployment benefit time period, so are switching to sickness benefit, either due to “stress” or “depression” because of their unemployment.
You also ignore another obvious possibility that people expect National to reduce benefits, and that the unemployment benefit is likely to be the first in their sights causing another natural shift to the more stable sickness benefit.
Problem #4 you are asking a question completely unrelated to the blog post. That makes you a troll.
Next time countess, how about you save yourself this embarassment and think for yourself instead of lobbing a blogrenade in the comments section of a post that is going to be very popular.
DPF, I think a separate post on each topic would be better for discussion. This thread will be too easy to get derailed. Toad will come in here and talk about climate change, and phule will pop up to say mean things about SirRD.
December 1st, 2009 at 12:09 pm
This is where it falls down unfortunately. It’s a chicken-and-egg scenario. Unless there is a massive increase in GDP, it will not be possible to limit expenditure to 29% of GDP without significant cuts to public services. If National proposes big cuts to public service, they will be voted out.
Sadly, I think it will take a collapse to 2nd World status before enough voting Kiwis support substantial reform.
December 1st, 2009 at 12:11 pm
The farmers who own Fonterra would be very reluctant to allow outside shareholding.
On other points – National won’t break election promises but almost all promsies were for this term. It could campaign on some of the recommendations of the taskforce in 2011 eg partial or full sale of some assets.
December 1st, 2009 at 12:12 pm
What happened to the RMA? its all very well increasing the supply of land for subdivision, but it STILL takes over two years to get Resource Consent if you are lucky. Do you know how much holdng costs must eb for developers?
Shouldn’t be government have done/be doing something about this?
Will Waitakere council be forced to sell its film studios? Makes them lots of income.
December 1st, 2009 at 12:15 pm
Hmmm, maybe Brash was reading this as he wrote the report.
Pity there isn’t a 2009 version.
Sorry to disappoint, Kimble, but the current ETS is so ineffective that the sooner it is reviewed the better, so ironically I agree with Brash’s recommendation in that regard, although for reasons different from his, I suspect.
December 1st, 2009 at 12:19 pm
“I don’t know enough about whether the increased subsidies have just rewarded families already using day-care facilities, or has allowed lower income families to access day-care.”
Apologies in advance for a hearsay/opinion answer…
Many working solo mums on low to average income are utterly dependent on the 20 free hours daycare. Without it the only affordable option for many would be to go on the DPB. Surely daycare subsidies are better than this even if it happened to be slightly more expensive overall?
December 1st, 2009 at 12:23 pm
How does #24 sit with the sinking lid policy on Civil service staffing?
(Is this an acknowledgement perhaps that some of them ***are*** worth having and not a pack of self-serving parasites?)
December 1st, 2009 at 12:29 pm
“Will Waitakere council be forced to sell its film studios? Makes them lots of income.”
And if they get a fair price they will recieve cash in todays money that matches the discounted cash flows of future income. Net effect should be zero or close to it. So the question becomes, what other non-monetary benefit is there for having the Council own a film studio? What is it about Council ownership that is so special?
December 1st, 2009 at 12:29 pm
Queensfarmer, the public sector can be cut back without interfering its performance. When you get middle management in there they are going to justify their position by duplicating tasks that are not necessary. Get rid of that and you can reduce the cost of public sector by quite a lot. “Cut public service” can be a good thing and make that department more efficient. When I talk to a teacher, I don’t talk to an administrator but a teacher. When I go to the hospital, I talk to a nurse or a doctor, not an administrator. Too many administrators and few front line professionals.
December 1st, 2009 at 12:29 pm
I don’t understand why there would be a recommendation to touch Zespri apart from it being Don’s hobby horse? The system appears to work really well, growers get good results by not competing against each other for market share. Do they want to end up like the Apple Board?
Politicians should only look at this if the majority of growers are keen on changing it. To date I think they’re happy aren’t they?
December 1st, 2009 at 12:29 pm
Don’t want to break any promises. yeh right. anyone remember tax cuts etc etc etc.
As for the kiwifruit issue. I’m at loss to understand why this task force would even mention it unless Gibbs has his finger in the money trail somewhere. Gibbs is welcome to do his own work in another country.
December 1st, 2009 at 12:32 pm
“The system appears to work really well, growers get good results by not competing against each other for market share.”
Yep, it is just that sort of non-competition that fosters innovation and helps maintain international competitiveness.
Or not.
December 1st, 2009 at 12:34 pm
Disgusting report. Why should the youth minimiam wage be scrapped? They are doing the same work and should get the same pay. If they arent up to scratch then I’m sure the employer wont hang on to them and they will then get up to srcatch. After seeing the recent polls that Phil Goff has only 5 per cent as preffered prime minister, this becomes rather depressing as it may actually happen again.
Hopefully John Key is to soft.
December 1st, 2009 at 12:37 pm
“Why should the youth minimiam wage be scrapped?”
There is no youth minimum wage. They are calling for one to be re-introduced. Your “disgust” is borne out of ignorance, meaning your opinion doesnt matter. Shut up until you have something intelligent to contribute.
December 1st, 2009 at 12:47 pm
“, and I don’t want the Government to become one of broken promises.”
Too late.
December 1st, 2009 at 12:48 pm
I have two people close my store each night. If I leave two 16yolds, there is on average a very clear difference in outcome to leaving it to two 22yolds or one 16yo and one 22yo to do. The most effective mechanism to control this outcome is to hire 22yolds as hiring the right people is far more efficient than firing the wrong ones.
It is also overwhelmingly typical that the 16yolds that work for me live at home and do not spend their pay on food and rent. All the 22yolds that work for me spend the majority of their pay on food and rent. The 16yolds spend more of their money on piss and petrol than the 22yolds.
I am happy to pay those 16-18 yolds with genuine leadership and initiative as much or more than those older than them, this situation is very rare unfortunately and I know it when I see it.
December 1st, 2009 at 12:49 pm
Jackp I agree in principle. But it’s the perception of “cutting public services” that hurts. If National was able to (say) cut the health budget in half while retaining exactly the same level of service, Labour will simply campaign that “National slashed the health budget in half – what’s next?”
It is disgraceful that any party would make political hay out of increased efficiency, but that’s been the Left’s tactic for years.
December 1st, 2009 at 12:58 pm
Countess – Baby boomers are now in the 50’s – early 60’s age group, so there is an increasing number of people of that age and a portion of them on average will be sick. There is also increasing unemployment and it would be that some employees who are marginal invalids would go on the invalid benefit – no one is to ‘blame’ for this. I would agree that the ‘worrying’ group would be those who lose their jobs and go on the sickness benefit. Possibly some of them literally worry themselves sick.
Employment Contracts – I have been wondering about relevance of ERA to higher paid employees. For starters ALL employment matters are handled by ERA then Employment Court, then High Court etc (but only on a matter of law). For example Rod Petrovic of Bridgecorp ‘fame’ tried to argue that he was owed renumeration by Bridgecorp, but the HC judge told him to see the Employment Relations Authority about this, which he did not want to do (it is under appeal but is now rather hypothetical as he did not get his Porche back).
Relatively few highly renumerated employee cases are likely to become before the ERA. Such employees are generally ‘competent’ (at least on paper), and would be sufficiently robust to sort out minor matters by negotiation. The usual motivations for wanting to get rid of them are personality, confidence and attitude problems. In such cases the employer accepts that there are insufficient grounds for dismissal and therefore negotiates a settlement.
Most employees have to accept an employment contract on a ‘take it or leave it’ basis one employers would make them ‘employment at will’ contracts if they legally could. Note that even under the former Employment Contracts Act, employers failed to achieve the ‘holy grail’ of ‘employment at will’.
Many prospective ’senior’ employees can actually negotiate an employment contract in a meaningful way, and would therefore be able to successfully resist an ‘employment at will’ contract, the compromise being instead renewable term contracts.
So possibly a change may not make too much difference.
IMO if >$100k employees were to be excluded from ERA jurisdiction, some safeguards are needed:
1. An employee must accept any offer of salary over $100k, otherwise an employer could promote an employee one day and sack them the next (I think that historically some shop floor employees were offered promotion to foreman thus going outside union coverage as a prelude to dismissal). As a transitional measure all >$200k employees could be fairly safely transferred to the new regime.
2. The limit be increased in accordance with consumer price or other suitable index.
This could be usefully extended downwards to cover minor CEO’s such as primary school principals.
December 1st, 2009 at 1:00 pm
Granted, kimble. Simple mistake.
And Sonny, who gives you the right to decide who to employ on your judgement on how they ‘might’ spend their money. Thats their buisness. Maybe they live at home and help their single parent out with food and rent for their younger brothers and sisters.
Everyone should be paid the same if the work is the same. Age discrimination doesnt work, whats more its just plain wrong.
December 1st, 2009 at 1:13 pm
People are paid on the basis of their (anticipated) productivity, not their age. It is not age discrimination to pay someone less if they are less productive. The reality, as most employees find, is that young workers on average, have less motivation and experience. That makes them (often) less productive. The best way to get around this problem is to have individual contracts where productive young workers can be targeted for higher payments.
Minimum wages are a device that is used to create youth unemployment and deter training. That is why youth unemployment is resolutely and persistently higher than the average unemployment rates. Minimum wage laws overprice the work of low-skilled workers and deter their employment by firms.
December 1st, 2009 at 1:18 pm
“And Sonny, who gives you the right to decide who to employ on your judgement on how they ‘might’ spend their money.”
Who are you to tell him how he should decide who to employ?
Age discrimination DOES work and there is usually nothing wrong with it. When you are looking for staff for a skater store you will not hire anyone over 50. You just wouldnt do it. You would be an idiot to. You dont even need to know that persons experience or knowledge of skating.
You ASSUME that young people do the same work, but they dont represent the same value as employees. Young people in general ARE less reliable, so there is a risk to employing them. Keeping the minimum wage at the same level for young people as for adults wont eliminate the disparity in value of the two types of workers, not matter how much you wail and gnash your teeth.
December 1st, 2009 at 1:19 pm
In fact there seems to be little regarding reform of local government. Their inflation rates are running higher than central government and they are grossly overpriced for the service that they deliver.
Its time that central government figured out why it is that local government is able to get away with taxing people out of their homes – surely a cap on rates increases to CPI + 0.5% (maximum) is in order.
In fact, i’d go even further and ensure that increases (both central and local government spending) were capped at tradeables CPI + 0.2%. That way they can’t ramp up inflation in the non-tradeable sector, as Cullen did with government spending, which only leads to NZ businesses becoming less efficient due to the high internal costs that are incurred.
December 1st, 2009 at 1:23 pm
This is why I left National.
John Key made great play of being ‘ambitious for New Zealand’. Sounded great. What a patriot.
Only at the same time, he made a sacred promise not to do any of the things that a real leader would do if he really was ambitious for his country, rather than just himself.
Then he promised to close the income gap with Australia. OK, great. Ambition revisited.
Then he got his former boss – a man who really is ambitious for New Zealand – to tell him what he has to do to close that gap.
Good idea.
But now, when told, he proudly repeats his promise not to do those things.
Of course, Key’s and English’s responses were no surprise to anyone. It merely confirmed who they’re really ambitious for.
In case you’re in any doubt, the ‘catch Australia’ goal was nothing to do with National. I think it started with me actually.
When I was working for them, I suggested they commit themselves to an exciting national goal – something to galvanise the population to get in behind and measure themselves against.
It was that last bit that absolutely horrified them. “But if we have a goal, people will hold us accountable.”
Ah, yeah, sorry, I guess it does. Just like in the real world.
By 2006, Don Brash was showing real interest in the goal idea. Then of course he left. And it was back to saying nothing but vacuous platitudes.
When approached to work for Roger Douglas, I suggested the same idea to him, and within what seemed like seconds he’d figured out what that goal should be: to catch Australia and bring our children home.
So this is not Key’s goal. It’s Douglas’s. Say what you like about Roger Douglas, but he’s the only politician in our lifetime to think in terms of goals and plans.
He’s the only one who’s really ambitious for New Zealand.
Be assured: John Key has as much appetite for being accountable for achieving bold goals as Helen Clark did. (Remember her temporary rush of blood to the head in promising to take us to the top half of the OECD? Yeah right.)
This is a goal Key was sensibly talked into by the man he categorically refuses to have in his Cabinet.
One wonders what more damage this man can do to the economy after the events of the past week.
First, he bribes the tribes, opening up an endless series of ratchet clause parity claims that will see us handing over billions and billions to the cunning part-Maori con artists.
Then he turns a blind eye to a Watergate-scale scandal that the underlying climate data has been faked, and passes his crippling ETS law under urgency.
Now he commits to doing precisely nothing to catch up with Australia and stop New Zealand haemorrhaging citizens.
These guys have but one strategy to fulfil their so-called ambition for New Zealand: drill and pray.
December 1st, 2009 at 1:56 pm
I agree John, but we just had 9 years of Labour, and it will take a term (hopefully just one) of John Key’s National-lite to soften NZ to a centre-right party. Once they have the *trust* of the nation (and secure future votes of middle new zealand), they can implement more of these plans. Yes it is not bold, and perhaps not bold enough to catch Australia within our lifetimes. But Key is a pragmatist – and I would rather have a centre right government at the helm than a centre left with the antics we had to put up with during the early noughties. If he plays it well, National will be in for another 2 terms and have real opportunity to take that trust they have established and run with some real reforms.
But yes – if enough New Zealanders get galvinized behind such a goal then Act can get more votes and pull National towards economic reforms that are needed but arent politically achievable right now. If NZ voted that way, I’m sure John would be only too happy to go with it.
December 1st, 2009 at 1:57 pm
Dr Brash will be grateful to this blog for carrying any discussion of his report. Given his performance on Morning Report and Nine-to-Noon this morning, the damning commentary by Rod Oram later, the equally damning and dismissive commentary by his own party’s leaders, and the support provided by the extremist elements of the business sector (minus exporters), he will appreciate any discussion.
December 1st, 2009 at 1:59 pm
Excellent comments, John Ansell.
December 1st, 2009 at 2:01 pm
I must agree with many of the comments above. I think a lower tax regime, less state welfare and more emphasis on individual and family and community responsibility would do us a world of good. Unfortunately the welfare state has been expanding out of control. People have been encouraged to have a sense of entitlement. This has discouraged people from growing up and accepting responsibility for their own lives and the lives of their families.
To me the burden of taxation has been intolerable for years. Lower taxes are an imperative. At present someone on $.39 in the dollar top tax rate is also burdened with GST at 12.5% not to mention tax on petrol and other items such as alcohol. And that is not counting the rates that we pay to local government. I would think many workers must be working until June of each year just to pay their taxes. Sometime around July they can keep their own money!
I would like to see National accept this report and steadily move to a much lower and simpler tax regime.
By the way on the subject of youth rates, my daughter is 15 and there is very little work at the moment. We note that youth unemployment in New Zealand is now 25%. So thanks Sue Bradford for scrapping youth rates. I would like to see youth rates reintroduced so that young people can get jobs. With such a move I think youth unemployment would fall dramatically.
December 1st, 2009 at 2:03 pm
Kimble . The item 7 covers the ‘working age ‘ population on benefits? That what is was commenting on . Its you who the self appointed wind bag
December 1st, 2009 at 2:06 pm
Thanks for your comments John Ansell — very enlightening. However I don’t mind if John Key does “drill and pray”. Drilling for new sources of oil makes sense to me. I think praying would also make sense — perhaps God will give Mr. Key some divine gumption.
December 1st, 2009 at 2:25 pm
Sorry this is a lazy post as I haven’t got up the enthusiasm to read the report fully – but instead trolled through the comments here. I always expected the report would be DOA because of the authorship and the missed opportunity to pick someone perceived as less doctrinaire (Cargill’s presence not withstanding). Overall I am just not convinced that cutting Govt spending to 29% is the panacea we all hope – there are a number of quality reports that state the NZ public service is in fact pretty efficient , and the real big money spends are in health, education and superannuation – the untouchables.
What I don’t see is concrete ideas about how do we get way from mainly exporting dead meat and milk – it takes a lot of our ‘3rd world exports’ to buy a new 1st world MRI machine, how do we get away from about 10-20 firms making up 90% of our export volumes, how do we get entrepreneurs to take their companies from small to big; rather than just selling up and buying the BMW, Omaha bach and Auckland Apartment? Where is the private sectors role in all this? – or is it ‘perfect’ and the problem really all the public sectors…
December 1st, 2009 at 2:26 pm
Drilling is a great idea. And so is sound economic management. Any mum or dad knows that.
If Brash’s recommendations are inflexible, as Tracy Watkins wrote this morning, it’s because sound economic management is boring. Good business is boring. Standing on your principles is boring.
That reminds me: I once stood in front of National’s Class of 2005 and said, “You guys have got to decide whether to stand on your principles or just find a large angry crowd and agree with it.”
Boy, did that get a response. The totally opposite response to the one I intended.
I won’t mention names, but one of them immediately replied, “That large angry crowd sounds like a great idea.”
Another said, “Principles are things you have after the election.”
And another became apopleptic with rage – beetroot red in the face – at my suggestion that principle should have anything to do with National Party policy.
It was then that I realised I was dealing with a party of selfish cowards.
And maxvp: If they won’t do the hard things when they’re on 60%, do you seriously expect them to campaign on them?
December 1st, 2009 at 2:35 pm
Countess, why even bother responding if it was just to say “what I said DID have something to do with the post”?
You didnt even bother to address points 1-3. Fail.
If you want to respond saying why YOU think National caused an increase in sickness beneficiaries then go ahead, otherwise stop wasting our time.
December 1st, 2009 at 2:41 pm
John, I hope you don’t mind but I thought people here might enjoy your blog:
http://johnansell.wordpress.com/
I found it after reading your excellent comments above. Maybe people know of it but I’m probably a bit slow. The unseen 2005 election billboards are great.
cheers
Malcolm
December 1st, 2009 at 2:49 pm
@John Ansell 2:26 pm
My money would be on that being Nick Smith.
December 1st, 2009 at 3:35 pm
when reading the 2025 taskforce report i asked myself two questions to every recomendation. (1) does don brash gain from this recomendation ? and if not, (2) does this recomendation take money or entitlements off those in the lower waged bracket?. if the answer is yes to either one i disregarded the recomendation. brash is still the hollow man, thank christ he did’nt win his election.
December 1st, 2009 at 3:35 pm
A left view, ramming through low taxation etc etc etc will not bloody work, for one good bloody reason, Labour will just change it back unless the Nats and Labour get together to work out what is the best road forward.
Back in the early eighties at lest we could all see something had to be done, but going to a food stamp welfare system will not work among kiwis for the vast bloody majority of us are liberals.
Key has a problem, he will be asked at the next election if he will promise not to drop free education etc etc, and he better be careful with the answers.
Which is why it is time for the two major parties to bloody well talk.
As for Libertarians with their I owe society nothing attitude, fuck em, they can fuck off to Somalia.
December 1st, 2009 at 3:37 pm
Well, you can agree all you want DPF, but you voted for a party that has said it won’t do anything and that this is all way too ambitious.
I’m already sick of National.
December 1st, 2009 at 3:38 pm
tautokai.baxter, in case you haven’t noted: not much youth are doing any work at the moment.
Maybe you forgot that in the market place you have to compete. If you can’t compete on experience, you can compete on wages and gain that experience to demand and be worth a higher rate.
December 1st, 2009 at 3:53 pm
” but you voted for a party that has said it won’t do anything and that this is all way too ambitious.”
It could be said in more diplomatic terms, but I won’t mince my words: people voted for a pack of cowards, traitors, appeasers, and chameleons.
December 1st, 2009 at 4:06 pm
toad: since that’s an obvious guess, I’ll answer it: no.
So I don’t have to keep this up, I’ll promise not to respond to any more guesses either way. Just take it from me, it’s a pretty general condition. (There may be one or two exceptions. Judith Collins is probably one.)
malcolm: I haven’t blogged since earlier this year, but plan to get back into it soon. I’ve designed a new political brand and will post it soon to see what people think of it.
I see the Aussies are delaying their ETS. Another blow to our chances of vaulting Matilda any decade soon.
December 1st, 2009 at 4:50 pm
Kiwis need to know that New Zealand is not just poorer than Australia. We’re hundreds of dollars a week poorer (on average) than EVERY SINGLE Australian state, and EVERY SINGLE American state.
Poorer, in other words, than those inbred Tasmaniacs and dem poor folks from Mississippi.
I don’t have the American figures, but here are the latest trans-Tasman average pay packets: (in AU$):
1. Western Australia – $73,700
2. Northern Territory – $72,300
3. ACT – $69,000
AUSTRALIA – $53,500
4. NSW – $51,900
5. Victoria – $51,200
6. Queensland – $50,700
7. South Australia – $46,200
8. Tasmania – $43,000
NEW ZEALAND – $38,400
Question: How much longer does John Key plan for us to remain, not just Aussie’s poor cuzzie, but also Tassie’s and Mississippi’s poor cuzzie?
If the Brash solutions are too radical for him, maybe he could share some of his and Bill’s.
In a recent Listener article, Key talked about having a plan, but wouldn’t say what it was.
Why not?
Because he hasn’t got one.
It’s a cunning campaign ploy to SAY you’ve got a plan – you don’t actually need to have one.
If Key had a plan, don’t you think he would have shared it with you by now?
The only party that’s ever had a plan is ACT, who took the trouble to cherry-pick the best-working policies from all round the world. If Brash’s policies looks similar, that’s why.
Would we rather he drew inspiration from the basket-case countries?
December 1st, 2009 at 4:58 pm
Was the innovation supposedly driven by dismantling Zespri subdivision into housing like what happened with Apple Orchards near Napier?
Increased compitition between growers is really great unless you happen to be a grower, I think Gibbs is looking to create a peasant class to provide his company with cheap fruit.
December 1st, 2009 at 5:08 pm
Bob 3 35 As I recall it, Mr Brash did win the election until the final count in the twilight zone of Manakau and we all know what the fate of the great local leader there was don’t we.
December 1st, 2009 at 5:43 pm
“35. Zespri’s monopoly on the export of kiwifruit to markets outside Australia should be removed”
What? And let Turners & Growers tear the pipfruit export industry apart? Have NZ pipfruit exporters forced to undercut each other till they break? Then coperate raider Turners & Growers can pick up the ruins at fire sale prices? No thanks.
December 1st, 2009 at 5:51 pm
John, do you have those figures after-tax? I wonder what the WFF transfer does to the NZ one.
December 1st, 2009 at 6:31 pm
Ha ha. Rod Oram. Exhibit A for the decline and irrelevance of mainstream media. He wouldn’t know business and economics if they pissed on him.
December 1st, 2009 at 7:00 pm
John Keys response to another taskforce/think tank/referendum… “oh no, you recommend change… why don’t you just have sex and travel”.
I cannot get over how limp his response has been to this. Why do people defend him with the lame excuse “national have to make no big changes as they might lose the next election” or something to that affect? I can almost guarantee that if national under john key are still government in 2017 we will be sitting there aiming to become a first world country again, with income tax still at 35%, government spending round 40%, three more state owned enterprizes, wanting national to stay in power as they need more time to make any changes.
John Key has already gone back on election promises… eg, tax cuts, maori seats etc, but these changes will incurr the wrath of the left. National under John Key is Center Left and if you think otherwise then you are as stupid as a stupid person beaten with a stupid stick underneath the stupid tree.
December 1st, 2009 at 8:14 pm
This whole debate is getting very sad.
Unless, and I think it clearly is now a forlorn hope, National is running a cunning 3 term strategy, NZ is poked.
or we could talk about how wise Key and English are to rubbish the 2025 taskforce report, which has simply pointed out the unpleasant truth that kiwis are a bunch of whingeing second rate bludgers, and we like it that way.
Want to close the income gap with Australia. Simple. Move there. and take your business, there won’t be an ETS to add to your tax burden for a while to come.
This may really be as good as it gets. kiwis have happily bribed themselves on borrowed money, and the reckoning isnt for another decade, so what they hell. who needs rich pricks generating successful business anyway.
December 1st, 2009 at 8:26 pm
“Specific
26. A high quality independent taskforce should be constituted as a matter of urgency to review resource management law from first principles, including identifying the policy goals that should be served by such legislation and assessing the best ways of achieving those goals.
I am unsure how much this differs from the RMA reviews underway.”
The present reforms mean we are fiddling while Rome burns. Nick Smith has promised the EDS that he will make NO changes to part 2 of the Rma which means he is just fiddling with process. And the last round of reforms have been seized on by local bodies to actually make things worse at the local level.
Take note of his objection I have just made to a consent to divide a single lot into two.
“5. These Compliance Costs Add Up.
We live near the tiny town of Kaiwaka in Northland trying to create a section on which to build a house for our retirement.
Before Council will give us title we have to make the following payments:
• a 5% reserve contribution estimate – say $10,000.
• a roading development contribution – $9,795.
• A double street crossing, estimate – $35,000.
• consent fees of $2,500 (just gone up) $2,500.
• surveyors fee estimate $6,000.
• challenge to consent conditions $600.
Total compliance costs $63,895.
SAY $64,000.
And we don’t have to pay our own consulting fees.
For most people who have to pay their consultants these compliance costs would be $70,000.
So this Kaiwaka lot has to carry $70,000 in compliance costs.
That does not include the cost of the land.
These costs add nothing to the value of the property. Indeed the gross Panzer Division Street Crossing will undoubtedly devalue both properties.
The charge for challenging these consent conditions is particularly galling because these conditions are almost certainly the result of the failure to visit the site as claimed in the report.
And the condition requiring the massive crossing is wrong in law.
In Houston, Texas, a fringe section costs US$30,000 – in a city of over five million with the fastest economic growth and highest employment growth rate in the US.
What are we doing to Kaiwaka?
And is this a taste of things to come?”
Does that answer your question DPF?
December 1st, 2009 at 8:57 pm
Queensfarmer, The argument labour would use about cutting social services could be turned around against them and made very simple to the average kiwi. Hire the front line as National promised and get rid of most of the middle management. Who likes management in the workforce? They aren’t trusted. National could overcome Labour’s objection easily and make them look desperate. Or, get rid of most of middle management and give doctors and nurses raises. I think that would be a winner.
Or, how about this… when there are two administrators to one teacher, I am going to reverse that to one administrator to ten teachers. Is that cutting social services? No, it is making it more effecient and our children will get the instructions they need. I could go on all day and you know what? It would all be true.
December 1st, 2009 at 9:43 pm
Don who ?
December 1st, 2009 at 9:46 pm
oops posted before seeing Jackp’s posr
Why are you in favour of giving the highest paid Government employees ( who also have their own medical practices anyway) MORE cash.
Doctors can go and get fucked, the blackmailing pricks
December 1st, 2009 at 10:00 pm
Doctors and Nurses carry most of the responsibility, dirty rat. . They also work hard. Harder than some administrator sitting at his desk patting himself on the back for doing nothing while his crony boss gives him a pay raise for showing no results other than spending his budget so he can get more the next year. I worked in a hospital while going to university. I saw the waste and I saw some of these doctors working night and day, coming in at midnight to see patients. I lost a lot of respect for administrators, they always tried to control the doctors and nurses but the reason why the patient was at that hospital was because of the doctors and care.
December 1st, 2009 at 11:12 pm
Owen McShane. Just to let you know, some of us understand what you are trying to say! What’s more, you are not completing screaming into the wind!!
December 2nd, 2009 at 12:10 am
I agree Chris.
He makes a lot more sense when he is not in denial mode over rising sea levels.
December 2nd, 2009 at 12:18 am
Seems the Australian Liberals are standing up on global warming. They may even fight an early election on the issue, which would force the media to accept big ads explaining all the facts.
And what do we think will happen to the Tasman wage gap if New Zealand has an ETS and Australia doesn’t?
December 2nd, 2009 at 9:53 am
National promised to catch Australia by 2025 and then they made a whole lot of other promises which make it impossible for them to achieve the first promise. I guess winning on election day is sweet, but then what do you do? Well, you set up a whole of taskforces and hope they never report. When they do, and they recommend the bleeding obvious, you duck for cover and say that you never actually intended to catch Australia and that it was merely ‘aspirational’.
Message to Key and English. If you can’t take the necessary decisions then call a snap election for a mandate to do so. If you lose then the message will be clear that it’s time to book that one way flight to Aussie, but at least the waiting and wondering will be over.
If you lose such an election then you too can head for Aussie and leave the Greens and Labour to fight it out in poverty. But you will at least be able to sleep straight in your bed knowing you did your best. Right now your efforts are plain embarrassing.
December 2nd, 2009 at 9:59 am
Thank you for the detailed information, Owen.
It illustrates the pathetic performance of Nick Smith and his incompetence ind ealing with important matters. How can a government leave ACC, ETS legislation, and RMA reform in the hands of a quasi-moron like Smith?
The spineless John Key has a lot to answer for.
December 2nd, 2009 at 10:02 am
Owen I have just replaced the deck on my bach in Rodney Cost of materials and labour $12000 Cost of structural engineer draughtsmen and Council fees $8500 And then the Council wanted me to have the front boundary i share with them resurveyed as the deck rail may have been 50mm I repeat 50mm too close to their boundary I told them to FOXTROT OSCAR and they did.
This is right one small but important example of why we are slipping down the slope to 3rd world status. Dumbarse thinking by dumbarse pollies and civil servants straining at knats and swallowing camels
December 2nd, 2009 at 10:10 am
John Ansell IMHO if NZ has a ETS and Oz doesnt it will just mean the gap widens more quickly and we join the ranks of the poor countries earlier.
Unless we have the structural changes recommended in the Brash Report there is no hope for us.
Our best and brightest young people will head off shore never to return and we will be left with the unemployed the unemployable and the aging baby boomers who will demand and get very costly health care and superannuation paid from ever increasing tax rates as the tax paying pool diminshes.
Key and English both know this as does Cullen et al They dont care because it wont be their problem to solve.
They like almost all pollies are a selfish venal and feral bunch only looking to win the next election and retain the baubles of power.
They are intellectually lazy and too scared to take bold decisions in the best interests of the citizens.
They are the problem not the solution and until we can find some leaders with vision and principle we will continue to see our standard of living decline
December 2nd, 2009 at 10:45 am
“..What’s more, you are not completing screaming into the wind!!..”
heh..!
phil(whoar.co.nz)
December 2nd, 2009 at 10:48 am
“..and phule will pop up to say mean things about SirRD…”
heh..!
phil(whoar.co.nz)
December 2nd, 2009 at 10:55 am
Freedom101 at 9.53a.m.
Very good contribution.
Such a snap election would be a watershed in our lifetime.
December 2nd, 2009 at 10:57 am
Dave, what do you think of Bill English’s refusal to entertain the free market reforms outlined in the 2025 Taskforce report? And do you think Mr 21% will be a millstone around the Key Govt’s neck in years to come?
December 2nd, 2009 at 11:00 am
“..The only party that’s ever had a plan is ACT, who took the trouble to The only party that’s ever had a plan is ACT, who took the trouble to cherry-pick the best-working policies from all round the world. If Brash’s policies looks similar, that’s why.
Would we rather he drew inspiration from the basket-case countries?..”
and..heh..!..number three..
“..cherry-pick the best-working policies from all round the world..”
here’s a thought..!
why not cherry=pick the ‘best’ working policies from those countries which self-evaluate as the ‘happiest’ countries in the world..?
wouldn’t that make some sense..?
but whaddaya know..!
those countries just happen to be those higher-taxing/higher social support/higher govt. spending as % of gdp..scandanavian countries..
y’know..!..where there are no underclasses for scum to exploit/demean/persecute/scapegoat on..eh..?
oh..!..guess what..!..those countries also come with low levels of crime/social unrest/child poverty etc..
hey..ansell..!..didyahear how the decades of your ‘wrong’ policies..(more on that later)..
have taken us to the top of the child poverty rates..?
we’re number one..!..we’re number one..!..noo zeeland..!
there’s a lot there to be proud of..
now..back to the ‘wrong’ policies..eh..?
you ansell..have obviously not yet seen the recant/mea culpa from allan greenspan..?
where he admits to a congressional inquiry..
that his life-long-held ‘freemarker’-beliefs..are..in his words..’wrong’..
and that those ‘wrong’ policies.. are what caused the american/global economies to implode..
i really think you need to go and see that mea culpa ..eh..?
and why don’t you take brash with you..?
eh..?
phil(whoar.co.nz)
December 2nd, 2009 at 11:08 am
What? Allow growers to sell to whomever they wanted? Force intermediaries to innovate and compete for markets? It always astonishes me when (particularly the primary sector) suppliers think monopsonists are somehow good for them.
December 2nd, 2009 at 11:09 am
^^^ Look at me I’m now a computer nerd I can haz indents!
December 2nd, 2009 at 2:51 pm
I have only one choice next election.. party vote Act. To bad the news isn’t unbiased with Rodney by ripping another you know what. He’s trying to save taxpayers billions and all the news wants to do is knock him down.