Clark and Cullen took over NZ’s economy when things were really starting to move. From 1990 to 1999 we had gained over 280K jobs, taken the country from the verge of bankruptcy to having a 1.5Bil surplus, paid off (from memory) 32Bil of overseas debt and built personal productivity up to three times higher than it was at the end of Cullens reign.

Cullen immediately started a tax and spend approach with a focus on redistributing wealth rather than creating it. It took some years before the good work of the 90′s was unwound and eventually productivity ebbed away and with it the prosperity of the nation.

I think the most telling sign of this was when Cullen had to admit under intense questioning in parliament at the end of their second term that while the average NZ’er had taken a step forward with the economic growth, the government had forced them to take an equally large step backward because of the 41 additional taxes we had been thumped with.

Imagine that. After six years of the best economic conditions in any ones living memory and by Micky Cullens own admission, the average NZ’er was right back to where he had started.

The most accurate comment is that they were the most incompetent government in NZ’s history.

Another ex colleague moaned that as the number of policy analysts employed in Wellington went up, the quality of analysis went down – as did accountability.

For my part I have argued for changes to the tax system for years – and did get manage IRD to change the way it calculated depreciation rates so it didn’t favour longer lived assets. However, the incorrect inputs weren’t changed. Who really believes a building only lasts 50 years? If that were so, half the houses in Wellington should be falling down and unfit for habitation.

Thought those following this thread might enjoy it.

Permanent link is http://xkcd.com/

NO ONE has the guts to simply fund science adequately (and I don’t mean open up the coffers and let us have EVERYTHING we want – there still has to be _some_ oversight and care, we should still be made to justify what we want to do and the costs) and then step back and let things happen. It’s because “they” want instant returns. And there is an insistence on “full cost” funding, as if the infrastructure and such wasn’t already there and funded to one extent or another.

It’s almost as bad as investors in the stock market who want immediate returns instead of building a long-term sustainable entity. Hmmm … come to think of it, that also seems to be the “modern” business model. Just look at the dot coms, etc. Instant gratification. Instant billionaires. Made up of nothing but fluff and puffery, with a bit (lot?) of marketing and spin.

All brought to you by the mindlessly stupid Simon Upton of the new bread of university educated National Party.
I kid you not but they have more of that sort of stupidity there yet.

The current funding model demands that science have some immediate technological spinoff, when every study and report ever done has shown that unfettered research produces the best and strongest economic results, but that it takes 20 years to show in the stats. All of our leaders, political and economic, keep thinking short-term. And that will ALWAYS bear short-term fruit and long-term “drought”.

I agree we NZ citizens need inspiring. John Key has won popular appeal but generally he appears to reflect rather than to beam out inspiration.

Commercialising science is a stiff challenge everywhere, and the technology start-ups in NZ generally struggle. The recent receivership of Botry-Zen shows that. Its organic fungicides for grapes and some other horticulture crops ought to have vast appeal to a wackily-Green world. It and other tech start-ups struggle and struggle to find capital to reach break-even.

If only ten per cent of the billions that went down the finance company drain had gone towards risky technology start-ups (and perhaps oil and gas exploration) NZ might be on the road to economic health.

IMHO, we are starting to sprout Third World characteristics, and we ought to be debating underlying issues related to these, all of which will ultimately dominate the economy. The Third World warnings as I see them:

-Persistent current-account deficits as imports outbalance exports. When will we find a way of making ends meet as a country?

- 40 per cent of the population in one city (in the US, this would equate to New York having around 120 million citizens).

– Demands for the Government to solve all problems.

– A creaking health system where a foreign-controlled and state-owned MSM lambast providers and heighten unrealistic public expectations.

– A weakened, politicised education system. Examples: you can now get a tertiary, non-honorary degree for non-academic experience, also the taxpayer funded free introductory courses to computing where these were once provided by volunteer computer user groups. The failure of state schools in the education of boys is more serious.

–A foreign-dominated financial system (the trading banks and Rabobank etc);

– Weak financial regulators: the Securities Commission, the Commerce Commission, and Reserve Bank sleeping through the finance-companies disaster;

– Coalition governments with the power they give to tiny minorities and their difficulty in taking unpopular but necessary economic action when the coalition maker has to pander to so many tiny groups;

– Failure to address incipient race/culture problems and crucifying those who dare raise them (Don Brash). We are indoctrinated with the leftist doctrine of multilculturalism (see link below for a Rightist take on this). Where is the discussion on whether we should have an assimilist policy for our new ethnic citizens? The question parallels the change in immigration sources, which regardless of whether these were good or bad, was introduced by immigration consultants led by former politicians, all without consultation with voters or any debate. Meanwhile activists within the coaliation seek for the indigenous minority apartheid-like separate institutions, even to the extent of Maori-ising local use of the English language. In all cases of race/culture discussion the MSM co-operate with activists to stifle debate quickly with accusations of racism. How are we going to have a viable economy when it is split in two, and where will the new ethnic communities fit?

The link to a Rightist view on multiculturalism: http://www.amnation.com/vfr/archives/000637.html

Dare I say this here but David Lange was an inspirational politician (till he found the Pope of course.)
Currently we don’t have anyone that is inspiring.
Kiwi’s need inspiring again. (Not by a socialist though!)

Viking2: please don’t hold up the DFC as an example for anything. What a bloody disaster that ended up. And Govt seed funding is just more soclalism.

SOB! How will we survive without their services?

We need to call into question the myth that housing was the cause of all this. Dr Don in his report studied that andd found that we spent no more nor no less than the OECD average. You can read it in his reporting.

The nub of the issue is that people don’t want to invest in shonky companies or take risks with their money (albeit that many have with finance companies.)
We have stopped spending on R& D in NZ due to Govt. policy because we buy most of it in.
We have stopped patenting many new idea’s. No education on the process, no assistance other than being rorted by patent lawyers.
We have ripped the heart out of our science facilities for a funding model that doesn’t work.
We have a securities commission that went to sleep (or overseas to fix the world) rather than scrutinize our companies properly.
We have taxed everything that moves or doesn’t move and plan to add more.
We have increased those taxes.
But worst of all we have attacked the independent spirit of people and put them down, smothered them in regulations and benefits.
Why do Kiwi’s in Aussie always laugh and have fun when we here are so taciturn and depressed?
We need to uplift the human spirit in Kiwi’s in business. Want an example, how about the team to go to the Soccer World cup?
We used to do all this but it was slowly and surely repressed.
We need banks that will take risks with innovation e.g. DFC before it went wrong.
We need lower taxes and if the trade off is that some have to pay for more things then so be it.

We need in short a Govt. that opens our freedoms up again and spends the money in the right places.
What would you all say if instead of spending so much on welfare we spent it on Crown Research Institutes, letting them get on and play with research? (That’s what’s made H&P and Toyota and dozens of other world companies.) Lets tip another 500 million into the science pockets instead of increasing the benefits. ( That would be about 30% of new Govt. spending this year.)
Lets have seed funding for new idea’s. 200 Mill would be a good start. Some will fail, some will be mediocre and some will be amazing. Doesn’t matter for the good will be greater than the not so good. Don’t try to pick winners, let the market do that but lets at least get the idea’s to market, (with hte appropriate protections of course.).

Cycle ways won’t produce our next billion dollar industry but seed funding and science will. ( good example; the 45 million given to Zespri.)

You can analyze everything to death but in the end you must do something for change. The greatest change comes from changing attitudes and we need to change our attitude from crime and lawyers and laws to freedom of ideas, people and attitudes. We need to go from helping everyone to helping only those that can’t help them selves, we need more individual responsibility.
We need to support those that are unable to help themselves.
But above all we need the right to be me. The right to grow and prosper and to help others do the same.
These are the

From around 2003/04 to 2008 the tradeable sector did not grow at all in real times, despite no external shocks. It is now only around 15% greater than it was in 1999, while the non-tradeable sector is around 50% higher.

More importantly, the productivity increases aimed for were not achieved. And you can’t build policies on the assumption that commodity prices and growing conditions would always be favourable. What started to bite was the growing macroeconomic imbalances- household dissavings rose, the current account worsened. These imbalances worsened from 2005 when fiscal restraint was largely abandoned. If dairy prices hadn’t defied gravity, the downturn in tradables would have occurred earlier.

Increases in the services sector are not all bad. But I agree more manufacturing would be much better than tourism. Tourism is a blight on us all!

So what exactly changed in the third term? And what was National promoting to do differently and how would that have changed the picture. And by the same reasoning it seems that for the first 6 years Labour was doing the right thing then, wouldn’t you agree?