Vance on Goff

May 24th, 2011 at 9:00 am by David Farrar

at Stuff blogs:

The parliamentary press gallery have not long traipsed back from our regular Monday “stand-up” with . It was a good chance for us to drill down on some of the finer points of Labour’s new proposals.

Here’s what we know: Labour is proposing to re-instate research and development tax credits, bring farmers into the ETS scheme earlier than expected and lift the minimum wage to $15.

But after our little question and answer session with Goff, there are more questions than answers.

Here’s what we don’t know: Will the tax credits extend to foreign companies? And how is Labour planning to cap them? What will the carbon price will be for the ETS proposals?

We didn’t get an adequate response to criticism that lifting the minimum wage will cost 6000 jobs.

When asked about policy details, Goff repeatedly – and testily – told us to ask Labour researchers. ”Look, I’m not going into the details on that.”

Hmmn, “Ask my staff, not me” is not generally regarded as a good line for leaders to use, even if it is true.

Goff reckons business can afford the wage rise – he told us previous rises under Labour had created jobs, ignoring the fact they were very different economic times.

That is the key point. In a booming economy where jobs are scarce, you can increase the minimum wage with well minimal impact on employment. But pledging to do so at a time of relatively high unemployment and incredibly high youth unemployment is irresponsible as it will price young workers out of the job market.

As at every stand-up, TV political editors and toyed with Goff like cats playing with a wounded mouse. They wanted to know how it is possible to impose a cap on the credits. (Business NZ chief executive Phil O’Reilly likes the idea but says it will be impossible to limit insterest. Key says you can’t – and Labour has got their numbers wrong on the cost.)

Goff, sensibly giving Labour’s reputation on spending, stressed there was $800 million in the pot and that was it. But he couldn’t explain how they could impose that limit.

Mainly because you can’t, unless you make the scheme entirely arbitrary and first in first served. This is one of the reasons the scheme was scraped – it has the potential to blow out massively as firms classify expenditure as research to gain the tax credit.

There the matter should have rested – but Goff’s political skills deserted him. Flustered, he fell into a catty exchange, mixing up the two veteran hacks and sniping “It’s sometimes hard to tell the two of you apart.”

Really?

This is Guyon Espiner. He is the One News Political Editor.

And this is Duncan Garner, Political Editor for 3 News.

If Phil is having trouble telling them apart, he may need glasses. But to help him, I’ll provide descriptions as if they were super models.

Guyon is the Size 0 editor while Duncan is the plus sized editor.

What a shame. It was all going quite well. The congress generated some positive headlines and, more important, some good debate about the economy. Business NZ liked the tax credits idea, and Goff made a good stab at smacking down Key’s claims that the ETS proposals would drive up the price of milk.

Now the wheels have come off a bit. If Goff can’t answer basic questions about his brand new economic  policies, do Labour’s ideas have your confidence?

Even worse they are not brand new economic policies. They are the policies Labour went into the last election on. So all the detail work was done years ago and would be available in papers and the like.

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21 Responses to “Vance on Goff”

  1. tvb (4,255 comments) says:

    Labour see the ETS scheme as a brand new tax which can raise revenue for some grand scheme of the Labour Party. The possibilities are endless. Lets face it the Labour Party is about taxing and spending. They figure that so long as the people being taxed are small in number they can spread the money raised far and wide to buy votes. Now we have the ETS scheme. All sorts of spending ideas are being hatched to spend the loot raised.

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  2. ben (2,414 comments) says:

    Here is Goff’s mistake on minimum wage: he is thinking in terms of affordability, and not at the margin. If a business is making $1 billion profit a year, it will not choose to hire a worker for $15/hour if that worker will only produce $14 of value for the business. Hiring is done at the margin, and this is true whether the business is making money or losing it.

    Goff’s words are quite deliberate here: he sees profitable business as charity, to share the wealth regardless of the economic merits of doing so. That is the road to serfdom: the reason wealth is created is because people and resources are put into the places they add value, and removed from the places they do not. Goff’s position is a direct attack on that process. NZ will be even poorer for it.

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  3. Manolo (13,517 comments) says:

    The ETS is a grand scam and Labour’s brainchild.

    Labour lite, aka National, tinkered with it by watering down this new tax. Now the socialists are planning to inflict even more pain and higher taxes on us.

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  4. Adolf Fiinkensein (2,834 comments) says:

    No wonder he was testy. He probably has just seen the latest Roy Morgan Results in which Labour’s party vote tanked to 28%.

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  5. side show bob (3,660 comments) says:

    God help this country if the far left lunatics ever regain the treasury benches. The country will tear itself in two. If Goofy thinks he will take from the agricultural sector to appease the useful idiots he’s in for a very nasty shock. I know dairy farmers feel betrayed by the National Socialists and if Goofy thinks he can calmly walk in and steal further wealth then he really is quite thick. Some years ago Fonterra toyed with the idea of paying it’s suppliers in US dollars in off shore accounts. If I was in government I would be very apprehensive, the goose is constantly being plucked, it will take fuck all to get it squawking.

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  6. backster (2,123 comments) says:

    “Goff, sensibly giving Labour’s reputation on spending, stressed there was $800 million in the pot and that was it. But he couldn’t explain how they could impose that limit.”

    Simple you accept applications only from those firms that provide a kickback to Labour…business as usual.

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  7. thedavincimode (6,590 comments) says:

    “Labour see the ETS scheme as a brand new tax ”

    Yes and no. Labour was already alert to the prospect of carbon emissions providing a windfall revenue gain when Herr Dokter gleefully announced several years ago that new business depreciation incentives were to be funded by NZ’s first international payout from this malarkey. As I recall, at the time he seemed supremely confident that this would be a nice little earner for a number of years, even though it was pointed at to him at the time that this little golden goose was in fact a pig’s ear in drag and would turn into a burgeoning liability within short order. But this didn’t appear to deter Herr Dokter. Moreover, he didn’t even seem embarassed by the fact that Landcorp was blazing a trail in de-forestation that only exacerbated the problem he wouldn’t acknowledge.

    Goofey’s latest cunning plan is really in the same vein and underscores the fact that Liabour’s first instinct in economic policy is to take money from X and give it to Y for no particular reason.

    There were a couple of other amusing questions Gaffey could have been asked. How much new R&D was created under Liabore’s last scheme, and how much of it was just re-classification of exisiting budgeted expenditure that would have been spent anyway? How was all this exciting new technology going to get to market without just disappearing overseas once it got to the vaguely interesting stage? Any plans there Gaffey? (Yes, you’re right: rhetorical question.)

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  8. PaulL (5,983 comments) says:

    Rather unusual for the mainstream media to actually do some analysis and question how policies might work. Hopefully this is the start of a trend – at both ends of politics.

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  9. Bevan (3,965 comments) says:

    Goff’s words are quite deliberate here: he sees profitable business as charity, to share the wealth regardless of the economic merits of doing so. That is the road to serfdom: the reason wealth is created is because people and resources are put into the places they add value, and removed from the places they do not. Goff’s position is a direct attack on that process. NZ will be even poorer for it.

    I’ve come to the same conclusion Ben. Goff needs to ask himself whay people invest their money into businesses. Maybe then he will see how detrimental his mentality that ‘business can afford it’, will just result in less investment into NZ businesses. When I invest any money I look at two things: 1: Initial investment & 2: Potential dividend. With 1, I like to make sure the value of my investment will grow, with 2 I’m expecting my investment to be generating an income for me. If the value of my asset is growing, I’m not too concerned about the dividend – but thats hardly been the case over the last couple of years and with the potential returns I’m seeing I could get in Australia. About the only thing stopping me is the exchange rate.

    But the way Goff’s talking, he’d rather I remove my money from NZ and take the exchange rate hit…

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  10. Forrest (15 comments) says:

    I don’t think that Phil Goff himself honestly believes in the effectiveness of the R & D tax credits – after all, in the 27 years since he was elected, he must have witnessed the numerous attempts to encourage R & D expenditure by this means – all of which after a short period have been either scrapped or severely surtailed by Governments when things get tough.
    Neither does he probaly subscribe to the voodoo economics behind the ETS. However, given the state of the books, how else to fund the R & D tax credits? Besides, as others have pointed out, he reasons that Labour will lose few votes from the farming community.
    As for the increase to the minimum wage – why stop at $15? If the economics of this are so compelling, why not increase the minimum wage to $20? I doubt that Goff deep down supports this either.
    I can only imagine the frustration of the union supporters within Labour, who are probably behind the call to increase the minimum wage. They must be aghast at the incompetence of business owners in NZ. If they were running businesses I have no doubt that they would be able to mop up all of the unemployed, the youth without skills, pay them all $20 an hour, give them 6 weeks annual leave, 26 weeks maternity leave, 35 hour weeks, and contribute 10% employer contributions into their Kiwisaver accounts.
    Perhaps that is why they have chosen to put their efforts into the union movement rather than into running businesses.

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  11. thedavincimode (6,590 comments) says:

    PaulL

    Dreamer. That was it for this decade.

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  12. Bevan (3,965 comments) says:

    If the value of my asset is growing,

    That should be: If the value of my asset is growing ENOUGH

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  13. Richard Hurst (798 comments) says:

    What R&D tax credits were used for last time: a packets of gingernuts for the staffroom and enough tissues, teabags and instant coffee to last us till hell freezes over.

    Thanks, Phil.

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  14. thedavincimode (6,590 comments) says:

    Forrest (4) Says:

    “I don’t think that Phil Goff himself honestly believes in the effectiveness of the R & D tax credits …”

    No he doesn’t, mainly for the reasons that you mentioned. This policy is concerned solely with Gaffey trying to carve out some space to make a stand and be different. Predictably, he chose the middle of a swamp.

    And as for the minimum wage – fuck it; why not make it $100/hr? Then everyone can be “rich”, we can get rid of WFF and put tax rates up. Yes, perfect.

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  15. lyndon (330 comments) says:

    and sniping “It’s sometimes hard to tell the two of you apart.”

    I didn’t think he was sniping, just trying to cover they way he’d just used the wrong name to respond to one of them. For context, audio Goff’s Monday standups are available at Scoop.
    http://www.scoop.co.nz/stories/HL1105/S00188/phil-goff-audio-23511-rd-ets-asap.htm

    Otherwise seems fairly accurate. Among other things, Key is much better at moving on from difficult topics.

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  16. lastmanstanding (1,241 comments) says:

    As usual the Socialists see a chance to get some revenue in the pot without thinking of the consquences. they are so desparate to relieve the citizens of their hard earned dollars they just dont care as to the mayhem and destruction they will cause.

    All they want to do is play Robin Hood. its all they understand. No fairness no equity no balance. Just rob the rich pricks and give to the poor. Whilst making the majority in the middle suffer for their outdates cause.

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  17. Pete George (23,345 comments) says:

    Forest – a major part of Goff’s image problem is he usually doesn’t look like he honestly believes in what he’s saying.

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  18. Adolf Fiinkensein (2,834 comments) says:

    Goff should cast his mind back to those childhood Fatty and Skinny rhymes. Remember them?

    Fatty and Skinny went out for a walk…….

    Fatty and Skinny were having a bath……..

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  19. gravedodger (1,528 comments) says:

    @ lms 12 08 you have nailed it in your second para, the truly wealthy will avoid the avarice of these socialist muppets and it will fall again on Mr & Mrs Struggle Hood and they will be powerless to avoid it.
    IMO Joe and Josephine Public are still very wary of the next Labour “miracle” which in reality is only recycling 101.

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  20. Steve (4,524 comments) says:

    Goff is discombobulated and will never admit to not knowing what ‘discombobulated’ means

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  21. Bobbie black (507 comments) says:

    Give Guyon time, look what happened to Lindsay Perigo after all.

    Actually I just realised one shouldn’t dwell too much on Guyon’s name.

    I respect him by the way.

    But come on…Guyon.

    I have a guyon for you.

    Might catch on in time, like Wellywood.

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