Not very hands off

January 24th, 2013 at 12:00 pm by David Farrar

David Shearer is going to give a speech next week and claim the Government is a hands off economic manager, and will be a hands on economic manager and this is the big difference. It’s a speech that may have been true in the early 90s, but anyone who seriously claims the Key Government is hands off is letting ideology get in the way of reality.

Personally I think the Government should be more hands off. I think many economic interventions are well intentioned but often have unforeseen consequences.

The Press reports:

A large Canterbury irrigation scheme may be among the first considered by a new Crown company that will act as a bridging investor.

Minister of Primary Industries David Carter said yesterday that the Government was setting up a company that would invest in feasible, affordable and profitable irrigation schemes.

The Cabinet decided late last year that a company was needed to run the Government’s $400 million irrigation fund. It would receive $80m in this year’s Budget for its first year of operation, he said.

It was appropriate the Government took the investment role to ensure the right projects got under way, Carter said.

“The Crown-owned company will be a minority investor in any development project and it will also plan to be a relatively short-term investor,” he said. “A number of groups are developing proposals for these larger, regional-level schemes, and the Government expects to consider at least one proposal in the next 12 months.”

Irrigation New Zealand called the move “well deserved”.

Chairman John Donkers said irrigation schemes were a huge financial pressure for farmers and farming communities.

“For many years farmers have personally carried the cost of water infrastructure, which can run into the millions of dollars yet benefits regional economies enormously,” he said.

“Having a government-owned company invest in the initial stages takes the pressure off small communities to find that kind of capital upfront. The benefits for regional New Zealand can’t be underestimated.”

It was important to realise the Government was not giving away money. “This is equity funding. The Government is going to want it paid back over time,” he said.

So when David Shearer claims the Government is ideologically averse to hands on involvement in the economy, I hope someone asks him about the $400 million irrigation fund, the $1.5 billion for ultra-fast broadband, $100m for export assistance, $15m for business capability, $30m for sector and special events, $30m for international growth opportunities, $50m for large budget screen productions, $10m for major events, $12m for venture capital, $10m for primary industry grants, $9m for sustainable farming, $70m for primary growth partnerships, $220m for CRI funding, $178m for high value manufacturing and services research, $106m for biological industries research, $84m for health and society research, $47m for Marsden Fund and so on.

Anyone who thinks John Key, Bill English and Steven Joyce are neo-liberal hands-off ideologues is somewhat demented. Personally I wish they were a bit more hands off.

This is not to say there are no differences betwee and Labour in terms of how involved the Government should be in the economy. There are differences, and reasonably important ones. Labour thinks the Government must own 100% of certain assets, for example. But the current differences between and Labour in terms of involvement in the economy tend to be around the details, not a fundamental disagreement that the Government has a role in . ACT has that view. Ruth Richardson (God bless her) has that view.

Shearer knows there are few votes to be won in claiming “our interventions in the economy will be better than National’s”. So what he will try and do is say National doesn’t intervene at all, and we will. He hopes enough people will believe that. The truth is far more mundane.

Tags: , ,

22 Responses to “Not very hands off”

  1. Pete George (23,436 comments) says:

    Hands off versus hands on is something Labour strategists have been working on for a while. If they persist it could bite them on the bum.

    An obvious unintended consequence is a future Labour government being seen as more hands-on tax.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. Viking2 (11,368 comments) says:

    HMMM, hands off versus involving themselves because of stupid people. Just like this .
    Magnet toys declared unsafe

    Thursday, 24, Jan, 2013 6:41AM

    A mother whose toddler had to have an operation to remove high powered magnets says it’s great they’ve been pulled from the shelves.

    Consumer Affairs Minister Simon Bridges has issued an unsafe goods notice on rare earth magnets, which means no one can import or sell them.

    Lila Vagana’s three-year-old son Zephaniah went through seven weeks of stomach cramps and vomiting before the magnets were discovered.

    She says the safety warnings were not enough.

    “Because they’re so interesting, it just lures our children to them, and there’s no going back once they swallow.”

    Lila Vagana contacted the Government about her concerns over the magnets because she didn’t want another child to go through the same thing.

    silly name syndrome is well involved followed by the Nats. pussy whipped party of interventionists.

    Oh and never mind those that can and do use these magnets safely. Bridges is just another doppy pussy whipped Nat.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  3. thedavincimode (6,627 comments) says:

    In order to put the predicted Shearer claim into context, it is important to bear in mind that he is a tool.

    Vote: Thumb up 5 Thumb down 0 You need to be logged in to vote
  4. Nick K (1,223 comments) says:

    Already there are indications of intervention in the stockmarket; the housing market; the electricity sector; and Red Russell would simply love to intervene in Fonterra and the farming industry.

    It won’t just be hands on with Labour and the Greens Reds, but feet on, arms on, legs on, and everything-we-can-throw-at-it-on as well. If Red Russell gets his way, so much will be on the economy, it will be crushed under the collective weight of what’s on it and will be starved of oxygen and die.

    Vote: Thumb up 1 Thumb down 1 You need to be logged in to vote
  5. bhudson (4,736 comments) says:

    Yes, like how they will hands on and correct the exchange rate. Now there’s a big Tui.

    The strategy might appeal to those who want to believe that the govt can just take care of it and fix everything, but their economic levers will see inflation rise and those same people will not like that their wages will be worth less – that eroding their earnings is the means to (supposedly) fixing the problems.

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  6. pq (728 comments) says:

    We are very wary of NZ Nat NZ Government down here in Christchurch, and we found out the hard way about hands on.
    Hands on here means no democracy.
    Tax without representation and we despise it.
    I am working now with NZ First so we can take advantage of this situation.
    Get ready Farrar

    Vote: Thumb up 3 Thumb down 2 You need to be logged in to vote
  7. thedavincimode (6,627 comments) says:

    pq

    Your idea of democracy seems to be that the people of Christchurch get to decide how my tax dollars are spent. By all means run a couple of pub raffles and a cake-bake to raise the $15b to rebuild your city and then you can make your own decisions. Until then, my version of democracy says that for as long as central governemnt is spending money then central government should exercise a measure of prudential control over the mad hatter local government politicians and cathedral re-builders who have done nothing other than demonsrate incompetence and collective stupidity.

    Vote: Thumb up 6 Thumb down 1 You need to be logged in to vote
  8. Peter (1,687 comments) says:

    Christchurch can do what they like, just so long as they don’t do it with my money.

    Vote: Thumb up 2 Thumb down 1 You need to be logged in to vote
  9. pq (728 comments) says:

    bhudson (3,142) Says:
    January 24th, 2013 at 1:30 pm
    Yes, like how they will hands on and correct the exchange rate. Now there’s a big Tui.
    The strategy might appeal to those who want to believe that the govt can just take care of it and fix everything, but their economic levers will see inflation rise and those same people will not like that their wages will be worth less – that eroding their earnings is the means to (supposedly) fixing the problems

    please explain here bhudson
    what it means to fix and correct the exchange rate and why, that is what the fuck are you talking bout

    Vote: Thumb up 0 Thumb down 1 You need to be logged in to vote
  10. kowtow (8,186 comments) says:

    Unintended consequences?

    Started,back in the day, with the old age pension,when wages were lower and life expectancy short. When taxes could pay for state activites and balancing the books was a priority.

    Now the state,and private sector , is broke and practically everyone is “entitled” to one hand out or another. It’s a human right,”equality” reigns supreme.

    Unintended consequences.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. pq (728 comments) says:

    thedavincimode (4,330) Says:
    January 24th, 2013 at 1:48 pm

    tha Davinci mode can be forgiven, for he knows nothing.
    Democracy here was altered not in the Christchurch Counciul, but in the Ecan Council, which was disbanded for political expedenicy.
    Please fell free to ask questions abouty reality Davincimode Auckland

    Vote: Thumb up 1 Thumb down 3 You need to be logged in to vote
  12. markm (112 comments) says:

    pq you are a tool , you were a tool before you even mentioned your involvement with serial fraudster , snake oil salesman W Peters.

    You dont speak for the people of Christchurch , who you obviously have failed to notice, voted overwhelmingly for National.

    You also need to be disabused of your view that if you mix only with idiots , theirs is the common view

    Vote: Thumb up 5 Thumb down 2 You need to be logged in to vote
  13. bhudson (4,736 comments) says:

    what it means to fix and correct the exchange rate and why, that is what the fuck are you talking bout

    pq,

    The exchange rate plan as touted by David Cunliffe – to relax the inflation range target and allow the Reserve Bank to play in the market to lower exchange rate. (The Greens would have them do so by pritning money – even worse.)

    1. It won’t work – we don’t have the capital to do anything but create short blips on the exchange rate. It was tried near the end of the property boom and failed.

    2. If is inflationary – which means that the income and savings of workers is reduced in real terms – $ buys less. (This is further compounded with any measure of success on exchange rates as imports will become more expensive – like petrol and long term finance.)

    Labour and Greens, with their inventionist/govt spending approaches, will cause inflation to rise, thus making everyone less well off. It is regressive in its impact as the less well off are impacted more heavily.

    Vote: Thumb up 3 Thumb down 1 You need to be logged in to vote
  14. thedavincimode (6,627 comments) says:

    the Ecan Council, which was disbanded for political expedenicy.

    Oh really? So those resource consent applications just got lost in the mail did they?

    Please fell free to ask questions abouty reality Davincimode Auckland

    Auckland? Heh. Why do cantabrians automatically assume that anyone that disagrees with them must be from Auckland?

    But back to my reality question: is Christchurch now funding the $15b refund itself? Or is it just that you think that the taxpayers of this country should just write out a cheque and let you spend how you want to whilst you all sit around holding hands and doing nothing?

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  15. Manolo (13,518 comments) says:

    Auckland?

    Nope. dvm is a proud citizen of Helengrad. :-)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  16. thedavincimode (6,627 comments) says:

    Manolo

    If only that were the case Manolo. You would then be allowed to ply me with liquor whilst I raised your political awareness. :)

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  17. thedavincimode (6,627 comments) says:

    hudson

    Don’t overlook the strengthening of the kiwi as a consequence of the booming economy and elimination of unemployment through investment in green technology and unionisation of the film industry that we will enjoy under the melon/nasty party rule.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. pq (728 comments) says:

    The fact of life is that Christchurch, which is part of New Zealand had a disaster.
    It is astronomical could be 60 billion
    We are now having to ask you New Zealand to help recover part of your Nation.
    We paid you road taxes , we gave you power, we gave you tourism. If the other way around we would pay you

    If the other way around we would pay for you

    Vote: Thumb up 1 Thumb down 4 You need to be logged in to vote
  19. pq (728 comments) says:

    There have been some very serious facts disclosed about Ecan, Regional Council Canterbury; specifically Nick Smith and Rodney Hide with their little axes. Nick Smith will come back to the front bench to haunt John Key. Wait and watch brothers.
    NZ Nat Government acted disgracefully against our representation.
    We will not forget. We only vote NZ Nat because the alternative is stupid.
    I wish we could declare independance from North Island and sell you people our cream and power.

    Vote: Thumb up 1 Thumb down 4 You need to be logged in to vote
  20. pq (728 comments) says:

    bhudson (3,144) Says:
    January 24th, 2013 at 2:10 pm above

    and explains here below what it means to fix and correct the exchange rate and why,

    quote bhudson
    “The exchange rate plan as touted by David Cunliffe – to relax the inflation range target and allow the Reserve Bank to play in the market to lower exchange rate. (The Greens would have them do so by pritning money – even worse.)

    1. It won’t work – we don’t have the capital to do anything but create short blips on the exchange rate. It was tried near the end of the property boom and failed.

    2. If is inflationary – which means that the income and savings of workers is reduced in real terms – $ buys less. (This is further compounded with any measure of success on exchange rates as imports will become more expensive – like petrol and long term finance.)

    Labour and Greens, with their inventionist/govt spending approaches, will cause inflation to rise, thus making everyone less well off. It is regressive in its impact as the less well off are impacted more heavily.

    end quote

    Vote: Thumb up 0 Thumb down 2 You need to be logged in to vote
  21. PaulL (5,947 comments) says:

    Shit yeah pq, very much in favour of sth island declaring independence. Shades of Scotland?

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  22. thedavincimode (6,627 comments) says:

    I wish we could declare independance from North Island

    Me too. Right now would be a good time.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote

Leave a Reply

You must be logged in to post a comment.