With this thoroughly retrograde decision, Russel has brought to a needless and sudden halt his near faultless eighteen month performance as the Opposition’s most astute economic critic of the National Government.
By abandoning QE, Russel has also deprived himself, the Greens, and any sort of useful ‘Centre-Left’ coalition government, of one of the very few means of mobilising the indigenous capital resources necessary to fund the job-rich, socially-just and “green” economic development New Zealand needs.
Both the Greens’ and Labour’s promises: to put New Zealanders back to work; on a living wage; in clean, green and innovative export industries; while guaranteeing them and their families an affordable home; effective health services; and a progressive, child-centred education system; can only be achieved at the cost of billions of NZ dollars-worth of new state spending.
What Chris Trotter is saying is that the policies of Labour and Greens are unaffordable, unless you printed more money to pay for them.
Russel’s QE proposal: Requiring the Reserve Bank to purchase government issued Earthquake Recovery Bonds to a sum equivalent to 1 percent of GDP (approximately $NZ2 billion) to both assist the Canterbury rebuild and bring down the value of the punishingly over-valued NZ Dollar; was one of the very few practical and non-inflationary funding options available to an incoming progressive government. By taking it off the table, what Russel is really telling us is that the Greens’ and Labour’s promises can no longer be paid for. –
Trotter is right that their promises can no longer be paid for. What he is absolutely wrong on is saying QE is non-inflationary.
The Greens have always made it a point of political honour to be absolutely straight with the New Zealand electorate. If they intend to keep faith with that tradition, then their co-leader and chief economic policy spokesperson needs to step forward now and admit that, with QE off the agenda, the Greens’ promise to give New Zealand a clean, green and innovative economy can no longer by paid for and, therefore, will no longer be included in the Greens’ 2014 Manifesto. And, while he’s at it, Russel should also foreswear any ambition to be Minister of Finance in a Labour-Green government.
I doubt they will do either. They’ll just hope the public don’t care of promises are affordable or not.