Labour effectively pledging a minimum wage of $18.40

September 5th, 2013 at 4:00 pm by David Farrar

writes at The Standard:

I’d like to thank Lynn and the authors of the Standard for this opportunity to contribute a post here, where members and the broader left come together online. The Standard is certainly one of the most respected political blogs and I am a regular reader.

I’ve always wondered if David is also an author :-)

I will introduce a for all employees of Government agencies – and I will extend this policy over time to any business that seeks to win Government contracts.

This pledge goes further than what we had before. This is not saying if you are doing work for the Government, the staff doing that work must be paid the Anglican Church mandated living wage. It it saying that any business that has (or seeks) any contract with the Government must pay $18.40 (for now) an hour.

Now the Government is a massive chunk of the NZ economy. There are few businesses who wouldn’t have at least one contract with a government agency. So if you own a copy centre, and you win the contract to do the copying for say the NZ Transport Agency, then you have to pay all your staff $18.40 an hour or more – even the 16 year old copy assistant.

So the way Cunliffe (and I presume Robertson) have worded their pledge, is in fact a de facto for all. The destruction of jobs that will follow would be massive.

Some may argue that it will only apply to those working for the Government through the contractor. But I can’t see that happening. Say you are a cleaning company. Could you pay staff $15 an hour when they clean the ANZ but $18.40 an hour when they clean the Reserve Bank? Of course not. No employment contract would allow you to pay people based on who your clients are. It would inevitably mean you would have to pay all your staff whatever figure Rev Charles Waldegrave proclaims every year to be the new living wage!!

The Herald editorial makes the point:

Everyone agrees that New Zealand needs to lift its incomes overall, to match Australian rates if possible. But the Labour Party seems to think that this can be done at the stroke of its pen. Mr Robertson in particular, is talking as though an economy is simply a job-creation scheme and all that a government needs to do is make its priority “people”.

He is surely insulting the intelligence of Labour Party audiences, most of whom appear to have been around a good deal longer than Mr Robertson and can remember when the economy was largely a job-creation scheme.

Promising to lift wages by stroke of a pen, and that there will be no impact on jobs, is a cruel hoax. If it was that easy, everyone would do it.

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80 Responses to “Labour effectively pledging a minimum wage of $18.40”

  1. Peter (1,712 comments) says:

    The Standard is certainly one of the most respected political blogs

    Still making stuff up I see…..

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  2. Redbaiter (8,944 comments) says:

    Increasing the wages of government employees and increasing their numbers should be seen for what it really is-

    A disgraceful attack on the democratic process.

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  3. dad4justice (8,224 comments) says:

    Do people really read that stupid sub standard sewer blog?

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  4. Roflcopter (463 comments) says:

    My money is on Silent T = Felix :D

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  5. Sir Cullen's Sidekick (890 comments) says:

    Scream what you want DPF. But this is a vote winner like student interest free scheme. Check the stuff poll. About 60% of the voters are now switching to Labour because of the living wage promise.

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  6. Cunningham (844 comments) says:

    Only Jones has been anything close to responsible so far. He is the only one who will resonate with the general public yet the supporters in Labour are far too stupid to see this and will elect either dumb or dumber. Is there any chance Jones is positioning himself for a leader of say NZ First? Seems like he doesn’t belong in Labour and with Winston retiring at some stage, could this be a possibility? I only say because it has been mentioned before and his views would better suit them.

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  7. Redbaiter (8,944 comments) says:

    “About 60% of the voters are now switching to Labour because of the living wage promise.”

    Well they should all fuck off and live in Greece for a while so they understand what they’re voting for.

    Low information voters, the left wing’s bread and butter.

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  8. Fisiani (1,039 comments) says:

    The Household labour survey shows that the number of Employed is currently 2,230,000
    The number Unemployed is 160,000

    Cunliff’e pledge to effectively raise the minimum wage by about $5 an hour will put approximately 10% or 223,000 people out of employment. This would Treble the current unemployment rate, Treble the unemployment benefit pay-outs. Reduce the tax base by 223,000 people and drag NZ back to the never ending deficits left by the discredited Labour government of 2008.
    He is trying to buy the votes of the lowly paid for one day in November 2014 and pay them back by putting them out of work forever.

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  9. PTM (47 comments) says:

    Does this pledge include people employed in local government? Even the crazy Hamilton council dropped the idea after they had a reality check.
    Still, it does provide Key with a repeat of the classic line “SHOW ME THE MONEY!” all the way to the 2014 elections.
    Should be fun to watch.

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  10. Monique Watson (1,062 comments) says:

    @Dad4J: No, people don’t really read it. It’s a load of horseshit. But if Cunliffe wants to use it as a soapbox to push his communist ideals, then by all means.

    That living wage shit is reasonably innocuous. It strikes me as a box of policy Fluffies. A feelgood, “masturbate the populace”, policy. The govt dept’s will have to come into budget regardless. Pay more people less or fewer people higher. Whatever. The wastage in Govt dept’s is unbelievable under both Labour and National.
    T’would be wiser and more plausible to pledge the living wage as a couple of dollars higher than the minimum wage.
    Cunliffe might win election for Labour for one term. But if he dicks around with the tax rates or minimum wage he’ll out on his snout the following term.
    Pass the popcorn.

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  11. Sector 7g (242 comments) says:

    What would Labour say if National wanted to cut taxes so that people would be $5 an hour better off?
    I say all NZ business should now raise minimum wage to $19 and increase their price of goods by the same margin. See how it goes. Starting with super markets.

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  12. CHFR (229 comments) says:

    I doubt the Stuff poll is a true reflection of public opinion. I have voted yes at least 15 times already and I suspect many of the readers here will have done the same.

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  13. anonymouse (716 comments) says:

    The other side of this statement is that the next labour government may find it had to get private businesses to take government contracts, and this could really put them in a pickle,

    i.e why would a rest home take a client that needed a govt rest home subsidy if it required them to pay everyone at least the minimum wage,

    You will end up with some homes only taking govt clients and other will not, because it would not be economic to only have a few govt subsidised clients if you needed to increase everyone’s wages.

    Sounds like a recipe for a really happy relationship

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  14. wiseowl (895 comments) says:

    There should be no minimum wage.let the market determine the wage.If you work hard you will get paid more.
    pushing for this minimum of around $18 would put a huge number of employers out of business.

    The fantasy continues.

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  15. Peter (1,712 comments) says:

    There was a question in there he only answered in part:

    “My voting papers are on the bench as yet unopened.

    I’d like to hear you talk about what appears to have been a ‘road to damascus’ experience which has seen you move from the right to the left of the party. I want to be sure you are sincere, and will be mighty angry if you lead another ‘third way’ government which continues to throw the poorest and those doing it hardest under the proverbial bus. What will you do for this group? Specifically?….”

    http://thestandard.org.nz/david-cunliffe-2/#comment-691170

    I’m thinking the hard left are going to remain deeply frustrated, personally, else surely we would have answered that in detail.

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  16. Ian McK (237 comments) says:

    The irresponsible behaviour of these imbeciles elucidates how fiscally naïve the Labour a/holes are, and always have been. They alone, are responsible for so many bludgers in this country that it defies belief. These three losers out wasting hundreds of thousands of taxpayers’ dollars on a socialist belief, are making things even worse. Their last term at the Treasury benches increased the public service by 50,000 plus, and we are still paying for that. Makes operating overseas a much better proposition, and we are seriously viewing a move sooner than later; they buy elections then stuff up and leave us in the shit every time . . . we are not getting bitten again. The idiots that support them, in the belief that a liveable wage will work, without inflation, unemployment, and bankruptcy, show the level of mentality of the left.

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  17. mandk (995 comments) says:

    The obvious point to be made is that this policy will raise the cost of services to the government. How will this be managed?

    There is no simple answer, but it is likely to result in some combination of contractors offering less service for the same money (i.e. fewer workers on the job), increased public expenditure and increased taxes (i.e. taking money from one pocket to put into another), increased public debt (leading to higher interest rates), and wage inflation (i.e. as those previously above the old minimum wage demand to maintain their differentials).

    It could work, though, but only if it drives increases in productivity.

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  18. stigie (1,201 comments) says:

    What will the next promise be DPF ? Government funded Morrocan cake hobby classes FFS !!

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  19. mandk (995 comments) says:

    re the Stuff poll, the comments thread was interesting. Last time I looked, the overwhelming majority of comments and votes suggested that the $18.40 proposal was unrealistic.

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  20. mikenmild (11,247 comments) says:

    This couild only work if accompanied by changes to Working for Families to channel those tax credits to employers to subsidise the ‘living wage’. Nonsense, in other words. Decent wages for all are all good and ‘aspirational’, can I say, but can’t be effected overnight by the stroke of a pen.

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  21. Ryan Sproull (7,153 comments) says:

    Is The Standard a place where the broader left came together?

    I’ve always got the impression it’s where a select group of young Labour career politicians in the making came together. It’s named after an old Labour print newsletter, isn’t it?

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  22. scrubone (3,099 comments) says:
    The Standard is certainly one of the most respected political blogs

    Still making stuff up I see…..

    Agree, I actually laughed out loud when I saw that. Mind you, your average blog isn’t very respected so it’s not exactly a high bar.

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  23. bhudson (4,740 comments) says:

    The economic destruction his policy would wreak upon the country is almost beyond belief. Abject power seeking at its very worst.

    Alas, there is worse to come should either Cunliffe or Robertson get their hands on the levers of power.

    No hard Left govt (as they wish to be) could possibly allow beneficiaries to fall further behind with workers now on a living wage. Oh no! Next it will be large increases to benefits. Perhaps it will be deemed that they too deserve the equivalent of the living wage. (After all their parliamentary crutch, the Greens, are clearly of the view that the benefit is a reasonable alternative to working.)

    There’s is no doubt that a Cunliffe or Robertson led Labour govt would take us to ‘hell in a handcart.’ Extending their redistributive largesse beyond those in work would be like strapping a jet engine to it.

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  24. anonymouse (716 comments) says:

    @DPF, but wont all that happens is that their WFF payments will fall as they move up the income tables,

    Any Family getting WFF will not actually get an increase in net income because their WFF credits will fall,

    This crazy wage policy will essentially benefit people without children, which from last time round are the least favoured group in terms of labour’s tax policies.

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  25. dad4justice (8,224 comments) says:

    ” Is The Standard a place where the broader left came together? ”

    Yes Ryan, unfortunately on a average day it smells higher than the Bromley sewerage plant in a Cantab Nor Wester.

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  26. mikenmild (11,247 comments) says:

    Why don’t they just go for the universal basic income – put everyone on the state payroll?

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  27. scrubone (3,099 comments) says:

    anonymouse – comment of the day.

    It’s amazing how often a leftist policy that supposedly helps group x actually does nothing of the sort when the real-world effects are examined.

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  28. edhunter (547 comments) says:

    If Wussel becomes Finance Minister & starts printing money the way he’s indicated there’s every reason to believe that before their 1st term is up the minimum wage would be $18.40, ok the living wage will be $35.00 an hour but the min will be at least $18.40.

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  29. dishy (248 comments) says:

    I pity the fool.

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  30. the conservative (66 comments) says:

    Let’s grow the government some more; let’s pay higher salaries to state employees only and encourage even more government departments and more state employees.

    And besides that nonsense………..what part of discrimination am I missing here? I thought these progressives were all about equality, but paying higher salaries to the state sector only doesn’t appear to be very equal, does it?

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  31. Sir Cullen's Sidekick (890 comments) says:

    Redbaiter (4,515) Says:
    September 5th, 2013 at 4:24 pm

    “About 60% of the voters are now switching to Labour because of the living wage promise.”

    Well they should all fuck off and live in Greece for a while so they understand what they’re voting for.

    Low information voters, the left wing’s bread and butter.

    I agree 100%. But promises like this get the votes, Labour-Green-NZ First-Mana toxic combo gets in, raises taxes, spend like there is no tomorrow. By then the damage has been done and with MMP Maths, they could get elected again in 2017….we are in for very bad 6-9 hours of left rule.

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  32. thedavincimode (6,759 comments) says:

    These cunts are out of control.

    Add the fucking railway line to the list.

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  33. thedavincimode (6,759 comments) says:

    In fact, given that the legacy of that other cunt Herr Dokter lives on, maybe they should route the Taieri on to Queenstown.

    Oh dear. Why do I think I might regret suggesting that?

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  34. OneTrack (3,109 comments) says:

    The conservative – as always, some are more equal than others.

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  35. All_on_Red (1,583 comments) says:

    What a moron. And how gullible or just plain selfish and greedy are those who vote for Labour?

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  36. projectman (224 comments) says:

    The living wage, as Cunliffe (and Robertson) are proposing it, is a crock. Of course, contractors are going to increase their tender price to cover the increase. Who pays for that? Us, the tax payers of course.

    Where is Cunliffe (and Robertson) going to get the money? By cutting other services, by increasing taxes?

    Some hard questions to be asked of them (but don’t expect most of the MSM to get on the case) and expect the usual flannel in return.

    As others have intimated, these people play on the emotions of the uninformed – and I suppose for that reason we get the politicians we deserve.

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  37. F E Smith (3,305 comments) says:

    From Cunliffe’s reply to a question from Anthony Robbins:

    The GFC has finally proven what many of us believed for a long time: that free markets left to their own devices are ultimately destructive of human well being and even economic performance. Unregulated markets tend towards monopolies and often concentrate vast wealth in the hands of a very few.

    Well, if he believes that then he is a complete and utter moron. 

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  38. itstricky (1,836 comments) says:

    The GFC has finally proven what many of us believed for a long time: that free markets left to their own devices

    Well, if he believes that then he is a complete and utter moron.

    Yeah, cause recent experience tells us otherwise, right? I’m pretty sure it was all caused by the cleaning lady from the Te Awamutu RSA.

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  39. F E Smith (3,305 comments) says:

    Sarcasm is not an argument.

    And, to repeat, any person who thinks that the GFC was caused by a free market left to its own devices is, quite simply, a moron.

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  40. itstricky (1,836 comments) says:

    But this is a vote winner like student interest free scheme.

    Yep, just like promising to sell state assets with a bunch of voters thinking to themselves “hmmm I could make a pretty penny off that”… it’s all the same.

    What? Too close to the bone?

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  41. itstricky (1,836 comments) says:

    Sarcasm is not an argument.

    Please feel more than free to describe, in painstaking detail, your analysis.

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  42. Monty (978 comments) says:

    My mate runs a small company employing about 16. Some below the bullshit living wage and some around the bullshit. Living wage. He has employed about. 12 guys under the provisions of the 90 no blame employment rule. If labour gets in he will have to make 8 redundant as they simply will not pay their way for the effort involved. And without the 90 day provision unlikely to employ additional guys.

    So Grant how are your changes going to help these eight guys?

    So David what specific changes will you make to encourage employers to take on some people..

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  43. Yoza (1,879 comments) says:

    itstricky (482) Says:
    September 5th, 2013 at 7:38 pm

    Please feel more than free to describe, in painstaking detail, your analysis.

    The faithful do not need to explain their beliefs, having faith in their doctrine is enough.

    This is probably the foundation of the observation that, “Explaining is losing.” Once they attempt to explain the benefits of the ‘free market’ or neoliberalism to the general population they lose. This economic system exists to strip wealth out of society generally and concentrate it in the hands of the well heeled few.

    I like this one from Cunliffe: “When National says they are going to cut people’s legs off, Kiwis don’t want to hear that Labour will too, just nearer the ankles and with more anaesthetic.”

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  44. Yoza (1,879 comments) says:

    All_on_Red (521) Says:
    September 5th, 2013 at 6:39 pm

    What a moron. And how gullible or just plain selfish and greedy are those who vote for Labour?

    Hilarious. As those who vote National or Act are noted for their altruism and selflessness.

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  45. Tom Jackson (2,553 comments) says:

    The other side of this statement is that the next labour government may find it had to get private businesses to take government contracts.

    Yeah, right. Businesses are going to get all high and mighty at the offer of government work. Pull the other one.

    When the minimum wage increases, those who earn it will have more money to spend. If I were the sort of business where such people shopped, I’d be quietly happy.

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  46. Camryn (543 comments) says:

    Yoza, itstricky – The primary cause of the GFC was Clinton-era legislation that mandated banks increase lending to the “disadvantaged” (in order to advantage them by getting them into asset ownership). The flood of extra buyers caused an increase in house prices and, as a result, the net worth of all home owners including the new (formerly disadvantaged) ones. Thus, the policy appeared to work. Except the banks needed to do something with all these mortgages they’d been forced into so they created the CDO to try to spread all this new (unwanted, as evidenced by their behaviour prior to regulation) risk. Turns out it didn’t work… nothing could resolve the fact that mortgages were now held by people with lower incomes and little protection from any bump in the road. And that bump came and it all collapsed liked a house of cards. And we all blame the banks because the politicians point at the banks to avoid their culpability and the voters agree with the politicians to avoid ours. Because the mass of voters really do believe it was the banks and *lack* of regulation and intervention (rather than the exact opposite) we’re doomed to repeat the mistake. So… suck it up and face facts that it was left wing intervention to help “the disadvantaged” that screwed up the global economy, hurting us all but mostly the group they originally wanted to help. It it always was, as it always will be. The left wing is a cancer. It’s so cancerous that you really think we vote right to advantage the rich. We don’t. We vote to be realistic, to be pragmatic, to carefully and responsibly create economic growth to benefit everyone. Just because we don’t believe in magic doesn’t mean we’re evil. And you’d have to believe in magic to vote left because all of those policies have failed and failed and failed and you guys still think they’ll work one day because they look so good if you just don’t think too hard about it!

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  47. Tom Jackson (2,553 comments) says:

    And, to repeat, any person who thinks that the GFC was caused by a free market left to its own devices is, quite simply, a moron.

    Lawl.

    Fannie Mae and Freddie Mac are this generation’s Smoot-Hawley Tariff – a straw grasped at by those who’ve already lost the argument.

    By reading daft American derp sites, you make yourself the moron in this case.

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  48. Tom Jackson (2,553 comments) says:

    The primary cause of the GFC was Clinton-era legislation that mandated banks increase lending to the “disadvantaged” (in order to advantage them by getting them into asset ownership).

    Yeah right. The dates don’t even match up. You are a victim of a ridiculous conspiracy theory.

    http://www.nybooks.com/blogs/nyrblog/2011/jul/13/why-fannie-and-freddie-are-not-blame-crisis/

    If you won’t be reasoned with, and you won’t respond to the facts, then you will be eliminated from the political process.

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  49. Tom Jackson (2,553 comments) says:

    You guys just need to stop humiliating yourselves.

    http://www.ritholtz.com/blog/2011/07/why-wallison-is-wrong-about-the-genesis-of-the-u-s-housing-crisis/

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  50. Camryn (543 comments) says:

    Tom – http://www.businessweek.com/the_thread/hotproperty/archives/2008/02/clintons_drive.html

    Your article correctly points out that Wall St made “bad bets on complex securities based on subprime mortgages. These bets were mostly placed during the mid-2000s”. However, it illogically fingers those bad bets as the cause of the GFC as opposed to the subprime mortgages that they were betting on. There could be no bets on securities based on subprime mortgages without… subprime mortgages. And without the subprime mortgages there would have been no reason to develop complex securities to try to turn that shit into gold. And why were there a pile of subprime mortgages in the 2000’s? Because of legislative interventions in the 1990’s. The dates match fine.

    So, yeah, the banks screwed up. But it was an unwinnable hand that they screwed up… and Clinton dealt the hand, followed by Bush, all egged on by the voters.

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  51. Camryn (543 comments) says:

    Tom – Your second article is based on “three key facts” that ignore that US house prices are linked to other parts of the US and global economies. Of course an imbalance in US housing can cause bubbles in other real estate sectors (i.e. by causing consumers to feel rich, spend more, etc increasing demand for commercial assets including real estate) and other economies (e.g. US consumers feeling rich and buying a ton of Chinese output which China reinvested back into US Treasury bonds causing excessive cheap credit that made US consumers feel even richer and buy a ton more Chinese output etc). The article also seems oddly focused on Fannie and Freddie. I’m not blaming them any more than I’m blaming the ratings agencies, other martgage securitizers or whoever. Everyone who was a cog in the lending process was *involved* whether private, government or whatever. But the problem was what the machine was running on and that mandate to lend to people who wouldn’t afford it came from politicans and thence from voters. If we don’t blame ourselves, it will happen again. It’s you who aren’t facing facts. Throw around conspiracy accusations all you want, but the true conspiracy is the sweet self-delusion that we did nothing wrong and the GFC was done *to* us instead of *by* us.

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  52. cha (4,032 comments) says:

    And without the subprime mortgages there would have been no was a reason to develop complex securities to try to turn dump that shit into gold onto the institutions that took the word of the ratings companies as gospel

    FIFY
    /

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  53. lolitasbrother (698 comments) says:

    About Wages
    I think Mr Farrar said earlier , that don’t we all wish there would be a good basic wage .
    PM John Key said if not $18 why not $30.
    I am over in Thailand where the populist Government said they would introduce 300 bht as a minimum wage per day
    300 baht is $NZ12.
    Let me be brief, these are cruel wages .
    I have watched men sweating on the floor and taken thier photos shovelling concrete for ten hours a day.
    Suck that for 300 baht =#NZ12
    I spend 2000 baht a day and I float around but I do not have a smart lifestyle.

    The Thai Government quickly realised that you can not impose wages .They backed out .
    They have subsidised their poor rice farmers to the extent of nearly $US15 billion , in rice shemes for their voters ,
    purely on the populist basis of 10 million votes
    and now the Nationl purse is crying.
    If you think we have problems with transparency, well it is little compred.
    Everyone knows, I do not have to ring up Eric Crampton , that vthe market is the market

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  54. itstricky (1,836 comments) says:

    Righto. So you’re saying that the banks deliberately tried to spread as much debt and risk as could cause a massive global meltdown and even though they knew it was happening they didn’t bother the Government about it because, like, they were too scared and the Government and the Banks have nothing to do with each other and never talk, right?

    And, further, it took (what?) approx. 10 years supposedly for the disadvantaged to start defaulting on their loans? So they paid their mortgages fine and dandy for 10 years and then just woke up one morning in 2006 and starting saying “oh, f’it, can’t be bothered anymore”. That’s seriously as dubious as those who post here still harping on about the wrongs that Clark is still inflicting on the country.

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  55. lolitasbrother (698 comments) says:

    About Wages
    I think Mr Farrar said earlier , that don’t we all wish there would be a good basic wage .
    PM John Key said if not $18 why not $30.
    I am over in Thailand where the populist Government said they would introduce 300 bht as a minimum wage per day
    300 baht is $NZ12.
    Let me be brief, these are cruel wages .
    I have watched men sweating on the floor and taken thier photos shovelling concrete for ten hours a day.
    Suck that for 300 baht =#NZ12
    I spend 2000 baht a day and I float around but I do not have a smart lifestyle.

    The Thai Government quickly realised that you can not impose wages .They backed out .
    They have subsidised their poor rice farmers to the extent of nearly $US15 billion , in rice shemes for their voters ,
    purely on the populist basis of 10 million votes
    and now the National purse is crying.
    If you think we have problems with transparency, well it is little compared.
    Everyone knows, I do not have to ring up Eric Crampton , that the market is the market

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  56. OneTrack (3,109 comments) says:

    “When the minimum wage increases, those who earn it will have more money to spend. If I were the sort of business where such people shopped, I’d be quietly happy.”

    So you have got shares in the Warehouse and KFC then? Yeah, that will help the New Zealand economy.

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  57. lolitasbrother (698 comments) says:

    About Wages
    I think Mr Farrar said earlier , that don’t we all wish there would be a good basic wage .
    PM John Key said if not $18 why not $30.
    I am over in Thailand where the populist Government said they would introduce 300 bht as a minimum wage per day
    300 baht is $NZ12.
    Let me be brief, these are cruel wages .
    I have watched men sweating on the floor and taken thier photos shovelling concrete for ten hours a day.
    Suck that for 300 baht =#NZ12
    I spend 2000 baht a day and I float around but I do not have a smart lifestyle.

    The Thai Government quickly realised that you can not impose wages .They backed out .
    They have subsidised their poor rice farmers to the extent of nearly $US15 billion , in rice shemes for their voters ,
    purely on the populist basis of 10 million votes and now the NationAl purse is crying.
    If you think we have problems with transparency, well it is to find out that the Market is not easily manipulated .
    Everyone knows, I do not have to ring up Eric Crampton , that the market is the market

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  58. lolitasbrother (698 comments) says:

    About Wages
    I think Mr Farrar said earlier , that don’t we all wish there would be a good basic wage .
    PM John Key said if not $18 why not $30.
    I am over in Thailand where the populist Government said they would introduce 300 bht as a minimum wage per day
    300 baht is $NZ12.
    Let me be brief, these are cruel wages .
    I have watched men sweating on the floor and taken thier photos shovelling concrete for ten hours a day.
    Suck that for 300 baht =#NZ12
    I spend 2000 baht a day and I float around but I do not have a smart lifestyle.

    The Thai Government quickly realised that you can not impose wages .They backed out .
    They have subsidised their poor rice farmers to the extent of nearly $US15 billion , in rice shemes for their voters ,
    purely on the populist basis of 10 million votes and now the National purse is crying.
    If you think we have problems with transparency, well it is to find out that the Market is not easily manipulated .
    Everyone knows, I do not have to ring up Eric Crampton , that the market is the market

    Click to Edit

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  59. itstricky (1,836 comments) says:

    Although, yes, I agree that the GFC was “done by us” as much as us includes those who deliberately tried to dig themselves out of it, make money out of it and devise their own butt covering way out without sticking up their hands and saying “errrrr there’s a problem over here this sh* don’t look so good”. A single disadvantaged person defaulting on their mortgage is absolute peanuts in comparison.

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  60. Camryn (543 comments) says:

    Agree that banks obviously did talk to government about it! Unfortunately they said “can you make it easier for us to spread the shit around?” rather than “stop making us generate shit to spread around!”. They did well out of the bubble when it was happening.

    I’m not defending banks. I’m just saying we all created the situation that they handled poorly. The chain of bad behaviour didn’t start with the banks so it’s odd to pin them as the root cause.

    Add, yeah, it did take subprime borrowers 10 years to start defaulting on their loans in significant enough numbers to burst the bubble. That’s how bubbles work! Rising house prices (due to the extra demand of the new borrowers) generated consumer confidence, which generated spending, which generated jobs, which generated more potential borrowers etc and the cycle continued. All of that continued for years until everything got too far ahead of the fundamentals.

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  61. Yoza (1,879 comments) says:

    Camryn (405) Says:
    September 5th, 2013 at 10:00 pm

    Everyone who was a cog in the lending process was *involved* whether private, government or whatever. But the problem was what the machine was running on and that mandate to lend to people who wouldn’t afford it came from politicans and thence from voters. If we don’t blame ourselves, it will happen again. It’s you who aren’t facing facts. Throw around conspiracy accusations all you want, but the true conspiracy is the sweet self-delusion that we did nothing wrong and the GFC was done *to* us instead of *by* us.

    O.K., I’ll bite.

    When neoliberalism took off in the Eighties ( Reagan in the US [Reaganism], Thatcher in Britain [Thatcherism] or the Lange regime in New Zealand [Rogernomics]) the predictable and observable effect was to strip vast tracts of wealth out of the lower tiers of society and concentrate that wealth in the bank accounts of those at the top of the social heap.

    This is why corporations and rich pricks generally support neoliberalism, it serves their interests.

    The problem with concentrating large tracts of wealth in so few hands is everyone else has to live. The apparent choices were unacceptable; a) Print more money, which of course devalues the horded wealth rendering this choice unacceptable. b) Pay people an amount that would allow them a dignified existence, dismissed out of hand as desperate circumstances ensure cheap obedient workers.

    As the humane options were nonstarters the only remaining ‘solution’ was ratcheting up the levels of debt. Clinton was no ‘left-winger’, his economic direction followed that of his predecessors Reagan and Bush snr. Allowing a more liberal lending environment was an unavoidable consequence of concentrating all that wealth. Where there is credit there must be debt, for there to be vast concentrations of wealth the must also exist a proportionately vast tract of deprivation.

    Lending money to desperate people who never had a hope of paying it back was never going to solve the problem, but it did provide the illusion, for a little while anyway, that the problem could be tamed.

    The GFC wasn’t a consequence of financial markets being deregulated or the excesses of the free market, as financial markets are highly regulated and ‘free markets’ are a myth. The problem was, and is, financial markets and ‘the free market’ were regulated to attend to the specific interests of the very wealthy and their professional coordinator class.

    The GFC didn’t end in 2008 or 2010 or 2012, it will continue until these rich pricks are stopped, once and for all.

    Cunliffe is making some acceptable noises, but there is nothing much he can do- the living wage is a small timid step in the right direction.

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  62. Yoza (1,879 comments) says:

    Someone takes lolitasbrothers’ computer off him, please.

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  63. Anthony (796 comments) says:

    Don’t let the facts get in the way your little fairy tale will you Yoza. The UK and NZ were basket cases before those reforms – maybe you are too young to remember the shitty products and hugely overpriced products we had to put up with under our greatest socialist prime minister Rob Muldoon.

    Roger Douglas was in fact all about not letting rich pricks with import licenses rip the rest of us off – but no, you’d rather have the state and a cosy club of old boys run everything – so nearly everyone is kept poor! Go live in North Korea.

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  64. Redbaiter (8,944 comments) says:

    “If you won’t be reasoned with, and you won’t respond to the facts, then you will be eliminated from the political process.”

    Yes, we know well the kind of behaviour you commie scum always turn to.

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  65. Yoza (1,879 comments) says:

    The conditions under Muldoon and the ‘solution’ offered by Douglas could be summarised as New Zealand’s domestic elites versus foreign elites and their New Zealand quislings. Roger Douglas wasn’t solving any problems as much as he was imposing an economic orthodoxy which best attended to the profit motives of predatory foreign capital.

    There were any number of ways of dealing with the rigid structure of society under the Muldoon regime without surrendering New Zealand’s economic sovereignty to foreign concentrations of capital.

    I’m one of these fools who like to think that cowering in subjugation before foreign masters is inimical to the independent character of the New Zealand spirit.

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  66. F E Smith (3,305 comments) says:

    I’m one of these fools

    We know, Yoza, we know.  Not much you can do about it except stay away from the computer.

    I didn’t avoid the issue, I went out for dinner.  Just got home.  Not going to explain anything right now.

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  67. Yoza (1,879 comments) says:

    Heh, speak of cowering subjects and up pops Smith. Does it wear away at your sense of self the way you must constantly defer to the judge while you are in the courtroom?
    All that bowing and scraping, is it in your nature or was it something into which you were willingly indoctrinated?

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  68. Mags (38 comments) says:

    What is the effective after tax income of someone on minimum wage? Are there effectively supplements and allowance that make this tax negative? Especially when WFF is added in? How would this change if the income increased to the Anglican ‘living wage’?

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  69. flipper (4,068 comments) says:

    Anthony (655) Says:
    September 5th, 2013 at 11:17 pm
    Don’t let the facts get in the way your little fairy tale will you Yoza. The UK and NZ were basket cases before those reforms – maybe you are too young to remember the shitty products and hugely overpriced products we had to put up with under our greatest socialist prime minister Rob Muldoon
    ******
    The fortress NZ economy was an expensive illusion, and to that extent you are correct. But your description of RDM is absolute crap. Stop parroting…..

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  70. ross69 (3,652 comments) says:

    I do not have to ring up Eric Crampton , that the market is the market

    So when John Key handed Rio Tinto $30 million of taxpayers’ money, that was the market at work?

    You really should think more before expressing your views on here.

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  71. Ian McK (237 comments) says:

    Ross69: You appear to have the financial ability and nous of a Labourite! Rio Tinto were not handed any taxpayers’ money, that is a Labour trait, trying to gain leadership of the party of perverts.

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  72. itstricky (1,836 comments) says:

    Camryn I am sure that a lot of what you have there is kosher. Two things however – the banks and financial institutions deserve far more blame than the average man. They had the power to see and do something about it but did not. (for profit reasons I believe) The same can not be said of the average house owner. In this respect it -is- a market failure. Sure they may not yave started it but who had the power to detect and correct?

    Also it is convienient that the proposed scapegoat is of the “right” political persuasion to knock down do you not think? Nobody is mentioning Bush… What did he do to correct this “obvious” mis calculated policy?

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  73. itstricky (1,836 comments) says:

    Talking of financial ability who can confirm Cunliffe’s statement that initial tax cuts cost $4b? This is in response to Key’s back of a napkin costing of the same for the wage policy.

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  74. Ian McK (237 comments) says:

    itstr?: It was not Bush that caused the failure, it was the liar Clinton, pushing left-wing policies to house his supporters . . . like all lefties, things got tough and they defaulted, leaving their country in the pooh . . . just like Labour do here after a couple of terms in power.

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  75. Duxton (651 comments) says:

    “Heh, speak of cowering subjects and up pops Smith. Does it wear away at your sense of self the way you must constantly defer to the judge while you are in the courtroom?
    All that bowing and scraping, is it in your nature or was it something into which you were willingly indoctrinated?”

    No, Yoza. It’s something he has to do when defending Labour-supporting cunts and losers…….

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  76. Duxton (651 comments) says:

    “Talking of financial ability who can confirm Cunliffe’s statement that initial tax cuts cost $4b?”

    Actually, tax cuts don’t cost anything. It was never the government’s money to start with.

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  77. itstricky (1,836 comments) says:

    itstr?: It was not Bush that caused the failure, it was the liar Clinton, pushing left-wing policies to house his supporters . . . like all lefties, things got tough and they defaulted, leaving their country in the pooh

    But Bush was in power. If it was so obviously wrong according to the Republican world, why didn’t he do something about it?

    It’s just convenient that Business Week fingers Clinton. Using the same logic you could extrapolate the argument and say “Well, why did Clinton have to create those policies to get home ownership affordable?” – was that not Bush Senior’s fault? No you say, well, maybe Bush Senior inherited the problems from Reagan. I mean, where does it stop? Just were your political ideology says it stops? Certainly where Business Week decides it stops.

    Camryn is right in that there are lots of parties to blame but there is one party who saw it coming and did absolutely nothing. Clinton didn’t see it coming 10 years down the track. That party is supposedly a high professional and ethical party too, so this to me is “market failure”

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  78. itstricky (1,836 comments) says:

    Actually, tax cuts don’t cost anything. It was never the government’s money to start with.

    Typical attitude. And I bet you don’t owe society anything for what it gave you, do you? You just happened upon this easy life. Count your stars, my friend and try not to be so self centred.

    No one has answered my question. It’s an honest one. I want to know if he’s right. And I guess the lack of response means he is.

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  79. Anthony (796 comments) says:

    Under RDM we had a wage and price freeze which is probably the closest NZ has come to total state control. Calling him the greatest socialist prime minister NZ ever had can’t be far from the truth. Even David Lange said NZ was being run like a Polish shipyard.

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  80. itstricky (1,836 comments) says:

    No answers. Thought as much.

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