Cunliffe pledges $18.40 an hour for 16 year old state sector office assistants

October 9th, 2013 at 4:00 pm by David Farrar

Radio NZ reports:

The Party leader David Cunliffe has told a meeting of Council of Trade Unions that a government would introduce a rate for core public sector employees as matter of priority if elected.

The union movement has been running a campaign for a living wage with a minimum hourly rate of $18.40.

David Cunliffe has also said scrapping the youth wage rate would also be one of the first things a Labour government would do.

So it will be illegal for a state agency to pay a 16 year old anything less than $18.40 an hour.

The stupidity of taking a calculation that is based on w couple with two kids and saying it must apply to all employees is massive.

Equally ridiculous is the outsourcing of your wages policy to some Anglican church minister in Lower Hutt. They  are basically saying that whatever Rev Waldegrave declares to be the correct level of the living wage – they will force the state sector to pay it!

The unions get their entire wishlist as payback for voting for Cunliffe according to the Herald:

Mr Cunliffe, who received strong support from unions during the recent leadership contest, underlined the commitments he made while campaigning for the job.

That included raising the minimum wage immediately to $15 an hour if Labour was elected next year, supporting the “Living Wage” campaign, putting it in place immediately for public sector workers, and extending paid parental leave from 14 to 26 weeks.

Mr Cunliffe also pledged to “scrap National’s unfair employment law changes in the first 100 days”.

He took aim at the “fire at will” legislation, “attacks on collective bargaining”, the undermining of health and safety, and moves “taking away smoko breaks”.

So Labour will return us to being the only country in the OECD without a grievance free trial period.

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116 Responses to “Cunliffe pledges $18.40 an hour for 16 year old state sector office assistants”

  1. Pete George (23,561 comments) says:

    Must we assume from this that Cunliffe will only go into coalition with parties that agree to all of his promises? He sounds definite about what he says his Government would do. He would have to have a fully compliant parliamentary majority to fulfill all his promises.

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  2. nickb (3,687 comments) says:

    If Labour believe that imposing extra costs on housing (i.e. a CGT) will reduce the number of houses bought and sold, do they think imposing extra costs on employers will reduce employment?

    That would be consistent, after all.

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  3. Flyingkiwi9 (54 comments) says:

    Would one of you left wing socialists out their describe to me what is so so wrong with 90 trial periods?

    There’s no argument against it.

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  4. alex Masterley (1,517 comments) says:

    Well I suppose as he owes the Unions big time he had better deliver.

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  5. Cunningham (844 comments) says:

    It’s game on! Cunliffe wil plunge us back decades. Will kiwis really want Unions running the country? Kiwis only need to look over to Australia to see the shambles that the Labor government and their Union buddies created there.

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  6. dubya (235 comments) says:

    You only own your labour, not your job. Socialists don’t seem to realise that. I’d predict a drop in our ease of doing business world ranking if Silent T gets anywhere near power.

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  7. Flyingkiwi9 (54 comments) says:

    there**

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  8. mikenmild (11,247 comments) says:

    dubya
    Yes, we could plummet down those rankings from 3rd or so to around 6th or 7th.

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  9. publicwatchdog (2,593 comments) says:

    Hidden due to low comment rating. Click here to see.

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  10. anonymouse (715 comments) says:

    Anyone pinned Cunliffe down on what “core public sector” actually is?

    http://www.ssc.govt.nz/state_sector_organisations

    SSC don’t count Parliamentary services as a “public service department” so poor old Johnny Campbell might be disappointed to know Cunliffe’s pledge might not help those Cleaners he is campaigning for,

    Also those working in Hospitals could be out of luck as they are much further from the “core public service” than they know,

    Also are schools included, ’cause there are currently untrained teachers who earn less than 18.40 and hour ( 38K a year full time) and they will be steamed if snotty nosed kids straight out of school start to get paid more than them

    This policy has trouble written all over it, and the costings will be much, much , much higher than anyone imagines…

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  11. Pete George (23,561 comments) says:

    Is the 16 year old State sector office assistant doing the same work as the adult?

    If so – then ‘equal work for equal pay’.

    Fair enough. And if they aren’t doing the same work or as productive as the adult?

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  12. Prince (105 comments) says:

    No worries. The fiercely independant investigative journos in TV1 and TV3, and the print media, will look into the links between Labour and the Unions, follow the money, track the secret meetings and run daily expose’s of the crooked deals being arranged.

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  13. Cunningham (844 comments) says:

    publicwatchdog (1,522) Says:

    “Is the 16 year old State sector office assistant doing the same work as the adult?”

    Who will hire the 16 year old when you could get someone older who already has work experience for the same cost? Didn’t think about that did you? Labour the party to tackle youth unemployement – YEAH RIGHT!

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  14. BeaB (2,123 comments) says:

    It’s a shame St John doesn’t change his tune and send young people the message that if they stay at school and get some qualifications, they won’t have to clean toilets at the bottom of the wage heap.

    I notice too he always leaves out the nil tax and Working for families these workers get.

    Unskilled jobs are always badly paid. Having too many kids when you can’t support them will mire you in poverty.
    The remedies for young people are simple and we need to get the message through to them instead of making these poor sods into working class heroes that the rest of us have to keep forking out for.

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  15. Rick Rowling (813 comments) says:

    I’m looking forward to Labour delivering on their two policies of “living wage” and “equality of outcomes”.

    Once all state employees receive both the living wage and equal outcomes, they will all be on $18.40 per hour, whether a cleaner, an MP, or the PM.

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  16. stigie (1,183 comments) says:

    This is fucking nuts coming from the far left !!

    Why not pay them $25.00 per hr then ?

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  17. mikenmild (11,247 comments) says:

    Rick
    Equality of outcomes does not mean what you appear to think it means.

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  18. georgebolwing (853 comments) says:

    Well at least we finally have a choice of policies. Labour et al are proposing that wages be set by government fiat, based on non-peer-reviewed work by part-time policy analysts. National are proposing (at least for now), that wages be set by the forces of supply and demand, with incomes being adjusted based on need via a (albeit loosely) targeted welfare system.

    My greatest fear is that National will do a poll and find that the living wage is popular among marginal voters and thus adopt it as policy.

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  19. hannity (152 comments) says:

    ‘Cunliffe pledges $18.40 an hour for 16 year old state sector office assistants.’

    What , all 7 of them?

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

    What is your issue? He has the mandate from people to do that. Latest NZ Herald and Roy Morgan polls give Labour/Green government a comfortable majority. So they can fulfil their promises. Move on fellows.

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  21. davidp (3,581 comments) says:

    London is a really expensive place, but also a place with a population of young NZers. What is the minimum wage in the UK?

    https://www.gov.uk/national-minimum-wage-rates

    £3.72 for people under 18.
    £6.31 for adults.

    So in the Cunliffe Greek-styled economy, young NZers employed by government departments will be able to earn around 50% more than adult Londoners. Well they would if any of them could find jobs at that rate.

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  22. wiseowl (893 comments) says:

    This is seriously nutcase material.
    Once in place (I hope never) it would create so many distortions.So many in the private sector are earning less than $18 per hour so we will end up with public servants and council workers earning more than those employed by the producers earning the income in the first place.
    Also heaps of older workers are not earning this rate so all of them will want more and justifiably.
    Who said Cunliffe was well educated?
    Very scary.

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  23. Keeping Stock (10,339 comments) says:

    Cunliffe is dragging Labour further to the Left than either Mana or the Greens. That’s going to cause an almighty shit-fight on the Left if Labour starts to cannibalise the Green vote in particular.

    Oh dear; how sad; never mind :D

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  24. anonymouse (715 comments) says:

    @BeaB

    I notice too he always leaves out the nil tax and Working for families these workers get.

    This is the cruelest twist of all that no one is talking about,
    Anyone who is getting WFF and is currently on the minimum wage will get slapped by a bigger abatement,

    What they get from an increased wage, they will lose in WFF payments,
    Hopefully someone in the MSM does some decent anaylsis of this before everyone thinks they will get a and extra 10K a year ( $5/hr @40hrs * 52 weeks)

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  25. berend (1,709 comments) says:

    So what’s the chance no 16-year old will be employed? 100%? Youth unemployment not big enough yet Cunliffe?

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  26. Keeping Stock (10,339 comments) says:

    And I wonder how Francesca Mold feels about Cunliffe’s pledge to get rid of the 90-day employment trials, or “Fire at will” as Labour wrongly calls them; she didn’t even last 90 days…

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  27. davidp (3,581 comments) says:

    wiseowl>So many in the private sector are earning less than $18 per hour so we will end up with public servants and council workers earning more than those employed by the producers earning the income in the first place.

    There is a social justice issue here. Private sector workers earning less than $18 an hour will pay extra tax (and therefore have lower incomes) so that public sector workers performing essentially the same job can earn more than them. It’s setting up a system of privileged public sector workers and the feudal minions who support them. Which is also a very Greek-style thing to do… public servants there retire at age 55 or so, while everyone else slaves away to pay their pensions.

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  28. chris (647 comments) says:

    Anyone who is getting WFF and is currently on the minimum wage will get slapped by a bigger abatement

    Yes, it’s funny how everyone always ignores this. It’s fairly likely they’ll end up only marginally better off, if at all. I’ve tried to calculate the difference myself before, but the WFF calculator never seems to work when I try it.

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  29. wiseowl (893 comments) says:

    @davidp
    Don’t suggest it or the next thing he will promise is retiring at 55.
    It would make more jobs available for the young.!
    Simple.

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  30. PhilP (163 comments) says:

    Well phuck me! appeasement in full flight from CunTliffe to the CTU for installing him as Liabore Leader. Doesn’t take long for the unrealistic promises of the far left to raise it’s ugly head. I despair at the thought of Labour/Greens controlling the Treasury Benches.

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  31. Reid (16,454 comments) says:

    This is seriously nutcase material….Who said Cunliffe was well educated?

    wiseowl expect more of this. It started happening when he was running for leader and it will continue. DPF had another post on something else he said over the weekend – can’t recall specifically what it was. He simply says what people want to hear and he doesn’t care if it makes any sense or not.

    This is a very telling sign of his character and although he may have great book-learning anyone who does this is ethically superficial and probably unwise but we won’t know about the latter until he gets elected and his promises come home.

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  32. Paulus (2,627 comments) says:

    Helen Kelly and her mates, who put Cunliffe there, are starting to pull the strings very quickly.

    I would expect many more zany ideas to come.

    Roll on Union Socialism

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  33. MT_Tinman (3,186 comments) says:

    All very nice Cunners but what about the important stuff?

    Not a mention yet about the increase in remuneration for taxi drivers?

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  34. big bruv (13,888 comments) says:

    Pay down your mortgages boys and girls, get rid of as much debt as possible.

    This country is about to be financially destroyed by the Labour/Green government should the people of this nation be stupid enough to vote them in.

    It will be a bonaza for bludgers/parasites and all the rest of the assorted scum who form the left.

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  35. ross69 (3,652 comments) says:

    So Labour will return us to being the only country in the OECD without a grievance free trial period

    As John Key would say: Good employers have nothing to fear; only bad employers will be concerned.

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  36. ross69 (3,652 comments) says:

    Yes, it’s funny how everyone always ignores this. It’s fairly likely they’ll end up only marginally better off, if at all.

    So, the policy won’t cost much…so there won’t be any scaremongering about the modest cost. Awesome.

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  37. Inky_the_Red (759 comments) says:

    David,

    How many 16 year old work in the public service? My guess is the number of under 18 year olds in the public service will be in the low 100s

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  38. labrator (1,850 comments) says:

    …so there won’t be any scaremongering about the modest cost…

    Do please show your calculations where a rise to an $18 an hour minimum wage is modest. I have a feeling you’ve left out the bit where all the people already on 18 dollars an hour are so happy that they’re now earning the same as a toilet cleaner that they never ask for a pay rise. After all, no one is worth more than the nation’s toilet cleaners.

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  39. chris (647 comments) says:

    So, the policy won’t cost much…so there won’t be any scaremongering about the modest cost. Awesome.

    It will move the cost of employment entirely onto the employer, rather than the effective subsidy that happens at the moment with WFF.

    You can argue whether or not this a good thing, but there will most definitely be a cost. It will almost certainly result in a) more unemployment b) higher prices and c) some business shutting down entirely.

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  40. edhunter (546 comments) says:

    http://www.stuff.co.nz/dominion-post/archive/national-news/27743/CTU-calls-for-15-an-hour-minimum

    This story is from 2007 when ‘she who shall not be named’ had been happily ensconced in power for 8yrs & the CTU then were bleating about ‘ believing the Employment Relations Act needed to be “significantly amended” to genuinely promote industry and multi- employer collective bargaining’

    And lets be clear here the minimum wage is the start line not the finish line. I’ve reluctantly employed people at minimum wage but if they proved their worth they quickly rose up the scale, sure sometimes you hit a ceiling when no matter how good you are at a job you can’t be paid any more, but that’s when good employers help the good employees better themselves & upskill.
    Some people are happy doing minimal work for minimal pay that’s their choice. And I say again good workers do not stay on minimum wage and that also is a choice.

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  41. Ross12 (1,425 comments) says:

    My cousin who lives in the USA was visiting in the last few days. He explained some of the details of Obamacare. Amazing what the “side effects” will be — massive job loses to start with. It is a well intentioned policy idea but when the implementation issues come along the policy ends up as a “dogs breakfast”. Similarly with this idea from Cunliffe –except I’m not sure the policy can be classed as well intentioned to start with –maybe Xmas comes early for some would better descibe it.

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  42. Simon (723 comments) says:

    Rev Waldegrave so what Key couldn’t win an argument against her anyway.

    All minimum wage laws are socialism pricing youth out of on the job training.

    What has National done to roll back the apparatchik?

    Key the socialist no different to Cunniiffe. Just that Key is only 4/5 retard not full retard. Some argument.

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  43. Yoza (1,872 comments) says:

    Flyingkiwi9 4:13 pm

    Would one of you left wing socialists out their describe to me what is so so wrong with 90 trial periods?

    There’s no argument against it.

    It leaves people at the bottom of the heap open to exploitation by ruthless bosses who are only going to employ them for 89 days at a time to perform some menial task at minimal remuneration before being ‘let go’ so the next victim can slot into their place for the next 89 days.

    The reason the social democratic left are attempting to adjust income distribution globally, and these policies will be seen being implemented in most Western democracies, is as a direct consequence of the ‘successes’ of the policies implemented by the neoliberal order.

    Neoliberalism has so successfully stripped wealth from the bottom eighty percent of society and concentrated that wealth in the control of such a tiny minority that the financial system is beginning to atrophy – the financial capital that has been created is not circulating through society.

    Capitalism only works if people have money to spend. Thirty years of restructuring, down sizing, out sourcing, privatising, rationalising, (add whatever business-speak buzz word is currently in fashion) has stripped so much money out of circulation that capitalism is beginning to reveal its inherent contradictions.

    It’s not hard to understand, although it is very difficult for the dogmatic acolytes of the likes of Milton Friedman to accept.

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  44. srylands (410 comments) says:

    >> publicwatchdog at 4:21 pm
    > Is the 16 year old State sector office assistant doing the same work as the adult?

    > If so – then ‘equal work for equal pay’.

    > Where will the money come from?

    > How about by cutting out the consultants and private contractors across the full range of State services?

    The minimum wage is a “minimum”. There is nothing stopping a 16 year old office assistant who is highly productive being paid more. Thanks to the Government’s tighter fiscal management most Government agencies have sharper incentives to efficiently manage their resources. (There is still some way to go, but compared to 5 years ago, there is less money to waste.)

    In the vast majority of cases, a 16 year old is going to be less productive than an older worker – usually MUCH less so. It is naïve to talk about two workers doing the “same job”. Two workers might look like they are doing the “same job” but they each can have very different productive capacity.

    Modern workplaces require workers who are flexible, have judgment, and the maturity to deal with changing demands. Flexibility and good judgment command a wage premium – if work demands change you can call on the flexible worker with good judgement to do things in a different way. Workers who are flexible, and deliver without complaining are like gold. They are rarely 16. And if they ARE 16 and that rare exception, they won’t stay on the minimum wage long!

    And paying for a “living wage” by getting rid of all the “contractors and consultants” – yeah that would work. Those from the envious left think they are all rich pricks because they focus on their higher headline hourly pay rate. Contractors are employed only because they are the cheapest solution for delivering the demand on hand. When they are no longer needed they are gone. Mostly, while they are there , they work hard and deliver. (If they don’t they get shown the door.)

    “Banning” consultants would reduce flexibility, and drive UP labour costs, not reduce them.

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  45. Anthony (796 comments) says:

    Lets pay the trolley boys at the supermarket $18.40 an hour and what about that guy who walks papers between the offices in Wellington – he’s probably already on more than that anyway I guess.

    Don’t worry about getting skilled or even doing your job well – you all deserve at least $18.40 from the day you start work!

    My daughter was in Brisbane for a trip and we were astounded at the amount she ran up on food – and was telling us that a sandwich in a cafe cost $15. Not surprising I guess given the higher minimum wage in Aussie and generally higher overheads.

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  46. stigie (1,183 comments) says:

    @Yoza

    It leaves people at the bottom of the heap open to exploitation by ruthless bosses who are only going to employ them for 89 days at a time to perform some menial task at minimal remuneration before being ‘let go’ so the next victim can slot into their place for the next 89 days

    You are a jerk Yoza… Most employers are not going to take on people and train them up
    just to fire them in 89 days. This is scaremongering coming from unions and Liarbour

    Get a fucking grip man !!

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  47. Bevan (3,924 comments) says:

    Do these morons understand that when they set a living wage as the new minimum, the inflationary effect will mean the good reverend will then calculate a new higher living wage, which will then have another inflationary effect and the good reverent will then calculate a higher living wage, rinse, repeat, rinse, repeat.

    I fear if Cunliffe gets in NZ won’t become the new Greece, it will become the new Zimbabwe!

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  48. wiseowl (893 comments) says:

    Yoza,don’t see it quite like that.There should be no minimum wage for a start and those who are employed need to show some desire to achieve,some initiative and they will be rewarded.
    The problem is the financial system is only helping banks and traders.There is no trickle down from QE and we have moved so far away from basic supply /demand that everything is just a sorry mess.

    The best thing that could happen now is for the US to default. If you or I had reached the end of our credit limit the banks would be after us.
    The US can’t just keep extending credit. 17 Trillion is already too big an OD.
    It is all connected.

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  49. slightlyrighty (2,475 comments) says:

    What no one seems to talk about is the question of Pay Relativity. If you raise the pay of the office junior, then to preserve relativity , all other salary scales should be adjusted.

    There goes your 30 million budget by lunchtime. The staggering thing is, Cunliffe knows it, and promises it all the same. The man is inherently dangerous.

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  50. Bevan (3,924 comments) says:

    Sr, and with that goes the economy. The inflationary impact of that kind of wage increase will be catastrophic.

    If it looks like Labour is going to win, get your money put of NZ ASAP

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  51. stigie (1,183 comments) says:

    A good piece Srylands, but you may have been banned from the Strandard for saying that !

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  52. OneTrack (3,093 comments) says:

    Yoza – Have you any real examples of that actually happening?

    But tell me, in a limited job market, when an employer has a school leaver and an experienced 30 year old in front of him, why would he ever employ the school leaver. I guess it might be a cunning plan of the left to keep kids on the dole and dependent n the state so they keep voting left. Others on the right think it would be good to actually encourage employers to try out these kids. But not Labour.

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  53. Yoza (1,872 comments) says:

    You are a jerk Yoza… Most employers are not going to take on people and train them up
    just to fire them in 89 days.

    Flyingkiwi asked for an argument against the 90 day probation law, I offered one. ‘Most’ is not all.

    The best thing that could happen now is for the US to default.

    As long as oil is the global economy’s life blood, and US corporations control a preponderance of the extraction and distribution racket, and US dollars are a necessary prerequisite to trading in that racket the US dollar will remain the defacto global currency; as long as the US dollar is the defacto global currency it will continue to be ‘printed’ to make up any balance sheet shortfall.

    The US is the only country that can ‘print’ money in the volumes it does without the currency losing value. China cannot all of a sudden decide it wants to change its 2 trillion or so US dollar reserves for any other currency without causing the value of the US dollar, and as a consequence its own cash reserves, to decline dramatically.

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  54. OneTrack (3,093 comments) says:

    “The US is the only country that can ‘print’ money in the volumes it does without the currency losing value. ”

    Oop. You better tell Russel because I think he has other ideas.

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  55. srylands (410 comments) says:

    “A good piece Srylands, but you may have been banned from the Strandard for saying that !”

    That’s OK. I will never again comment at The Standard. My morbid fascincation with economic lunatics ended. The earnest, genuinely believed horror changed from bemusing to frightening.

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  56. noskire (842 comments) says:

    It’s all well and good to poke fun at this maniac policy on Kiwiblog, but the stark reality is that Cunliffe and his communist co-horts could well be in a position to make this a very dark reality next year, thanks to a lot of idiots eligible to vote who will fall for this shit.

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  57. OneTrack (3,093 comments) says:

    Noskire – I am in no doubt that we are in very great danger of exactly that happening. Those same idiots will be whining by about mid 2015 when some of those chickens start coming home to roost – “err, I didn’t think that would happen” or “I didn’t think they would do that”, etc.

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  58. Fisiani (1,039 comments) says:

    6 years of hard work by National to get the government into surplus then pissed away by the Union Party/Greens in just 100 days followed by economic sabotage for another 1000 days before New Zealanders can kick them out again. Is this really to be the future for New Zealand. This is the nightmare that faces the nation.
    Will people fall for the promise of free money from nowhere?
    Will people accept rule by the unelected Confederation of Trade Unions?
    Are kiwis really that stupid?
    Will they choose progress under National or regression under the Unions.
    Sadly people who are too stupid to vote are allowed to vote.

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  59. srylands (410 comments) says:

    “It’s all well and good to poke fun at this maniac policy on Kiwiblog”

    I don’t find it funny. A number of people I talk to (who I would not describe as idiots) find it ssuperficially attractive. They are concerned about low income people struggling. But they don’t see the consequences that will absolutely and totally defeat the stated policy of alleviating poverty for low income earners.

    The Government needs to hammer the futility of policies like the living wage much harder. Trying to dial up prosperity by regulation is madness. The inflationary and employment consequences of big rises in low end wages will take us backwards fast. Within 12 months inflation will erode the gains for those who did see a wage rise, and they will be demanding another wage hike.

    It is a challenge to explain the policies necessary for NZ to achieve a rise in living standards. Clearly the Government has not done enough of this otherwise the insanity of the “living wage” would not have oxygen. Any societal response to “low” wages is going to differ enormously across different segments. Our concern about a 50 year old cleaner with kids on $13.75 will be completely different to our reaction to a 19 year old law student working in a café on $13.75.

    For this generation of “permanent” low wage earners (the 50 year old cleaners) our priority should be safety nets that allow them a decent living. But it will never be flash, and neither should it.

    My priority is the children of these cleaners. You want to say “Don’t end up like your parents”. This is where the Government’s economic narrative should come in – what they are trying to do on education, rebalancing the economy, macroeconomic management, the importance of sound monetary policy and low inflation – all the prerequisites to ensure that the next generation can have higher living standards. If we manage that we can also have better safety nets for the 50 year old cleaners.

    This is a complicated story – and difficult to tell. Much easier to say we will have a living wage and tax rich pricks. That will sort it. This policy makes me both sad and frightened, not for me but for the nation. (I could always leave.)

    The “living wage” policy is just the start. It is those who the policy purports to help who will be most damaged by it. Many will lose their jobs. Those that have jobs will chase higher wages as inflation erodes their illusory gains. All while the rich pricks leave New Zealand, eroding the tax base necessary to keep policies like WFF alive. And so the slide will accelerate.

    Somehow the Government needs to tell this narrative. What I call the “prerequisites of prosperity”. If it fails, the media will just lap up living wages and rich pricks.

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  60. ross69 (3,652 comments) says:

    The Government needs to hammer the futility of policies like the living wage much harder

    The Government is its own worst enemy, wanting to drive wages even lower and forcing thousands of workers to Australia. With a living wage policy, we might actually see some of those ex pats return.

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  61. ross69 (3,652 comments) says:

    6 years of hard work by National to get the government into surplus

    Your revisionist history smells somewhat. You’ve obviously forgotten that under Labour we had 9 budget surpluses in a row and the lowest debt to GDP ratio in living memory when it left office. Keep repeating the lie but it won’t change the truth.

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  62. ross69 (3,652 comments) says:

    It’s all well and good to poke fun at this maniac policy on Kiwiblog, but the stark reality is that Cunliffe and his communist co-horts could well be in a position to make this a very dark reality next year, thanks to a lot of idiots eligible to vote who will fall for this shit.

    What you seem to be saying is that Labour could soon have a mandate. Well, if that’s the case you won’t be allowed to complain, just like the Left are not permitted to complain about asset sales because according to the Right, National has a mandate.

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  63. chris (647 comments) says:

    The inflationary and employment consequences of big rises in low end wages will take us backwards fast. Within 12 months inflation will erode the gains for those who did see a wage rise, and they will be demanding another wage hike.

    And in the meantime, those who were on incomes higher than the “living wage” will have seen our purchasing power erode in real terms. I guess that’s one way to address the inequality that the left keep harping on about. The only problem is that we’ll all be poor. Not the mention the much higher unemployment that will result. And I see ross69 seems to think a living wage policy will see the ex-pats flock back to NZ. I think we’d see more go the other way…

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  64. ross69 (3,652 comments) says:

    And I see ross69 seems to think a living wage policy will see the ex-pats flock back to NZ.

    If we didn’t have an economically illiterate government, maybe tens of thousands of skilled workers wouldn’t have departed for greener pastures. Or do you think that losing skilled workers is the way to go?

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  65. chris (647 comments) says:

    You’ve obviously forgotten that under Labour we had 9 budget surpluses in a row and the lowest debt to GDP ratio in living memory when it left office. Keep repeating the lie but it won’t change the truth.

    Only by taxing the bejesus out of everyone as more and more people moved into the “rich prick” tax bracket. And don’t forget they got us into recession *before* the rest of the world, and left the cupboard well and truly bare when National came into office.

    What was that again? Keep repeating the lie but it won’t change the truth. I think that applies to you.

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  66. noskire (842 comments) says:

    OneTrack – and the fuel to this danger is a MSM dominated by left-wing hacks who spurt this crap out to the illiterate and uneducated who lap it up like they would a Lotto ticket.

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  67. swan (665 comments) says:

    Ross69 – permanent structural deficit mean anything to you? Cause that is what Labour left us with.

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  68. Kea (12,839 comments) says:

    srylands, a good comment. I would like to see everybody earn a wage they can live on, but unfortunately it is not as simple as passing laws. Though it does bother me that within some companies we have people on outrageous money while others do not get enough to live on.

    The problem is not some people being too rich, it is many people being too poor. If we do not sort this out then we can expect NZ to drift further and further left regardless of the consequences.

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  69. srylands (410 comments) says:

    >> ross69 at 8:24 pm

    “You’ve obviously forgotten that under Labour we had 9 budget surpluses in a row and the lowest debt to GDP ratio in living memory when it left office. ”

    My dog Max could have achieved 9 Budget surpluses in a row in that period. Do you actually believe your inference that the previous Government’s fiscal restraint achieved budget surpluses? The story is quite simple. (The 50% increase in spending, the high taxation, the cheering on of the housing boom which transferred government debt to private debt, the export sector smashing into recession 18 months before the GFC, the subsequent smashing of tax revenue by the GFC led recession, the outlook of a decade of deficits.) It was frightening. This is an evidence based narrative. Read the Crown Accounts from 2009.

    I am not insulted by you. I know from my “The Standard” experience with similar statements that you either (a) know what I am saying is correct and you are winding us up, or (b) you do believe what you say because you are delusional, uneducated, dropped on your head, whatever.

    Which one are you?

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  70. OneTrack (3,093 comments) says:

    Ross69 -” just like the Left are not permitted to complain about asset sales because according to the Right, National has a mandate.”

    Nobody said the left aren’t allowed to complain about the partial share sale. But the left wants more – they lost the election but just because they don’t like National policy, they literally are demanding that National not deliver on their election promise. That’s why the talk of the mandate – National won the election, that means they get to implement their policies. That’s how it works in democracy, sometimes the people actually vote for the other team. If your team wins the election, and the proceeds to implement the policies they campaigned on, they will have a mandate as well.

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  71. srylands (410 comments) says:

    ross69 (2,947) Says:
    >> Ross69 at 8:26 pm

    “What you seem to be saying is that Labour could soon have a mandate. Well, if that’s the case you won’t be allowed to complain, just like the Left are not permitted to complain about asset sales because according to the Right, National has a mandate.”

    Of course I will be allowed to complain! Anyone can complain about Government policies. But yes the incoming Government, should it campaign to do crazy things will indeed have a mandate to do them. The difference is I won’t be collecting signatures for a referendum on the Living Wage.

    And what do you mean “according to the Right” the Government has a mandate? It was a central policy in the election campaign!

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  72. lilman (959 comments) says:

    I wonder if Cunliffe will ask them who they voted for before the get the $18.50 an hour.

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

    Cunliffe isn’t doing this for no reason at all. Unlike you, he doesn’t believe that markets allocate incomes efficiently, and I would agree he’s almost certainly right about that. The general market failure we’ve been living through since 2008 is evidence of that.

    If you want to know why he’s doing it, the reason is here:

    http://en.wikipedia.org/wiki/Predistribution

    The original paper is here:

    http://www.policy-network.net/pno_detail.aspx?ID=3998&title=The+institutional+foundations+of+middle-class+democracy

    It’s a politically more palatable alternative to welfare. The idea that it will cause massive collapse is completely daft. The Scandinavians have been doing this for a long time IIRC. The person who said it will make sandwiches more expensive is correct, but if that sort of thing is the only real consequence, then who cares?

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  74. noskire (842 comments) says:

    And how convenient this policy is announced in the same week that Campbell Live runs a piece on poorly-paid toilet cleaners at Parliament.

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

    If you want an obvious case of market failure, consider the surfeit of useless, overpaid managers we all have to deal with. One of the reasons I stick with my current job is that I don’t have to report directly to any of those berks.

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  76. chris (647 comments) says:

    it will make sandwiches more expensive is correct, but if that sort of thing is the only real consequence, then who cares?

    It will make *everything* more expensive, undoing the wage increase. And given their WFF will be reduced with a higher wage (if they have kids), they probably won’t end up with much more income anyway. So not much more income + an inflationary jump = no better off.

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

    By all means ignore the policy if you like. It is specifically designed to catalyse middle class political life in the way that Obama’s election campaign did.

    At election time when it seems like there are endless hordes of people traipsing around your neighbourhood with Cunliffe’s mug on their buttons, it will be too late.

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  78. swan (665 comments) says:

    Tom,

    It is basic economics/logic that says redistribution through welfare is far more efficient and less distortionary than minimum wages. This is not a left or right thing it is just what is better. And Cunliffe likely knows that.

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

    It will make *everything* more expensive, undoing the wage increase. And given their WFF will be reduced with a higher wage (if they have kids), they probably won’t end up with much more income anyway. So not much more income + an inflationary jump = no better off.

    You’re missing the point of the underlying theory of predistribution.

    Since the 1970s the proceeds from growth have accrued almost solely to the wealthy. The reason for this, according to Hacker and company, is that the rules of the game were deliberately changed in such a way that income and wealth flowed to the wealthy. In essence, income was “predistributed” to the already wealthy. Hacker is simply proposing that we reverse that by predistributing back the other way.

    We already know it works, because we’ve done it before, and some countries (i.e. the Nordics) have kept doing it even when we weren’t.

    Your appeals to economic models are pointless, because we have real world examples of it working in the long term.

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

    It is basic economics/logic that says redistribution through welfare is far more efficient and less distortionary than minimum wages. This is not a left or right thing it is just what is better. And Cunliffe likely knows that.

    No it’s not. You have no genuine standard of what is more or less distorted. For all you know, a minimum wage could increase efficiency.

    Someone needs to read about the General Theory of Second Best. You are illegitimately inferring from the fact that a perfectly free market is perfectly efficient to the claim that making any market more free necessarily makes it more efficient. Economists have known that is false for over 50 years.

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  81. swan (665 comments) says:

    That para about predistribution above is utter nonsense. There is no empiricism or rational theorising just feel good wishful thinking

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  82. swan (665 comments) says:

    No I am not. The only thing you need to know is that at the margin people are less likely to be hired the higher the price of the labour. It’s pretty simple. The reason the unions like minimum wages is mainly about preventing competition from cheaper labour.

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

    That para about predistribution above is utter nonsense. There is no empiricism or rational theorising just feel good wishful thinking

    You… have… no… argument…

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  84. Ed Snack (1,872 comments) says:

    Tom, since you’re so keen on the Scandinavian model, can you tell us what their minimum wage is and if they have youth rates and a trial period ? Hint, I don’t think the “Scandinavian model” works quite like you think it does.

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  85. swan (665 comments) says:

    Nice one Tom. I have heard about predistribution quite a bit lately. Show me some objective logic or accept its bullshit.

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

    No I am not. The only thing you need to know is that at the margin people are less likely to be hired the higher the price of that labour is. It’s pretty simple. The reason the unions like minimum wages is mainly about preventing competition from cheaper labour.

    Yet unemployment was relatively low when we had highly unionised workforces in the 50s and 60s.

    Don’t let the real world get in the way of your a priori theorising.

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

    Nice one Tom. I have heard about predistribution quite a bit lately. Show me some objective logic or accept its bullshit.

    What’s objective logic? I know what logic is, but I’m in the dark as to what you mean.

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

    Tom, since you’re so keen on the Scandinavian model, can you tell us what their minimum wage is and if they have youth rates and a trial period ? Hint, I don’t think the “Scandinavian model” works quite like you think it does.

    I’d be quite happy to dispense with the minimum wage and use their model of union bargaining if you like. :)

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  89. wat dabney (3,756 comments) says:

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  90. swan (665 comments) says:

    What is the nonsense you have written about managers Tom? Again a complete lack of coherent argument or evidence. Just words.

    The logic required is to explain why predistribution is better that redistribution accounting for established economics around the use of price controls.

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  91. swan (665 comments) says:

    “Yet unemployment was relatively low when we had highly unionised workforces in the 50s and 60s.”

    You mean when we had swift economic growth via the implementation of decades of technological progress? Yeah the command economy worked great until, you know, it didn’t.

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  92. chris (647 comments) says:

    Yet unemployment was relatively low when we had highly unionised workforces in the 50s and 60s.

    We also had far fewer women in the workforce too. Most of them tended to stay at home with the kids. I guess if the same was true today we’d have lower unemployment ;)

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

    The logic required is to explain why predistribution is better that redistribution accounting for established economics around the use of price controls.

    That’s a weird way of using the word logic. You seem to mean “argument”.

    Hacker’s argument for that is in the paper I linked. Roughly, the argument is that it’s more politically palatable to do it that way, and it also has what to him are pleasing social effects, such as increasing middle class participation in democratic politics (via unions, etc.).

    Predistribution is unavoidable. What we have now is predistributed, according to Hacker, in favour of the well off due to political changes from the 1970s onwards. He’s just proposing we change it back.

    Your error seems to be to think of the current state of affairs as somehow necessarily more efficient than the previous because it involves freer markets. That’s committing the error that the General Theory of Second Best exposes – a subtle error, but a profound one. Until you get that straight, I don’t think you’re going to get it.

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

    You mean when we had swift economic growth via the implementation of decades of technological progress? Yeah the command economy worked great until, you know, it didn’t.

    One could say the same of the current disaster of a system.

    We also had far fewer women in the workforce too. Most of them tended to stay at home with the kids. I guess if the same was true today we’d have lower unemployment

    It’s like those women in the workforce don’t actually produce anything… sigh…

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  95. Nostalgia-NZ (5,202 comments) says:

    The questions are: will this wake the absentee Labour voters from the last election? Possibly.

    If Labour win will the policy be implemented across the board? Unlikely.

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  96. chris (647 comments) says:

    It’s like those women in the workforce don’t actually produce anything… sigh…

    No surprises that my facetious comment went right over your head… sigh…

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

    No surprises that my facetious comment went right over your head… sigh…

    Sorry, I thought you were the other guy. My bad.

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  98. swan (665 comments) says:

    Tom,

    You are arguing against individual freedom. It is incumbent on you and Hacker to show why individual freedom needs to be curtailed. Nothing is “predistributed” in a way that is policy relevant unless it is done with the coercive power of the state.

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

    If Labour win will the policy be implemented across the board? Unlikely.

    You may be surprised. I’m pretty sure that people said the same about Thatcher.

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

    You are arguing against individual freedom. It is incumbent on you and Hacker to show why individual freedom needs to be curtailed. Nothing is “predistributed” in a way that is policy relevant unless it is done with the coercive power of the state

    All systems of law curtail individual freedom. The free market property system curtails my freedom to take what I want. Hacker’s point is that just that coercive power was used in the 1970s to predistribute in favour of the wealthy.

    Jonathan Franzen’s recent novel was about this aspect of freedom. Worth a read.

    But you’ve segued into moral arguments, which is a slightly different kettle of fish.

    Agh… I have to go to bed. Pick this up again sometime.

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  101. KevOB (267 comments) says:

    Only $18.40/hr? That was a compromise: the Auckland rate was given as $24+ if I rightly recall. How are they going to reconcile the regional differences? The report authors couldn’t and dropped it. It’s all documented in the report details not the summary.

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  102. Wayne Mapp (67 comments) says:

    David Cunliffe seems to be promising to roll back every single employment law reform since 2008, and may well introduce compulsory awards. He will probably do the same in education.

    If it is his plan to do this across the board and reverse every single thing the Nats have done, (education, employment law, local govt, RMA, welfare etc), he breaks a basic premise of govt, which is to work out what the previous govt did which you should accept. The Nats certainly did that in 2008.

    The lesson for the Nats would be to simply repeal all of Labours reforms (in say 2020 when the Nats get elected with Simon Bridges as Leader) and simply appeal to ones own supporters. That would mean Employment Contracts Act, all schools bulk funded, abolish Health Board. No doubt others would think of other things.

    Of course it does not produce stable politics or a business environment, but the political incentive will be to only appeal to one’s own supporters, and accept that when you lose power it all gets rolled back. Of course this is dependent on the key support party being to the right of National, in the same way as the Greens are to the left of Labour.

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  103. vto (1,131 comments) says:

    fuck there are a lot of selfish wankers in the comments above.

    how anyone could think that it is ok to pay a man less than it costs to live for a decent days work.

    New Zealand is more than rich enough to pay everyone an income to live on. The problem is the redistribution system we currently have. It is fucked.

    It costs more to keep a slave than it does to pay the minimum wage.

    Wake up and pull your heads out of the sand

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  104. flipper (4,060 comments) says:

    vto (1,115) Says:
    October 10th, 2013 at 7:35 am
    fuck there are a lot of selfish wankers in the comments above.
    *****

    The only wanker is you vto.

    You have the right to pay more tax (voluntarily), to pay the sellers of all goods and services more (voluntarily) so they can engage in your gratuitous income re-distribution (theft).

    But you will never to that, will you?
    Almost certainly you give at some academic institution (on the tax payers tit), or waste time at a central or local government taxpayer funded , useless activity.

    Pull your head in

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  105. Pete George (23,561 comments) says:

    What does it cost for a man to live vto? A woman? A man and woman with children? An 18 year old working living on their parent’s farm? A 25 year old in Otara? A forty year old in Remuera?

    What is a decent day’s work?

    It will be interesting to see how much of middle New Zealand would be happy to see the country become a socialist state, with state enforced equal everything – apart from effort and contribution.

    Eddie and others think they have won lotto, but the draw isn’t for another year, and the cost comes after that.

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  106. Pete George (23,561 comments) says:

    lprent says:

    The costs aren’t particularly high. In fact they are so low, you’d have to ask why National hasn’t already done them.

    It should be asked why lprent and Labour haven’t mentioned the cost. Have they actually done any costing? If so why haven’t they given us any details?

    I mean the projected total cost including expected flow on effects, wage inflation, goods and services inflation, additional welfare through higher unemployment etc etc.

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  107. hannity (152 comments) says:

    Yet you’re so sure this unaffordable, on what basis?
    Where are your costings ?

    “What is a decent days work ?”

    Get a job ,and find out for yourself.

    Hypocrite

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  108. Kea (12,839 comments) says:

    fuck there are a lot of selfish wankers in the comments above.

    how anyone could think that it is ok to pay a man less than it costs to live for a decent days work.

    vto, I agree. I am no fan of Labours economic policies, but paying a few government workers properly is not going to bankrupt the country. Anyone who does a full days work should get enough to live on. If that is unaffordable, then the business is a failure.

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  109. Bovver (173 comments) says:

    I love this observation by Karl du Fresne on silent T

    “But I’m withholding judgment. I decided I disliked Mr Cunliffe when, as Minister of Health in the Clark government, he sacked the democratically elected Hawke’s Bay District Health Board, describing them as “a nasty little nest of self-perpetuating provincial elites”. He struck me then as a politician who liked to throw his weight around just because he could.

    Nothing since then has changed my view of him. In fact my opinion was reinforced by an interview with Guyon Espiner in The Listener which exposed Mr Cunliffe as precious, controlling and acutely concerned – in fact almost neurotic – about his public image.
    His pronouncements before and since his election as leader suggest he’s a politician who will say whatever he thinks will ingratiate him with voters. In this respect he is disconcertingly similar to former Australian prime minister Kevin Rudd.

    There’s a Uriah Heep-ish quality to Mr Cunliffe: rampant ambition overlaid by a phony air of humility. Those quibbles aside, I’m sure he’s a top bloke. “

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  110. Longknives (4,744 comments) says:

    “There’s a Uriah Heep-ish quality to Mr Cunliffe: rampant ambition overlaid by a phony air of humility.”

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  111. Pete George (23,561 comments) says:

    vto @The Standard:

    How can there be any cost to the country? The money stays within the borders. In fact it would stay even more within the borders, being paid to low paid hard workers who spend all within the community.

    There is no net cost.

    If it was such a no-cost no-brainer then there would be countries all over the world taking money off people and handing money out so everyone was equal.

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  112. thePeoplesFlag (245 comments) says:

    “…I love this observation by Karl du Fresne…”

    I must say, it is refreshing to have a Labour leader who so much rattles the nasty little nests of self-perpetuating neo-liberal elites!

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  113. ross69 (3,652 comments) says:

    Of course I will be allowed to complain! Anyone can complain about Government policies.

    OK, so the government doesn’t have a mandate for asset sales which you’d have to agree that asset sales are a dumb idea.

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  114. ross69 (3,652 comments) says:

    What is a decent day’s work?

    You mean you haven’t a decent day’s work and need guidance? :)

    Try becoming a cleaner and you might have a good idea.

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  115. stigie (1,183 comments) says:

    @ ross 69
    So you agree then that the next Liarbour government will have a mandate to pass all
    these policy bribes. Well, us on the right will just have to go along with that and not gripe wont we !!

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  116. Pete George (23,561 comments) says:

    Amongst the many jobs I’ve done I’ve been a cleaner, which included toilets. Much harder, dirtier and more hazardous was cleaning up at a woollen mill during it’s summer closedown, from the ceiling down.

    Ross69 – have you ever been employed as a cleaner? I’d bet I’ve done more “decent day’s work” than you have.

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