My first degree was economics and I maintain a keen interest.

If you look back at the major disruptions to the world economy – The Great Depression, the stagflation of the 1970s, the 1987 share market crash, the GFC – the commentators/politicians/banks of the day got the diagnosis/solutions wrong in the moment. They then learned the lessons in hindsight – figured out what would have worked in a particular situation – and applied that solution, without nuance, to the next crash. The great movie The Big Short illustrates this superbly.

Milton Friedman’s “Inflation is always and everywhere a monetary phenomenon” still has significant validity in that if a nation increases the money supply (which Labour has done willy-nilly) without increasing production the prices can only go one way – and rapidly. NZ’s one trick is the Reserve Back increasing the Official Cash Rate.

I believe this inflation is significantly more supply-side weighted and needs appropriate solutions. Just hoping in the RBNZ interest rates hikes is exactly the wrong approach. It is hitting the wrong curve. It may eventually work but, like the last time NZ brought inflation down, the cost to employment and business could be massive.

Businesses are facing interest rate increases and business owners who are also home owners get hit hard at each OCR jump. They are also facing wage increases, compliance increases (especially farming), energy cost increases (including effectively having a fine for importing suitable work vehicles). Add to that the complexity and time taken for building and change of use consents. The NZ qualifications system (and NZ education is in DEEP trouble) is creating a skills shortage and Minister Hipkins has done nothing to improve it. I am not sure where his head is but it is somewhere worse than in the sand. We also have a record number of NEETs (Not in Employment, Education or Training) with no effort being made to get them off the couch.  The current Auckland NEET rate is the highest since 2010. In the year to December 2021 12.4% of Auckland 15-24yos were Not in Employment, Education or Training (nationally 11.9%). In 2015 this figure was 9.8%. These people don’t count in the Household Labour Force unemployment statistics as they are not willing to work.

Hoping in immigration is likely to be forlorn for the skills shortage as every Western nation is seeking solutions through immigration and NZ is unlikely to win that fight without a change in approach. Our government’s handling of the economy, health and education as well as Ardern’s ridiculous UN speech has significantly damaged NZ’s reputation and many kiwis will look abroad for work and lifestyle reasons.

The government needs to look at reigning in their spending. Robertson loves to say they are “investing” in education, health, etc. Investment implies an improvement and there is little or no signs of that. Adding approximately 1200 employees to the Ministry of Education has certainly not worked and we now have over 8,000 children not enrolled anywhere. The Ministry is also taking an incredible amount of time to release Term 2 school attendance figures.

The tax take is huge. It is time to consider taking GST down to 10%. It is a highly regressive tax and doing so with help both business and very much help lower and/or fixed income people. The income tax brackets have long needed adjusting but greedy Grant will have none of it.

Other policies/changes are needed to improve energy supply to lower costs, get NEETs off the couch, transform immigration quickly and provide incentives for highly skilled individuals in sectors where we are lacking. Our productivity statistics are highly problematic but is barely addressed. Compliance costs need to come down and planning permissions need to be sped up. Farming needs to be far better supported. R&D needs to more highly incentivised. The education system needs massive change and improvement.

I hope I am wrong – but if the above is mostly true – and the one trick approach remains, the interest rate changes could cause carnage for everyone but the banks.

Stuff reports:

In his inauguration speech on Friday night, Auckland’s new mayor Wayne Brown said a “fiscal storm” coming Aucklanders’ way has begun, and he used it as a scene-setter for unprecedented restructuring at Auckland Council.

Brown is eyeing up to $25 million in cuts to head office spending.

That would be a good start.

He said the same approach needed to be taken to every part of the council, its agencies and the port company.

“We need to apply the test: ‘Less is more’ – and ask ourselves, about every activity and line of expenditure: ‘If we stop doing this, would anyone notice?’

If only we could get that philosophy into central Government.

There seems little doubt the GOP will win back the House. But the Senate is looking to be a thriller.

The Democrats should have been facing wipeout here as they are defending so many seats in states Biden lost. But the GOP selected some pretty bad candidates. So the Dems in June were at just 40% to keep control. Then the Dobbs decision, some wins for Biden and bad candidates for the GOP saw their chances at 538 increased to 70% in mid September. But the last month has seen it drop day after day and now they are at 52% – neck and neck.

The four key seats are Georgia, Nevada, Pennsylvania and Arizona. The GOP need to win 2 to get the majority.

Georgia should have been an easy win but the GOP candidate has paid for more abortions than is healthy for an anti-abortion candidates. However he is now 0.2% ahead.

In Nevada the poll average is tied at 48.1% each. However momentum appears to be with GOP’s Laxalt.

Arizona should also have been an easy win for the GOP but Blake Masters has not appealed to many and trails be 3% 0 within the margin of error.

Most interesting is the one GOP held seat of Pennsylvania. This should not be competitive but again the GOP candidate Dr Oz was a bad pick, seen as a New Jersey carpetbagger. However the Democratic candidate John Fetterman had a terrible debate which shows he should not be a candidate after he had a stroke, and even though he has a 1.3% lead, many expect him to lose.

All four seats could go either way so could have 51 seats Democrats if they win all four to 53 seats Republicans if they win them all.

Newshub reports:

A 57-year-old woman has been arrested over wilful damage at Prime Minister Jacinda Ardern’s Mt Albert electorate office earlier on Thursday. Ardern’s office was left with a shattered window and what appears to be a samurai sword was lying nearby.

A spokesperson for the Prime Minister said no one was at the building at the time. She had no further information to provide.

Jackson said on a Facebook post, the woman argues she had “long-standing grievances” with the Prime Minister.

“That doesn’t justify symbolic destruction and smoke bombing her electorate office,” he said.

“There has been a violent change of political debate in this country that has gone from the normal and vigorous disagreement a democracy requires to unhinged conspiracy theories which justify political violence.

“Attacking the PM’s office with a sword and smoke bombing it are not legitimate responses in a democracy, they are the unacceptable actions of a fragment of society who have ended up believing conspiracy theories that are deeply harmful.”

Not only are they not legitimate responses, they are deeply criminal responses. If found guilty, a short prison sentence as a deterrence would be appropriate.

One News reports:

Furore has erupted near the remote, rugged country of Te Urewera, where work is now underway to strip, dismantle and burn down backcountry Department of Conservation huts.

At least 15 are gone and another 33 are set to be removed by December, set to be replaced with a “new kind of visitor experience”.

Hikers and hunters claim they have been dismissed, without any consultation, details or timeframes. …

Exactly what will be built to replace the huts, and when, remains unclear.

A post on a Facebook page run by Ngāi Tūhoe this month suggested new accommodation could be built in “2 to 3 years” but said “things like pandemics, wars and inflation make you shy to commit to timeframes”.

“Your association to these places are acknowledged and respected, but that enjoyment has often come as a cost to others,” it said

Surely the sensible thing to do is build the new huts first and then demolish the old ones?

The Government appointed review of local government has come up with stuff which seems mainly about making local government less democratic. Their recommendations include:

• mana whenua appointments to Councils to “supplement” elected members
• Pay rises for Councillors
• Forcing STV on all Councils even where residents have overwhelmingly voted against it

Make no mistake – this is about ending equality of suffrage in New Zealand. They even denounce the concept of one person, one vote as reported in the Herald:

Panel chairman Jim Palmer said while Māori wards were valuable, mana whenua appointees were a recognition of the special place in New Zealand of Te Tiriti o Waitangi, which allowed for the greater involvement of iwi and hapū in local decision-making.

“We think it’s a more nuanced conversation than just ‘one person, one vote’,” Palmer said.

One person, one vote, is equality of suffrage. It is a fundamental human right enshrined in the Universal Declaration of Human Rights. We should no more have a conversation around ending it, than we should have a conversation about whether women should have the vote.

Stuff has compiled a list of 12 things National has pledged to scrap. They are:

1. The 39% tax rate
2. The Maori Health Authority
3. Fair Pay Agreements
4. Three Waters
5. TVNZ-RNZ merger
6. Compulsory income insurance scheme
7. Auckland Regional Fuel Tax
8. Auckland Light Rail
9. Three Strikes Repeal
10. Bright Line test extension from five to 10 years
11. Ute tax
12. Plain Language Act

Newshub reports:

Emergency doctors have drafted health targets of their own, and they want Minister Andrew Little to adopt them.

It comes as multiple deaths associated with ED wait times increase pressure on the Government.

We had a health target for ED waiting times – 95% seen and treated or transferred within six hours. And National got the number up from 70% to 94%. Now under Labour it is down to 76%.

Even worse in the Capital, where only 56% seen within six hours.

“If you don’t have a target in place, then there is no main aim. There is nothing you’re training your system towards to become a healthier system,” Australasian College of Emergency Medicine Deputy-Censor Dr Elspeth Frascatore told Newshub.

They’re called Hospital Access Targets. 

They state for admissions, greater than or equal to 60 percent of patients should have a stay of no longer than four hours. 

Eighty percent no longer than six hours and 90 percent no longer than eight hours. 

And all patients should be through ED within 12 hours. 

These sound reasonable and would be a huge improvement on the status quo. But the are still longer than what was previously achieved. I’d advocate:

• Four hours: 75%
• Six hours: 90%
• Eight hours: 95%
• 12 hours: 100%

The Labour Government scrapped National’s so-called “arbitrary” health targets back in 2017. It did introduce “indicators”, but ED wait times have still ballooned.

The Health Minister today rubbished suggestions the Government is opposed to health targets.

“We have measures in place for EDs who are required to achieve at a level of 95 percent. Either treating, discharging, admitting patients who go through ED within six hours,” Health Minister Andrew Little said.

But, in a puzzling twist, Little’s press secretary emailed Newshub research showing “targets don’t work”.

The Government relies on spin over substance. The Minister claims they support having health targets and his press secretary says they don’t work.

Labour has passed the so called Fair Pay Agreements Law. This isn’t a return to the 70s, but is even worse.

We now have a law that allows a government appointed body to set pay rates and conditions for an entire industry – even if not a single employer in that industry agrees with them.

Even under the bad old 70s law, employers had a choice – they could reject a bad agreement and face strikes.

Now there are no strikes, as the Government appointed Employment Relations Authority can impose pay rates and conditions on an entire industry – and employers can’t do anything about it.

When there is a change of Government, this law should be repealed within 24 hours.

This law is about forcing workers to fund unions, which is no surprise as 30% of Labour’s caucus are former union organisers. This is 100,000% greater share than in the overall population.

Stuff reports:

The second-in-charge of a high-profile Waikato gang which has burnished its public image with a proclaimed tough stance against meth has admitted importing and selling “commercial quantities” of the drug.

Mark Anthony Griffiths, 52, appeared in the High Court in Hamilton on Tuesday morning, where he pleaded guilty to charges of importing, possessing and supplying methamphetamine.

Griffiths also admitted possessing and supplying Gamma-Butyrolactone (GBL), commonly known as the “date rape” drug.

A spokesman for Waikato Mongrel Mob Kingdom has been quick to put some distance between Griffiths’s actions and the other members of the gang – saying they are still profoundly anti-meth and his actions do not represent them.

This is the 2ic, not some rando. The reality is that gangs are funded through drugs and criminal activity. Without that they would not be gangs, they would be clubs.

A gang can hire a PR person to claim day is night on their behalf, but actions speak louder than words.

Our Arctic Ocean reports:

 In the first round of Brazil’s closely watched elections this month, the polls were off the mark. They significantly underestimated the support for the far-right incumbent, President Jair Bolsonaro, and other conservative candidates across the country.

Many on the right were furious, criticizing the pollsters as out of touch with the Brazilian electorate.

That response was expected. What happened next was not.

At the urging of Mr. Bolsonaro, some of Brazil’s leaders are now trying to make it a crime to incorrectly forecast an election.

Brazil’s House of Representatives has fast-tracked a bill that would criminalize publishing a poll that is later shown to fall outside its margin of error.

Obviously not a good law, to put it mildly.

Think if you extended it to economists and GDP projections?

Or public health officials and Covid projections?

The penalty for inaccurate polls should be reputational, not criminal!

The Herald reports:

Government minister Nanaia Mahuta put her young relative Waimirirangi Ormsby on a list of candidates for a paid appointment to the working group that produced the He Puapua report, documents released to the Herald under the provisions of the OIA indicate.

Mahuta recently suggested to the media that decision-making for the appointments was made by officials. It’s also controversial because the Cabinet Manual – which guides Government Ministers in matters of conflict of interest including the appearance of a conflict – recommends, though the language is not absolute, that where a minister has a conflict of interest and also has ministerial responsibility, mitigation should go farther than a simple declaration of interest.

Last month, Mahuta told reporters that questions about the appointment of Waimirirangi Ormsby should be directed to the department: “That’s a matter for Te Puni Kōkiri, there were a number of names that were put up in relation to, I think, the working group you’re referring to, and that was last term. Yeah, so there were a number of names with a number of requisite skills and a number of considerations but the point at which I saw that, by recollection, was at the point where a shortlist was made and those decisions were made by the department.”

The briefing document of May 28, 2019, prepared for Mahuta, stated: “We ask that you consider the range of potential appointees, and select a total of five individuals, who you wish to put forward for appointment. When you have selected the individuals you wish to appoint, the next stage of the process is for us to confirm their availability and willingness to be appointed.”

So Mahuta claimed the official decide, but the OIA documents reveal Mahuta in fact decided.

Last week, Mahuta declined to answer questions about the discrepancy between her comments and the briefing.

A spokesperson said “there’s nothing further to add to previous comments to [the] NZ Herald on this question.”

What can they say? You caught us out!

The Herald reports:

Just 2 per cent of decile 1 students passed the writing component of new standards that from 2024 will be required for NCEA assessments. …

And only 10% meet the numeracy target and 24% the reading target.

You want to close the gaps in society in terms of income, life expectancy etc etc – you need to change this.

This post is by PaulL, a regular commentor and occasional contributor.   It is the tenth post in a series on the financial incentives to work and the impacts of our tax and transfer system on household formation, and the third post on the “what could we do” subsection.  The index to all posts in the series can be found here.

If we can’t afford a full UBI, can we perhaps afford something else universal?  From the earlier analysis we know the effective marginal tax rates are worst for those with children, because we have a number of targeted programmes that help those with children. Could we make the child-centred bits of the tax and transfer system universal?

1. He will be the 79th Prime Minister of the United Kingdom
2. He is the first Prime Minister of Asian descent
3. He has an MBA from Stanford
4. His wife (and him) are thought to be worth around NZ$1.5 billion
5. He supported Brexit
6. His parents were born in Kenya and Tanazania
7. He is a Hindu, and will be the first UK PM who is not a Christian
8. He is a teetotaller
9. He and his wife are both 42 years old
10. He got a first from Oxford

NBC News reports:

Less than three weeks before Election Day, voter interest has reached an all-time high for a midterm election, with a majority of registered voters saying this election is “more important” to them than past midterms. 

What’s more, 80% of Democrats and Republicans believe the political opposition poses a threat that, if not stopped, will destroy America as we know it. 

I hope New Zealand never ends up like this.

I am passionate about politics. I think generally policies of the centre-right are much better for New Zealand. But we must never regard those we disagree with on policy grounds as enemies who threaten the country. The vast majority of people in politics have good intentions.

We need to argue for our corner, advocate strongly and contest elections. But we must accept the results of elections, and not portray Governments we don’t support as existential threats.

The Herald reports:

At least seven people are understood to be putting their names in the ring for National, while Labour seems to have lower interest to run in the byelection forced by the resignation of Gaurav Sharma after his expulsion from the Labour Party.

Those interested in the selection for National include business director Rachel Afeaki – Taumoepeau, health professional Dr Frances Hughes, former Mayor Andrew King, and the former Hamilton West MP Tim Macindoe, who lost the seat to Gaurav Sharma in 2020.

Tim Macindoe and Andrew King are well known. Who are the other two?

Hughes has a long career in nursing management and health and in 2020 was awarded the New Zealand Order of Merit for her Services to Nursing & Mental Health. She returned to New Zealand in 2019 after spending a few years in Queensland as chief nursing and midwifery officer and in Europe as chief executive of the International Council of Nursing. She is now the Group General Manager Clinical and Care services at Oceania Healthcare.

Hughes has an incredibly impressive resume. She has held very senior roles in the public and private sector in healthcare, including running the global nursing council. Her PhD thesis was on “Politics, Policy and Nursing” which sounds useful.

Afeaki-Taumoepeau, a New Zealand-born Tongan raised in South Auckland, is a business director and involved with charitable, church and NGO work. She was chair of the New Zealand Tonga Business Council and is involved in local Waikato business groups.

Also very impressive CV. She has worked in senior roles in the UK for BP and Sky, and has done a huge amount of governance work in New Zealand.

Meanwhile, Labour sources have pointed to Georgie Dansey as their potential candidate, although a few others are said to be weighing it up before nominations close also on Wednesday.

Dansey is currently the electorate chair for Labour’s Hamilton East electorate. She was 84th on the Labour list – the last placed MP – and – wrote a good-humoured piece in the Spinoff about it.

Dansey is a former teacher who has worked for the PPTA and PSA.

Stuff reports:

The Green Party wants the Government to impose more sanctions and restrictions on Iran to support and help protect “the brave Iranian activists who are fighting to bring meaningful change in their country”.

Green Party foreign affairs spokesperson Golriz Ghahraman​ said the “women-led revolution in Iran is an historic struggle for women’s rights and democratic freedom”. …

ACT deputy Brooke van Velden questioned Prime Minister Jacinda Ardern in the House on Tuesday on her statements on Iran.

“We have been raising the issue around women’s rights in Iran, for instance, in the Human Rights Council in 2021,” Ardern said.

I LOL at this. Raising Iran’s behaviour at the Human Rights Council is akin to complaining about sexual harassment to Harvey Weinstein.

Ghahraman said New Zealand should introduce legislation similar to the specific sanctioning of Russia, as the country does not have an autonomous sanction regime, or designate the Iranian Revolutionary Guard as a terrorist organisation.

That’s a great idea from Golriz. Hopefully the Greens can draft a bill to that end.

The Herald reports:

The Government is pushing on with NCEA changes as planned despite critics calling for a pause as just a third of students in a pilot programme passed the new writing standard.

The Post Primary Teachers’ Association (PPTA) said the results showed more time was needed for students and teachers to adapt to the new standards before the rollout began at level 1 in 2024 progressing to level 3 by 2026.

The Government has set new literacy, numeracy, Te Reo Matatini (Māori language literacy), and pāngarau (Māori language numeracy) standards that will need to be taken alongside NCEA.

The standards are being introduced because a study found 40 per cent of students who got NCEA level 2 were not functionally literate or numerate.

Ahead of the nationwide rollout the Ministry of Education has conducted pilots last year and this year. A nationwide pilot will also take place in 2023.

More than 200 schools, kura, and tertiary providers took place in the first pilot this year online.

The results showed just 64 per cent passed the reading standard, 34 per cent writing and 56 per cent numeracy, Te Reo Matatini (Māori language literacy) at 24 per cent and Pāngarau (Māori language numeracy) at just 18 per cent.

They are terrible results. This is not about having kids get university entrance. This is about them being able to count, read and write after ten years of schooling.

We should not be accepting anything less than say 90% to 95% meeting basic literacy and numeracy standards.