Prudence best recipe for sustainability

August 15, 2014

Trans Tasman previews next weeks PREFU:

. . . What the PREFU will highlight are Treasury forecasts on economic growth remaining robust, but “normalising” after the dairy boom last season, and on fiscal surpluses thinner than those set out in the budget.

There’s no windfall in revenue as there was in 2005 when the Govt of the day, caught by surprise, scrambled to splash out big spending programmes like Working for Families. The economic situation NZ finds itself in during this cycle is very different. Then credit growth was running at around 10%, compared with 4% now, inflation was high, and consumption was fuelled by rampant debt. This time round, the Reserve Bank Governor Graeme Wheeler jumped in early, and has got the surge in house prices under control. Inflation is subdued, wage growth is only moderate, productivity is rising, households are keeping their spending in check, and corporate balance sheets are in good shape. 

So the cycle this time will have a flatter, steadier profile, but growth will be at a sustainable pace, lasting longer. The economy is growing another “leg,” with hi-tech exports rising exponentially. For the Govt, the aim is to keep the economy running on a smooth, upward trajectory. Its eyes are on winning not just this election, but in 2017 as well. For this to be achieved, it has to deliver rising standards of living through the whole cycle. It can’t yet risk another boom-bust, of the kind which has dogged NZ over the last half century, if is to capitalise on the reputation it has sought to nurture of being the most prudent economic managers the country has had in the modern era. . .

The improving outlook for the country has been hard-won and is a result of careful management.

The expected outlook for growth at a sustainable pace and lasting longer is encouraging but it’s not assured.

We know what a National-led government has achieved and can be confident they will continue with the same prudent recipe to ensure that growth is sustainable

A prospect of a weak Labour Party leading a coalition propped up by the Green, New Zealand First and Internet Mana Parties gives no cause for confidence.

Policies announced so far are repeating the failed recipe of the past based on the toxic ingredients of  higher taxing, higher spending.


Need to earn respect

August 1, 2014

Trans Tasman on complaints of media bias:

The tawdry cry of media bias, marinated in bitterness and misanthropy, has been held aloft by Labour activitists. They have a point, but not the one they think they are making. How journalists’ view political parties is affected by many factors, and individual political biases and prejudgements is only one of them – and seldom the most important. Almost every journalist in the press gallery has tales of slow or non-existent response from Labour to requests for information, or of interviews/appearances agreed to and then “pulled” at the last minute.

It isn’t a matter of incompetent staff: the almost total turnover in the past three years is only one indication something deeper is the problem. No one knows what is going on because people who should be told are not told, and the big reason for this is internal levels of mistrust are so toxic. It adds up to an organisation – and we use the word ‘organisation’ with some degree of over-stretch here – which cannot do the political equivalent of walk from Mum’s car to the kindergarten gate without having a trouser incident.

And of course this affects coverage. Journalists experience this level of cluster-fornication every day and it has a deep impact. And this is before we get to the public snafus, the destructive and bitter factionalism and the way many electorate candidates are distancing themselves from the current, official election strategy. Almost everything Labour does at the moment sends the message it is in no position to run anything.

If there is a tone of disrespect in how journalists cover Labour – and there very definitely is – it is because Labour is not behaving in a way which earns respect.

Daily displays of cluster-fornication don’t earn respect.

Nor do obvious internal divisions, a predilection for sideshows and failure to learn from mistakes.

Labour is in a mess and that’s reflected in media coverage.

It’s a mess of the party’s own making and the media can’t be blamed for showing it in a negative light when there’s so little positive to focus on.


Gonna tell on you

July 18, 2014

Quote of the day from Trans Tasman:

. . . Meanwhile Dotcom, is now promising to reveal all he knows about John Key just before the election. And it’s pretty damn big, he says. Oh yes. In political terms, this is a bit like the playground “gonna tell on you and my father is a policeman and my aunt is a wrestler and you’re gonna be REAL SORRY!” . . .

This reminds me of Labour’s desperate smear attempts before the 2008 election when they sent Mike WIlliams to Australia to dig the dirt.

He came up with egg on his own face and no dirt at all.

If Dotcom really has something on Key he’d spill it now which would give the opposition a strong foundaiton on which to build an all-out assault.

The only advantage in waiting is to keep himself in the headlines.


The importance of certainty

July 4, 2014

Trans-Tasman notes the appeal of certainty and stability:

National emerged neat and tidy from its election year conference. Delegates went home knowing what they have to do to ensure the party can re-form a governing coalition. It’s this disciplined approach which carries its own message to the electorate, contrasting with the inchoate array of parties lined up on the other side of the fence. Private polling shows within the electorate, opinion is beginning to harden on the parties of the left being so disparate, (even if they gained a majority of seats in the next Parliament), a coalition of those parties would be highly unstable and couldn’t last.

Certainty, along with stability, is the priority for most voters. The difficulty for the parties of the left is they project not just instability, but incoherence in the policies they are espousing. The realisation has grown Labour would have to share power with the Greens, NZ First and possibly the Mana/Internet alliance. How would it work? In the NZ Herald this week John Armstrong noted Labour seems to be increasingly paralysed by the division between MPs who put a priority on economic development and those who want environmental concerns to be very much part of that development.

The Opposition has forgotten what Helen Clark did in the run-up to the 1999 election, staging a reconciliation with Jim Anderton and his Alliance to project a united front and give electors an idea of what a Clark-led Govt would look like (even though it must have savaged her personal pride to cosy up to her old foe). . . 

 The more voters see of what a Cunliffe-led Labour/Green/NZ First/Mana/Internet Party might look like the less appeal it has.

There are enough uncertainties in most people’s lives without adding an uncertain coalition and the instability that would come with it especially when its contrast with the certainty and stability of a National-led government with John Key as Prime Minister.


Regions bouyant

June 28, 2014

Opposition parties have been trying to convince us the regions are in decline, but the reverse is true:

. . . The latest Westpac survey shows economic confidence has declined in most regions but remains buoyant. Respondents in the quarterly survey are not so upbeat as previously. It follows reports from some economic groups and unions that some regions outside Auckland are at risk of stagnating. ANZ Bank economists disagree with the stagnation theory. They say the idea the regions are being plundered for the benefit of the cities is simply not backed up by the statistics. “Our own Regional Trends proxy for regional economic activity puts Northland at the top of the annual growth stakes in the year to March 2014.” Canterbury and Auckland have led economic growth over the past few years. Strong rises have also been recorded by Waikato, Otago, Taranaki and Nelson-Marlborough. The ANZ commentary says to get the full story, it’s worth doing a bit of knife-and-fork economics (that’s a few dinners chatting along the way).

“While everyone talks about Christchurch, 100km down the road is a place called Ashburton; it’s booming. That’s irrigation for you. South Canterbury is riding the same wave. Central Otago is going very well with evening flights the icing on Queenstown’s cake. Ironically in Otago, it’s the city (Dunedin) that is underperforming the region. Southland is just Southland and getting on with business and not crowing about it. Blenheim just had a bumper grape harvest; Nelson has a reasonable vibe (was there last Wednesday). Taranaki – white and black gold working in tandem. Bay of Plenty – Psa being worked through (kiwifruit land prices have rebounded), they’re seeing Aucklanders relocate, and the port is going well (though the forestry sector is grinding to a halt, which is something we’re watching). Wellington – no Govt spend but lots of IT spend and investment, and Kapiti is doing nicely. Waikato – a 2-hour wait to get into Fieldays the other Friday told us something. Manawatu – trundling along solidly. There are weak spots, but this talk of cities surging and the regions being down in the dumps is just hubris. In many cases it’s not a lack of demand or opportunities holding regions back, it’s getting the available resources (particularly labour). That’s not a bad problem to have!” . .

Just like the manufactured manufacturing crisis opposition parties tried to promote, regions aren’t in decline, they’re buoyant.

 


Compounding moral bankruptcy

June 9, 2014

John Banks served as an electorate MP and Minister, retired then returned to parliament representing a party with whose principles and philosophy he had something in common but which weren’t best matched to his own.

Laila Harre served as a list MP and Minister, retired and is now seeking to return to parliament leading a party which doesn’t appear to have much in the way of principles.

Worse it’s led by man whose actions appear to be diametrically opposed to all she professes to believe in.

As Trans Tasman pointed out last week:

. . . It is possible, back when she was an ardent campaigner for feminism and against capitalism, racism and corporatism, Harre foresaw the day she would sign up to front a party funded by a convicted German fraudster who made much of his money from pornography and who also has a fetish for racist, not to say outright Nazi, humour. Harre wasn’t even elected: she was anointed by the aforementioned convicted German fraudster who has trafficked in pornography and who thinks n-word jokes are hilarious.

There are many terms for this sort of thing, none of them complimentary. We will avoid the ‘h’ word – not just because MPs are not allowed to use the term hypocrisy in the House, but mostly because hypocrisy is part of the human condition. All of us fall short of our ideals. But this is not mere hypocrisy, not a minor falling short. This is moral bankruptcy of a particularly shameless kind. . .

At least Banks had some positive things in common with Act.

All Harre has is negative – the aim to get rid of John Key and National.

And Banks wasn’t bought by anyone.

Harre is accepting Kim Dotcom’s money – a salary of more than $100,000 for herself and millions for the party.

If she thinks he won’t expect her to dance to whatever tune he calls, she’s compounding the moral bankruptcy with stupidity.

 


Carbon tax conundrum

June 6, 2014

Trans Tasman explains the implications of the Green Party carbon tax policy and the conundrum it poses for Labour:

. . . Dairy farmers who are currently exempt from the ETS will pay a reduced rate of $12.50 a tonne for their pollution. Beef and sheep farmers will be exempt. A BERL economic report released with the policy indicates the average dairy farmer would take a 12.5% hit to their income, and should the milk price fall to around $7kg M/S, about 10% of dairy farmers would be vulnerable. Implementation of the policy would hinge on post-election backing from Labour, which appears at best lukewarm – David Cunliffe is already distancing himself from the policy saying it is Green policy to be negotiated after the election. NZ First leader Winston Peters says he does not support a carbon tax. So it leaves confusion in voters’ minds whether a carbon tax would be a goer.

A policy with such serious implications as this isn’t one that ought to be left to post-election negotiations.

Whether or not Labour would countenance the tax could well influence voters – but maybe that’s why Cunliffe won’t make a stand.

What Peters says he supports and what he would actually support, given the chance, aren’t necessarily the same thing.

But it does confirm the Greens, in placing such a high priority on climate change protection (even though NZ is only responsible for 0.14% of global emissions), want to drive fossil fuel producers out of business, and halt the expansion of dairying. And if Labour has to cosy up closer to the Greens to ensure it looks like a Govt-in-waiting, how will this play out in electorates like the West Coast (where mining is a core industry) or New Plymouth where Andrew Little, with leadership ambitions, will be trying to show he can win a seat? . . .

A party trying to gain only a relatively small proportion of the party vote can afford policies which impact badly on certain areas.

Those trying to win electorates too are much more aware of the negative impact policies which might be attractive in theory have on real people in practice in real life.

 

 

 


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