July 3, 2008
Some policy areas are supposed to be kept clear of party politics.
Labour trampled all over the convention that consitutional matters were in that category with the Electoral Finance Act. Now they look set to do it again with monetary policy.
The Government is signalling a change in the way the Reserve Bank fights inflation in what could mark the first major shift away from the bank’s focus on interest rates as its sole weapon.
It is understood the Government has decided to give up on seeking consensus with National over possible changes and will go it alone.
That could see it campaigning on changes to the policy targets agreement between the finance minister and the governor of the bank – or even changes as radical as amendments to the Reserve Bank Act itself.
I am concerned because Labour:
* is abandoning a bi-partisan approach to monetary policy;
* has not learned from the EFA debacle that they should not play politics with matters which need to have at least bipartisan and preferably cross-party support.
* has made no effort to cut back their own profligate spending of taxpayers’ money which has made a significant contribution to inflation.
* is prepared to put short term politics before the long term interest of the country by abandoning the fight against inflation.
Inflation is theft which hits the poorest hardest.
There may be better ways to fight it than interest rates – but that should be determined by cross-party concensus not by petty party politics in a desperate bid to turn the polls around.
The Visible Hand In Ecnomics is troubled by this and is calling for submissions on it.
Hat Tip: Adam Smith
July 3, 2008
In a discussion ont he irony of Jim Bolger chairing Kiwi Rail, Tracy Watkins notes
If we ever doubted, meanwhile, that Bolger truly is a formidable politician, his response to questions about whether National was right to sell rail back in 1993 pretty much summed it up.
It was right to sell it at the time, Bolger suggested – but times had changed and it was now right to buy it back.
Well he’s right about the sale but wrong about the buy-back. So is he half left -what Cactus Kate calls a pink tory – or just plain wrong?
July 3, 2008
Petrol is more expensive than diesel because the former has a fuel tax levied on it and the latter doesn’t. But diesel powered vehicles pay Road User Charges instead.
The chair of the Road Transport Forum, Steve Doughty told Mary Wilson on Checkpoint last night that he’d be keen on an investigation to determine if fuel tax might be better than RUCs.
My initial reaction to this is positive. RUCs are based on distance, the further you go the more you pay. That sounds fair enough until you work out that vehicles which travel further efficiently pay more than those which travel a shorter distance inefficiently.
Fuel taxes, are consumption taxes so the more you use the more you pay and there is a financial incentive to use it efficiently.
Doughty reckons that the administration on RUCs costs around $100 million a year. That sounds high but there must be a lot of paper work involved with all the vehicles each with individual RUCs which need to be purchased and processed. It would be simpler and cheaper to pay fuel tax at the pump as we do for petrol.
Changing from RUCs to fuel tax might be more expensive for people with diesel powered cars who drive short distances. But it would definitely be easier and, by reducing the adminsitration, possibly cheaper for every vehicle covering long distances.
It would also relieve traffic police of the task of checking RUCs are up to date and writing tickets if they’re not 🙂
July 3, 2008
I’m having one of those fortnights this week so just caught up with this in yesterday’s Press over breakfast:
A Melbourne punter thinks National will win New Zealand’s election and has plunged $A 10,000 ($NZ12,720) on John Key’s party. The punter stands to win $A13,500 with Australian betting agency Centrebet if National wins the election later this year.
Centrebet has since firmed National in to $1.30 with Labour the outsider at $3.35.
“It’s one of the biggest bets so far, but we also have a London punter who’s placed L2000 ($NZ5,300) on Key at $1.30,” Centrebet political analyst Neil Evans said.
However, he said Clark has not been friendless in the betting, with a Christchuch punter recently backing her at $3.15, while an earlier Wellington punter staked $1000 on her at $2.65.
Would it be unkind to point out this could prove that only losers are backing Labour?
National opened three months ago at $1.47 and Labour at $2.62.
Over at The Inquiring Mind Adam Smith has copied a letter to the editor of the NZ Herald from Labour president Mike Williams in which he argues that polls are losing their predictive value.
I wonder what he thinks about betting agences? They can be wrong, but their businesses thrive because they’re right more often.
July 3, 2008
Does this sound familiar?
The group believes the [meat] industry is at a unique turning point in its history and that there will be profitable opportunities for those companies which can adjust to the new realities of adding value through processing, new technology and marketing…
It could come from those promoting PGG Wrightson’s bid to buy 50% of Silver Fern Farms. But I found it in the book Rural Challenge, A History of Wrightson Limited.
It’s a quote from Fletcher Challenge’s 1985 annual report. By the time the company got out of the meat industry a few years later it had cost them around $600 million.