OECD prescribes less debt, more productivity for NZ

April 16, 2009

The OECD’s latest report on New Zealand  forecasts a shrinking economy for the rest of this year with hesitant growth in 2010.

It recommends that the Reserve Bank cuts interest rates again and keeps them low and says the government must take control of deficits and debt.

Given the risks to the government’s credit rating and to market confidence and the heavy dependence on foreign debt funding, there is little room for more fiscal expansion. It is crucial that the new government’s first budget this May delivers a credible consolidation plan.

It says the gap between New Zealand’s productivity and the rest of the OECD must be addressed.

Although the quality of New Zealand’s regulatory regime is generally high, it has fallen relative to other OECD countries. Even if a cyclical improvement is likely following the downturn, a durable pick-up in productivity growth with high employment will require structural policy changes

The graph in the previous post shows how bad the gap is and the report says that is partially explained by our geographical isolation but:

The country appeared to be on the right policy track with its earlier market-oriented reforms. But the policy focus on productivity and growth eroded during the years of economic buoyancy, while other countries advanced. Notably, a large amount of new regulation, at times poorly designed, coordinated and focused, was introduced. Such measures have increased the costs of doing business and sent bad signals to foreign investors.

The report’s prescription for economic recovery includes increasing public sector productivity, shifting the tax base from income to consumption and selling assets.

The authors commend the basic principles of the RMA but recommends improvements to  its management and implementation including streamlining the consenting process and establishing local provisions for water trading and the measurement and consent of nutrient flows.

They also suggest our greenhouse gas targets are dependent on other countries having similar policies and targets.

The report says that rising health care costs threaten long term fiscal sustainability and suggests an increase in private insurance and provision.

Its prescription also includes increasing medical student numbers and accepting more foreign students.

To the extent that New Zealand cannot offer international-level specialist wages, it should work harder to create a satisfying and innovative clinical environment, giving doctors a high degree of autonomy and interaction with other professionals in the new collaborative-care settings.

How easy would that be and would it be enough?

The report is recommending strong medicine and memories of the fallout from the last time that was administered in the 1980s and early 90s will foster resistance.

But tough times require tough measures and the challenge for the government is to deliver the medicine the economy needs without turning it into political poison.


What went wrong?

April 16, 2009

Remember Labour’s pledge to get New Zealand into the top half of the OECD?

This graph from the OECD’s latest economic survey shows that progress didn’t match the rhetoric:

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What went wrong?


Mulga Bill’s Bicycle

April 16, 2009

Today’s contribution to poetry month comes from across the Tasman.

It’s Mulga Bill’s Bicycle by Banjo Paterson, from Snowy River and Other Verses, published by Angus & Robertson.

                                     

                                       Mulga Bill’s Bicycle  

'Twas Mulga Bill, from Eaglehawk, that caught the cycling craze;
He turned away the good old horse that served him many days;
He dressed himself in cycling clothes, resplendent to be seen;
He hurried off to town and bought a shining new machine;
And as he wheeled it through the door, with air of lordly pride,
The grinning shop assistant said, "Excuse me, can you ride?"
 
"See here, young man," said Mulga Bill, "from Walgett to the sea,
From Conroy's Gap to Castlereagh, there's none can ride like me.
I'm good all round at everything as everybody knows,
Although I'm not the one to talk - I hate a man that blows.
But riding is my special gift, my chiefest, sole delight;
Just ask a wild duck can it swim, a wildcat can it fight.
There's nothing clothed in hair or hide, or built of flesh or steel,
There's nothing walks or jumps, or runs, on axle, hoof, or wheel,
But what I'll sit, while hide will hold and girths and straps are tight:
I'll ride this here two-wheeled concern right straight away at sight."
 
'Twas Mulga Bill, from Eaglehawk, that sought his own abode,
That perched above Dead Man's Creek, beside the mountain road.
He turned the cycle down the hill and mounted for the fray,
But 'ere he'd gone a dozen yards it bolted clean away.
It left the track, and through the trees, just like a silver steak,
It whistled down the awful slope towards the Dead Man's Creek.
 
It shaved a stump by half an inch, it dodged a big white-box:
The very wallaroos in fright went scrambling up the rocks,
The wombats hiding in their caves dug deeper underground,
As Mulga Bill, as white as chalk, sat tight to every bound.
It struck a stone and gave a spring that cleared a fallen tree,
It raced beside a precipice as close as close could be;
And then as Mulga Bill let out one last despairing shriek
It made a leap of twenty feet into the Dead Man's Creek.
 
'Twas Mulga Bill, from Eaglehawk, that slowly swam ashore:
He said, "I've had some narrer shaves and lively rides before;
I've rode a wild bull round a yard to win a five-pound bet,
But this was the most awful ride that I've encountered yet.
I'll give that two-wheeled outlaw best; it's shaken all my nerve
To feel it whistle through the air and plunge and buck and swerve.
It's safe at rest in Dead Man's Creek, we'll leave it lying still;
A horse's back is good enough henceforth for Mulga Bill."
 

                         – Banjo Paterson –


Ever wondered why we have fences?

April 16, 2009

Bernard Darnton explains at Not PC:

Fences make farming possible, promote secure development of land, and encourage Wanaka tourists to remove their bras. They feed us, they enrich us, and they irritate the stuffed shirts at the Queenstown Lakes District Council. What better vision could you facilitate?

And I thought we just used fences to stop the sheep and cattle straying.


PureNZ have your say gets rave reviews

April 16, 2009

Tourism New Zealand’s mobile caravan is touring the country, recording video postcards which are posted on YouTube   and the PureNZ have your say  campaign has exceeded expectations.

 Over 950 video postcards have been recorded in the mobile studio, posted on YouTube and emailed out to visitors’ friends and families back home. The video ‘raves’ have been viewed a total of more than 75,000 times.

Tourism New Zealand Chief Executive George Hickton says the reach of the initiative has gone beyond initial estimates.

It’s the 21st century update on the postcard proud parents used to share with family and friends back home,  videos on the web where they can be seen by the world.

The campaign was originally aimed at attracting tourists from Britain but so far they’ve  recorded visitors from 37 countries, including Argentina:

It’s certainly generating interest, although the true measure of success will be how much of that interest translates into extra visitors.


Taking the scenic route

April 16, 2009

Giving and following directions has always been an inexact science, and it’s particularly difficult in the country.

One shelter belt looks very much like another to most people and the paddock on the corner you remember so well when it sported sunflowers in bloom on your last trip looks quite different planted in wheat on your next.

Those problems ought to have been solved by technological advances, but Laughy Kate’s cousin discovered that it doesn’t pay to take Google Maps as gospel.

She wanted to find the best route to cycle to her parents-inlaws’ house but:

Google Maps managed to turn her 40 kilometre trip into a route that covered 52, 795 kilometres, a few oceans, three different countries and would have had her arriving at her parent’s in-laws sometime around the middle of August!

Whoops.

The story made the Daily Telegraph  which contacted Google and was told the engineers might have been having a laugh when they put the service together.

Hat Tip: Quote Unquote


It’s too late, Phil

April 16, 2009

Labour leader Phil Goff was in Dunedin yesterday and gave his prescrpition for economic recovery:

If Labour was still in power it would do three things: spend money on retrofitting houses with insulation which would provide jobs, cut power costs for the public and create healthier living conditions; look at encouraging on-the-job training so that when New Zealand came out of a recession, it had skilled workers; and continue with environmental sustainability issues, such as the emissions trading scheme.

It’s too late, Phil.

It’s not so much a question of whether these are good ideas or not as, if they are, why didn’t you implement them when you had the chance?

You were in power for nine years when the economy was going well in spite of what you did and now we’re in a worse position to deal with the recession because of what you did.

If you couldn’t do much to contribute to economic growth when international factors were in our favour, we’re not going to trust your prescription now they’re not.


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