Australian honour for Roger Kerr

Sir Roger Kerr, executive director of the Business Roundtable has received an Alan McGregor Fellowship from Michael Darling, chair of the Centre for Independent Studies:

Business Roundtable chairman Roger Partridge said the awards are given to honour individuals who have made a significant contribution to the advancement of the principles of free markets, a liberal society, and personal responsibility.

“This is a great honour for Roger Kerr and the Business Roundtable and it’s great to see the work he and the organisation have done over the years recognised in this way. . .

Mr Darling noted in his citation that Roger Kerr “has personally commissioned, overseen and made extensive editorial contributions to all of the work produced by the Business Roundtable, totalling more than 200 books and reports and well over a thousand articles, op-eds, submissions, media releases, speeches and policy backgrounders.”

Mr Darling also quoted New Zealand Institute of Economic Research chairman Michael Walls who, in awarding Mr Kerr the 2001 NZEIR Qantas Economics Award, said: “No single individual has done more over the past 15 years to persuade important parts of the business sector to support economic policies which, though often contrary to the interests of individual firms, were in the interest of the country as a whole.”

That last sentence bears repeating: “No single individual has done more over the past 15 years to persuade important parts of the business sector to support economic policies which, though often contrary to the interests of individual firms, were in the interest of the country as a whole.”

People who promote economic liberalisation and personal responsibility are often criticised for being selfish. But it’s protection which helps individual businesses at the expense of other businesses, consuemrs and the country.

 Former Australian Prime Minister, John Howard, was the only other award recipient.

Purpose of good governance: growth and efficiency, not redistribution or morality.

John Key crossed the Tasman to learn from Kevin Rudd, but it’s Key who’s showing Rudd what to do according to an op-ed in The Australian.

. . . Key came to visit to see how Australia did things, why Australians enjoyed salaries one-third higher than those of their Kiwi neighbours, what NZ should emulate to match the better living standards. Despite Key’s substantial commercial success in banking before entering politics, his self-effacing nature made it look like a case of little cousin with modest goals meeting big cousin, the ambitious and supremely confident Kevin who had everything to teach little John.

How the tide has turned. Rudd is polling poorly after lacklustre reforms while Key, along with Minister of Finance Bill English, passed down an impressive budget last Thursday and surprised everyone. And perhaps what Rudd will envy the most is Key’s approval rating in the polls. . .

The writer, Luke Malpass,  is a policy analyst with the New Zealand policy unit of the Centre for Independent Studies. He explains the Budget and concludes:

These changes are broadly fiscally neutral over the forward estimates for the next three or four years. The cuts to the personal tax rates are deeper than expected and designed, along with spending freezes in most areas (except the big three: health, education and welfare), to return some integrity to the tax system that was lost under the previous Clark government. The reductions also reflect the present administration’s conviction that growth and efficiency, not redistribution or morality, is the purpose of good governance.

Those who accuse National of being Labour-light haven’t recognised the change of focus. This government’s much more concerned about policies which will make a bigger cake. That’s a pleasant change from the previous one which concentrated on cutting it into smaller pieces and telling us how much we could eat.

The strategy of Key and English is the opposite of that of Rudd, who has used his full arsenal of rhetoric to justify meagre changes to the tax system, especially changes that will not be funded without the proposed resource super-profits tax. . .

Malpass also approves of the tax changes:

Key has quietly and substantially rebalanced NZ’s tax system, far more so than in Australia.

The tax reform in NZ’s budget may seem a bit tame to many Kiwis but is radical compared with what the Rudd government is contemplating. Australia seems to be inexplicably averse to increasing its GST or giving it some integrity by getting rid of frivolous exemptions.  Indeed, the GST was deliberately omitted from the Henry review’s terms of reference.

This is surprising given that by raising the GST to 12.5 per cent and cutting exemptions, the government would have a highly effective revenue-raiser and could do away with most of the 115 economically damaging taxes, which raise only 10 per cent of government revenue in any case. . .

Anyone tempted by those trying to sell the idea of complicating our GST by exempting fresh fruit and vegetables should take note of the cost and benefits of those frivolous exemptions.

This is quite unlike the Clark Labour government, which was more concerned with the principle of progressivism than its actual effect on tax take, growth or the resources wasted to gain tax advantage.

The Rudd government, unfortunately, is falling into the same trap with the RSPT. This has been demonstrated by invoking unhelpful notions of class war (big fat miners and their profits) and redistribution (by being somehow related to helping superannuation and mining companies at the margin), as well as a good dose of unhealthy jingoism (attacking multinational miners).

Where the Rudd government has tended to make bold claims about weak reform, the Key government has been quietly creating an atmosphere for more growth, foreign investment and a tax system that doesn’t penalise higher earnings. Even more impressive is the government’s projected 10-year spending reduction plan to reduce spending as a proportion of gross domestic product from 35 per cent to 29 per cent, and this is without any big-bang reform or swingeing cuts yet.

Those who criticise National for not going far enough ignore political reality – bit bangs usually cause more pain than the electorate will tolerate.

Despite only these modest, conservative and “steady as she goes” efforts, Key’s personal net satisfaction poll ratings (approval minus disapproval) are stratospheric at about 50 per cent compared with minus 12 per cent for Rudd.

Perhaps little John can teach big Kevin a thing or two after all.

Is it too much to hope that the left in New Zealand could learn from Rudd’s mistakes so that if/when they’re back in power they don’t repeat them?

P.J. O’Rourke on capitalism and free trade

The Business Herald interviewed USA satirist P.J. O’Rourke who said on capitalism:

The free market is simply a measurement. It’s a yardstick; a bathroom scale. You may hate what you see when you step on a bathroom scale, but you can’t pass a law making yourself thin. And I feel there are a lot of politicians out there who think that you can, or want to tell the public that the public can.

On China:

Two years ago, I spent quite a long time there. And I was there a year ago too, although that was more Hong Kong. But it’s an amazing place. The changes are great. People who say the Chinese economic boom has not come with greater freedoms are only talking about a limited range of freedoms. When people are able to feed themselves, as opposed to unable to feed themselves, that makes them a lot freer. Economic freedoms are a big part of the freedom we use every day. They’re easy to mock, but the freedom we use most often, and to the greatest extent, is economic freedom. And so the Chinese all of a sudden have that, and it’s extraordinary to see. But it also is an important lesson that economic freedom is a necessary, but not sufficient, part of complete freedom.

And On free trade:

People will lie about this. Even if they don’t always understand the free market is to their advantage, they do understand that free trade is to their advantage, in a macro sense over a long period of time. But nobody seems to understand yet that when you restrict your imports you are restricting the actions of your own people and you are hampering the freedoms of other people around the world to indulge in the harmless exchange of goods. People say free trade causes dislocation. In actual fact, it’s the lowering of trade barriers that causes the dislocation. It’s not the natural state of things that causes dislocation, so much as it is the changing from the previously unnatural state of things.

The full interview is here. 

He doesn’t know how to use a computer and writes with a typewriter. As a specialist in work avoidance I concur with his view on the danger of distraction with computers, but there is no way I’d choose a typewriter over a word processor and not just because it’s easier to make corrections when I type faster than I spell.

There’s a link at the bottom of the interview for information on O’Rourk’s John Bonython lecture in Auckland on April 30th. It didn’t work but I found if on the Centre for Independent Studies’ website.

Hat Tip: goNZo Freakpower