Subsidy

Hosking points out the obvious flaws in Labour’s wood policy

Mike Hosking sees right through Labour’s wood policy…another that they will no doubt claim is a “game changer”.

In what the Labour Party will hope is some sort of turning point in their poll run, they’ve started talking wood. They’re pro-wood. They’re getting into and involved in the wood industry.

The potential upside of this is it differentiates them from the Government. It gives them a point of difference. What they’re up to is incentivising the industry – there will be tax breaks for it.

Now the immediate problem I had with the idea is that it originated from their manufacturing inquiry they held a couple of years ago. That was the cross party ‘crisis’ inquiry where Labour, the Greens and NZ First wandered around the country listening to people complain about manufacturing. The big problem being that while they were all in a room together wringing their hands and moaning, manufacturing was going gang busters. Manufacturing has been expanding for the past 18 months in a row and across all sectors. Manufacturing levels are at record highs.

The single best thing Labour could do is declare that the wood industry in crisis and hold an investigation into it.  Read more »

Australians don’t like bludging car making ratbags

The latest polls in Australia deliver bad news for the unions and for Labour.

It is clear that Australians don’t like bludging car making ratbags.

”The government has started taking some big decisions, some hard decisions, that people notice,” notably to refuse public subsidies to SPC Ardmona and the car manufacturers. ”There’s just more of a consistency to what they are doing and saying and that’s coming from the Treasurer, which he pithily summarised as ‘the end of the age of entitlement’.”

A poll by Essential Media last week found that only 36 per cent of voters approved of continuing government subsidies to the car sector, with 47 per cent opposed.

So it may be that Joe Hockey is the one winning kudos for the government.  Read more »

Here pig, pig, pig

We think our politicians are troughers, well get a load of the UK politicians and how they want to extend the trough.

MPs have called for prices of alcohol to be slashed at Commons bars.

Despite prices for alcohol being kept cheaper than a nearby Wetherspoons pub at the four Palace of Westminster bars, MPs have suggested prices should be linked to pubs outside of central London to make them cheaper.

At the moment prices are linked, and kept lower, than a nearby Wetherspoons in Victoria Street, with pints of John Smith’s bitter costing ÂŁ2.60 and Becks lager ÂŁ3.20 – cheaper than many London pubs.  Read more »

Western craziness hits India

You would think that people around the world had looked at the pending financial doom of western democracies mired in locked in welfare wouldn’t you?

Not India, they are hell bent on driving down the same dusty road of welfare:

The Indian government is handing out cash to the poor as part of a phased rollout of a scheme designed to replace some 30 welfare programmes. Initially 200,000 people in 20 districts will receive the money, but the government plans to cover the whole country by the end of 2013.

“Nothing less than magical, and a game changer for governance” is how India is selling the ambitious scheme in which an estimated 90 million households stand to receive around $58bn in cash.

Those living below the poverty line will receive between $542 and $723 a year.

Welfare isn’t magical…it created shackles worse than slavery.

Read more »

Smug Alert

Oliver Stone, it turns out, is a bludging ratbag:

When Oliver Stone made the 2010 sequel to “Wall Street,” in his mind there was only one place to shoot it: New York City. Nonetheless, the film, a scathing look at bankers’ greed, received $10 million in tax credits, according to 20th Century Fox.

In an interview, Mr. Stone criticized subsidies for industries like banking and agriculture but defended them for Hollywood, saying that many movies can be shot anywhere and that their actors and crew members pay state income taxes. “It’s good,” Mr. Stone said of the film subsidies. “Or like basically the way business is done. I don’t understand what the moral qualm is.”

The practical consequences can be easily seen. The Manhattan Institute for Policy Research, a conservative group, found that the amount New York spends on film credits every year equals the cost of hiring 5,000 public-school teachers.

We can afford the NZSO but make teachers buy kids food

ᔄ Stuff.co.nz

School staff in the Waikato are forking out their own food and money so students don’t go hungry, according to new research into school food programmes in the region.

One low decile school reported half of its children were arriving hungry each week, while others said a lack of access to good food was causing high non-attendance rates because kids were getting sick.

Poverty Action Waikato researcher Anna Cox has been looking at food provision in the region’s schools since March in an effort to “break the cycle” of child poverty and encourage more schools to introduce food programmes.

“It became apparent that something needs to be done around food, and schools are a great resource in that way for a community.”

Anyone attending the NZSO, with their minimum subsidy of $160 per seat, should think about the poor unfortunates who go to school unfed, and whether the $160 minimum subsidy would be better spent on kids being fed as they kick back and enjoy state funded kultur.

Tagged:

A good change

ᔄ NZ Herald

The left wing parties are upset over changes to rest home subsidy qualifications.

Labour has accused the Government of trying to sneak through a change which will mean fewer elderly people qualify for rest home subsidies which are asset-tested.

The Bill to make the change was introduced as part of the Budget. It will mean the asset threshold below which the elderly qualify for Government subsidies towards their care will increase by the rate of inflation every year, rather than the annual increase of $10,000 which previously applied.

It is likely to mean the asset threshold raises at a lower rate in the future, so fewer people will qualify.

Under the change, the threshold from July 2012 will increase to $213,297 rather than $220,000 for a single person or a married couple both of whom are in care. It will increase to $116,806 – rather than $125,000 – for married couples where one of them is in care.

The Health Ministry has estimated it will mean 260 people next year are no longer eligible for the subsidy, rising to 1040 people in 2015/16.

This is a good change. It basically requires people to pay for their own care instead of the government providing subsidies. All the subsidies are doing currently is getting taxpayers to subsidise the inheritance of the off spring of people in aged care.

The reality of aged care now is that few people enter a rest home from choice, particularly in Auckland. If you are in a rest home you are never coming out except in a box and so any money spent by the taxpayer and not the aged is simply a subsidy for the inheritence for their offspring.

It is not the responsibility of government to ensure legacies are preserved for children.

Tagged:

What a waste of money

Subsidies are evil at the best of times, but worse when one of the richest families in the world avails themselves of corporate welfare in the form of subsidies:

The Queen has received ÂŁ7million in farming subsidies funded by taxpayers over the past ten years, it emerged yesterday.

And the Duke of Westminster – one of Britain’s richest men – has been given around ÂŁ6million.

They are among a roll call of millionaire land owners who have accepted bonanza payouts from Brussels.

The subsidies, made under the controversial Common Agricultural Policy, are meant to ensure farmers a reasonable standard of living while giving consumers quality food at fair prices.

Bludgers.

Even the Germans got burned by green energy

Germans are usually much more cunning with their money, but they got sucked in by the green economy scams:

Germany once prided itself on being the “photovoltaic world champion”, doling out generous subsidies—totaling more than $130 billion, according to research from Germany’s Ruhr University—to citizens to invest in solar energy. But now the German government is vowing to cut the subsidies sooner than planned and to phase out support over the next five years. What went wrong?

Subsidizing green technology is affordable only if it is done in tiny, tokenistic amounts. Using the government’s generous subsidies, Germans installed 7.5 gigawatts of photovoltaic capacity last year, more than double what the government had deemed “acceptable.” It is estimated that this increase alone will lead to a $260 hike in the average consumer’s annual power bill.

According to Der Spiegel, even members of Chancellor Angela Merkel’s staff are now describing the policy as a massive money pit. Philipp Rösler, Germany’s minister of economics and technology, has called the spiraling solar subsidies a “threat to the economy.”

Germany’s enthusiasm for solar power is understandable. We could satisfy all of the world’s energy needs for an entire year if we could capture just one hour of the sun’s energy. Even with the inefficiency of current PV technology, we could meet the entire globe’s energy demand with solar panels by covering 250,000 square kilometers (155,342 square miles), about 2.6 percent of the Sahara Desert.

Unfortunately, Germany—like most of the world—is not as sunny as the Sahara. And, while sunlight is free, panels and installation are not. Solar power is at least four times more costly than energy produced by fossil fuels. It also has the distinct disadvantage of not working at night, when much electricity is consumed.

Great, they put in alternate energy systems and their power prices is skyrocketing…I guess it could be worse they could have put in a RMA and hamstrung new generation capacity for decades.

Why do people change their minds on political issues?

I was reading an interesting article in The Economist about the ending of corn ethanol subsidies in the US:

Three years ago, corn-ethanol subsidies appeared to be one of those common things in politics, an indefensible policy that was completely sacrosanct. It had, as many such policies do, a fiercely committed natural consistency, corn farmers, who enjoy a somewhat privileged political position due to their all-Americanness and the importance of the Iowa presidential caucuses. Corn ethanol is environmentally damaging; it puts more carbon emissions into the atmosphere over the course of its production and consumption cycle than it takes out, and it uses up cropland that would otherwise be producing food for human or animal consumption. But this point was generally too complicated for environmentalists to make to the general public. And while conservatives are usually theoretically opposed to subsidies, in practice they’ve either actively backed them for carbon fuel industries, or never done anything to stop them. It just seemed as though corn-ethanol subsidies were the kind of policy that wonks all agree is terrible but that continues forever because of political realities.

But if the old saying goes that a week is a long time in politics then 3 years is an eternity:

Sometime in the past three years this all changed. The rise of the tea-party movement forced conservative politicians to take principled opposition to subsidies far more seriously. The budget-cutting frenzy in Washington made the subsidies a target. And the strange high-beta situation of Midwestern farmers, who are enjoying high corn prices and rising land prices while the rest of the country is seeing stagnant income and declining real-estate values, has muted their fervour for subsidies too. The speed with which this has happened puts me in mind of the country’s startling attitude shift on gay marriage. I have absolutely no idea how things like this come to pass, and I don’t think anyone could hope to predict them. But I think it serves as a somewhat hopeful close to a mostly horrible year to observe that in politics, solutions to problems often seem to be completely impossible, until all of a sudden they’re not.

Which is all very interesting but the original question remains un-answered. Why do people change their minds on political issues? Is it incremental? Or evidence based?