Bet the left don't wax lyrical this time

The left wing has been feteing Bernard Hickey for some time since he started attacking the government, but I bet you they won’t be publicising his latest column where he prescribes some hard medicine for New Zealand.

So here are five ways New Zealand Inc can stop this slide into poverty.

1. Cut the middle-class welfare

Dropping Working for Families, interest-free student loans and “free” early childcare would be the fastest way to reduce the budget deficit. It would also reverse one of the great deceptions of the 2000s: we convinced ourselves we could afford these improvements to our standard of living, but we hadn’t earned it. As a nation we borrowed to consume – it is not sustainable.

2. Introduce land and capital gains taxes

The International Monetary Fund and the Tax Working Group have told the Government that these taxes are needed to quickly and fairly bring the budget deficit under control. They would take back some the windfall gains from the property boom and some of the air out of New Zealand’s property bubble.

3. Bring the NZ dollar down

Everyone, including the IMF, argues that New Zealand’s currency is about 15-20 per cent overvalued.

The Reserve Bank should take on the speculators and drag the currency down. It has done it before. It can do it again.

4. Restrict bank funding and lending, and companies borrowing offshore

The Reserve Bank is already looking at various macro-prudential options to restrict our banks from borrowing hot money offshore and pumping it into our housing market. The Government could also impose a tax on New Zealand corporates borrowing overseas, as the Brazilians have done. Many New Zealand companies have leaped offshore in the past six months to borrow cheaply from markets where official rates are near zero. Those companies include Transpower and Kiwibank.

5. Invest heavily in infrastructure

The Government and businesses should invest in the physical and intellectual infrastructure needed to improve our productivity. That means better broadband networks, roads, rail, power, education, more staff training and a more aggressive approach to lifting output per hour worked.

Most importantly, we need leadership to convince New Zealanders to take some pain now for sustainable gain later. Is our Government up to it?

The pinkos will especially hate number 1 and 5. Number 1 is a definite, Working for Families is a trap and an economic landmine laid by Labour when Michael Cullen mistakenly believed that surplus’ were structural.

I’m not sure even Labour has the stomach to push for a capital gains tax but I think it is something at least worth investigating. It is interesting that Bernard Hickey wants to first bring the dollar down and the restrict access to overseas markets for lending. One of the reasons why our exchange rate is high is our higher than the rest of the OECD interest rates, which is also why institutions look to borrow off-shore where it is cheaper even considering the exchange risk.

Of coursr the Reserve Bank standing in the market and lowering our exchange rate will raise the cost of things that we import, like fuel, which again raises the costs of things in our stores leading to further erosion of our purchasing power by inflation.

I don’t think Bernard has thought too hard about this prescription of changes. Still even just doing number 1 and number 5 would be a good start for John Key.



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  • roger

    Cam,Hone Key is saving real money here?? NZ a joke in the pacific, old fuckwits from the past doing what they did in the past, a pig and poddle show (key and english)
    bonkwits they dont deserve the F word (idiots)
    NZ the way we didnt want it

    • whafe

      roger, although I agree it is tragic the birth in prison, does your pea brain really think this could and would not have happened under Labour????? You are deluded…

      • grizz

        It did.

  • whafe

    Your Pinko’s roger cant even begin to give us any policy, until they sort there Pinko Circus, the population will not at all listen to there murmurings of the left wing give all the lazy fuckers something else policies….

    The sad thing with the Pinko’s is they have no issue in borrowing up a storm to in their small minds make things right, it is bad enough what National are borrowing per month, but have no idea the borrowings that Labour will be required to do to fund the moronic policies that have been dribbled out…

    Point 1 needs looking at immediately….

  • reid

    The Reserve Bank should take on the spec­u­la­tors and drag the cur­rency down. It has done it before. It can do it again.

    It can’t take on the speculators, that’s suicide.

    The only way you can stop speculators treating the Kiwi like a baby seal, is to make trades in it subject to a tobin tax, which would be brilliant, for all concerned except the speculators. What a shame.

    Unfortunately, you can’t impose a tobin tax unilaterally. What you can do is start advocating for it, at every international forum.

  • Point 1 is politically unsaleable for Neville Key. However, capping WFF (no more annual adjustment) will kill it off over the next 10 years and pull it back from the middle class and have it available to low income working families only.

    Point 3 is impossible – the UK tried and lost as it had less in the kitty than all the speculators. NZ is in the same boat.

    I would add a point 6 – time limits for welfare. $10b pa is going on welfare, only $3b really needs to be spent on limited support. The Government should tell everyone else to get to a polytech for three months to learn how to weld/drive a forklift/maintain a motor and then get a job.

    • reid

      Point 1 is polit­i­cally unsaleable for Neville Key.

      I disagree Frontrower. It means expending a vast amount of political capital, but unsaleable, in these times? No. Definitely a proposition worth discussing. He won’t do it, but he should.

      It’s total crap vast expenditure that doesn’t need to happen. The recipients will almost all find alternatives without adjusting their lifestyles significantly. A very very few round the margins will find it hard and may need special consideration but the vast majority in all cases – WFF, student loans or free child-care will find other means and carry on.

      Now isn’t that worth doing, in these times?

      I would add a point 7, random drug-testing for all welfare recipients. 1st strike = compulsory drug program. 2nd strike = reduction in benefit of $50 p.w. for six weeks. 3rd strike = what? What do you do with someone who will either be on the street or off it, depending on this decision. What, precisely do you do?

  • axeman

    Yep sure Hickey has attacked the government in the past. Yet the Pinkos wouldn’t have liked it when he noted “John Key should stop looking for magic bullets and just do the hard work. He could do it. All he has to do is blame Labour for the economic, taxation and spending distortions now evident and convince New Zealanders they are better off in the long run with a cleaner, simpler, broader and flatter tax system.”

    However he was also on the nail : “Goff appears lost in voteless wilderness, throwing out policies and words that he thinks might be popular, but not really knowing what to believe or having any overarching strategy or new thinking.” NB. This was written last May

  • grumpy

    Bring the exchange rate down??? FFS, how will he do that when the Canterbury Earthquake has to be paid for by insurers and re-insurers on $NZ?

    Why not try lifting real wages for a change (remember the Brash taskforce?)

    The rest I agree with, especially WFF and student loans.

  • peterwn

    There is a problem with 4 & 5 considered together. If you are going to build infrastructure, borrowing is quite OK and if you can borrow overseas very cheaply, that is what you should do.

    With 4, I have said time and time again that Bernard is right up the shute on this one. There is already starting to be a housing shortage as new building slows down and landlords exit the market. At the end of the day such a shortage has to be tackled by the Government either by getting into the business itself (‘the state house’), giving inducements or easing back on RMA requirements. As far as commercial / industrial real estate is concerned, it is tenants who will ultimately pay for removal of depreciation provisions. Similarly capital gains taxes will tend to push up rents as landlords will either expect a higher return or invest elsewhere. Interestingly IMO, office properties should return 8-9% net (they are ‘sexy’ to own), industrial 10% (solid but not ‘sexy’), small retail 11-12% (since tenants can be pain in backside) and residential 15-16% (wear & tear, damage, ‘runners’ etc).

  • nigelk

    The problem is that voters have gotten used to living beyond their means and making their children pay for it. They will not give this up. Now we can’t return to sensible levels of tax and spending because any party that suggests doing so will become unelectable. And there will always be at least 61 politicians willing to run on policies that are bad for the country. I suggest getting out now while Australia will still take us.

    • reid

      Nigel very good analysis and agree with everything but the last sentence, although I actually think I will head there soon, but for different reasons.

      This country isn’t knackered, but it’s in bad shape that Key’s not explaining cause he wants to be popular and there are arguments both ways on the wisdom of that.

      I personally favour the trust the people approach: i.e. give us all the info and let us decide but the issue with that is Liarbore works on cultivating fear and fear in this climate is explosively contagious.

      If Liarbore did the whole fucking country a favour and promised to lay off its fear-mongering it would be a good thing, but they won’t, and you can’t even put the argument to them, the arrogant pricks and so full of their own hubris they wouldn’t even listen past your opening sentence.

      So maybe NZ is currently down, but is she out?

      Nah, fuck that. There are enough of us to know what the fuck is going on, to make a go of it, plus, when the fuck did a nation of farmers and Kiwis ever walk away from a problem.

      I know this country is right now looking like she’s pretty fucked, but as things get worse, which they are going to, economically, you wait to see the attitude changes those events bring. People in these coming times are going to get real serious, real fast, I predict.

      • grasshopper

        There is a very simple solution, a little word beginning with w and ending in k, you guessed it “work”. It’s something most people in this country have forgotten the meaning of.

        We have the upper class feeding off the masses, those who have manouvred themselves into favourable positions in government jobs, or beneficaries of state privatisations and the unemployable, gangs and undesirables feeding of the general taxpayers. Hardworking taxpayers subsidise the wealthy and the bottomfeeders.

        The private sector basically funds a lazy and inefficient public sector. The public sector including most politicans are parasites feeding off the earnings of the private sector.

        If you have ever had to deal with someone in the public sector you would understand what i am talking about, most are useless and would be unemployable in the private sector.

        As for the cost of our Government Officals and the cost of Whale’s friends in the Justice Department what a joke, highly paid misfits who have never done an honest days work in their lives all on $300 per hour, no wonder this country is STUFFED!!!

        • reid

          a lit­tle word begin­ning with w and end­ing in k, you guessed it “work”. It’s some­thing most peo­ple in this coun­try have for­got­ten the mean­ing of.

          There are many people in this nation who’ve been conditioned into a life of dependency. That is, they have been taught their destiny consists of collecting the dole.

          Those are the only hopeless cases and I rather suspect they’re easy to identify.

          So why don’t we hug and cuddle and counsel and console these poor wretches even more than what we’ve already been doing. Are we so heartless, that we let money intercede betwixt our fat wallet and their thin and innocent tummies?

          OTOH, why don’t we challenge these people who are actually of all ages and needs and capabilities, with challenges and opportunities and assistance suitable to their need?

          Many, perhaps most of these people, don’t get the basic, yearly, nine-to-five routine that we all get into. None of these people get the daily interactions we get from arising to sleep, with all sorts of people, in all sorts of positions and roles. Gradually anyone in this position starts losing ground and the more ground they lose as they move through this alternative reality the more difficult it is for them to bridge the gap because they fall further and further behind, with each passing year. The tragedy is when it happens early, and when it happens long term.

          Now how do you deal with people who actually have no subconscious understanding that the normal thing to do Mon-Fri is to get up and go to work. If they think the normal thing to do is something else entirely, what precisely, does one do?

          • titanuranus

            There are many peo­ple in this nation who’ve been con­di­tioned into a life of depen­dency. That is, they have been taught their des­tiny con­sists of col­lect­ing the dole.

            Besides the the ones we elect into government?

  • grizz

    Hickey has attacked the governement as they have been gutless and not prepared to make the hard decisions that are required. Labour for all their rhetoric have not come up with suitable alternatives apart from doing the alternative of what Hickey is advocating: Spend, spend and spend some more with a live beyond our means on someone elses money mentality.

  • deputy


    You are the Man !!!!

    Nice one.

  • gaskranken

    There hasn’t been an administration since vietnam that has had a better opportunity to implement politically unpopular policies than this one but instead we have this article in today’s SST.

    This is what happens when you govt dept workers spend all their time sending emails to each other full of waffle instead of living and working in the `real world’

    Seems to me that our country is dominated by the existance of a huge deep trough, awash with an obscene amount of taxpayer cash with a huge number of snouts occupying it and happily hoovering up that cash on a daily basis and every political crisis is triggered by whose and how many snouts are under threat of being pulled from the trough at any given time.

    It’s fucked but that’s better left unsaid, gotta get to work need more money the bills don’t pay themselves eh Bernard?

  • whafe

    In simple terms, if some radical decisions are not made, then executed we as a country are fucked more than we are fucked now…

    National to dose up on concrete pills and make the tough calls, do it now while the Labour Pinko’s are a BIG cluster fuck…..

    • Mr. Infinity

      Sounds like a plan. Slash and burn in the first six months of 2012, let the public forget about it.

      WFF – Gone.
      Interest free student loans – Gone.
      Term limits on benefits effective immediately, along with crap like the artists benefit dumped.
      All public funding for show-business gone. That means TVNZ are sold, along with all the NZSO/Ballet crap.

  • whalewatcher

    Northern hemishere is polluted by radioactivity courtesy of Japan – so watch the demand for NZ milk, meat, wool, wood

    There can be no free lunches.
    People need to work to eat, not let others do it for them
    We need to trade, invent, innovate – and we do.
    But we need to celebrate those ‘tall poppies’ and keep them here. Or if they are overseas, get’em home.
    And we need to utilise our natural resources, balancing this with conservation.
    We are borrowing $300,000,000 a day? week? Whatever the numbers, we need to keep our assets (rail, electric, etc), and mine our resources, but in a modern smart way.
    It can be done, we are smart innovative buggers.
    We just need to sideline the nay-sayers, and get on with it as Kiwis can.

  • gaskranken

    Why when we have the internet is it necessary for kiwis to return home, I might be wrong but I’m sure global domination in the marketplace is only possible if you have people on the ground everywhere, seems to have worked pretty well for Mainfreight.