Economic policy

The Future of Work Commission’s findings will be published in November

Labour Party 1st runner-up leader twice in a row, Grant Robertson, has created a paper entity called The Future of Work Commission. ?It is going to try to understand what “work” is, what “jobs” are and, through this, win an election.

He’s talking up quite a storm, his paper entity and Grant.

Grant Robertson says New Zealanders can expect a radical shift in the Labour Party’s economic policy ahead of the 2017 election as his party looks to prepare workers for huge changes in the labour market in coming decades.

Mr Robertson is in Paris for the OECD’s Future of Work Forum, where politicians, businesspeople and unions are discussing how to adapt to the digital economy and the increasing casualisation of the workforce.

The shadow finance and employment minister is seeking ideas for his Future of Work Commission, a two-year project which will inform Labour’s new economic development policies.

“If we look ahead two decades, there will be enormous change,” he told the Herald from Paris. “Up to half of the jobs in the economy today won’t be there.”

That is because blue- and white-collar jobs are being lost to robotics, automisation and computerisation.

The working environment is becoming more flexible, and people are more likely to have several different career paths over their lifetime.

Mr Robertson said addressing these changes would mean a radical change of direction for his party.

I’d love to see Grant sell that to the party’s union masters. ?As far as they are concerned, they are still going to be holding on to the old jobs thank you very much. ? Read more »

New study shows that ?the rich? don?t just pay their ?fair share,? they pay almost everybody?s share

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A US study has shown that the claims of the leftwing that the rich should pay even more tax as being just and fair in the world is based on lies.

They already do pay more than their fair share, in fact they pay almost everybody’s share.

[T]he major finding of the CBO report is that the households in the top income quintile are the real ?net payers? of the US economy. The average household in the top one-fifth of American households by income paid $57,500 in federal taxes in 2011, received $11,000 in government transfers, and therefore made a net positive contribution of $46,500. The second-highest income quintile basically just barely covers its transfer payments, so it?s really the top 20% of ?net payer? households that are financing transfer payments to the entire bottom 60% AND financing the non-financed operations of the entire federal government.

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Armstrong on Dirty Politics v Economics

If – as the participants keep insisting – this election is really about “the things that matter”, then the question of which of the two major parties has the economic agenda with the most foresight would be dominating the campaign.

That question should, in fact, be dominating the campaign. But it is not the case. The campaign has instead been consumed with the?Dirty Politics?farrago. Just about everything else has been shut out.

That has hindered Labour by drawing attention away from its policy releases. But it has also forced National to delay what it must surely have been planning – an all-out assault on Labour’s planned capital gains tax.

It might surprise some voters, but Labour has no intention of relaunching that policy which first appeared in its 2011 manifesto.

Labour is not stupid. It can claim to be winning the theoretical argument for such a tax. But that could easily unravel if the argument shifts to the detail of how the tax will be applied in practice – and to what extent dollars-wise. Read more »

More good news

The good economic news keeps on coming in, destroying the opposition and their trash talking of the New Zealand economy.

The latest piece of good news is from the IMF who have given our economy a big tick.

Macroeconomic policies are moving in the right direction. With excess capacity largely exhausted the RBNZ has begun tightening monetary policy. The government?s plan to return the budget to surplus is on track. With public debt low and interest rates above the zero bound, the authorities have monetary and fiscal policy space to respond to shocks, and the free-floating New Zealand dollar provides an additional cushion against terms of trade and other external shocks. The well targeted macro-prudential policy framework should allow the RBNZ to take additional measures if needed to guard against the financial sector risks that would arise from an unsustainable acceleration in house price inflation.

[…]

Growth is forecast to increase to about 3? percent this year and moderate to a trend rate of 2? percent over the medium term. Strong construction activity is expected to remain an important driver for near-term growth (text figure), although the speed of the Canterbury post-earthquake rebuild and its interaction with the wider economy are less certain. The terms of trade are projected to ease somewhat due to an assumed moderation in global dairy prices, but remain high relative to historical levels and continue to boost growth in national income. The current monetary policy stance remains well below neutral, and with leading indicators pointing to an economy that is set to grow above trend in the near-term, pressure on core inflation should follow, particularly from the construction sector.

[…] ? Read more »

Good onya Joe, he takes “show me the money” literally

I wonder if we could swap Bill English for Joe Hockey.

In one of his first acts as Treasurer, Mr Hockey will instruct the Australian Tax Office to send taxpayers a personalised and itemised receipt thanking them for their tax dollars and detailing where the money was spent.

The receipts will show, in dollar terms, how much of a person?s tax bill was spent on welfare, health, education and other areas.

The level of gross government debt will also be displayed prominently with a break-down per person.

Treasurer Hockey said the receipts, which will be sent at tax time starting next year, would boost transparency and hold government to account.? Read more »

Passing Australia in world competitiveness rankings

Australia’s economy is tanking as they head into the election this weekend.

New figures show that our economy is now performing better than Australia, especially in competitiveness.

New Zealand has outperformed Australia on the latest Global Competitiveness Index for the first time, the World Economic Forum (WEF) says.

New Zealand has climbed five places to 18th, while Australia has slipped one place to drop out of the top 20 for the first time with a ranking of 21st.

The?Global Competitiveness Report??is compiled from 111 indicators, categorised into 12 pillars of competitiveness in four main sub-indices: basic requirements, efficiency enhancers, and innovation and sophistication factors.? Read more »

Bludging farming ratbags take 40% of EU’s budget

Subsidies have been killing Europe for years and now that they have run out of other people’s money they are having to drastically curtail?subsidies…especially agricultural subsidies where they were sucking up 40% of Europe’s budget.

Things are going to get very tough now in Europe.

European Union negotiators have agreed a package of reforms to agricultural subsidies which will see big farms lose up to 30% of their payout.

Ministers reached a deal with Euro MPs and the European Commission.

However, environmentalists say many of the green measures in the original proposals have been swept away. ? Read more »

Not a policy?

The Greens are trying to weasel out of their batshit crazy printing money policy by pretending it wasn’t really a policy.

O RLY?

SHANE: So just so we?ve got it clear ? you want the Reserve Bank to go out and print some new money to buy some earthquake bonds off the government. The government then would use that money to help with the Christchurch rebuild ? help build the sewers and the streets and that type of thing ? and also to go towards saving for our next disaster.

DR NORMAN: That?s right.

SHANE: In a nutshell.

DR NORMAN: In a nutshell, and those earthquake? Because the government wouldn?t be borrowing for those earthquake bonds from overseas, that reduces the pressure on the New Zealand dollar.? Read more »

The Lucky Country? Not any more

Helen Clark’s government forecast a decade of deficits…National arrested that. In Australia Julia Gillard is similarly facing a decade of deficits despite promising many times to balance the books. Predictably the Liberals have attacked.

Australia faces a decade of budget deficits with the annual total set to pass $60 billion in 2023 unless governments take tough action to “share the pain”, an expert panel has warned.

The Grattan Institute’s assessment comes as Treasurer Wayne Swan confirms the budget has taken a $7.5 billion hit since the midyear update in October.

He told the ABC from Washington: “We have seen the terms of trade come down but the dollar didn’t move. That’s caused a hit, if you like a sledgehammer, to revenues in the budget since the midyear update of something like $7.5 billion. And of course the impact won’t just be in this financial year. It will also be across the forward estimates.”

The institute says that while notionally on track to surplus now, the combined state and federal budget deficits should reach?4 per cent of gross domestic product?by 2023, which is about $60 billion in today’s dollars and would be about $100 billion in 10 years’ time.

Still more reasons why Canada isn’t falling off the fiscal cliff

The Huffington Post article on Canada that I blogged earlier is fascinating…we have already looked at?the role of big government in stuffing everything up and then attempting to fix it.

But what about the role of debt:

Governments must lead by example when managing their own debt and spending. Low debt is the result of low spending. Federal government spending as a share of the overall economy is 15 per cent in Canada (2) and 24 per cent in the U.S. (3). The numbers are not merely the result of prodigious U.S. military spending, though that is certainly a factor. Non-military federal government spending is 14 per cent of Canada’s economy (4), and 18 per cent of America’s (5).

Just as cause equals effect, spending equals debt. Net government debt as a share of the?Canadian economy is 36 per cent. In the?U.S., it is 83 per cent.?America’s gross government debt is now bigger than the entire U.S. economy. According to the U.S. Treasury Department website, Mainland China holds $1.1 trillion of it. To quote Mark Steyn: “If the People’s Republic carries on buying American debt at the rate it has in recent times, then within a few years U.S. interest payments on that debt will be covering the entire cost of the Chinese armed forces.”

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