Jacinda’s dawning ministry

By
Stephen Minto
-
22
1594
A week is a long time in politics but the trends are not good for a Labour victory next year.
 
Like the third Labour Government which in 1973/74 had to deal with the first oil shock and stagflation; the current sixth Labour Government has some strong economic head winds:
  • A sociopathic Reserve Bank deliberately trying to create a recession.
  • A neo-liberal economic model that only has one tool to deal with inflation; raise interest rates to brutally bash the demand side of the economy .
  • A delay in economic recovery from the Covid crisis. 
 
It’s certainly not about Gen X’s having grand ideological schemes.
 
Ideology or a strategy can form a framework for what a government does. But more importantly voters do actually vote for change and action by the parties they vote for to fix problems. The government has to be seen to fix the problems before it. John Key was going to be voted out as problems were all over the place and he kept saying — nothing to see here. Helen Clark suffered the same sort of fate, she wasn’t seen to be responding to the debates and issues of the day.  
 
So what are the current government’s initiatives and how are they getting on. None are doing well. 
  • The governments affordable housing policy is National party policy and its a complete failure that will not deliver affordable housing. But the current economic slowdown of housing is an excellent opportunity for government to discourage private building (which is not affordable as they have to maximise profit) and soak up the resources into contracts to build properly designed affordable housing in commercial parts of the cities (not residential parts) at truly affordable prices.
  • All the rest are actually easy to fix with more confident communications that simply, clearly and repeatedly debunk the misunderstandings and conspiracies. 
 
The economy is a different matter. And it is the one that matters. 
 
The problem with the covid recovery is that many middle class people were habituated to certain ways of making money that were based on mass immigration, tourism and student services, e.g., holding short term rentals.  Jobs to do with property were big time for middle class New Zealand. These sectors haven’t come back quickly so they are looking around thinking the government isn’t doing enough to get the economy going; in the way they understand it. They can’t see the vision of the government for how a person can earn a good income so they don’t know where to direct their effort for reward. 
 
What National would do is simply throw all the levers wide open for immigration, tourism and students while cutting taxes. So the massive infrastructure underspend identified by the Productivity Commission would just get worse. All our problems would just return; housing through the roof, poor education and health services, some nice roads; and the New Zealand as we know it will simply slip away for a few bucks to some voters. 
 
Labour needs to get a new economy up and running with new opportunities. The simplest thing would be to undertake the tax and ownership changes I have previously suggested. These changes would put a massive comparative advantage back onto small low cost businesses. For example, we would see a return of many smaller independent food services. Less franchise stores.
 
The government should be redirecting investment away the property income sources. Like running buy out schemes for rental housing with capital paid out as if it was income. Lump sum payments run the risk of money being spent on high end overseas holidays or products. The rentals are then made available for purchase or rent at affordable rates. E.g. Rent to buy . It’s a good time to do this. The government can fund this as an asset comes into the accounts to balance money going out.
The economy could have more social work services, e.g., mental health, Governments could run the contracts/jobs.  Just to redirect resources to the parts of the economy that actually need it. 
 
Or it can simply pay a lot more to teachers and health professionals which will pull many of these people back into these types of jobs. Because currently all the incentive is to get bullshit jobs for private companies that aren’t doing very much to satisfy the wants and needs of New Zealanders. It would also buy Labour votes.
 
That is the government’s challenge, to redirect the economy. And it can be done without anything too major. 
 
p.s. Fortune favours the brave? But if you pull out of everthing you are doing; then what is the vision you are setting out? There is no reason not to vote for the other, your party isn’t fixing the problems. 

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22 COMMENTS

  1. I don’t think NZ governments are permitted to stray from a strict orthodoxy centered on low taxes and minimal government engagement in the economy. Labour will never raise taxes or commit to any economic policy that requires heavy lifting. For example solving the ‘housing crisis’ (not really a crisis if you own property is it) means challenging middle class property wealth – no-one will ever get elected promising that as an outcome.
    While NZer’s are very good at talking the talk on equality and virtue signaling their egalitarian credentials any whisper of wealth re-distribution or bold economic policy (3 waters, Fair Pay Agreement, GST on property sales, lifting welfare payment, raising the minimum wage, co-governance) will have them running in genuine terror and screaming that the sky is falling down.

    • Will you then list Peter B the various restraints that ankle bracelet Labour to what entity, or if more than one, those who have us in this invisible compound we’re in? These entities have power but are not the visible ones we commonly see, so who and how do they keep us in thrall.

      It seems more and more like Truman Burbank in The Truman Show. Living his life as an individual watched continually and scripted by others, I have a fellow feeling as the months unfold

    • You’re giving Labour excuses for not doing anything remotely left-wing and helpful to human beings. Fact: they have no excuse. They literally don’t give two f**ks about normal people.

  2. ‘ministry’ is an apt term to describe the mental gymnastics her flock have to go through to belive she’s any kind of progressive…maybe a mega church will be her next employment option…

    as my auntie used to say ‘fine words butter no parsnips’

  3. No one would trust the current government to implement your ideas. The sheer deadweight costs of the failed Kiwi Build which Labour assured us was fully planned and costed cf. the lack of delivery plus other epic promises without delivery mean most people have switched off. It is now too late for current Labour to recover. They have blown their opportunity. BTW I agree the government should be incentivising investment away from property etc. However this could be done just by changing rules and regs. No to current Labour trying to be more hands on; they just don’t have the skills!

    • As someone who has extensive contacts within the building industry, I can tell you that the shortage of framing timber, which is being exported at a rate that, because the Key government induced a totally self serving farming lobby to cut down most of the forests that would have supplied that timber, and replace them with thralldom to the Chinese milk powder requirements, knowing that the Chinese are going all out to develop their own dairy industry, with our help, that will reduce us to irrelevance, and destitution, as the only alternative to dairy farming here is selling houses to one another.. China’s temporary dairy farm and a giant property market… The Stupidity, and naked greed displayed by Keys handlers, the farming lobby, real estate industry, and their blind followers and hangers on will leave this country helpless against any takeover by corporates wanting a bolthole, or simply getting the numbers here to hold the islands should war with China does develop as a result of the warmonger Bidens irresponsible behaviour… THAT is how munted NZ was by 2017.. The current government are up against the whole bureaucratic structure, the news media, which is basically the mouthpiece for the colonial descendants, a nakedly self interested farming lobby, and the property speculators that have made untold millions out of an obscenely over inflated property market (deliberately inflated)… This government needs the spine of a Savage government to have any hope of recovering some semblence of what NZ used to be… This one is a product of the environment produced by repeated, and celebrated attacks on what made this country liveable.. So now, as usual, the scapegoating has started.. Same old same old.. Kiwis never learn it seems… Even Australians aren’t as blissfully and smugly ignorant as Kiwis have become in my absence.. I’m now trying to gather the money together to get away once the family situation which had me trapped here during the pandemic is resolved.. This place has had the smell of putrification about it for over a decade now, and still the “monied class” fight desperately to continue the destruction of an entire society for their own profit… It’s shameful, short sighted, and depressing to watch the slide into squalor that is occurring all across the country, that was, and is, totally avoidable.. Keep in mind, that the surge in inflation has been caused by the obscene profit levels Keys buddies were given the green light to extract from helpless kiwis… Your knowledge is spotty, and your logic specious..

  4. Is it even possible, like at any time, for either major political party to get into power and restructure the tax system in an appropriate manner? ‘Cos they’re going to need to do this at some point! If we increased personal income tax rates for those on high incomes like they’ve just done in the UK then that may go some way towards curbing the growing income inequality in this country. An estimated 74% of people believe that the emerging social divides are to do with an unfair/unjust system of wealth redistribution. Hey, I don’t think that bootcamps are the solution in this instance for anyone else other than any Minister/s who are illegally claiming housing allowances!

  5. I’m inclined to the view that in “The West”, governments generally last for about a decade – and that New Zealand governments are generally good for 3 terms.

    Unless they come across as completely ineffectual or generally hopeless.

    Labour have a history of this.

    I think 2023 is National’s to lose – and they’re certainly putting the effort in.

  6. Good thinking Stephen – would anyone iwith some authority and power near gummint read it?
    The governments affordable housing policy is National party policy and its a complete failure that will not deliver affordable housing. But the current economic slowdown of housing is an excellent opportunity for government to discourage private building (which is not affordable as they have to maximise profit) and soak up the resources into contracts to build properly designed affordable housing in commercial parts of the cities (not residential parts) at truly affordable prices.

    Ergo inicio cogiatio bona or Hey good idea, let’s get going while its fresh.

    • When Labour runs the country everything is Nationals fault, when National runs the country everything is Labours fault.
      The country in the meantime goes tits up in a very bipartisan fashion. Now have some gruel with these Christams Carols, and there will be no seconds.

  8. Has Jacinda Ardern not been fair and transparent to the public and to her colleagues? She could very well have some way to go as both a Prime Minister and a member of parliament, not to mention her career as a politician. I think politics is something she enjoys in terms of both debates and policy.

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