I’ve made two posts recently on economic-related issues: One on interest rates in
A case in point is the recent report on New Zealand’s economy from the OECD (the OECD is made up of the world’s richest nations), part of which talks about New Zealand’s standard of living being below the median for the OECD.
The report does indeed sound like a National Party manifesto, as acting Finance Minister Trevor Mallard said. Here’s why:
So, to simplify it, the report urges that the richest people get tax cuts and the poor and working classes and the elderly all get hit harder. Sounds like typical neo-conservative nonsense to me.
Interestingly, however, the report also urges that
National Party spokesman Bill English told Radio New
Zealandraising GST and instituting a capital gains tax were not on the party's agenda.
Their position figures, since all voters would oppose raising GST, and their middle and upper class base would oppose a capital gains tax. Actually, I would, too, and I’m hardly a National Party supporter (I’d like to tell English where to go after he suggested that the government should cut spending on health).
The truth in these matters exists—yet again—between the extremes. Encouraging the middle and upper classes to invest here in
Similarly, encouraging people to save more and spend less would be good overall, but hard to achieve. Punishing people for spending isn’t the way to do it.
Cutting retirement pay is meanspirited—by then it’s too late for people to make up the difference. And, besides, the government is taking steps to deal with future retirement by setting aside money in a huge fund to pay for the future demographic bulge in retirement entitlements. From July this year, the KiwiSaver plan will encourage people to save for retirement.
Both ends of the spectrum can agree that raising productivity would help, but the government is correct to note that the current record low unemployment rate means that large numbers of relatively low-skilled workers have entered the workforce, driving down productivity.
All of this boils down to an argument over numbers, which is sure to make most people’s eyes glaze over. It’s this inattention that encourages politicians to play games with the economy. Some of us are watching, however.