Little Dear Leader on Police Pay & State Asset Sales…
There are often little ‘nuggets’ of insights to be gleaned from interviews of our elected representatives on TV1′s “Q+A” and TV3′s “The Nation” . It’s usually not the carefully ‘spun’ rhetoric that is of interest – but the unintentional slips which offer an insight into their mindset and beliefs.
An interview with National’s Minister of Economic Development, Steven Joyce, on 24 June, was no exception.
Watch full video here: Q+A: Steven Joyce on Economic Growth
Read full transcript here: Transcipt of Steven Joyce interview
On Police Pay…
Shane Taurima asked Joyce about police pay.
With recent suggestions that there will be a nil-increase for police pay this year, and talk of a Police march of Parliament, this is obviously a touchy subject for National. Joyce certainly did his best to avoid a direct answer,
“ SHANE We take your point, but before we go, because there’s growing concern- Just before we go, there’s growing concern amongst our police over their pay, and I want to know whether they’re going to get-
STEVEN You’re getting a little beyond my portfolios at this point, but, again-
SHANE But you are Associate Finance Minister.
STEVEN That’s true, but let me take you through this. Again, New Zealand has to cut its cloth to actually meet what it actually affords to buy in the world. So you have your Lucy Lawlesses on saying we need to stop-
SHANE Let’s talk about the police-
STEVEN No, no-
SHANE The police-
STEVEN No, let me finish.
SHANE You haven’t even mentioned the police yet-
STEVEN No, let me tell you-
SHANE Let’s get your answer on the police.
STEVEN No, let me take you through it, because there’s no answer that’s independent of these other answers. Because the reality is you need to grow the economy to actually create more income to pay for the public services. And in the meantime, things are going to be tight because, actually, we’re spending more than we’re earning. We have for some time.
SHANE So no increase?
STEVEN We have to actually balance it. I’m not saying about no increase with the police. What I’m saying is that every government agency, every public service is dependent on how strongly we grow the economy forward, and that means taking advantage of all the opportunities we have, and, frankly, that includes intensification of agriculture, it includes oil and gas, it includes clean tech and high-tech industries, and that’s what we’re focused on. “
Note Joyce’s reference to linking state sector pay with “growing the economy”,
“…Because the reality is you need to grow the economy to actually create more income to pay for the public services. And in the meantime, things are going to be tight because, actually, we’re spending more than we’re earning. We have for some time. “
If Steven Joyce is suggesting that increasing state sector pay depends on “growing the economy”, that all but guarantees a low-wage state sector, including for nurses, doctors, firefighters, police, teachers, etc. These are the state sector workers that determine the difference between New Zealand being a First World nation with modern services and infra-structure – or a Third World banana republic where skilled workers are in short-supply, having packed up and headed of to Australia.
So much for National’s rhetoric on raising the skill levels for our teachers and paying them more.
National is not a Party that is known for generosity with pay scales and improving wages. In fact, when it comes to state sector workers, they and Scrooge speak from the same page.
With one exception,
Last November, salaries for the Prime Minister, Ministers, and MPs, were substantially increased,
PRIME MINISTER New salary (backdated to July 1): $411,510. Was: $400,500.
DEPUTY PRIME MINISTER New salary: $291,800. Was: $282,500.
CABINET MINISTER New salary: $257,800. Was: $249,100.
MINISTER OUTSIDE CABINET New salary: $217,200. Was: $209,100.
SPEAKER AND OPPOSITION LEADER New salary: $257,800. Was: $249,100.
BACKBENCHERS New salary: $141,800. Was: $134,800.
Steven Joyce’s salary rose from $249,100 to $257,800 – an increase of $8,700 p.a.
That increase in salary was based on economic growth of 1.8%.
On Capital Markets…
When Shane Taurima asked if National was going to back down on state asset sales, Joyce offered this reply,
” STEVEN No, I don’t believe the Government’s going to back down on that at all, and the reason for it is this- well, firstly, there’s a couple of things. Firstly, we did take it to the country, and I think what the country said at the last election was some aspects of, say, for example, mixed ownership was of concern to them, but they understood the role of the government in actually bringing the books back into surplus and creating opportunities for New Zealand going forward. And you can’t buy a quarter of the package, which was my point in relation to economic growth. You can’t say, ‘I want the jobs, but I don’t want this, this and this,’ because, actually, you do have to provide those opportunities. Now, if you go to the mixed-ownership model, one of the most important things about it, which I believe so far, you know, hasn’t been talked about enough is the strengthening of the capital markets by getting those shareholdings listed on the capital markets in New Zealand. Now, the New Zealand capital markets actually historically, certainly over the last 10 years, have performed very poorly relative to the rest of the world, and that’s because there’s been some breaches of faith historically. Go back to 1987 – that’s been very difficult for New Zealanders to have confidence in their capital markets since then. We need to grow our capital markets because that’s how our companies get the opportunity for more capital, to grow further, to add more jobs. So I’m hopeful that the mixed-ownership model with the opportunity to list those companies, which would be strong companies in the New Zealand environment, that’s an opportunity to actually strengthen the capital markets and get more Kiwis interested- “
With particular emphasis on this point made by Joyce,
“… one of the most important things about it, which I believe so far, you know, hasn’t been talked about enough is the strengthening of the capital markets by getting those shareholdings listed on the capital markets in New Zealand. Now, the New Zealand capital markets actually historically, certainly over the last 10 years, have performed very poorly relative to the rest of the world, and that’s because there’s been some breaches of faith historically. Go back to 1987 – that’s been very difficult for New Zealanders to have confidence in their capital markets since then…”
It is not the first time that this blogger has heard or read that rationale for privatising state-owned assets. The argument goes something like this;
- After the 1987 share market crash and the global financial crisis (GFC), people are wary in investing in shares.
- People prefer to invest in bricks & mortar – rental and commercial properties, as it is an investment they can see and touch, and no shonkey system is going to steal it away from them.
- The share market and companies are therefore ‘starved’ of investment by “mum & dad” investors.
- Adding share from SOEs to “the mix” will strengthen the share market as SOEs give a certain measure of credibility and confidence to the Share Market.
To which this blogger responds with: well, tough luck, and screw that!
The whole premise of the neo-liberal system is that capital and business must be unfettered by the State and left to operate with the Invisible Hand of the Free Market.
The free market is supposedly superior to the State.
The State cannot run services as efficiently as the private sector.
The State is cumbersome and wasteful when compared to the business world and the Free Market.
If that were true, then why is Steven Joyce and other National politicians demanding that shares from the part-sale of SOEs are needed to prop up the capital markets system?
Why can’t the capital markets system operate efficiently and effectively without the need for what is, in effect, State assistance, by way of privatising SOE shares to improve investment in the capital markets system ?
This is the share market’s version of a State subsidy.
If the capital markets cannot opperate without the assistance of the State, through SOE privatisation, then what does that say about the validity of neo-liberaliasm and the Free Market?
Consider for a moment, that once all SOEs are privatised (god forbid) and all wealth is now focused on the capital markets; what will National do next time the share markets collpase? Will they sell the roads? The state conservancy parks?
If state assistance for the capital markets is the raison d’etre for asset privatisation, then it becomes obvious that Muldoonist interventionism and corporate welfarism is never far from the surface of the National Party. Little wonder that the ACT Party is so often exasperated with their larger coalition partner.
So New Zealanders should take heed. The partial-privatisation of our state assets is not about “mum and dad” investors. It is about propping up a capital market that seems unable to sustain itself without massive State support.
Which is why the rotten system of neo-liberalism is fated to end the same way as the old Soviet collectivist system. Because eventually we will run out of props to keep it from collapsing. Or SOEs to sell off.
= fs =
For a better New Zealand…
~ Cleaner rivers
~ No deep-sea oil drilling
~ Less on Roads - more on Rail
~ A Living wage at $18.40/hr
~ Marriage equality - Yay! Got that one!
~ Strong, effective Unions
~ No secret free-trade deals
~ Breakfast/lunches in our schools
~ Introducing Civics into our school curriculum
~ Cut back on the liquor industry
~ A fairer, progressive tax system
~ Fully funded, free healthcare
~ Ditto for education, including Tertiary
~ Fund Pharmac for Pompe's Disease medication & other 'orphan' drugs
~ No state asset sales!
~ Rebuild public TV broadcasting!
~ Keeping farms in local ownership
~ Reduce poverty, like we reduced the toll for road-fatalities
~ Jobs, Jobs, Jobs!
~ Being nice to each other
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