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Report: Increasing the minimum wage v.s. job losses

7 August 2014 6 comments

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PUT-THE-POLITICIANS-ON-MINIMUM-WAGE-AND-WATCH-HOW-FAST-THINGS-CHANGE

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Introduction

Labour recently announced a policy which evidence strongly indicates will impact positively on every low-wage earner in this country; families;  as well as benefit small-medium businesses;

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Labour pledges $2 rise in minimum wage to $16.25

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The knee-jerk reaction from Dear Leader Key and his little wannabe side-kick, Simon Bridges, was as predictable as the sun rising;

Key hit back at the announcement.

[...]

New Zealand already had the highest minimum wage relative to the average wage in the developed world, he said.

Pushing it up too too fast would cost jobs.

“It’s pretty well documented around the world that, yes, you can make changes and do that over time but if you think about the mass of employers in New Zealand they’re not the big companies like Fletcher Building or Fonterra they’re actually the hundreds of thousands of small businesses around New Zealand and they simply will employ less staff, fire people or ultimately not take on staff in the future.”

Labour Minister Simon Bridges, reiterated Key’s claims, saying the policy would hurt businesses.

“Labour’s policy to immediately increase the minimum wage to $16.25 would cost at least 6000 jobs … If you want to make people unemployed this is a good way to go about it,” he said.

So how true is it that raising the minimum wage “would cost 6,000 jobs”?

As far back as November 2011 (the previous election campaign)  Key repeated the mantra  that  6,000 jobs would be lost if Labour increased  the minimum wage to $15 an hour.

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raising-minimum-wage-wont-cost-jobs-treasury

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However,  those bright young things at Treasury  seemed to hold a radically different view;

The Department of Labour says the rise will cost 6000 jobs. But Treasury has a counter view; “This has not been true in the past. The balance of probabilities is that a higher minimum wage does not cost jobs.

Indeed, according to a report on the Australian Business Insider, the notion that increasing minimum wages led to unemployment was “exploded as a myth”, after it was revealed that;

“…  a November 2011 study from Barry Hirsch and Bruce Kaufman of Georgia State University and Tetyana Zelenska sheds light on how businesses respond to increases in labour costs, and the results were surprising. 

The group surveyed managers of fast food restaurants in Georgia and Alabama as they contended with three annual increases in the federal minimum wage between July 2007 and July 2009. 

They asked the managers if they were taking any steps to offset increases labour costs. 

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…only 8 per cent of managers surveyed thought that firing current employees was at all important to make up for lost wages. 

Indeed, raising the minimum wage allowed management to extract more performance from current employees in more than half of all cases. 

Higher labour costs weren’t only offset from cuts to total labour cost, either. Management also took several steps to increase efficiency and productivity to compensate for the higher costs… “

The Georgia State University study also asserted (page 31);

Further, our study does not find evidence of clear-cut employment losses – even
over three years and a 41% increase in the MW. Possibly over a still longer time span, or with a larger
sample of restaurants, a negative effect might appear. Discussion with owners and evidence outside our
study period suggest that negative effects may manifest through reduced store openings and increased risk
of store closings. Given this important qualification, the message from our study, along with other results
in the literature, is that employment effects in the short-to-medium run are small, perhaps near zero in
many settings, and certainly smaller than expected based solely on the competitive model. It would be
surprising (at least to us) were an important reason for this result not the behavioral dimensions of wage
setting and human resource management (e.g., discretionary effort, equity concerns, management heterogeneity)
 that the standard competitive and monopsony models largely ignore.

The data

Here in New Zealand, the minimum wage has risen fifteen times since March 2000;

Previous minimum wage rates

In force from: ADULT YOUTH TRAINING
1 March 1997 $7.00 $4.20
6 March 2000 $7.55 $4.55
5 March 2001 $7.70 $5.40
18 March 2002 $8.00 $6.40
24 March 2003 $8.50 $6.80 $6.80
1 April 2004 $9.00 $7.20 $7.20
21 March 2005 $9.50 $7.60 $7.60
27 March 2006 $10.25 $8.20 $8.20
1 April 2007 $11.25 $9.00 $9.00

 

In force from: ADULT NEW ENTRANT TRAINING
1 April 2008 $12.00 $9.60 $9.60
1 April 2009 $12.50 $10.00 $10.00
1 April 2010 $12.75 $10.20 $10.20
1 April 2011 $13.00 $10.40 $10.40
1 April 2012 $13.50 $10.80 $10.80
1 April 2013 $13.75 $11.00 $11.00

 

In force from: ADULT STARTING OUT TRAINING
1 May 2013[4]
n/c
$11.00
n/c
1 April 2014 $14.25 $11.40 $11.40

 

Notes:

  1. From 2001 to 2008 the adult minimum wage applied to employees aged 18 years and over. Prior to that, the adult minimum wage only applied to those aged 20 years and over. From 1 April 2008, the adult minimum wage applies to employees aged 16 years and over, who are not new entrants or trainees.

  2. The youth minimum wage applied to employees aged 16 and 17 years. From 1 April 2008, the youth minimum wage was replaced with a minimum wage for new entrants, which applies to some employees aged 16 or 17 years.

  3. The training minimum wage was introduced in June 2003.

  4. From 1 May 2013 the minimum starting-out wage replaced the minimum wage for new entrants and the training minimum wage for trainees under 20 years of age.

[Above chart and information-notes courtesy of MoBIE/Dept of Labour]

So how do those increases compare to our employment/unemployment rates? Let’s superimpose the dates for each increase in the adult minimum wage with numbers of  employed persons. (Red vertical bars indicate increase in minimum wage. All data courtesy of Dept of Labour/MoBIE.)

6 March 2000 – Increased from $7.00 to $7.55 p/h

(Labour)

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NEW ZEALAND EMPLOYED PERSONS - 2000NEW ZEALAND UNEMPLOYED PERSONS - 2000

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5 March 2001 – Increased from $7.55 to  to $7.70 p/h

(Labour)

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NEW ZEALAND EMPLOYED PERSONS - 2001NEW ZEALAND UNEMPLOYED PERSONS - 2001

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18 March 2002 – Increased from  $7.70 to $ 8.00 p/h

(Labour)

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NEW ZEALAND EMPLOYED PERSONS - 2002NEW ZEALAND UNEMPLOYED PERSONS - 2002

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24 March 2003 - Increased from   $ 8.00 to $8.50 p/h

(Labour)

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NEW ZEALAND EMPLOYED PERSONS - 2003NEW ZEALAND UNEMPLOYED PERSONS - 2003

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1 April 2004 - Increased from  $8.50 to $9.00 p/h

(Labour)

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NEW ZEALAND EMPLOYED PERSONS - 2004NEW ZEALAND UNEMPLOYED PERSONS - 2004

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21 March 2005 – Increased from  $9.00 to $9.50 p/h

(Labour)

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NEW ZEALAND EMPLOYED PERSONS - 2005NEW ZEALAND UNEMPLOYED PERSONS - 2005

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27 March 2006 - Increased from  $9.50 to 10.25 p/h

(Labour)

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NEW ZEALAND EMPLOYED PERSONS - 2006NEW ZEALAND UNEMPLOYED PERSONS - 2006

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1 April 2007  - Increased from 10.25 to $11.25 p/h

(Labour)

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NEW ZEALAND EMPLOYED PERSONS - 2007NEW ZEALAND UNEMPLOYED PERSONS - 2007

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1 April 2008   - Increased from  $11.25 to $12.00 p/h

(Labour)

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NEW ZEALAND EMPLOYED PERSONS - 2008NEW ZEALAND UNEMPLOYED PERSONS - 2008

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1 April 2009   - Increased from $12.00 to $12.50 p/h

(National)

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NEW ZEALAND EMPLOYED PERSONS - 2009NEW ZEALAND UNEMPLOYED PERSONS - 2009

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1 April 2010   - Increased from $12.50 to $12.75 p/h

(National)

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NEW ZEALAND EMPLOYED PERSONS - 2010NEW ZEALAND UNEMPLOYED PERSONS - 2010

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1 April 2011   - Increased from  $12.75 to $13.00 p/h

(National)

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NEW ZEALAND EMPLOYED PERSONS - 2011NEW ZEALAND UNEMPLOYED PERSONS - 2011

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1 April 2012   - Increased from $13.00 to $13.50 p/h

(National)

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NEW ZEALAND EMPLOYED PERSONS - 2012NEW ZEALAND UNEMPLOYED PERSONS - 2012

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1 April 2013   - Increased from  $13.50 to $13.75 p/h

(National)

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NEW ZEALAND EMPLOYED PERSONS - 2013NEW ZEALAND UNEMPLOYED PERSONS - 2013

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The above graphs reveal the following;

  1. In eleven out of fourteen years, numbers of employed rose after a minimum wage increase.
  2. Nearly all the years which show a fall in employment numbers are post-Global Financial Crisis; 2009, 2010,  and 2012.
  3. The fall in employment numbers in 2009, 2010, and 2012, occurred post-minimum wage increases which were smaller amounts than pre-2008 minimum wage increases. Ie; 50 cents, 25 cents, and 50 cent incremental increases for respective years 2009, 2010, and 2012.
  4. One of those three years – 2010 – showed a drop in employment for only one Quarter before rising again.
  5. By contrast, increases between 2000 and 2008 range from 15 cents an hour (2001) to $1 an hour (2007) – and show continuing, sustained, employment growth.
  6. Employment fell in 2006, due in part to  a “… slowing in growth over 2005 was largely driven by the external sector.  A relatively high exchange rate and some relatively poor agricultural production seasons resulted in weak export growth, while a strong domestic economy contributed to considerable growth in import volumes.  Recently, however, growth in the domestic economy appears to have eased with weakness in the household sector as growth in private consumpti on and residential investment slow.  This has led to a significant slowing in import volume growth and has seen some rebalancing towards net exports following strong increases in agricultural production“.

So would increasing the minimum wage benefit every low-wage earner in this country; families;  as well as benefit small-medium enterprises (SMEs)?

Why do critics – usually adherents of neo-liberal dogma and National Party ministers, supporters,  and fellow-travellers – vociferously deny the advantages of raising the minimum wage?

Neo-liberals who maintain that increasing the minimum wage creates job losses see only one half of the Grand Picture. They see money flowing from employers to employees – and that’s as far as they see what is happening.

What they are missing is the second half of the Grand Picture; those employees do not bury their extra pay in the back yard, forever consigning it to the earth as compost.

Instead, employees spend their pay increases.

There are currently 54,600 workers currently on minimum wage in this country.

Increasing the minimum wage from $14.25 per hour to $16.25 per hour means an extra $80 per week for a worker (gross). That means 54,600 workers’ spending power increasing by a staggering $4,368,000 per week (gross).

That’s a whole lot of extra groceries, clothing, shoes, appliances, medication,  and other essentials and  consumer goods being purchased in our economy.

All of a sudden, small-to-medium businesses will have 54,600 potential customers spending an extra $227,136,000 annually(gross). Plus additional tax-revenue gained by the State. Plus less paid on welfare, as more people are employed.

Right-wingers will make the oft-parroted, plaintive cry, “But where will the money come from?”

The answer; from the productivity created by those 54,600 workers. They just get to keep more of that productivity, instead of  into the bank accounts of invisible share-holders or disappear off-shore to corporate owners.

And as those 54,600 workers spend more, SMEs will sell more; which will mean higher turn-over; more profits; more investment; more jobs…

The logic is clear-cut; increasing the minimum wage increases spending power; generates more economic activity; and achieves the same goal which Key & Co used to justify their 2009 and 2010 tax-cuts;

 “…The tax cuts we have delivered today will inject an extra $1 billion into the economy over the coming year, thereby helping to stimulate the economy during this recession. More important, over the longer term these tax cuts will reward hard work and help to encourage people to invest in their own skills, in order to earn and keep more money.”

If  tax cuts for the rich can help “stimulate the economy“, then so can a livable wage increase for 54,600 low income earners.

It cuts both ways.

Even as Key has stated on numerous occassions,

 

We think Kiwis deserve higher wages and lower taxes during their working lives, as well as a good retirement.” – John Key, 27 May 2007

We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.” – John Key, 29 January 2008

I don’t want our talented young people leaving permanently for Australia, the US, Europe, or Asia, because they feel they have to go overseas to better themselves.” – John Key, 15 July 2009

Science and innovation are important. They’re one of the keys to growing our economy, raising wages, and providing the world-class public services that Kiwi families need.” – John Key, 12 March 2010

We will also continue our work to increase the incomes New Zealanders earn. That is a fundamental objective of our plan to build a stronger economy.” – John Key, 8 February 2011

We want to increase the level of earnings and the level of incomes of the average New Zealander and we think we have a quality product with which we can do that.” -  John Key, 19 April 2012

Summation

Evidentially speaking, the data above shows;

  1. More often than not, employment numbers rise after an increase in the minimum wage.
  2. Unemployment is affected by factors other than minimum wage increases (eg; Global Financial Crisis, drought, etc).
  3. Labour increased the minimum wage $5 per hour (2000 to 2008), and unemployment dropped to 3.4% by December 2007.
  4. National increased the minimum wage  $2.25 per hour  (2009 to 2014)  and unemployment currently stands at 6% (new unemployment stats due for release on 6 August).

Key’s assertion that lifting the minimum wage would lead to “6,000 jobs lost” is therefore patently false, and electioneering with peoples’ lives.

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References

Fairfax media:  Labour pledges $2 rise in minimum wage to $16.25

TV3: Raising minimum wage won’t cost jobs – Treasury

Australian Business Insider: A 2011 Study Exploded One Of The Biggest Fears About Raising The Minimum Wage

Georgia State University: Minimum Wage Channels of Adjustment

MoBIE/Dept of Labour:  Previous minimum wage rates

NZ Treasury: New Zealand Economic and Financial Overview 2007

MoBIE/Dept of Labour:  Employment & unemployment – December 2007

Statistics NZ: Household Labour Force Survey: March 2014 quarter

MoBIE: Minimum Wage Review Report 2013

NZ Parliament: Tax Cuts—Implementation

Trading Economics: New Zealand Employed Persons

Trading Economics: New Zealand Unemployed Persons

 

Previous related blogposts

John Key’s track record on raising wages – 5. The Minimum Wage

Dollars and common sense – raising the minimum wage

Treasury’s verdict on raising the Minimum Wage?

Treasury’s verdict on raising the Minimum Wage? – Part II

 

 


 

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Living Wage

Above image acknowledgment: Francis Owen/Lurch Left Memes

This blogpost was first published on The Daily Blog on 3 August 2014

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Radio NZ: Nine to Noon – Brian Easton – 7 February 2013

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- Nine To Noon -

 

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- Friday 7 February 2014  -

 

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- Kathryn Ryan & Brian Easton -

 

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Income inequality in New Zealand is set to become a central election issue, but is it really getting worse?

Brian Easton offers a solution how to address income inequality. Listen and find out what he suggests.

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Radio NZ logo -  nine to noon with Brian Easton

 

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Click to listen: Brian Easton, Economist ( 13′ 37″ )

 

 

 

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Acknowledgement: Radio NZ

(Hat tip: Murray Simmonds)

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Key & Joyce – competing with Paula Bennett for Hypocrites of the Year?

7 February 2014 1 comment

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Labour hasn't learned from the past - Joyce

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Reacting to Labour’s newly announced “Best Start” policy, National launched into a wholly predictable – and somewhat repetitive – reactionary condemnation of the plan.

According to “Economic Development” Minister, Steven Joyce,

Once again, the moment we get a lift in the economy, they want to start bribing people with massive extra spending. We haven’t even got to the end of January and Labour and the Greens are already promising to spend the thick end of an extra three quarters of a billion dollars a year. You can’t spend your way to prosperity. This Government understands that and is building a stronger economy to provide higher incomes for Kiwi families.”

Bribing people“?

Massive extra spending“?

You can’t spend your way to prosperity“?

Aside from being more meaningless right-wing cliches, the sheer hypocrisy of Joyce’s remarks beggar belief.

It was only five years ago that John Key was promising bribes – a-la tax cuts – even as the Global Financial crisis was beginning to impact on our economy.

Here in New Zealand, by 26 September 2008 (note the date) – we were officially in Recession – convincing evidence just how rapidly individual economies were being shaken as the Global Financial Crisis (GFC) spiralled out of control.  Three days later, as global share-markets lost value, the NZ Superannuation Fund posted a $880.75 million loss for the year to June 2008 , compared with a $1.09 billion profit the previous year.

By October, Republican President Bush signed into effect a US$700 billion bailout package for firms facing bankruptcy and the Bank of Scotland and HBOS – both facing collapse – were “effectively” nationalised by the UK government.

By November 2008, Lehmann Bros was bankrupt; over 200 US banks were in serious financial troubles; US mortgage finance companies Fannie Mae and Freddie Mac had collapsed; the Russian stock exchange closed after massive share-price falls; and other shocks reverberated throughout the global economy.

As the media was reporting the crisis day-by-day, with financial  headlines dominating every newspaper and television network in the country – what was National doing?

It was promising tax cuts. Big tax cuts “north of $50″ for each taxpayer. Tax cuts which Cullen said were unaffordable as then-Finance Minister, and warned,

Finance Minister Michael Cullen yesterday sent the country a further warning that the Government’s cupboard was bare, saying the pre-election fiscal update was expected to show “significantly worse” deficits than the $3.5 billion forecast in the Budget.

As Key’s promises mounted up, Cullen  challenged the Nats to say they would not borrow to pay for their tax cut programmes.

Despite the country being in recession, and the global situation deep in trouble, Key was still promising tax cuts. And he promisedthat the package announced today requires no additional borrowing, or cuts to frontline services to fund it“.

“No additional borrowing.”

In another speech at around the same time, Key said that “National has been mindful of recent global events“. So they were not oblivious to the financial storm swirling around the planet.

On 8 October 2008, Key was even more specific;

“Several months ago I made it clear that our tax plans would be hermetically sealed from other government spending tracks. That continues to be the case.

Paying for this package will not require additional borrowing. It will not require any cuts to public services.”

Unfortunately, like so many of Key’s promises, it was hollow rhetoric. Blatant lies, to be more accurate.

By March 2009, as the GFC and recession impacted on our economy, government revenue was already falling,

“The New Zealand government’s operating balance before gains and losses (OBEGAL) for the seven months ended January 31 was NZ$600 million, which was NZ$800 million below the pre-election update and NZ$300 million below December forecasts, Treasury said. Tax revenue and receipts during the period were NZ$500 million lower than the pre-election forecast.

Meanwhile, Treasury also disclosed a NZ$15.4 billion rise in Gross Sovereign Issued Debt to NZ$45.4 billion (25.3% of GDP) from the pre-election forecast.”

Despite worsening indicators and falling government tax revenue, in  April 2009, the newly-elected National Government enacted it’s first round of tax cuts. The second was scheduled for October 2010.

The result was wholly predictable. As the government lost hundreds of millions in foregone revenue, National  cut state sector services  – despite Key’s promise not to make such cuts,

“Government biosecurity cut backs leaves billion dollar industry vulnerable

The National Government’s decision to make more than 50 workers whose job it is to protect New Zealand from biosecurity risks leaves this country’s primary production industries vulnerable, Labour Biosecurity spokesperson Damien O’Connor says.”

As Andrea Vance wrote in October 2010,

“More than 2000 positions have been cut from the core public service since the Government capped numbers soon after it came to power.

State Services Minister Tony Ryall said yesterday more jobs were likely to go as many government departments would have little or no increase in funding in the next few years.”

And debt continued to rise,

(Year Ended 30 June 2010)

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As the second round of tax cuts was implemented on 1 October 2010, two thousand positions had been cut from the public State sector. And John Key’s government was borrowing $380 million a week – despite his earlier assurances that “paying for this package will not require additional borrowing”,

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Govt borrowing $380m a week

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A month later, all those borrowings were totalled up;

Treasury today published the Government’s financial statements for the 10 months ended April 30, which showed the debt mountain had grown to $71.6b. “

Meanwhile, despite assurance by Key,  cuts were also being made to public services such as  early childhood education, which was amongst the worst to suffer,

The Government is refusing to rule out further cuts to early childhood education as reductions affecting more than 2200 centres kick in today.

The Government announced at last year’s Budget it would eliminate the top rate of funding to early childhood centres.

Later in the year, Education Minister Anne Tolley announced an ECE taskforce would review the effectiveness of spending in the sector and propose new ideas.

Asked yesterday if she could rule out further cuts in this year’s Budget, she said: “Any budget decisions will be announced on Budget day.”

Tolley said the Government was “bringing spending under control”.

Labour says thousands of families will face average fee increases of $20 to $45 as a result of the funding cuts.

It has promised to restore funding and will today put its name to a petition against any more cuts.

Ministry of Education figures show 2249 of the country’s 5251 services will be affected by the cut.

Without much doubt (except to the most blinded-by-ideology National/ACT supporters), National won the 2008 election with big promises of “affordable” tax cuts; no cuts to public services; nor State sector redundancies.

None of those promises were kept.

On 29 January,adding to Joyce’s comments, Key said,

David Cunliffe’s developing a reputation around Parliament for being very tricky. He [Cunliffe] just needs to learn to be up front with the public so they can actually trust his word. I read his speeches and now after a number of examples of this, I really question whether the guy is telling me the truth …”

The same might be said of John Key’s reputation  for being very tricky, and perhaps Key  needs to learn to be up front with the public so they can actually trust his word.

Because really, when Key makes promises, I really question whether the guy is telling me the truth.

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References

TV3: Labour hasn’t learned from the past – Joyce

Labour Party: Best Start Package

Marketwatch: The fall of Lehman Brothers

CNN Money: New recession worry: Bank failures

Washington Post: Treasury to Rescue Fannie and Freddie

Huffington Post: Russia Halts Trading After 17% Share Price Fall

NZ Herald:  Recession confirmed – GDP falls

Fairfax media: NZ Super Fund drops $880.75m

The Telegraph: Financial crisis: HBOS and RBS ‘to be nationalised’ in £50 billion state intervention

NZ Herald: National sticking to $50-a-week tax cuts

Dominion Post: Cullen to Nats: will you borrow for tax cuts?

NZ Herald: Nats to borrow for other spending – but not tax cuts

John Key Website:  NEWS: Economic plan: A tax package for the times

John Key Website: SPEECH: National’s Economic Management Plan

NZ Herald: John Key on Tax Cuts: The National leader’s speech

Interest.co.nz:  Budget deficit worse than forecast; debt blows out by NZ$15.4 bln

Scoop Media:  Biosecurity cut backs leaves industry vulnerable

NZ Treasury: Financial Statements of the Government of New Zealand for the Year Ended 30 June 2010 – Debt

Fairfax media: ‘Unrealistic’ workloads on civil servants after cuts

NZ Herald: Govt borrowing $380m a week

Fairfax media: Government debt rises to $71.6 billion

Fairfax media: Further early childhood education cuts possible

Scoop Media: National Election Pledge Card

NZ Herald: Key launches scathing attack on Cunliffe’s credibility

Previous related blogposts

The National Party, common sense, and sausage sizzles

Another day in a lie of the National Party

From 2011 back to 1991?

Other blogs

The Standard: Gower plays a shocker

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Election 2014

Above image acknowledgment: Francis Owen

This blogpost was first published on The Daily Blog on 30 January 2014.

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Journalists encouraging irresponsible government policy?

6 January 2014 3 comments

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John Armstrong - Cutting tax tempting for National

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Sorry, John, but precisely WHO is talking about tax cuts?

Because so far, all I’m hearing is a couple of journos putting the question to Dear Leader and his faithful little side-kick, Lassie Bill English. No one else is seriously contemplating cutting taxes – not when New Zealand’s sovereign debt is now $60 billion as at 9 November this year – and  increasing by $27 million every day since Key’s hopelessly  incompetent government came to power in 2008.

According to Hamish Rutherford, writing for Fairfax Media, this equates to $13,000 for every man, woman, and child in New Zealand – and expected to increase by another $10 billion by 2017.

We need to address this problem – not fuel it by increasing consumption of imported goods, thereby worsening our balance of payments.

For god sakes, stop encouraging National to engage in any further irresponsible slashing of revenue.  National’s two previous tax cuts in 2009 and 2010 did nothing to  help stem the growth in our sovereign debt. Not when revenue fell by up to $4 billion after those tax cuts.

We have other priorities.

For example, why is the Wellington City Mission short of $2 million to carry out it’s valuable work to assist the poorest in our society? It is obscene that the Mission will have to consider reducing some services, as Chief executive Michelle Branney recently suggested.

Why are New Zealand’s poorest families unable to afford basic  medicines since this government-for-the-rich increased prescription charges in January 2013? When National cut taxes, it attempted to make up for the revenue shortfall by raising GST (despite promising in 2008 not to) and increasing government charges such as for prescriptions, Court fees, etc.

Why are New Zealanders needlessly suffering from rare diseases because PHARMAC cannot afford life-giving medication?

Why are poverty-related diseases making a come-back with such a vengeance?

Children’s Commissioner Dr Russell Wills…

… report is expected to reveal a 12 per cent rise from 2007 to 2011 in hospital admissions for poverty-related illnesses such as acute bronchiolitis, gastroenteritis, asthma, acute upper respiratory infections and skin infections.

“Most New Zealanders will find the numbers of children affected by disease shocking,” Wills told the Herald on Sunday, “but for those of us working clinically with families in poverty it is not surprising.”

Wills also works as a paediatrician in Hawke’s Bay. He said hospital wards were now full of poor, sick children every month of the year – not just in winter. There was no longer a “summer lull” in diseases.

English found himself so cash-strapped after their tax cut profligacy that, by 2012, he was even reaching into the meagre pay-packets of newspaper delivery boys and girls to grab extra tax revenue.

Instead of frittering away taxes, we need to be looking at the real problems confronting us;

  • Address child poverty problems

When children go to school hungry because families cannot afford sufficient food after paying high rents, electricity bills, etc. then there is something seriously wrong with our country.

Especially when we are now seeing children eating out of rubbish bins because there is no food at home for them. I refuse to believe that most New Zealanders want this kind of society for their children.

This is not the New Zealand I grew up in.

The next Prime Minister must make this a #1 priority, and begin with taking on the role of Minister for Children and implementing a comprehensive Food In Schools programme (not the shonkey half-measures undertaken by National earlier this year).

Next on the agenda; returning welfare payments to pre-1991-slash levels (inflation indexed); reduce prescription prices for medicine;  and implement a massive job creation programme.

  • Pay down debt

From 2000 to 2008, Clark’s administration not only paid down debt, but also posted Budget surpluses,

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Government Debt

New Zealand Government Debt To GDP

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Government Budgets

New Zealand Government Budget

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To be fair, Labour’s Finance Minister, Michael Cullen did not have the Global Financial Crisis to contend with. But by exercising fiscal prudence -  instead of  tax-cut lolly-scrambles demanded by the then-National opposition – he left the country in a fit state to weather the on-coming financial storm that was about to envelope the planet.

By the time National came to power in 2008, the global financial crisis was well and truly upon us, with the collapse of Lehman Bros on 15 September 2008. The GFC had started earlier, and signs were apparent to all but the most intransigent optimist that dark storm clouds were on the horizon.

As unemployment rose and economic activity slowed, National persevered stubbornly with it’s tax-cut programme – a move that would further indebt this country and put our government’s books back into the red again. At one stage, National was  borrowing $380 million  a week to make up for the shortfall.

This despite the fact that it was common knowledge that we were facing a dire crisis, as Tracy Watkin and Vernon Small reported on 23 April 2009,

The recession was expected to blow a $50b hole in the economy during the next three years, plunging the Government further into the red as costs climb and tax revenues fall.

“That’s $50 billion we will not recover as a nation, and $50 billion that cannot be taxed by the Government,” Mr English told a business audience in Auckland.

And yet, despite his own candid admission, English went ahead with tax cuts that we could ill afford, and had to make up with massive borrowings; cuts to government services; increased user-pays; mass sackings of state sector worker, and eventual partial asset sales. Even welfare was targetted for “reforms” (read; cost cutting) to claw back government spending.

Little wonder that by September 2011, credit rating agencies Fitch and Standard & Poors had downgraded us.

  • Invest in upskilling the unemployed

Why are we importing tradespeople from overseas when we have 7.1% (153,210) unemployment in this country?

National’s response to the skills shortage was this ideological fob-off from Bill English, in June 2011,

In the first place, it is the responsibility of the companies that expect to rebuild Christchurch to ensure that they have the skills.

And to ensure that everyone understood that National was maintaining it’s long-held tradition of shirking responsibility, he added,

Of course it will be tight, because they are competing with very, very large salaries, particularly those in Western Australia where something like $250 billion worth of capital projects are in the pipeline.”

IBID

That’s the problem with a government that places it’s faith in a free market solution to everything (except corporate welfare) – nothing happens.

Wouldn’t it have made more sense to offer free skills training to every unemployed person in New Zealand, along with subsidised accomodation in Christchurch for workers moving from other towns and cities to take up work offers?

There would have been a cost, to be certain. But that would have been off-set by (a) reduced welfare payments; (b) upskilled workers who would continue to use their new training for subsequent building projects; (c) more taxes paid by more employed workers;  and (d) a flow-on effect to other businesses as income-earning workers spent their wages.

The $4 billion frittered away in tax cuts would have made a considerable dent in our unemployment and given a much needed boost to our economy. And by providing work to the unemployed, the government would have saved millions in welfare.

But by sitting on it’s hands and doing nothing, National has maintained the status quo; 160,000 unemployed wasting their time, and requiring more of our taxes to be paid for the dole.

Is this crazy or what?

Hopefully an incoming Labour-Green-Mana(-NZ First?)  will have more sensible policies than what we’ve seen thus far from National. (Which won’t be hard to achieve.)

And other areas which desperately require State intervention,

  • A fairer taxation system, including reducing (or even eliminating) GST; introducing a comprehensive Capital Gains Tax;  looking at a Financial Transactions Tax (or “Robin Hood” tax, as Mana refers to it); making the first $20,000 tax free; and increasing tax for the top 1%.
  • A sensible pricing system for electricity especially for low/fixed-income earners.
  • Increase funding for early childhood education.
  • More state housing, so our fellow New Zealanders have a decent roof  over their heads.
  • Invest in public transport, especially in Auckland, before the city grinds to a stop.

Those are the things we need to look at. Not cutting taxes for the well off (which is usually what the Nats end up doing).

These should be the priorities of a sensible government. Anything, everything,  else is grossly irresponsible.

Otherwise, what the hell are we leaving our children?

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debt-mountain-cartoon.

May I have some food, a home, parents

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Postscript

Armstrong’s article on tax cuts features a large image of a smiling David Cunliffe. Note; Cunliffe. Not English, nor John Key.

Is there a subtle sub-text being conveyed here that I’m missing? Perhaps I’m getting the wrong ‘message’ from Armstrong’s piece, especially when he finishes with this intriguing comment,

Overall, English will not want to tie himself to future tax cuts without more solid evidence they can be sustained.”

My… that almost sounds like a veiled warning, doesn’t it?

This blogpost was first published on The Daily Blog on 30 December 2013.

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References

Bill English: Dr Cullen maintains tradition of tax-cut denial

Wikipedia: Bankruptcy of Lehman Brothers

NZ Herald: Govt borrowing $380m a week

Fairfax media: $50b hole in economy

TV3 News: Double credit downgrade a double blow for NZ economy

Fairfax media: Key ‘no GST rise’ video emerges

NZ Herald: Food parcel families made poor choices, says Key

The Press: Irish rush for quake jobs

NBR: Chch rebuild companies will have to find skilled workers – English

TV1 News: Rise in prescription charges ‘not fair’ – Labour

NZ Herald: Tax cuts: High earners set to benefit most

NZ Herald: Budget 2012: ‘Paper boy tax’ on small earnings stuns Labour

Fairfax media: $4b in tax cuts coming

Dominion Post: Bennett expects welfare reform to save $1.6b

Fairfax media: Public debt climbs by $27m a day

Radio NZ: Pharmacies ‘carry cost’ of increases

NZ Herald: Child poverty ills rising

Fairfax media: Hungry kids scavenge pig slops

Fairfax media: Mum Not Prepared To Wait And Die

Radio NZ: PM defends record of helping poor families

Radio NZ: 5th year in deficit at City Mission

Radio NZ: Funding declined for housing project

NZ Herald: John Armstrong: Cutting tax tempting for National

The Atlantic: Tax Cuts Don’t Lead to Economic Growth, a New 65-Year Study Finds

Sources

Trading Economics:  New Zealand Government Debt To GDP

Trading Economics: New Zealand Government Budget

Statistics NZ: Household Labour Force Survey: September 2013 quarter (6 Nov 2013)

Roy Morgan: New Zealand real unemployment down 0.3% to 8.5% and a further 8.6% (down 1%) of workforce are under-employed (5 Dec 2013)

Statistics NZ: 2006 Census

Statistics NZ: 2013 Census

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Bennett & Borrows – where are the jobs?!?!

1 August 2013 7 comments

From a recent Fairfax report,

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Hundreds apply for 90 Fonterra jobs

Source: Fairfax Media – Hundreds apply for 90 Fonterra jobs

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And there have been plenty of other similar situations, where job applicants have outnumbered available vacancies. See:

Employment-Unemployment Fact Sheet #1: Queues for Vacancies

So instead of welfare “reforms” which consist of re-naming various benefit categories and constant belittling of unemployed as drug-takers; alcohol abusers; prolific “breeders”; and mis-treating children – what is really needed are,

Jobs

But aside from a Convention centre deal with Skycity, which will most likely result in more problem gamblers, this National government has done precious little to generate more jobs for the unemployed.

Even the Christchurch rebuild, we are now told, will be done by foreign workers,

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Deal opens door for Chinese workers in Christchurch rebuild

Source: TV3 -Deal opens door for Chinese workers in Christchurch rebuild

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Why is there a “shortage of 17,000″ workers?!

The last big quake hit Christchurch in February 2011 – two and a half years ago! In that time, what have National ministers been doing?  Surely they must have received advice from governmental departments; industry organisations; and other expert advisers, that an army of trained workers would be required in the coming years?

Why was no plan set up to,

  1. Assess New Zealand’s current “stock” of skilled tradespeople,
  2. Begin a crash-programme to train people where perceived gaps were indicated,
  3. Organise infra-structure (accomodation, transport, meals, etc) to cater for the Rebuild Army

This is how previous governments built past massive projects such as the Manapouri power station, Clyde, etc: planning.

Indeed, I spoke to one person who worked at the Deep Cove end of the Manapouri Power Project in the 1960s. He  informed me that as part of his employment, his accomodation (aboard the Wanganella) and meals were all paid for.  (He also mentioned how his lunch box and tools kept regularly vanishing, and he thought his work-mates were playing pranks on him. Then, one day he saw a Kea make of with his shiny new lunchbox…)

This was the style of planning, support, and incentives offered to workers to travel to an isolated part of the country where the work was difficult, dirty, and often dangerous.

The building of our nation was certainly not left to the vaguaries of the “marketplace” to achieve.

Because really, when you hear comments like this,

“We frankly can’t run our industry without significant numbers of immigrant workers,” says Federated Farmers president Bruce Wills. “The industry is just too important to be hijacked by a lack of labour. If we can’t get Kiwis in these roles, then we’ve got to make it easy to attract and retain good immigrant labour.”

The problem is there aren’t enough New Zealand workers with the right skills.

“They need to be experienced,” says John Hughes of Rural Contractors New Zealand. “They need to have a work ethic. They need to have an ability to hit the ground running.”

Source: IBID

- this is nothing but a pathetic excuse that the “marketplace” has failed spectacularly to plan ahead and invest in up-skilling New Zealand workers.

“They need to be experienced,” says  John Hughes of Rural Contractors New Zealand, without explaining where that experience will come from if  workers are not hired and trained by people like Mr Hughes.

“They need to have a work ethic,” says John Hughes. Really? Is Hughes saying that since 2008, New Zealanders have misplaced their work ethic?? Yet, the situation of 900 people applying for jobs at Fonterra (see above) seems to indicate that workers not only have a work ethic – they want the work to go with it.

“They need to have an ability to hit the ground running,” says John Hughes. What does that mean? Because what I’m getting from Mr Hughes’ statements is nothing but self-serving excuses that his industry – Rural Contractors New Zealand – has done stuff all to train workers to meet their needs.

Who else is he expecting to meet the needs of the “marketplace”? The State?

But… isn’t the State supposed to stay out of the marketplace, according to neo-liberal business doctrine?

Anyway, this lazy, incompetant government is the last place we should be looking for active leadership on this growing problem (I refuse to call it an “issue”).  As Immigration Minister Michael Woodhouse said on TV3′s The Nation, on 21 July,

“Any employer will tell you when Work and Income sends some workers to them they will have some of those barriers. That is they’re not skilled or educated enough to do the jobs. They may have some issues with drug and alcohol or mobility, and I think those are barriers that we need to continue to move so Kiwis are first in line for the jobs.”

Source: IBID

So what Woodhouse is trying to tell us is that 95,000 New Zealanders suddenly developed a drug habit, alcohol dependency, lost their skills, forgot their education since 2007/08?

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New Zealand Unemployed Persons 2008 - 2012

Source: Trading Economics – Unemployed Persons in New Zealand

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So the Global Financial Crisis, which National regularly uses as an excuse for the poorly performing economy, had no part to play in the massive growth in unemployment from 3.50% in December of 2007 to the high of 7.3%  last year?

Which is strange, because even social welfare minister, Paula Bennett, was forced to concede on TV1′s Q+A, in on 29 April 2012,

There’s not a job for everyone that would want one right now, or else we wouldn’t have the unemployment figures that we do. “

See:  TVNZ  Q+A: Transcript of Paula Bennett interview

Let’s be quite clear here. When Borrows, Bennett, and other National Ministers refer to “drug dependency”, “alcohol abuse”, “lack of skills”, “lack of work ethic”, and other derogatory terms for unemployed and other welfare recipients – in reality they are shifting blame for on-going chronic unemployment from government inaction, to the victims of National’s “hands-off”, market-based policies.

This is a failure on the part of a government that is so wedded to hands-off, free market policies, that it’s hands are “tied” and cannot bring itself to be proactive on this growing problem.

National’s failure is so entrenched; so widespread; that it is, in effect, utterly paralysed to do anything.

The only recourse is to import cheap foreign labour to make up for this gross deficiency in government and industry  planning.

Once upon a time, our great little nation had the determination, resources,  vision, and sheer guts to build dams and roads  in isolated, rugged, wilderness areas.

By contrast, after two and a half years, we are scrambling to find workers trained to whack a nail into a piece of four-by-two.

With 146,000 jobless (HLFS) there is no reason in this wide world why government and industry groups, with union participation, could not have begun planning from Day One after the February 2011 earthquake.

What, exactly, do we pay the Minister for Earthquake Recovery (Gerry Brownlee) to do?

This mess is further proof (not that we needed it) that a hands-off, free-market approach, will not deliver on large scale development where only  the State has the necessary resources to plan and execute such projects.

Blaming the unemployed for lack of planning may fool some gullible members of the public. But the rest will eventually begin to question why we are importing foreign labour when 146,000 pair of hands are ready, willing, and able to do the work.

Once upon a time, we could do this. We rebuilt Napier after the 1931 earthquake, a more devastating seismic event than the 2011 Christchurch quake,

Few insurance policies covered earthquakes, and many insurers refused to pay for fire damage that resulted from the quake. In 1931 Parliament had passed the Hawke’s Bay Earthquake Act, which provided loans for local companies and individuals to rebuild their premises. Because of the economic depression, however, the funds granted were far from adequate, and repayment terms were harsh. Much of the money for recovery came from charity, which poured in during the weeks after the quake…

[...]

In November 1932, Hastings celebrated its reconstruction, and in January 1933, almost two years after the earthquake, during the New Napier Carnival, Napier was declared officially ‘reborn’.

Source: The Encyclopedia of New Zealand – Story: Historic earthquakes- Page 8 – Rebuilding Napier

Almost two years after the quake...”

With far more destruction; greater loss of life (256); less money available (no EQC funding or insurance cover back then!); and limited technology, our grandparents didn’t faff around waiting for the “market place” to deliver results. Nope, they pulled up their sleeves and got down to it.

Whilst it’s true that circumstances between Napier 1931 and Christchurch 2011 differ in many respects – we also have more resources than our grandparents did, eighty years ago.

More resources, perhaps.

Lacking in a bit of #8 fencing wire spirit…

But with a surplus of ideology.

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Show us the jobs!

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This blogpost was first published on The Daily Blog on 26 July 2013.

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Other blogs

Ideologically Impure: Oh look, Diane Vivian: Paula Bennett DID come for you

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David Shearer – New Solutions or Time-Honoured Answers?

29 January 2013 7 comments

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David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Wainuiomata, Sunday, 27 January 2013 -  It was a scorcher of a day throughout most of the country – and the Wellington region was no exception.  The Met Office was predicting 23 degrees – this blogger scoffs at that and thought it nudged closer to 30.  Not for the first time, I thanked the Human Race for the invention of air-conditioning inside a car.

This was not the first time I had heard Party leaders speak. My very first occassion was Bill Rowling, in the 1975 election campaign.  According to my memory, he seemed a nice enough guy and had some good things to say.

Unfortunately forLabour – and for the nation – Muldoon made “mince meat” out of Rowling; won the ’75 election; trashed Labour’s compulsory super-savings scheme; and set the country on a course for future dependency on foreign bankers. Nice one, Rob.

My most recent encounter with a Party leader had been John Key, in Lower Hutt and then in Upper Hutt, in 2011 in the lead-up to the general election.

Impressions? I understood why many people likened politicians to used-car salesmen.  There was something about Key that instinctively made me feel uneasy and doubt every word he uttered. At any moment, I expected him to offer the audience shares in the Wellington harbour bridge. (Soon, he’ll be offering us shares in companies we already own. So I wasn’t far off.)

Back to the present…

At first, I thought the Wainuiomata Rugby Club – at a far-flung corner of this little village – was an odd place for a public meeting. But maybe not. In some ways, Wainui represents New Zealand  in the wider world; tiny, isolated, out-of-sight of the rest of the country and mostly forgotten. As a microcosm of New Zealand, surrounded by verdant green-covered hills, it was a perfect setting.

The Rugby Club car-park was jam-packed. Decided to park across the road. Smiled nicely at the Wainui Bowling Club folk who must’ve been wondering what was going on across the road, and legged it.  Bloody traffic had been slow all the way through the Hutt Valley and through Wainui and the ” star attraction” was due to start his speech within minutes.

The host’s introductory speech was just finishing, and David Shearer walked – strided confidently – from a rear annex where he had been waiting with one of his staff.

There was good applause from the audience, perhaps a third or half of whom were Labour party members or supporters.

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Shearer was in good form as he opened his speech,

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Tena koutou katoa.

Greetings everyone and thank you for being here together on a Sunday.

It’s great to see so many friendly faces.

It’s wonderful to see so many of you prepared to give up some of your summer break to talk about the future of our country.

There is nothing more important. And nothing more urgent.

I can tell you that today I’m refreshed, I’m fired up, and I’m raring to go.

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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This year will be a big year for Labour – a year where we not only hold the government to account, but also show there’s a better way.

A way of hope, where there is a place for everyone and where we fight for a world class NZ that we can all be proud of.

Today I want to lay out the challenges before us, the need for change and our focus for the year.

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Shearer started off well – and for the most part, maintained a vigorous energy as he gave his twenty to thirty minute long speech.

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David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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NEW ZEALANDERS WHO INSPIRE US ALL

A book I was given for Christmas tells the stories of 50 inspiring New Zealanders – artists, scientists, musicians, business people, some well-known, some less so.

Reading about their lives, they share the same passion and pride in their work and in their country. The ambition to be world class.

As scientist Ray Avery says: ‘we have no respect for the status quo’.

These people never say it’s too hard – we’re not big enough, we’re too isolated, we don’t have enough money.

Instead they say, “To hell with it, I’m going to do it anyway”.

New Zealanders have always achieved what wasn’t supposed to be possible.

Sir Edmund Hillary’s idea of what was possible took him to the very top of the world.

Kate Sheppard’s idea of what was possible made New Zealand the first country to give women the vote.

Alan MacDiarmid’s idea of what was possible took him from Masterton to winning the Nobel Prize.

We’ve always dreamed big and succeeded.

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Interestingly, this is the same book that Alliance leader, Jim Anderton, referred to on numerous occassions during the 1996 general election campaign.  He often mentioned it in his speeches, highlighting how New Zealanders had struggled to overcome adversity during their lives.

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I see that same attitude in families and schools, businesses and sports teams as I travel up and down the country.

People overcoming adversity, dreaming of something better.

When I see a single mum put herself through polytech to build a better future for her kids, I’m inspired.

When I meet New Zealanders well into their retirement, who after a lifetime of service are the first to volunteer come Daffodil Day, I’m inspired.

When a kid, who the stats say should fail, becomes the first member of their family to graduate from university, I’m inspired.

It’s inspiring because Kiwis don’t lie down.

From the most famous to the most humble, courage and determination is the common bond.

They deserve a Government that backs their hopes and inspires them to succeed.

A Government that says: you do your bit, we’ll do ours.

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Shearer used the phrase “you do your bit, we’ll do ours” several times throughout his speech. It’s a phrase that can mean different things to different people.

In a centre-left context, it can suggest an interventionist hands-on government. Though it  harks back to the famous Marxist expression, “from each according to his ability, to each according to his needs“, I doubt if 21st Century Labour’s speech writer  had Karl Marx in mind.

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That’s what a Labour Government will do.

That’s what a government I lead will do.

 NATIONAL’S EXCUSES ARE HOLDING US BACK

 But this Government’s low expectations are holding us back.

For 4 years we’ve been fed skilfully spun excuses for why we can’t get ahead.

It’s the Global Financial Crisis, the Canterbury earthquakes, the global outlook that is the problem.

We are told we have to accept second best.

There is always an excuse for why we can’t get ahead. For why we can’t be a leader in this field or that.

For example, the National government aspires to being a fast follower when it comes to climate change.

Hold that thought. What is a fast follower exactly?

Does it mean that if we follow too fast we become … what…an accidental leader?

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Good point; “Does it mean that if we follow too fast we become … what…an accidental leader?

Writing his speech, I would have referred to New Zealand’s leadership during the French anti-nuclear tests at Muroroa, and our opposition to apartheid in South Africa. Whilst our Aussie cuzzies were lukewarm in their support of Norman Kirk’s decision to send a frigate to the test site, we went ahead and did it anyway.

We were The Mouse that Roared. And this would have tied in beautifully with his references above to “ 50 inspiring New Zealanders”.

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But a leader with no clue about where they’re going.

That’s not good enough with an issue that is so important to our planet, and our country.

We deserve better than that.

I refuse to accept that for New Zealand.

And so do the Kiwis I meet.

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Strangely, this seems reminiscent of Key’s January2008 speech, “A Fresh Start for New Zealand“,

We know this isn’t as good as it gets.  We know Kiwis deserve better than they are getting.  We are focused on the issues that matter and we have the ideas and the ability to bring this country forward. 

National is ambitious for New Zealand and we want New Zealanders to be ambitious for themselves.

The reason I point this out is that Shearer’s speech writer(s) should be wary of using too much generalised rhetoric. In many cases New Zealanders have heard it all before.

If rhetoric is used, make it original and make it something unique to social democratic precepts. There has to be a different language; different words – a different brand – to that of the Nats.

Otherwise Labour’s message will be diluted and lost within the political-media maelstrom.

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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 FORGOTTEN NEW ZEALANDERS

 But this Government has forgotten the hard-working and inspiring people I come across every day.

In a pub in Napier, a guy came up and said to me “I’m working harder than ever, I pay my taxes, we’re trying to bring up our kids the best we can, but we simply can’t seem to get ahead”.

He went on to say: “I just feel nobody is standing up for me”.

So many others I have met feel the same.

They’re busy helping organise school galas, donating their time to charities, running the sausage sizzle to fundraise for local sports clubs.

They are at the heart of our communities helping make our country the great one it is.

I’ve run into that spirit amongst many small business owners.

They’re the kind of people who pay themselves for 40 hours but work 80 just to keep the doors open.

They’re not asking for an easy ride or a hand-out.

But like thousands of others across this country, they’ve been taken for granted.

They feel the Government has forgotten them.

Kiwis across the country are working harder than ever.

They’re doing their fair share. Playing their part.

We all have that responsibility.

But they feel let down.

My promise to you as Prime Minister is that I will always stand up for the hardworking, forgotten New Zealanders.

You’re doing your bit, it’s time you had a Government that did its bit too.

 NEW ERA – HANDS ON GOVERNMENT

 We desperately need real leadership now more than ever.

The Global Financial Crisis has exposed the frailties of the old economic wisdom.

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Now we’re getting to the knitty-gritty. Recent history backs up Shearer’s statement 100%  that  the “Global Financial Crisis has exposed the frailties of the old economic wisdom“. This is reality and only the most hard-line rightwing National/ACT Party devotee  would attempt the futility of arguing to the contrary.

This is where National is vulnerable (amongst a truckload of other vulnerabilities).

In point of fact, whilst Key may not have been personally responsible for the 2007/08 Global Financial Crisis – his profession certainly had a hand in it’s making.  Key has admitted as such, two weeks after the 2008 general election (notice not before the election),

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Source

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In turn, despite the lies from National MPs (more on that in an upcoming blogpost), Labour left the New Zealand economy in a fairly positrive state,

  • unemployment was low at 4.6% (source)
  • sovereign net debt mostly paid down from 20% to 5.6% of GDP (source)
  • and Labour was posting surpluses, as even Key had to admit, with open derision (source)

These are all positives that Labour shouldn’t be afraid to remind New Zealanders – many of whom suffer from long-term memory-fade at the best of times.

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The National Party believes the financial crisis is just a blip to get over. Their solution is to apply their failed ideas of the past over and over.

They are wrong.

The hands-off, simply leave it to the market approach has failed all over the world.

We are on the cusp of a new era – when new thinking and leadership is needed to build wealth we can all share in.

The world has changed…

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Why not offer a few examples?

- Examples of hands-on State intervention.

- Examples of governments re-taking control of their currencies.

- Examples of people throwing out right wing governments and replacing them with centre-left administrations.

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…National hasn’t. It’s stuck in the past.

We need a government that recognises times have changed.

We need a Government that finds the courage to act, not better excuses for why we can’t.

We need a government prepared to stand up for hardworking forgotten Kiwis.

We need a smart, hands-on Government.

A government that is prepared to be a player, not a spectator.

That will be a Labour Government, and the Government I will lead.

It’s about getting our priorities right, being thrifty about our economy.

Bringing our debt under control.

But being smart about how we tackle the massive challenges ahead.

Above all, this country needs a government that chooses to act. Let me tell you what I mean.

When a young couple is putting off having kids until they buy a house, and yet despite saving hard, prices always slip beyond their reach, it’s time to act.

That’s why I’m committed to putting 100,000 families into new homes.

It’s ambitious, but New Zealanders can see right through the Government’s hands off approach that leaves it to the market.

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Ambitious? Of course – but also doable. This is not beyond our means and it’s laughable that those right wingers who poo-poo the idea as “too hard” or “too costly” are always – always – the same ones who defend against similar   criticisms levelled at  National’s “pet projects” for their business mates.

Evidently subsidising Warner Bros (a multi-billion dollar corporation) or a rugby tournament with our taxes is “not hard” and “not costly”. It’s called an ‘investment’.

So why is building homes for our own people “too hard” or “too costly”?!

Right wingers have a blinkered view of the world and a narrow idea of what is an ‘investment’.

Housing for our citizens is a human right and something we’ve always taken pride in. This is Labour’s core strength; ensuring a roof over peoples’ heads.

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They see through the tinkering with the RMA.

They see through the latest excuse – to blame the local Council.

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Well sussed.

Key has been blaming everyone and everything for the poor state of our economy; rising unemployment; growing poverty, etc.

  • In 2008 he blamed his money-trader mates
  • He’s blamed the Global Financial Crisis
  • He’s blamed people receiving welfare payments
  • He’s blamed “dodgy statistics”
  • He’s blamed the Labour Party
  • He’s blamed the Greens
  • He’s blamed Winston Peters

And now, recently, Key and his National cronies have taken to blaming local body councils,

We need more houses built in New Zealand, at a lower cost. That means we need more land available for building, more streamlined processes and less costly red tape…

… It’s ridiculous that we allow councils to demand almost anything as a condition for the consent.

And it’s ridiculous that we allow them to charge whatever fees they want.

See: John Key’s State of the Nation speech – post mortem

I’m waiting for him to next blame aliens, Illuminatii, et al.

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It’s just not credible.

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Damn right it’s not.

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It’s also why Labour will introduce a Capital Gains Tax to move investment into business and away from property speculation that is pushing house prices through the roof.

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Problem, solution.

Good.

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When a student graduating from university faces 7.3% unemployment and little chance of getting a job, it’s time to act.

They’ve done their bit, we need to do ours.

It’s heart-breaking watching parents waving goodbye to their kids at our airports.

People want to work – they just need the jobs.

Two days ago, John Key had an epiphany: We have a youth unemployment problem – we need apprentices.

Good on him. I thank the focus group that brought that to his attention.

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There was thunderous applause from the audience at this point.  The remark referring to “government by focus group” is a quip  that National constantly  tossed at the Clark government.

It applies equally well to National’s term. Let’s keep using it.

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There are now 20 per cent fewer apprentices today than when he took office. We are now importing foreign labour to meet skills shortages in the biggest rebuild in our history in Christchurch.

Is he just waking up to this now? Is this government asleep at the wheel, completely out of touch?

You don’t need to answer that. The answer is obvious.

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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There was a touch of humour as Shearer said, “you don’t need to answer that. The answer is obvious.” The audience loved the wry touch and laughed. The laughter was at National’s expense.

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I have been serious about youth unemployment from the day I was elected leader.

Labour’s plans are out there. I’d be delighted if this government picked them up and ran with them.

For example:

We’ll pay employers the equivalent of the dole to take on apprentices.

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More loud applause. Everyone welcomes the idea of apprentices – what’s not to like? Taking young folk from our 85,000 Unemployed or Not in Education or Training(NEET); training them into a trade; adding to the skills base of our country – this is real investment.

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We’ll back Kiwi businesses to get their slice of the $30 billion dollars the Government contracts out every year – but we will require them to take on apprentices and trainees in return.

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This is the kind of  social contract that only a centre-left government can enact. National’s neo-liberal dogma could not allow such a hands-on, visibly interventionist, policy. It flies in the face of everything they hold dear; that only the “Market” can create jobs.

Labour (or any other centre-left and left Party) has no such constraints. They can be utterly pragmatic and do whatever it takes to generate jobs.

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We’ll give tax breaks to companies doing world-leading research and development, so the innovations – and the jobs – they create stay right here in New Zealand.

Another thing.

When I see talented people forced to leave their home town because there’s nothing on offer for them, it’s time to act.

That’s why we’ll work with councils on projects that support their provinces. Projects like the Gisborne to Napier rail link to boost economic development and create jobs.

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This was well received by the audience, with good applause and rowdy cheering. The audience seemed to understand perfectly well the long-term value of rail.

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When I hear of high value manufacturers shedding jobs because our high dollar cuts them off at the knees, it’s time to act.

We’ll make changes to monetary policy so that our job-creating businesses aren’t undermined by our exchange rate.

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Problem, solution.

Excellent.

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When a 5 year old girl falls asleep in class because she had no breakfast before she left home, it’s time to act.

Labour will put food in schools, to make sure all our kids get the same chance to learn.

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Problem, solution.

On a roll…

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When a mum and dad work long hours but still can’t afford healthy food for their kids, it’s time to act.

We’ll lift the minimum wage and champion a living wage to make sure hard work can provide a decent living.

This is what I mean when I say we need a smart Government prepared to act.

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Problem, solution.

Good stuff!

Plenty of applause at these statements.  And plenty of material for the electronic media,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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And print media,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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This is where National will continue to be on the back-foot. Come 2014, (if the Nat-led Coalition lasts that long – by no means a foregone conclusion) Key and his administration will have been in office for six years. Aside from balancing the books (oh f****n hooray), what will be their legacy? What practical achievements can they present to the voting public after two terms in office.

Bugger all, I would suggest.

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A Government that says we will back you if you’re prepared to do your best.

Yes, we face huge challenges, but by being hands on we can turn our biggest challenges into opportunities for the future.

Since we announced KiwiBuild last year, excitement is growing. Architects, construction companies and designers around NZ have been in touch.

They see an opportunity to build affordable, energy-efficient – even energy generating – houses.

Houses that use home grown sustainable materials.

Houses that families will be proud to call home.

This is an idea the country is embracing.

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And it’s also 100% feasible. There is no reason why any of Shearer’s suggestions cannot be implemented. It is, after all, part of our innovative, “number 8 fencing wire” mentality that we love to espouse as a Kiwi characteristic.

Ok, well let’s put that into operation. Not just to make money for overseas corporates like Warner Bros – but for our own young people.

This is the kind of talk that cuts through the free market, neo-liberal BS. This is what will encourage New Zealanders to call  this country home – and not just a launching pad for overseas destinations.

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More than 70 per cent of Kiwis support our KiwiBuild programme to build 100,000 first homes.

New Zealanders are also behind our other new ideas and those numbers are growing.

Most people see the need for a Capital Gains Tax on investment properties.

Nearly six in every ten New Zealanders support our idea to make KiwiSaver universal.

And nearly two-thirds of you back our pledge to protect universal superannuation for future generations by gradually lifting the age of eligibility.

The forces of conservatism said that reforming Super wasn’t the right thing to do.

It wouldn’t be popular – so we shouldn’t do it. They were wrong.

New Zealanders are forward thinking and are prepared to do what it takes to create a better future.

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When New Zealanders understand the long-term implications of their decisions, and vote accordingly for sensible policies on Election Day, we can achieve great things.

But when we vote through sheer stupidity for selfish reasons – as many did on 29 November 1975 for Robert Muldoon – we inevitably achieve short term gain. But loose out Big Time on long term benefits (see related blogpost:   Regret at dumping compulsory super – only 37 years too late).

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National has a big idea of course – it’s to sell our best assets.

And, with them, goes another chunk of our future.

That is their plan.

Most Kiwis hate it. And we are behind them fighting that idea all the way.

 HANDS ON – A GLOBAL TREND

 Labour isn’t alone in knowing the time has come for active government.

A movement of leaders and people across the world have realised the old hands-off solutions take us nowhere.

It’s a new way of thinking and it’s evolving.

New Zealanders are looking to a government that will roll up its sleeves and back them.

You do your part, and we the government will do ours.

In 2014 that’s the Government I will lead.

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And that it pretty much what persuaded voters to support Labour and it’s coalition partners in 1999. The do-nothing, slash-and-burn mentality of Bolger and Shipley  was driving New Zealand to a yawning chasm. Neo-liberalism was creating a nightmarish society of high unemployment, degraded social services, missed opportunities, and widening gap between the rich and poor.

Sound familiar?

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 AGENDA FOR 2013

Kiwis won’t have to wait until the election to find out what I stand for and what I’ll do about the issues that matter to them.

I’ve already put clear stakes in the ground on housing affordability, quality education, growing jobs and the economy.

There’s more to come.

For Labour, this year is about preparing for Government.

We want New Zealanders to know that we’re ready to govern.

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It’s simple: appear confident and act like a government-in-waiting – and they will flock to you.

Note, this applies also to NZ First, Mana, and the Greens. The public want to see Opposition Parties working together for the good of the country as a whole. By all means offer your own policies for public debate – but take note that there’s a very fine demarcation between debate and squabbling.

Any hint of squabbling and the voters will turn of.

There have to be positive reasons for voters to take a punt on voting for the Opposition.

Work together, in a cool, calm, methodical, professional manner – and they will flock to you.

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That’s why today I’m setting out my agenda for the year.

Number one is jobs.

It is our most urgent priority and cuts across everything we do.

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Damn straight.

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Labour’s plan to build new affordable homes will create thousands of new jobs and apprenticeships.

A job is more than a weekly wage, it’s gives people a purpose and pride in themselves. That’s why I’m focussed on jobs.

Our housing proposals are at the cutting edge of urban design and energy efficiency.

This year we will bring together the best ideas of architects, designers, urban planners and others to a housing conference.

I want KiwiBuild ready to roll on Day 1 when we take office.

First-home buyers shouldn’t have to wait.

Jacinda Ardern, my Social Development spokesperson, will produce an alternative white paper this year, setting out our direction to help lift kids out of poverty.

There are 270,000 children in hardship in this country, and the government is failing them.

Kids deserve the best chance in life regardless of their parents’ wealth, and with Labour they will get that.

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And those of us on the Left will be supporting, encouraging, and where necessary, nudging, a Labour-led government to maintain the focus of these problems (I refuse to call them “issues”) .

It is simply unacceptable to have poverty in this country and tackling this cancer in our society must rank at the top, along with job creation and caring for our children.

On this note, I would suggest that David Shearer demonstrate his total commitment to addressing child poverty in this country by taking on the role of Minister for Children.

There is nothing more important to the future of our nation than our children. (Some rightwingers don’t get this simple fact – but then, they do suffer from a brain-deficit in comprehension of social problems.)

John Key made himself Minister of Tourism – and spent his holidays in Hawaii. I guess he’s Minister of Tourism for Hawaii, and we just didn’t hear that part of the announcement.

An incoming Labour Prime Minister’s portfolio must be Minister for Children.

No ifs, buts, or maybes – that will set the tone of an incoming Labour-led government.

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Their best opportunity is from a world-class education system.

We’ve already set out our plan to put food in schools and extend reading recovery so our kids aren’t destined to be drop outs from their first day at school.

This year I’m asking my education team to look at ways to improve transitions from school to further training and high-skill jobs.

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Suggestions;

1. Can Charter Schools. These are parasitic neo-liberal constructs which add nothing to our education system.

2. Look at Finland. They’re at the top of OECD PISA tables for achievement. I suggest they have a wealth of knowledge we can  gain from them. (Finland does not use the “Charter schools” model.)

3. Whether of not NZ First joins the Coalition on an official basis, I would strongly suggest that MP Tracey Martin be given an education or health or Associate Minister of Children’s portfolio. This woman has talent and should not be over-looked. (Disclaimer: I’m not a member, supporter, or even fan of NZ First. But I recognise talent when I see it.)

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85,000 young New Zealanders are not in work, education or training.

It’s a flaw in our system.

I want to see our schools seamlessly connect to further training opportunities.

I want every child to go through school with a purpose and plan of where they’ll end up.

Because every young Kiwi deserves a shot at a career that excites and motivates them.

Without this we’ll continue to see kids, without the right skills to get a job, falling through the cracks.

And our employers will continue to struggle to find the skills they need.

That’s not a future I want for my kids or yours.

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Pretty damned obvious, eh?

I mean, really, it’s so fricken insanely straight forward.

In fact, it’s so patently obvious that voters have a clear choice,

A. Vote National and more of the same – 85,000 not in work, education or training.

B. Vote for a centre-left Coalition and get these kids into apprenticeships.

Is there anyone out there who doesn’t get this?

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I’ve spoken of a clean, green, clever economy many times.

We need our environment to drive our economic success and our economy to keep our environment clean.

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Despite warnings from the likes of Dr Mike Joy that our environment was hardly the fiction of  being “100% Pure” or “Clean & Green”, right wing spin doctors (see:  When spin doctors go bad) and our Dear Leader don’t seem to understand the simple fact that much of our economy is predicated on our marketing brand (see:  John Key’s “pinch of salt” style of telling the truth).

Dr Joy was lambasted by Mark Unsworth – a rabid right-wing lobbyist for a professional “government relations consultancy” company, Saunders Unsworth – who condemned the scientist as an economic “saboteur” on 21 November, last year.

Now, as our environmental mishaps begin to compound, the chooks are coming home to roost – and crap all over everything,

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NZ works on agreement on residue in milk

Source

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The reality is we will not create more better paying jobs by simply exporting more milk powder.

We’ve been talking about it since Mike Moore invented lamb burgers.

Our future prosperity will be carved out by backing the talent of businesses working in high tech, or the innovations of those adding value to our natural resources.

It will be built by those that see the promise and opportunity of a clean, green future.

Great ideas are emerging from organisations like Pure Advantage, and from thousands of innovative can-do Kiwis.

A thriving manufacturing sector is at the heart of my vision. That’s why our manufacturing inquiry that starts tomorrow is an important first step.

But the commitment is lacking from government.

Well I am committed to this future.

There is simply no other option.

That is why I have asked my colleagues to develop a clear plan to diversify our economy.

A plan we can put in front of New Zealanders, not airy fairy concepts.

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There was more applause to this…

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All of these areas – jobs, education, housing and building a new economy – are critical to rebuilding our second largest city.

I am committed to rebuilding Christchurch from the grassroots up, not the Beehive down.

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A part of me thinks that “rebuilding Christchurch from the grassroots up, not the Beehive down” may be the toughest, most demanding of Labour’s promises.  300,000 Cantabrians may have 300,000 opinions as to what should be done.

At the very least, a Labour-led government must put an end to  school closures and the prospect of the Charter Schools experiment. Christchurch has enough stresses without central government adding to the woes of an already vulnerable community.

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That’s why I’ll be talking to Cantabrians about how they see their future.

To ensure their voices are heard.

That’s what we’ll work on in the coming months.

These ideas will make a difference.

These are ideas National simply can’t see.

CONCLUSION

The difference between the forces of conservatism and the need for change has never been wider.

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Indeed. On almost every level, there is a world of difference between the expectations of National Party supporters and those who support Labour, the Greens, Mana, and NZ First.

The differences are best epitomised by the issue of child poverty.

National/ACT supporters play the blame-game and deride parents for making “bad choices”. Key himself validated this belief in February 2011, when he said,

But it is also true that anyone on a benefit actually has a lifestyle choice. If one budgets properly, one can pay one’s bills.

“And that is true because the bulk of New Zealanders on a benefit do actually pay for food, their rent and other things. Now some make poor choices and they don’t have money left.”

See: Food parcel families made poor choices, says Key

This attitude of selfishness can become vicious and downright psychopathic in cruelty. Perhaps the nastiest I’ve seen was Damien Grant’s piece in the NZ Herald yesterday – see:  Damien Grant: I’d rather a better phone than feed a hungry child.

People like Grant – and those who posted vile messages in support of his comments – are the mean spirited, self-centered, dark side of humanity. Their vision of  society would not be too dis-similar to to Dickens’ Victorian-era world.

Though strangely enough, Rightwingers/National Party supporters are never quite able to explain  how a child can choose to be born into a family ridden by unemployment, poverty, dysfunction, addiction, abuse. Strange, eh?

Labour/Green/Mana and probably NZ first supporters see problems such as  child poverty as a societal problem that affects us all. They understand there are many reason why a family may be living in poverty.

With 175,000 New Zealanders now unemployed, it’s hardly surprising that poverty is increasing. Contrary to the bizarre fantasies of right wingers and low-information voters, the dole is not very generous. No one in their right mind would give up a job earning $600 a week, to go on the dole for $204.96 a week, net (see:   WINZ Unemployment Benefit – current).

A priority of an incoming Labour-led government should be  to un-do the benefit cuts of Ruth Richardson in 1991. It is an indictment on Labour that it never carried out this positive reform during it’s tenure in office.

Aside from being the right thing to do, Labour should ask itself; why should the poorest in our society vote for them if they don’t un-do the policies of previous right-wing  governments?

What’s in it for them?

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Come 2014, New Zealanders will face a choice more stark than any in a generation.

A choice in the direction of their country.

A choice between staying as we are and managing our decline, or being part of a hands-on

Government that’s backing hardworking New Zealanders.

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Government that’s backing hardworking New Zealanders“.

Code for the fickle middle classes?

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A government that chooses action over excuses.

A government that understands the world is entering a new era and we need to change with it.

One that shares the determination and passion of those Kiwis who inspire us most.

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There was more loud applause at this point. Despite not giving specifics, the audience seemed to like what they were hearing; the direction that Shearer was moving the Party.

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That’s the Labour Government I will lead.

But I can’t do it alone.

Today, I am asking for your help.

I want you to be part of my team and play a part in the next government.

I want to hear your hopes for this country and your ideas of how we get there.

I want each of you to take the Labour message out to your neighbours, your co-workers, your congregation, and your friends.

Tell them yes, we in the Labour Party are committed to making a real difference in people’s lives.

We will not accept the status quo.

A tide for change is building.

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Indeed. And that tide for change is not just the poor; the unemployed; or the low-paid. Even businesspeople seem to be getting mightily pissed of at National’s arrogant  hands-off, do-nothing, Leave-It-To-The-Marketplace attitude,

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The managing director of a company that makes and exports a device that protects crops from hail stones said comments from the Government that his sector needs to get smarter are “insulting and unnecessary”.

Mike Eggers said he is sick of hearing politicians telling him he has to up his game if he wants to survive – when the high dollar makes it more and more difficult to operate.

“We’re told to get smarter and I find that irritating and insulting. I’m about as smart as they get in my little field. How the hell do these people get smarter? For a politician to tell somebody else to get smarter – he’s risking his life.”

A scrap-copper manufacturer told the inquiry the Government can’t continue to do nothing about the exchange rate.

A W Fraser managing director Gordon Sutherland said the over-inflated dollar is crippling exporters and it was disappointing when the Government told them to keep making efficiencies to remain viable.

“We know that – we’ve known that for a very, very long time. Of course we get efficient, of course we try and work as hard as we can to be efficient – it’s the only way we can exist. It drives me insane when people say, ‘Get efficient’. What do you think we are – idiots? We’re not.”

Joyce’s immediate response?

“Nobody’s arguing that being a manufacturer isn’t challenging. In fact, in my history in business, every time you’re in business it’s challenging.

“But going around and trying to talk down the New Zealand economy and talk about a crisis in manufacturing, I don’t think is particularly helpful.”

Mr Joyce said there was no simple answer to the problems the sector are facing, except to keep working hard to further improve their businesses.

See: Radio NZ – Exporters tell inquiry of threat from high NZ dollar

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If Joyce and his little  National buddies think that kind of response will win them the next election – they must be more deluded than I thought imaginable.

Joyce might as well have saved time and simply told exporters and manufacturers, “Go vote Labour”. The effect will be the same.

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Change that guarantees everyone gets ahead, not just those at the top.

Change so we once again stand tall as a country.

A country where we strive to be a leader – not a follower.

A country where the Government is hands-on and backs its people.

A country we can be proud of.

Friends, join with me to build that future.

Because, together, that’s what we will do in 2014.

Thank you.

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With that, Shearer concluded his speech.  As the audience rose to their feet, cheering enthusiastically, he left the stage,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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So, what to make of  Shearer’s performance?

Shearer spoke from a pre-prepared speech (hard-copy provided to this blogger) which he more or less followed. He spoke convincingly and  passionately and though perhaps not as charismatic as a Jim Anderton or younger Winston Peters or late Rod Donald, it was sufficient to present his message to people in the  Hall.

Reading a pre-prepared speech, this Blogger scores Shearer  a 6/7  (where 10 is in the league of Lange/Kirk/Savage and 1 is one-dimensional to the point of being robotic.)

The speech scores a 5/6. It was adequate – but perhaps something was missing. Something that would make a listener sit up, with the proverbial lighbulb switching on.

After Shearer left the stage, Hutt South MP, Trevor Mallard, invited the gathering outside to enjoy the beautiful hot day in an adjacent park, as well as a free sausage sizzle for all,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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A traditional Kiwi sausage sizzle provided free snacks – though there were suggestions that NZ Herald journo, Audrey Young (not pictured) pay for hers in the spirit of Market User Pays,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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It also gave Shearer an opportrunity to meet the press outside, to answer questions. Most questions  seemed focused on  Labour’s recently released Housing policy,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Patrick Gower (at left, with pink tie) was the main questioner,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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At times the questions were so intent on detailed house pricing; number of bedrooms; location; location; location, that they  seemed more suitable for a real estate agent than a Party leader. But they were fair questions and this blogger has no quibble with them,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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I stood with the group throughout the Q + A session, listening and recording the exchange between Shearer and msm journos.

My impression? He has improved significantly since his earlier days as Labour’s mumbling, incoherent,  leader. Occassionally there is still hesitation, and that requires further training to make his speech patterns more fluid, natural, and assertive.

In any case, except for an occassional moment or two, he answered journo’s questions reasonably  well.

The question is – is he ready to go head-to-head with The Great Car Salesmen, aka, our Prime Minister John Key? Currently, I’m not sure. By 2014, with more practice and experience, and as his confidence grows, he has a fair chance.

What the Labour Party needs to do is ensure that not only does Shearer get the training and experience, but that he is 100% well-versed in every aspect of Labour policy and funding mechanism.

National is vulnerable right now, and this blogger  believes things are about to get a whole lot messier for the Tories. 2012 was only the beginning of their eventual demise as government.

There’s still a lot of work ahead of us, and every critic and opponant of National must do their bit; Party activists; MPs (which means side-lining hopeless non-performers and elevating those who are taking it to the Nats); bloggers; and disaffected ordinary New Zealanders who’ve had a gutsful.

2014 is ours to seize.

Other moments and faces of the day

Rimutaka MP, Chris Hipkins, (“Kennedy for President” t-shirt) and friends,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Hutt Mp, Trevor Mallard, chatting with two members of the public,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Te Atatu MP, Phil Twyford, and supporters,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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And Labour leader, David Shearer, listening intently to a fellow New Zealander,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Other blogs

The Jackal: Anti Shearer faction loses traction

The Standard: For a February leadership vote

Disclaimer

This blogger has no links or preference to either “Team Shearer” or “Team Cunliffe”, and is mostly neutral in the leadership stakes.

Copyright (c)  Notice

All images are freely available to be used, with following provisos,

* Use must be for non-commercial purposes.
* Where purpose of  use is  commercial, a donation to Child Poverty Action Group is requested.
* At all times, images must be used only in context, and not to denigrate individuals.
* Acknowledgement of source is requested.

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= fs =

John Key’s State of the Nation speech – post mortem

25 January 2013 28 comments

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John Key today delivered his State of the Nation speech. This is my appraisal of the contents of his address to the people of New Zealand…

Whether it’s welfare reform, law and order, education, the rebuild of Christchurch, or continuing our improvements in public services, it’s full steam ahead.

But no mention of jobs?

We’ve made a huge turnaround in the government’s books, we’ve brought in the biggest changes to the tax system in a generation, and we’re making significant changes to reform the welfare system and strengthen work obligations.”

Still no mention of jobs!

Among other things, we’ve introduced 90-day trials; set time limits for the consenting of large projects under the RMA; introduced a competitive new system for awarding oil and gas exploration permits; got ACC back into good financial shape; and kick-started a multi-billion dollar programme of infrastructure investment.”

Where are the jobs?

” …an economy that was left unbalanced, and in poor shape, by the previous government.

Bullshit. Aside from being National’s “Big Lie“, Labour posted several Budget Surpluses, and payed down debt.  How long can National keep blaming Labour for non-existant ‘mis-management’?

“…  the impact of the Global Financial Crisis

That was FOUR years ago – what has National been doing in the meantime – aside from banging on about welfare “reforms” and adding to unemployment by cutting back on the State sector and under-mining the export sector by not addressing the high Dollar?!

Since the bottom of the recession, in mid-2009, the economy has grown at an average of just under 2 per cent a year, and economists are expecting that to strengthen further.”

Yeah? Reallllly???

Which economists? These ones; Rodney Dickens finds economists consistently over-estimated growth?

And how can it be ‘strengthening’ when unemployment is rising; the export sector is being knackered by our high dollar; and government austerity is dampening growth?

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Govt austerity slows growth, keeps rates low - RBNZ

Source

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Key is practicing more of his “vacant optimism”, and bugger all else.

Our employment rate is very high in comparison to other countries, with over three-quarters of all New Zealanders aged 20 to 64 in work. There are still too many people looking for work who can’t find it.  But forecasts show employment continuing to increase and unemployment falling.

Bullshit. Unemployment has risen in the last four Quarters,

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New Zealand Unemployment Rate jan 2012 - dec 2012

Source: Trading Economics – Unemployment

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By what stretch of his money-addled brain is he expecting it to fall? Especially when the 170,000 new jobs predicted in 2011 by a vacantly optimistic Key, have yet to materialise.

Interest rates are at 50-year lows.

Oh, puh-leeese.

Interest rates are not determined by government. They are set by the Reserve Bank. And current interest rates are low only because the economy is weak.

Reserve Bank Governor Alan Bollard said: “New Zealand’s economic outlook has weakened a little since the March Monetary Policy Statement.

“Political and economic stresses in Europe, along with a run of weaker-than-expected data, have seen New Zealand’s trading partner outlook worsen. Furthermore, there is a small but growing risk that conditions in the euro area deteriorate more markedly than is projected in the June Statement.

The Bank is monitoring euro-area developments carefully given the potential for rapid change.“Increased agricultural production and the weakened global outlook have driven New Zealand’s export commodity prices lower.

The resulting moderation in export incomes, although partially offset by depreciation in the exchange rate, will weigh on economic activity in New Zealand. Fiscal consolidation is also likely to constrain demand growth going forward.

See: Reserve Bank Monetary Policy Statement June  2012

Is Key taking credit for a weak economy?! Go on, Dear Leader, I dare you to do it!

Prices for primary exports are holding up, and our terms of trade remain high.

Say whut? Has Key been caught out fibbing – again?  Terms of  trade are not “remaining high”. Quite the opposite,

New Zealand’s terms of trade fell to a three-year low in the September quarter as the country’s strong currency ate into returns from an increasing volume of dairy exports.

The terms of trade, which measures how much imports can be bought with a fixed quantity of exports, fell 3.2 per cent in the three months ended September 30, according to Statistics New Zealand. That’s more than the 1.8 per cent forecast in a Reuters survey of economists. Export prices sank 6.3 per cent, ahead of the 3.6 per cent expected, while import prices declined 3.3 per cent versus an anticipated 2 per cent fall.

See: New Zealand Herald – Terms of trade hit three-year low

Primary export prices are not “holding up”. They are falling,

Dairy, which accounts for about a quarter of New Zealand’s exports, was the biggest contributor to the falling export prices and rising volumes, with volumes surging 32 per cent in the quarter, even as prices sank 13 per cent.

See: IBID

This isn’t a “State of the Nation” report – it’s a work of goddamn  fiction.

That will be centred, of course, on Christchurch, where the spend is now estimated to be around $30 billion. But construction is also expected to pick up in other areas, and manufacturers across the country will be gearing up to supply materials.”

Again, more vacant optimism from Key.

If two major earthquakes had not trashed Christchurch, where would the “growth”  come from? What would be driving economic growth and employment? Faith in the Free Market?!

Volumes

Total manufacturing rose 2.6 percent.
Excluding meat and dairy product manufacturing, sales fell 1.4 percent.
Meat and dairy product manufacturing rose 13 percent.

Values

Total manufacturing rose 1.6 percent.
Excluding meat and dairy product manufacturing, sales fell 1.1 percent.
Meat and dairy product manufacturing rose 9.3 percent.

See: Statistics NZ Economic Survey of Manufacturing: September 2012 quarter

In any three-month period in New Zealand, between 100,000 and 200,000 jobs disappear, and between 100,000 and 200,000 new jobs are created, as businesses start up, expand, contract and close altogether.”

Is Key suggesting that there are “100,000 to 200,000 new jobs” created within a three month period?!

The man is in la-la land.

Statistics NZ revealed that for the Setember 2012 Quarter,

The number of people unemployed increased by 13,000 people.
The employment rate fell 0.4 percentage points, to 63.4 percent.
The number of people employed decreased by 8,000.
The labour force participation rate remained unchanged, at 68.4 percent.

See: Household Labour Force Survey: September 2012 quarter

I see no evidence of 100,000 or 200,000 new jobs anywhere. Unemployment, however, rose from 6.8% in the June 2012 Quarter  to 7.3% in the September 2012 Quarter.

Key’s speech mentions none of this, and is as vacantly optimistic as he was last year, or 2011, or 2010, or 2009…

Because the truth is, you only get jobs and growth in the economy when people invest money, at their own risk, in setting up a business or expanding an existing business.

[...]

But the only way net new jobs can be created is by private investors putting their money into businesses in New Zealand.”

Which brings us to the matter of Market failure. We simply are not seeing the number of new jobs required to soak up any of the 175,000 unemployed.

Since 2009, a net total of 114,200 Kiwis left for Australia and elsewhere (see: Johnny’s Report Card – National Standards Assessment y/e 2012: migration ). One could only imagine the staggering level  of  unemployment if Australia  wasn’t an economic “safety-valve” just across the ditch.

” Governments can encourage investment but they can also discourage investment.

A government can load up big costs and uncertainties onto business.

It can make people unwelcome because they are considered to be the wrong nationality to invest here, or in the wrong industry.

And it can lock up the resources of the country.

That would certainly discourage investment.

But as I said, we have to be a magnet for investment.

That’s why my Government is working hard to reduce costs and uncertainties for business.

That’s why we welcome investment that benefits New Zealand.

That’s why we are keeping our own costs down.

That’s why we are ensuring people have the right skills to contribute to the workforce.

That’s why we are ensuring the country has the infrastructure it needs to grow.

And that’s why we’re focused on opportunities to use our natural resources productively and sustainably.”

Ok. So again – where are the jobs?!

After four years of National’s “working hard to reduce costs and uncertainties for business”, “welcoming investment that benefits New Zealand”, “keeping our own costs down”, “ensuring people have the right skills to contribute to the workforce”, “ensuring the country has the infrastructure it needs to grow”, and “focused on opportunities to use our natural resources productively and sustainably” – why are we not seeing this translated into more jobs?

Instead we are seeing unemployment GROWING – not reducing.

Something is terribly wrong here.

” This year we are launching five new vocational pathways that clearly signpost the subjects young people should take to prepare for vocational careers in construction, manufacturing, the primary sector, the service sector and social services.

This year there will be over 4000 places available in trades and services academies, allowing young people to explore vocational career opportunities while still at school.

And there will be around 8700 Youth Guarantee places for young people to study fees-free outside the school environment.”

Two years after the earthquakes that levelled Christchurch?! National has belatedly realised that Market failure is not delivering the number of skilled tradespeople required, and government intervention is needed?

Oh well, better late than never. At least they didn’t wait till after the 2014 elections… Or the turn of the next century… Or the Second Coming…

“Under Labour’s wasteful management, up to 100,000 people a year listed as being in industry training were in fact “phantom trainees” who achieved no credits and in some cases were no longer alive.”

Oh, how original – more Labour-blaming!!

I suspect that figure of  “100,000″ is pure Key bullshit. But regardless, how long is National going to use Labour as a scapegoat?! Especially since, I suspect, that had National kept Labour’s apprenticeships scheme, we’d have the necessary numbers of tradespeople to help re-build Christchurch.

But I guess it’s easier for the Nats to do nothing; wait for the Market to deliver results – and then blame Labour when that nutty idea crashes and burns.

I hope Key realises that the finger-pointing of Labour-blaming is wearing rather thin? People are wondering when the Nats will start taking responsibility for their actions. Especially since National is the Party of personal responsibility,

We also need to remember the enduring principles on which the National Party is based – individual responsibility, support for families and communities, and a belief that the State can’t and shouldn’t do everything.” – John Key, 30 January 2007

Source: National Party

“That has freed up some very significant funding to re-invest in expanding apprenticeships.”

Oh? How much?

Is this “new” money?

Or money stolen from other budgets such as Vote  Health, eg;   for grommet operations for kids with glue ear? (see:   Grommet cuts fear )

One will excuse my cynicism, but with National’s current maniacal obsession with balancing their books, they are constantly robbing Peter to pay Pauline. The net result is that state services are being cut back and no  part of our community is safe from National’s cost-cutting slash-and-burn activities.

One thing is for sure – some other part of the community may find their services wound back to pay for National’s “expanding apprenticeships”.

” So today I am announcing a new initiative to expand and improve apprenticeship training.

This has a number of parts to it:

1. From 1 January next year, we are…”

“Next year”?!?!

Well, never let it be said that National moves with decisive speed when confronted with critical economic and social problems.

Initiating their “new” apprenticeships scheme will mean another year that Christchurch suffers a shortage of trained workers; another year we could have been training some of the 85,000 unemployed youth in this country. Another year – wasted.

This isn’t a government “on top of things”. This is procrastination by deliberate design. Perhaps Key is hoping that the Market will do the job in the next twelve months, giving National an excuse to quietly forget and drop this scheme?

“…we estimate that around 14,000 new apprentices will start training over the next five years, over and above the number previously forecast.”

This sounds remarkably familiar… Didn’t we get a similar promise in 2011,

Treasury say in the Budget, as a result of this platform on what we’ve delivered, 170,000 jobs created and 4% wage growth over the next three to four years.” – John Key, 19 May 2011

See: Budget 2011: Govt predicts 170,000 new jobs

Which was backed up on their 2011 election flyer,

“National’s Brighter Future Plan will help businesses create 170,000 new jobs over the next four years.”

Source: National Party

That one didn’t work out very well either.

Key went on to say,

“The whole idea is to kick-start new apprenticeship opportunities ahead of the curve, so that thousands of New Zealanders get to learn a new trade that will last them a lifetime.”

I have a simple question for our smile and wave Dear Leader; why didn’t they do this immediatly after the 2008 election? Why didn’t this come out of the Jobs Summit in 2009?

And why, as he’s said above, are they now leaving this critical problem to be addressed next year???

All in all – there is little here to create new jobs, now, when we need it the most. Even his comments regarding infrastructure are just so much ‘fluff’,

“Moving on to infrastructure, the Government will this year continue its significant programme of investment, which supports thousands of jobs across the country.”

Well that “support for thousands of jobs across the country” hasn’t worked out so well. Unemployment has risen four quarters in a row. Redundancies were happening across the board, up and down the country. 175,000 New Zealanders are now out of work. Three months prior, that number was 162,000.Before that, 160,000. (see previous blogpost: Johnny’s Report Card – National Standards Assessment y/e 2012: employment/unemployment ) The numbers are going the wrong way.

“In terms of housing, the Government is itself planning to build more than 2000 houses over the next two financial years…”

Two thousand?

That number is derisable and falls woefully short of the 20,000 new houses  required to be built each year to keep up with demand. As Warwick Quinn, from the Registered Master Builders Federation, said last October,

New Zealand had fallen way behind the required build rates of 20,000 homes a year, hit by the global financial downturn that began in 2008...”

See:  20,000 houses for Chch in next five years

Two thousand new houses over the next TWO years?

That doesn’t cut it, Mr Key. Not even close. In effect, what Dear Leader has done is acknowledge that a critical housing problem exists – but that National is unable/unwilling to address it in any meaningful way.  Their ideological attachment to free market dogma binds their actions at every turn.

Two thousand new houses over two years is a joke. Not a particularly funny one at that.

” We need more houses built in New Zealand, at a lower cost. That means we need more land available for building, more streamlined processes and less costly red tape.”

Now THAT comment worries me.

Didn’t we go through a de-regulation of the building industry in 1991? And didn’t we end up with billions of dollars of poorly built homes that leaked and rotted?

And wasn’t the end result of that disaster a situation where  liability ended up with local body councils paying 25% for repairs; central government 25%; and  home owners were lumped with 50%?! Oh indeed that IS the case!

Up to 89,000 home owners were affected by the “red tape” de-regulation of the early 1990s – and Key appears to be staggering drunkenly  down the same route. (see: Leaky home payouts start tomorrow )

Will this be a  repeat of the same errors of history all over again?!

Key went on,

” It’s ridiculous that we allow councils to demand almost anything as a condition for the consent.

And it’s ridiculous that we allow them to charge whatever fees they want.”

Why not? After all, National demands whatever taxes and government fees they want. Eg; rising petrol taxes; increased early childhood costs; increased ACC fees; raised GST, etc.

But when backed into a corner, default to Strategy #1 – blame Labour. As Key then said,

” Labour’s so-called ‘plan’ to build 100,000 houses doesn’t do anything to fix the actual cost of building – so will either fail miserably, deliver dwellings that people don’t want to live in, or require massive taxpayer subsidies. It’s dishonest and it doesn’t stack up.”

Well, Key would know about dishonesty: John Banks. Raising GST when promising not to. Mystery email regarding Standard & Poors. Clandestine meetings with Skycity executives. Pledging meals in schools, then recanting.

Key derides Labour’s plans to build 100,000 new houses, proclaiming it will “fail miserably”.

This from the smile and wave man who lives in a multi-million dollar mansion; has a holiday home in Hawaii; and god knows what other property – while young New Zealanders are desperate to buy their own homes. (See: Frustrated home buyers want investors to be discouraged)

This from the same smile and wave man who offers New Zealanders 2,000 new homes over TWO YEARS.

It beggars belief how anyone can take John Key seriously these days. The man is a joke.

Key then took the stick to local body councils,

“But if councils aren’t able to change their planning processes, then the Government would have to get a lot more proactive, because we are very serious about resolving this issue.”

Oh really? “Very serious”, eh? So serious that in four years National has done nothing about our housing shortage?

Moving from blaming Labour, Key now seems to be beating up on  local body councils.

Does National ever take responsibility for anything?!

On the environment…

” New Zealand is rich, for example, in minerals. The Greens and Labour oppose it, but we are going to continue to encourage development of our country’s oil, gas and mineral resources.

Looking across our resource base as a whole, what’s clear is that we need a much better system of planning and resource management – one that enables growth and provides strong environmental outcomes, and does so in a timely and cost-effective way.”

National’s ‘devotion’ to “strong environmental outcomes” is amply illustrated by their abandonment of the Kyoto Protocol; watering down the ETS,  and scrapping the five yearly State of the Environment Reports, despite John Key having endorsed it in September 2008 as one of National’s own policies. (See: National scraps crucial environmental report , Government shuns second Kyoto committment )

Anything Key, or one of his ministerial muppets, utters about environmental concerns can be safely dismissed as empty platitudes.

On the TPPA,

“The Greens and their fellow travellers say the TPP is anti-democratic. That is nonsense.”

Interestingly, Key does not say why claims that  the “TPP is anti-democratic” are “nonsense”.

Nor does he acknowledge that the TPPA negotiations are currently held in secret. The public and media are excluded from proceedings. Eventually, the TPPA presented to Parliament will  be a done deal, with no chance for media analysis and public oversight. If that’s not anti-democratic then I fear that Dear Leader has no concept of the principles of democractic participation.

Considering Key’s penchant for secretiveness when it comes to deals with corporates such as Mediaworks, Skycity, et al, It’s not clear to me why we should take him at his word.

On asset sales…

” Subject to the Supreme Court’s decision, this will start in the first half of the year with our offer of up to 49 per cent of the shares in Mighty River Power.

We also want to proceed with another IPO later this year.

The whole share offer programme will be a shot in the arm for New Zealand’s capital markets.”

Really? So National is flogging of half of Meridian, Genersis, Mighty River Power, Solid Energy, and further down-selling Air New Zealand… to satisfy “New Zealand’s capital markets”?!

Key’s background as a money-trader appears to have besotted him. The Big Sell-off has begun, and he’s positively salivating at the prospect.

Meanwhile, over 75% of New Zealanders don’t want a bar of state asset sales. But hey, so what? Anyone would think this was a democracy?

“At the same time, the Government will maintain majority ownership of the companies, and will use the proceeds to invest in other public assets, like schools and hospitals.”

Rubbish. National will use the proceeds to balance their books. Any other suggestion to the contrary is patent nonsense.

“That’s because overseas investment in New Zealand adds to what New Zealanders can invest on their own.”

?!?!

That makes no sense… Typo? Brain-fade? A drunk speech writer?

“It creates jobs, boosts incomes, and helps the economy grow.”

*sighs*

So much bullshit…

Let’s remind ourselves  for the zillionth time that,

  • unemployment is up
  • the income gaps between New Zealand and Australia continues to widen
  • the economy is “growing” at a snail’s pace and as it does, our Current Account deficit grows. Why? Because increasing economic activity boosts profits for foreign owned companies, which means more  profits remitted overseas, which results in a worsening Current Account deficit. That, in turn, impacts on the interest rate we pay for our own capital (borrowings for mortgages, etc),

John Key knows all this – but he ain’t sayin, Billy-Bob boy.

And businesses aren’t so happy either,

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The axe falls - Industry boss blames cuts on Govt

Source
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On Science & Innovation…

” Finally, despite tight times, the Government is continuing to put a real priority on science and innovation. Research funding will be greater this year than it ever has been, because new ideas are a key driver for a modern economy.”

Didn’t National remove the 15% R&D tax credit soon after winning the 2008 election? If that’s putting “a real priority on science and innovation” – I’d hate to see the Nats in full-flight when they positively hate something. (Oh yeah, kinda like beneficiary bashing.)

So back to default Strategy #1,

“But I can guarantee you one thing – Labour will oppose almost all of it.”

Yeah. Piss poor of Labour not to support National when Key demands absolute fealty. In fact, Labour, Greens, and NZ First should just bugger off and leave National to govern on it’s own… and we know what that’s called, don’t we?
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dancing cossacks
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Perhaps  New Zealand would be better served if – instead of constantly deriding and blaming Labour, the Greens, NZ First, local body councils, and Uncle Tom Cobbly – that National focused on the problems confronting our nation; our economy; and our society.  Fixating  on  Opposition Parties for eighteen  paragraphs is not a good look. Defensive, much, Mr Key?

John Key’s constant reference to Labour makes him look fearful – and perhaps so he should be.

By 2014, National will have been in office for six years, with very little to show for it. If Key goes to the election with nothing more except playing a bitter blame-game against Labour, voters will desert him in droves. Voters want results; something reassuring to make them feel better -  not excuses. Certainly not high unemployment, a stagnant economy, growing child poverty, lagging wages, more and more people taking flight to Australia, etc.

” As for the National-led Government, our plan will encourage investment, strengthen the economy and boost jobs.

People know what that plan is, we have stuck to it and we will continue to stick to it.”

Well, I’m happy-as-larry that National has a plan. Because most people haven’t got a clue what Dear Leader and his Nat mates are up to. Aside from cutting state and social services,  asset sales, and subsidising multi-billion dollar film companies, most New Zealanders are scratching their heads wondering precisely what this wonderful “Plan” is.

In 2011, business leaders were asking precisely the same thing,

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Business NZ sees no economic plan

See: Business NZ sees no economic plan

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Key’s speech can be summed up threefold;

1. Consisting mainly of wishful fantasy – with facts and the last four years disproving almost everything he claimed as a “success”,

2. Constantly blaming others for his own Party’s policy-failings. Grow a pair, Mr Key; man up and own your failings.

3. National’s faith in the ability of the Market to produce economic growth, jobs, and higher wages has been sadly misplaced. His announcement on 2,000 new homes over two years is an insult, and National’s new apprenticeship scheme is two years too late, and too little.

National’s neo-liberal policies are more faith-based dogma than anything rooted in Real Life – and the chooks are coming home to roost.

This wasn’t a State of the Nation speech – it was a Statement of  National failure. A Hekia Parata-style own-goal.

If this is National’s idea of a “bright new future”, they’ve just sent Labour and the Greens a very long concession speech for the next election.

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References

NZ Herald: Full text: John Key’s state of the nation speech

Other blogs

Pundit: Mom, apple pie, apprenticeships & not much else

Idle thoughts of an Idle Fellow: The Ruminations of Robert Winter: The Negative Mr Key

The Dim Post: All part of the service

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