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Posts Tagged ‘free market’

The Mendacities of Mr English – The covert agenda of high immigration

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Context

Bill English was recently caught on-the-spot when challenged why National was permitting high immigration at a time when unemployment was still high, and rising.

Make no mistake, National has opened the floodgates of immigration because it is an easy way to artificially  stimulate the economy. This was pointed out in May 2011,  by then-Immigration Minister, Jonathan Coleman, who trumpeted the contribution made by immigration to economic growth;

“All of us have a vested interest in immigration and I’m pleased to share with you some specific actions the Government is taking to enhance Immigration’s contribution to the economy, service improvement and changes to business migration.

[…]

…I’m confident that you will acknowledge the partnership approach that Immigration is now taking to provide tangible improvements to help support New Zealand’s economic growth.

[…]

Considering the economic challenges the country faces, lifting immigration’s economic contribution takes on more importance.”

Justifying the need for high immigration to generate  economic growth, Coleman cited “New Zealand [going] into deficit in 2009 after several years of surpluses and the economic situation has been compounded by the September and February earthquakes” and unsustainably “borrowing $300 million dollars a week to keep public services ticking over“.

Coleman  admitted that “If we were to close off immigration entirely by 2021… GDP would drop by 11.3 per cent“. He revealed that, “new migrants add an estimated $1.9 billion to the New Zealand economy every year“.

Easy money.

The downside to high immigration has been to put strain on critical services such as roading and housing, and reduce demand for locally trained workers to fill vacancies. There is a downward pressure on wages, as cheaper immigrant-labour is brought into the workforce.

As Treasury pointed out in June last year;

“There is a concern that recently there has been a relative decline in the skill level of our labour migration. The increasing flows of younger and lower-skilled migrants may be contributing to a lack of employment opportunities for local workers with whom they compete.”

Faced with increasingly negative indicators from high immigration, English was forced to explain why we were seeing high immigration at a time of rising unemployment;

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English’s response was predictable if not offensive.

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Playing National’s Blame Game

As per  usual strategy, English defaulted to National’s strategy of Default Blame-gaming. When in trouble;

  1. Blame the previous Labour government
  2. Blame ‘welfare abuse’/Release a ‘welfare abuse’ story in the media
  3. Blame Global Financial Crisis or similar overseas event

(If the trouble is Auckland-centered, Default #4: Blame Auckland Council/RMA/both.)

This has been the pattern of National’s policy to shift blame elsewhere for it’s consistently ineffectual policies;

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The Blame Gaming was applied recently to National’s appalling do-nothing record on housing;

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Resorting to Deflection #2, English had the cheek to blame young unemployed for our high immigration level;

One of the hurdles these days is just passing the drug test … Under workplace safety, you can’t have people on your premises under the influence of drugs and a lot of our younger people can’t pass that test.

People telling me they open for applications, they get people turning up and it’s hard to get someone to be able to pass the test – it’s just one example.

So look if you get around the stories, you’ll hear lots of stories – some good, some not so good – about Kiwis’ willingness and ability to do the jobs that are available.”

His comments on 27 February were echoing previous, similar sentiments in April last year, when he again abused unemployed workers as “hopeless”;

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Quite rightly, English’s comments were condemned by many. English admitted that his comments were based solely on “anecdotal evidence” . This is the worst form of evidence possible as absolutely no confirmation by way of actual, real data is involved. “Anecdotal evidence” panders to prejudice – a  difficult thing to shift even when real evidence proves to the contrary.

Real evidence surfaced only a day after English made his slurs against the unemployed, when it was revealed that out of over 90,000 (approx) welfare beneficiaries, only 466 failed pre-employment drug tests over a  three year period. That equates to roughly to 155 failed tests out of 30,000 per year.

As Radio NZ’s Benedict Collins reported;

Government figures show beneficiaries have failed only 466 pre-employment drug tests in the past three years.

[…]

The Ministry of Social Development said the 466 included those who failed and those who refused to take the test.

Some failed more than once.

The ministry did not have the total figure for how many tests were done over the three years, but said there were 32,000 pre-employment drug tests in 2015.

Those 466 over a three year period consisted of (a) those who failed the test, (b) those who refused to take the test, and (c) some failing more than once.

Put another way, 155 failed tests out of 30,000 per year  equates to half a percent fail rate.

Which means that 99.5% of beneficiaries are clean, according to MSD’s own collected data.

There was further confirmation of low fail rates from another media story. On the same day as the Ministry of Social Development released it’s data on failed drug tests, The Drug Detection Agency revealed that fail-rates were as low as 5%;

While the rate of positive tests has remained at about 5 percent, the company is doing more tests and therefore failing more people, said its chief executive, Kirk Hardy.

“We’ve seen an increase overall in our drug testing and we now, annually, conduct about 144,000 drug tests,” he said.

Looked at another way, 95% of the workforce was clean.

Which simply confirms Bill English to be the typical manipulating, lying, politician that the public so consistently distrust and despise.

However, English has his own  sound reasoning for blaming welfare beneficiaries for this country’s immigration-caused problems. He has to do it to obscure the two reasons why National has opened the tap on immigration as far as they can possibly get away with…

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Cargo-cult Economics

Remember that in May 2011,   then-Immigration Minister, Jonathan Coleman revealed;

If we were to close off immigration entirely by 2021… GDP would drop by 11.3 per cent“.

A 11.3% fall in GDP would have pushed New Zealand into a deep recession, matching that of the early 1990s.

This was especially the case as only a few years ago the economy was suffering with an over-valued New Zealand dollar. Manufacturing and exports had slumped;

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Combined with the multi-billion dollar Christchurch re-build, mass-immigration was National’s “quick-fix” solution to boosting the economy. It might cause problems further down the track, but those were matters that National could address later. Or better still, leave for an incoming Labour-Green government to clean up the resulting socio-economic mess.

This is  quasi-cargo-cult economics, 21st century style.

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The Not-so-Free-Market

In Coleman’s May 2011 speech, he also referred – indirectly – to the second rationale for opening the floodgates of mass-immigration;

If we were to close off immigration entirely by 2021… The available labour force would drop 10.9 per cent

This was critical for National.

A crucial tenet of free market capitalism  (aka neo-liberalism) is that the price of labour (wages and other remuneration) should be predicated on supply and demand;

The higher the wage rate, the lower the demand for labour. Hence, the demand for labour curve slopes downwards. As in all markets, a downward sloping demand curve can be explained by reference to the income and substitution effects.

At higher wages, firms look to substitute capital for labour, or cheaper labour for the relatively expensive labour. In addition, if firms carry on using the same quantity of labour, their labour costs will rise and their income (profits) will fall. For both reasons, demand for labour will fall as wages rise.

Note the part; “At higher wages, firms look to substitute capital for labour, or cheaper labour for the relatively expensive labour“.

Mass immigration may or may not supply cheaper labour per se, but more people chasing a finite number of jobs inevitably “stabilises” or even drives down wages, as migrants compete with local workers. As pointed out previously, this is precisely what Treasury warned off in June last year;

“There is a concern that recently there has been a relative decline in the skill level of our labour migration. The increasing flows of younger and lower-skilled migrants may be contributing to a lack of employment opportunities for local workers with whom they compete.”

National is wary of wages rising, thereby creating  a new wage-price inflationary spiral, reminiscent of the 1970s and 1980s. English said as much on TVNZ’s Q+A in April 2011;

Guyon Espiner:  “Can I talk about the real economy for people? They see the cost of living keep going up. They see wages really not- if not quite keeping pace with that, certainly not outstripping it much. I mean, you said at the weekend to the Australia New Zealand Leadership Forum that one of our advantages over Australia was that our wages were 30% cheaper. I mean, is that an advantage now?

Bill English:  “Well, it’s a way of competing, isn’t it? I mean, if we want to grow this economy, we need the capital – more capital per worker – and we’re competing for people as well.

[…]

Well, it is a good thing if we can attract the capital, and the fact is Australians- Australian companies should be looking at bringing activities to New Zealand because we are so much more competitive than most of the Australian economy.

[…]

Well, at the moment, if I go to Australia and talk to Australians, I want to put to them a positive case for investment in New Zealand, because while we are saving more, we’re not saving more fast enough to get the capital that we need to close the gap with Australia. So Australia already has 40 billion of investment in New Zealand. If we could attract more Australian companies, activities here, that would help us create the jobs and lift incomes.”

National is circumventing their own neo-liberal ideology by importing large numbers of workers, to drive down wages (or at least permit only modest growth).

In times of scarce labour, wages should grow. Demand. Supply.

This is the counter to recessionary-times, such as the 2008 Global Financial Crisis, when wages remain static, or fall, due to heightened job losses and rising unemployment. Supply. Demand.

But National is subverting the free market process by ‘flooding the labour market’ with immigrant labour. The price of labour cannot rise because National has interfered with the process of supply  by widening the field of the labour market. The labour market is no longer contained with the sovereign borders of our state.

This reveals “free market economics” to be a fraud. It is permitted to work unfettered only when it benefits the One Percent, their business interests, and their ruling right-wing puppets.

The moment there is a whiff that the “free market” might benefit workers – the goal-posts are shifted. (Just ask Nick Smith about shifting goal-posts.)

The game is fixed. The dice are loaded. We cannot hope to beat the House at their game.

Time to change the game.

Inevitable Conclusion

Welfare beneficiaries. Drugs. Drug testing.  It was never about any of those.

The real agenda is for National to create a false impression of economic growth and reign-in wage growth, through immigration. Anything which threatens to expose their covert agenda is to be countered. Especially before it becomes fixed in the public consciousness.

Welfare beneficiaries are very useful as National’s go-to scapegoats. Or herring of a certain hue…

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Postscript: A case of REAL workplace drug abuse

Meanwhile, in what must constitute the worst case of workplace drug abuse, took place on 14 June 1984;

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…Muldoon had made up his mind.  In one of the biggest miscalculations in our political history he decided that he would go to the country. At 11.15pm a visibly intoxicated Muldoon made his announcement to waiting journalists.

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References

NZ Herald: Beyond the fear factor – New Kiwis can be good for us all

Fairfax media: NZ unemployment jumps to 5.2 per cent, as job market brings more into workforce

Fairfax media: New Zealand’s economic growth driven almost exclusively by rising population

Beehive: Immigration New Zealand’s contribution to growing the economy

NZ Herald: Budget 2016 – Feeling the Pressure

NZ Herald: Treasury warns of risk to jobs from immigration

TV3 News:  Bill English blames unemployment on drug tests

Radio NZ: Employers still struggling to hire NZers due to drug use – PM

Radio NZ: Farmers agree Kiwi farm labourers ‘hopeless’

Radio NZ: Tens of thousands drug-tested, hundreds fail

Radio NZ: Drug use not the whole worker shortage story – employer

NZ Herald: Willie Apiata our most trusted again

Radio NZ: Exporters tell inquiry of threat from high dollar

Wikipedia: Cargo cult economics

Economics Online: The demand for labour

TVNZ: Q+A – Guyon Espiner interviews Bill English – transcript

Radio NZ: Unemployment rises, wage growth subdued

Statistics NZ: When times are tough, wage growth slows 

Fairfax media: Shock rise in unemployment to 7.3pc

TVNZ: Frontier Of Dreams – 1984 Snap Election

Additional

TV3 News: Government gets thumbs down on housing

Other Blogs

The Standard: English hammered on druggies smear

Previous related blogposts

Election ’17 Countdown: The Promise of Nirvana to come

When National is under attack – Deflect, deflect, deflect!

National under attack – defaults to Deflection #2

National under attack – defaults to Deflection #1

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This blogpost was first published on The Daily Blog on 5 March 2017.

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Foot in Mouth award – Former ACT MP exposes flaw in free-market system

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Foot In Mouth Award

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Meet Ken Shirley;

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ken shirley ACT MP

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Most folk won’t remember who Ken Shirley was, prior to his current ‘gig’ as  CEO of the Road Transport Forum (RTF), representing road transport interests since July 2010.

From 1984 to 1990, Shirley was nominally a Labour Party MP. He was closely aligned with the likes of Roger Douglas, Richard Prebble, and other right-wingers who had seized control of the party during the 1980s.

From 1996 to 2005, Shirley was an ACT Party MP. As such, he was an acolyte of  the neo-liberal school of economics and a strong adherent of free market forces. Part of ACT’s policies is to scrap the minimum wage.

Indeed, to under-score ACT’s abhorrence of the minimum wage, ACT’s current leader (and sole MP), David Seymour, condemned a recent rise in minimum wage levels. On 26 February this year, Seymour was scathing;

“The new $15.25 minimum wage will hit regional employers especially hard… In Auckland, $15.25 might not sound like much, but small businesses in the regions who generally charge less will struggle to bear the cost. Hikes to the minimum wage will discourage new employment, and lead to more lay-offs and business failures.

The first employees to suffer will be young, low-skilled workers who won’t be offered a chance to prove their worth. Pulling up the jobs ladder will only add to poverty in low-income areas.

This is a wage set for the distorted Auckland economy. Why should the rest of the country have to bear the same costs?”

[Fun Fact: As a Parliamentary Under-Secretary, Seymour is currently a taxpayer-funded beneficiary on a salary of $185,098 p.a. – which equates to nearly $89 per hour. One wonders if “small businesses in the regions who generally charge less will struggle to bear the cost” of Seymour’s salary?]

But returning to Ken Shirley; as an ex-ACT member of Parliament he is still most likely an  advocate for the abolition of the minimum wage.

On 5 May, Shirley was invited to be a commentator on Radio NZ’s afternoon Panel, hosted by Jim Mora;

 “Ken Shirley of the Road Transport Forum discusses what’s behind logging truck crashes and what needs to be done.”

At one point in the discussion, a suggestion was made that low wages in the trucking industry is not attracting the most highly-skilled and experienced workers;

@ 7.50

Jim Mora: “How bad do you think, Ken, is this situation with truck driving?”

Ken Shirley: “Oh, the spate we’ve had in Northland is just unacceptable. There’s no excuse for roll-over[s]. We know we have some difficult roads in New Zealand with topography, Northland’s is particularly difficult.

But there’s an obligation on the drivers and the forestry companies who hire the drivers to make sure they drive to the conditions. That’s the obligation on all drivers, and the spate we’ve had is just unacceptable, and I think inevitably it seems it’s not mechanical failure, it is driver error.

Whether it’s speed, inattention, or fatigue.”

Jim Mora: “So, it’s a…what, is it a hiring of drivers problem, hiring the wrong drivers, or is it a keeping-costs down problem, Ken? What do you think?”

Ken Shirley: “Well, the two are related of course. We have a chronic shortage of H5 drivers in New Zealand. That’s the heavy combination driver, the truck and trailer. It’s a global problem, but it’s particularly severe in New Zealand at this time. We’ve had it for many years, but with the activity in the economy now, that we are currently having, there is a chronic shortage of drivers.

Many of our members throughout the country are just saying they simply cannot get drivers. And I guess inevitably, you can, in that situation, such a tight situation, out of desperation, you can perhaps hire someone who’s not as skilled as you would like or need, out of sheer necessity. But at the end of the day, there’s no excuse. This should not be happening. We’re taking it very seriously.

We’ve actually instigated a series of roll-over prevention seminars in conjunction with NZTA around the country. They started some six weeks back. And these are actually very good seminars. But we have to educate the drivers, the loaders, the dispatchers, the transport operators themselves, but we must not have this level of roll-over.”

Jim Mora: “Ken, is it the… what is it deep down? Is it the meager wages paid, as some people are saying? You’re just not attracting the skills to the industry?”

Ken Shirley: “Ah, no, you do, it’s, you know, you can have a driver error. But it’s, it’s… you have to have better training, better awareness, that has to be the answer.”

Jim Mora: “So, there was this work-force development strategy, wasn’t there, ah, put into place a wee while back to try and try to entice more people to become truck drivers because of that shortage. But what is the point of a work-force development strategy if we know what the problem basically is, which I’m interpreting as maybe a lack of training and a lack of procedures put in place in the industry – [garbled].”

After a further exchange between Jim More, Peter Elliot (one of the panelists), and Ken Shirley, the host returned the discussion to the matter of wage rates;

Jim Mora: “It does seem though, with the wage rates that we see talked about, that you might not be getting the optimum recruits for the job? Is that a fair criticism, or not?”

Ken Shirley: “Well we know that the skilled labour market across the economy, whether it’s a diesel mechanic, a skilled driver, all of of those industries are, are, reporting severe chronic shortages. And because they are so highly skilled, reliant on a high level of, of, of, experience, when there is a chronic shortage, there is a temptation to often, out of desperation [to] take what you can get. And, and, that’s, that’s when you start to get into issues that like we are seeing and that’s when you start introducing potential road safety problems.”

Jim Mora: “I understand, but would you solve your chronic shortage if you paid higher wage rates?”

Ken Shirley: “Well, indeed, and all the members I speak to want to, but there’s been a race to the bottom, it’s –

[panelist scoffing (?) noise]

such a fiercely competive industry…”

Shirley’s admissions are astounding.

His comments appear to be a frank admission that the free market has experienced a spectacular  failure on a key point in the Northland logging industry;  that if there is a shortage of  skilled labour, the price of that labour (heavy-truck drivers in this case) should rise – not fall – to attract skilled labour. That is a basic tenet of supply and demand in the free market system.

As the guru of free market economics, Milton Friedman put it;

“But when workers get higher wages and better working conditions through the free market, when they get raises by firm[s] competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody’s expense. “

And Investopedia described a free labour market thusly;

Assuming there are a large number of employers in a region, or that workers are highly mobile geographically, the wages that a company will pay workers is dependent on the competitive market wage for a given skill set. This means that any company is a wage taker, which is simply another way of saying companies must pay competitive wages in order to obtain workers.

None of which seems to be happening in Northland at present.

To the contrary, logging companies – according to their own spokesperson, Ken Shirley – are engaged in a “a race to the bottom” with drivers’ wages.

To compound the problem, in April of this year, Shirley specifically opposed and condemned outright any attempt to increase the wages of drivers;

“The link between remuneration and road safety is highly questionable and as a recent PWC report highlights, the system will result in a net cost to the Australian economy of more than A$2 billion over 15 years.

It is therefore very concerning that the Labour Party here advocated for the same policy and campaigned on it during the last election.”

National awards and government-imposed orders are not the way to lift industry wage rates or make the industry safer. All they do is saddle the industry with inflexible and time-consuming obligations and additional costs.

Let’s not repeat Australia’s mistake in New Zealand. It has been proven that national awards burden the economy and cost jobs and I hope that Labour and other political parties here will accept that reality and ditch the concept once and for all.”

Shirley’s comments last month are in stark contrast to his public lamentations on Radio NZ.

Not only has the free market failed in one of it’s key tenets – but Shirley is actively opposed to raising wages by any means necessary, to attract skilled, experienced truck drivers.

This should serve as a clear lesson that the innate contradictions of the free market ideology – many of which are little more than articles of faith – will eventually become more and more apparent.

Shirley has inadvertently helped with the slow dismantling of the neo-liberal fantasy.

Appendix1

Unfortunately, knowing how the system operates  in this country,  it will takes catastrophic events with several tragic deaths, before the government acts on this growing problem.

That’s how we roll in New Zealand.

Over bodies.

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Tourist dies in logging truck crash near Matamata

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References

Wikipedia: Ken Shirley

ACT NZ: Welfare and family

ACT NZ: Minimum wage hike whacks regional employers

Parliament: Current MPs – David Seymour

Parliament: Salaries payable under section 8 of Members of Parliament

Radio NZ: The Panel with Peter Elliott and Susan Guthrie

Good Reads: Milton Friedman

Investopedia: Breaking down ‘Demand For Labor’

Scoop media: Government imposed remuneration orders have no place in NZ

NZ Herald: Tourist dies in logging truck crash near Matamata

Additional

Road Safety Remuneration Tribunal: About road safety remuneration orders

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John Key says I'd like to raise wages but I can't

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This blogpost was first published on The Daily Blog on 10 May 2016.

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Johnny’s Report Card – National Standards Assessment – Sunrise, Sunset, and Outlooks

9 January 2013 3 comments

To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.

The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.

Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc)  in 2008 and four years in office to make good on it’s election promises.

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Sunrise, Sunset, and Outlook for 2013

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What are we manufacturing today

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We need businesses producing high-value products for overseas markets and businesses using R&D to develop those products which drives other benefits, like better production processes and marketing.  Basically it’s about using innovation to drive our economy.

We have some of these companies already – the likes of Fisher and Paykel, Tait and Rakon. Our world-leading dairy industry also owes much of its success to innovation.” – Jonathan Coleman,  Associate Minister of Finance, 1 July 2011

See: EDANZ National Economic Development Forum – Speech Notes

It’s a funny old world we live in…

Sunrise Industries…

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Central Auckland super brothel approved

Full story

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tobacco-deal-creates-50-jobs-in-petone

Full story

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skycity-deal-puts-laws-up-for-sale

Full story

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Another liquor outlet set to open

Full story

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Sex, gambling, tobacco, alcohol – the new profitable industries of the 1st century? We seem to have left out other “growth” industries, the modern sex-slave trade in women and children, and arms manufacturing.

Oh. Wait. Maybe not,

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Govt funds still invested in cluster bomb makers

Full story

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Oh well, National and it’s  free-market fellow-travellers will be delirious with joy. If there’s a buck to be made from vices and weapons, they’ll be happy as a pig in mud.

Now if only they can find the price of a soul, and a market for it…

And the Sun sets on…

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Sounds silenced by $20m debt

Full story

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Borders, Whitcoulls under administration

Full story

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Real Groovy Wellington to close

Full story

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Closing chapter for fine arts bookshop

Full story

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Bookstore another victim of public sector cuts

Full story

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Marbecks music shop closes down

Full story

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Meanwhile…

Basically it’s about using innovation to drive our economy. We have some of these companies already – the likes of Fisher and Paykel, Tait and Rakon. Jonathan Coleman,  Associate Minister of Finance, 1 July 2011

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Rakon cuts full-year profit guidance

Source

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F&P confirms job losses

Full story

Warning as Haier wins all

Full story

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Oh well, one (Tait) out of three still seems a ‘goer’. How long for, I wonder?

Meanwhile, how are our export and related sectors doing?

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Job losses blamed on high NZ dollar - more forecast

Full story

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And the stats back up the ODT story above,

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New Zealand in Profile_2012_economy

Source: New Zealand in Profile: 2012 – Economy

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Not too good it seems.  The red-highlighted sectors all declined from 2006 to 2011.

National’s “hands off” doctrine, in deference of the ‘Invisible Hand of the Market’, is certainly achieving one result; giving advantage to our exporting competitors from other nations. The Nats seem resigned (hellbent?) to more job losses; more exporters going under; more skilled tradespeople leaving for Australia; and a further decline ineconomic growth,

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Job losses inevitable in declining industries, say ministers

Full story

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What the hell!? The export sector is a “declining industry“?!?!

When even National’s allies – the Manufacturers and Exporters Association – are calling for government intervention about the high New Zealand dollar, it really drives home the seriousness of the crisis. An economic crisis that this time had it’s origins on Molesworth Street – not Wall Street.

For National to persist in it’s “hands off”  and obedience to Free Market dogma will have nasty consequences for our economy.

For 2013, expect,

  • unemployment to rise
  • the export sector to worsen
  • growth to remain low, under 1%
  • an early election this coming year, as Dunne and the Maori Party desert the National-led coalition.

It’s easy to predict – we’ve seen it all before.

Previous related blogposts

New Zealand’s OTHER secret shame

New Zealand’s OTHER secret shame – *Update*

NZ’s 21st Century Growth Industries – Drugs, Gambling, & Prostitution

Drugs & Gambling – NZ’s 21st Century Growth Industries?

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outlook for 2013

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The Benign Neglect of the Free Market

25 September 2012 3 comments

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Nuplex joins a long line of other industries, manufacturers, retailers, government departments, SOEs, etc, who plan to shed jobs,

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Full story

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The announcement of redundancies adds to a shocking list of job losses this year alone,

What sets Nuplex’s announcement apart from others was this extraordinary statement from New Zealand Manufacturers and Exporters Association president, Brian Willoughby,

New Zealand Manufacturers and Exporters Association president Brian Willoughby said Nuplex’s decision would have come after all other options were exhausted. “Nuplex would have been working really hard to be as effective as it could, like the other companies that have announced these closures and layoffs. This is the end game – they can’t make it work.”

He said the Government, and past governments, clearly understood the reasons why manufacturers and exporters were facing such challenges.

“They have all operated with benign neglect and let it get to this,” said Willoughby. “There are so many buttons that could be pushed.”

He said the Reserve Bank could lower interest rates, which would help keep the New Zealand dollar’s strength in check.”

See: Ibid

Benign neglect“, Willoughby calls it.

Another term is the free market in full operation.

Were it not for the fact that thousands of New Zealanders are losing their jobs on a weekly basis, pushing up the unemployment rate, I would find Willoughby’s remarks laughable.

Businessmen and women are quick off the mark to demand less State interference and more market de-regulation to suit their vision of a pure free market.

Both National and Labour governments  have been happy to comply, reducing company tax rates, as well as personal marginal tax rates for high income earners.

In the last four years, company tax rates have been slashed from 33% to 28%.

See: IRD – For businesses and employers

Industrial labour “reforms” have included the 90 Day “trial rate” to allow employers to take on more staff more easily (and still unemployment is rising?!) since 1 Aprl last year.

See: Ministry of Business, Innovation and Employment – 90 Day Trial Period

And FTA deals are being planned all over the place.

If National was any more “business friendly”, politicians would be literally climbing into bed and sleeping with business people. (No inferences made.)

And business sector groups are now whinging that past governments  ” have all operated with benign neglect “?!

Ungrateful buggers.

As if Brian Willoughby’s whining wasn’t enough, Catherine Beard, executive director of Manufacturing NZ, made this stomach-churning complaint,

She said measures the Government could take to address the strong dollar included reducing debt, to take the pressure off interest rates, and putting an end to “poor quality spending” such as Working for Families and student loans.

See: The axe falls: Industry boss blames cuts on Govt

Yeah. Why should families raising kids  and young people starting out in life get all the breaks, huh?

I look forward to Ms Beard advocating  an end to namby-pamby laws protecting workers’ conditions so that children can have real choices in life.

Like whether to work in sweat shops or clean the insides of chimneys.

Choice is important.

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When a failure of neo-liberal policy is pointed out to a right winger…

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… they will always default to one of three positions;

1. Blame the previous government
2. Blame the welfare state and/or beneficiaries
3. Blame the global recession (but not for an increase in welfare beneficiaries – that’s a “lifestyle” choice”)

Pick a public on-line messageboard at random. Look at the postings on  political discussion-threads. Note the response from right wingers and neo-liberals.

When confronted by a failure of the ‘free market’, the neo-liberal and/or right winger will always respond with one of the three  options above.

Rule #1 of the Right Wing mentality: never accept responsibility. (That’s only for  welfare beneficiaries and the poor.)

It’s all they have to explain the failure of their ideology.

 

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A little trick borrowed from the former Soviet bloc…

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Full Story

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In the late 1970s, I had the opportunity to visit my parent’s homeland, behind the Iron Curtain. It was possibly the most educative experience of my life, and I had an opportunity to witness, first hand,  an economic and social system that was quite alien to me.

Some of the lessons I learnt…

  1. Extreme economic policies – whether marxist-leninist or neo-liberal – don’t work, and will ultimately fail. Neither cater for human needs, individually or socially.
  2. It’s true what they say about centralised planning and the public transport system; it was incredibly cheap, efficient, and very user-friendly.
  3. Alway take extra jeans with you to sell on the black market.
  4. Do not mess with the local police. Ever.
  5. Unemployment doesn’t exist in a socialist country – though they have three or four people doing the job of one. That’s the trade-off; unemployment or over-staffing. Which do you prefer? (At least with over-staffing, there were few idle hands for mischief-making and you didn’t have to waste money on unemployment benefits.)
  6. New Zealand was actually more egalitarian (or socialist or whatever you want to call it) in the 1970s, under Norman Kirk and Robert Muldoon – than an actual Soviet Bloc country. Weird – but that’s how it felt.
  7. There was no such thing as inflation. Oh no – they just changed the labels. So Brand X of coffee at 100 forints would disappear off the shelf, to be replaced with Brand Y, at 110 forints. Or a lower weight. That was marxist/leninism’s version of capitalism’s “creative accountancy”.

And it appears that, judging by recent media reports, New Zealand businesses have caught on to Item #7. Instead of raising prices, simply reduce the content.

The only thing is… it didn’t work very well for the Soviet Bloc, and their economies  eventually all but collapsed by the late 1980s, or early 1990s.

Just a thought for us smug Westerners. Reducing content and/or brand-name replacement is only a temporary sticky-plaster and hides fundamental problems with the economy.

As if the lessons of the global banking crisis and resultant recession wasn’t enough of a clue for the West…?

Ok, who’s up for a 150 135 gr bar of Cadbury?

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“Whatever happened to the Golden Mile?”

9 April 2012 7 comments

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Whatever happened to the Golden Mile?” asks right-wing Auckland Councillor;  National Party member; supporter of ACT politicians; and one-time almost-ran National Candidate, Cameron Brewer.

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ACT MP John Banks, David Lumsden, Cr Cameron Brewer

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Cr Brewer is complaining about the transformation of  Auckland’s “Gold Mile” in Queen Street. He says,

Now it has come down to these little shoebox shops selling absolute rubbish.

You really have to wonder the logic of the council wanting to spend nearly $500 million on CBD and waterfront upgrades over the next 10 years, when at the same time it’s signing off these awful little developments.

It completely runs counter to the mayor’s vision of creating a world class city centre.

Pocket traders would only send good retailers and shoppers away to the suburbs.

Only five years ago Queen St had about $50 million of ratepayers’ money spent on it, and more recently the same amount was spent on Aotea Square and millions on turning some side streets into shared spaces.

Then council allows this. It’s very frustrating. The planning department needs to start talking to the economic development department, because things have got to change.” – Ibid

Then he added, quite oddly,

Sometimes it’s more about getting a migrant visa, than creating a sustainable business.”

Am I getting the impression that Cr Brewer just took a ‘dig’ at immigrants?!

The irony here is that Mr Cameron is a National Party member, and has worked for ACT’s Rodney Hide and John Banks. Part of  the National/ACT ideology is that the free market determines the nature of business – not the State.

This is the same Free Market ideology which allowed dozens of state assets to be privatised; electricity production to be corporatised and sold at a profit; removal of tariffs and flooding NZ  with cheap goods from low-wage countries; the de-unionisation of the workforce; corporate competition forcing down wages; and which determines the price of everything from anzac biscuits to Zoo tickets.

This is the ideology which has transformed many Council Organisations from previously council-run enterprises – to independent, profit-oriented, corporate entities.

In short, the New Right, neo-liberal ideology is that the State has no business being in business, nor creating “unnecessary” impediments and restrictions  to business.

Cameron Brewer is not averse to supporting business, as he stated in a press release on 20 September 2011,

Auckland Council’s draft economic development strategy was peer reviewed by Greg Clark who advises international cities on how to lift their performance. Mr Clark believes Auckland’s number one priority should be creating a “business-friendly well run-city, with enabling business and investment climate”. “

When Cr Brewer asks “Whatever happened to the Golden Mile?“, the answer is quite simple: the free market is what happened.

And that’s the thing about the “free market” which I would point out to Cr Brewer;  control of our society; the way our communities live; is now at the mercy of  market forces.The bottom-line rules; the Consumer is King; and everything is by the power of the Contract.

Welcome to New Zealand, post-1984.

Eventually, of course,  those same market forces will impact our lives in unintended ways, and cause consequences   that the Cameron Brewers of New Zealand, will not welcome, and will bitterly resent.

After all, how many people in South Auckland angrily resent the proliferation of alcohol outlets in their communities, selling cheap booze at all hours of day and night?

How many people revile the pokie machines that suck  millions of dollars out of families’ pockets, and impact so tragically on communities throughout the country?

Even as Cr Brewer quoted Greg Clark above,

…Mr Clark believes Auckland’s number one priority should be creating a “business-friendly well run-city, with enabling business and investment climate”. “

So Cr Brewer need wonder no more as to “Whatever happened to the Golden Mile?

He got what he voted for.

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Related Blogposts

A kronically inept government

You’ll have a free market – even if it KILLS you!

Booze – it’s time for some common sense

Unfortunate Outrage

Media reports

NZ Herald:  Shoe-box retailer debate heating up

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