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Posts Tagged ‘free market’

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.

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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

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

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Another liquor outlet set to open

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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

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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

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Borders, Whitcoulls under administration

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Real Groovy Wellington to close

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Closing chapter for fine arts bookshop

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Bookstore another victim of public sector cuts

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Marbecks music shop closes down

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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

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Warning as Haier wins all

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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

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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

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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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National signals epic fail – and waves flag of surrender (Part #Rua)

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When National took office in November, 2008, unemployment was on the way up. From a record low of 3.4% in December 2007, it stood at 4.8% a year later.

By December 2009, the Quarter Household Labourforce Survey unemployment rate had risen  to 7.3%,

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Source

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The unemployment rate has since dropped back to 6.3%, for the December 2011 quarter. The slow drop from 7.3% to 6.3% has taken two years to achieve – and even the cause of that outcome is debateable, as New Zealand  “baby boomers”  start retiring and others  escape our stagnating economy to Australia.

I will make one thing clear; I do not lay blame nor responsibility for the doubling of our unemployment at the feet at National. The 2008  global banking crisis, ongoing recession, and massive debt-problems were issues beyond any political Party in any country. National inherited an international situation not of it’s direct making. (Though National does espouse a neo-liberal ideology which most certainly contributed to the crisis in capitalism.)

As an interesting aside; National and it’s groupies  (quite rightly) blame the 2008 recession for our high unemployment rate. However, they conveniently ignore the 2008 recession when engaging in beneficiary-bashing – then the issue of  increased unemployment is a “lifestyle choice”.

However, this blogger maintains that whilst the rise in unemployment was not National’s fault – that National has been derelict in it’s duty to address the crisis in joblessness. Bashing beneficiaries and painting them as lazy layabouts indulging in a “lifestyle choice” will not create one single job.

Blaming beneficiaries for a global situation they had no hand in making is an abrogation of responsibility by National.

I think we all know by now that National hasn’t a clue when it comes to job creation. They have no policies to generate jobs, and what what they have been doing has been tragically counter-productive,

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This blogger is aware of one solo-mum who used the TIA to go through University; upskill; find a well-paid job;   move of welfare; and is now a tax-paying member of society. But I guess that is not the meme that National wants  entering the public consciousness. Their agenda is better served by scapegoating solo-mothers. (But never solo-dads.)

See:   Once upon a time there was a solo-mum

Paula Bennett  used the TIA to put herself through University; upskill; and then move on to a more well-paid benefit; she became Minister of Welfare.

See: Hypocrisy – thy name be National

Bennett’s axing of the TIA and other cutbacks in training and upskilling is what is colloquially known as a false economy.  It may save a few million bucks now – but will only delay the Day of Reckoning when we end up with an untrained, low-skilled society.

Even John Key made this a theme of his speech four years ago,

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The National Party has an economic plan that will build the foundations for a better future.

  • We will focus on lifting medium-term economic performance and managing taxpayers’ money effectively.
  • We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.
  • We will cut taxes, not just in election year, but in a regular programme of ongoing tax cuts.
  • We will invest in the infrastructure this country needs for productivity growth.
  • We will be more careful with how we spend the cash in the public purse, monitoring not just the quantity but also the quality of government spending.
  • We will concentrate on equipping young New Zealanders with the education they need for a 21st century global economy.
  • We will reduce the burden of compliance and bureaucracy, and we will say goodbye to the blind ideology that locks the private sector out of too many parts of our economy.
  • And we will do all of this while improving the public services that Kiwis have a right to expect.  

Because the hard truth is that Labour’s economic underperformance hasn’t delivered the social dividend they promised us.  

So, make no mistake: this election won’t be fought only on Labour’s economic legacy.  National will be asking Labour to front up on their social legacy, too. Many of the social problems the Government said it would solve have only got worse.

This time a year ago, I talked about the underclass that has been allowed to develop in New Zealand. Labour said the problem didn’t exist.  They said there was no underclass in New Zealand.

But who now could deny it?  2007 showed us its bitter fruits. The dramatic drive-by shooting of two-year-old Jhia Te Tua, caught in a battle between two gangs in Wanganui. The incidence of typhoid, a Third World disease, reaching a 20-year high. The horrific torture and eventual death of three-year-old Nia Glassie. The staggering discovery of a lost tribe of 6,000 children who are not enrolled at any school.” – John Key, “State of the Nation Speech”,  29 January 2008

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John Key finished of that speech  by saying,

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We will not sweep problems under the carpet.  We will not meet the country’s challenges by quietly lowering our expectations.”

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So how has National performed?

Not so good, I’m afraid. (But that’s hardly surprising.)

Aside from cutting back on training, National seems to be engaged in a clandestine programme to actually keep wages depressed. Bill English admitted as much last year, on TVNZ’s Q+A when he let slip that New Zealands lower wages were a competitive advantage to Australia,

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“”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…

“… we need to get on with competing with Australia. So if you take an area like tourism, we are competing with Australia. We’re trying to get Australians here instead of spending their tourist dollar in Australia.” – Bill English, 10 April 2011

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Despite a low-wage economy being counter-intuitive for a multitude of common-sense reasons, it appears that – with National’s coded  assent – some local industries are attempting to drive down wages and develop a low-wage economy.

The current industrial disputes with AFFCO and Ports of Auckland Ltd are based purely around driving down wages  by cutting conditions; casualisation; and crushing unions in the workplace.

In October last year, the Seafood Industry Council (SeaFIC) told a ministerial inquiry into Foreign Charter Vessels that their industry needed more cheap foreign labour,

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SeaFIC says FCVs hiring Asian crews was no different to companies going to low wage countries.

“Many New Zealand businesses have exported jobs previously done in New Zealand to other countries with wage rates considerably less than minimum wage rates in New Zealand.” ” – Source

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See: Is this where New Zealand is heading?

See: Foreign fishing boats, Hobbits, and the National Guvmint

The prospect of slave crews on foreign fishing vessels in our territorial waters was a step too far, even for right-wing blogger and National Party cadre, David Farrar. He seemed horrified at what a ministerial inquiry and US journalist had uncovered. (Or perhaps it was faux-disgust, to try to distance National from slavery on New Zealand’s high seas. Who can tell.)

See: A Slave By Any Other Name

However, it was not a good look for one of our industries to be lobbying National to permit more cheap labour into New Zealand. Even if it was to be far out at sea, out-of-sight-out-of-mind, our US-based clients were not too happy when they found out what was going on under our noses, and from which we were seen to be profitting,

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Full Story

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Now, National’s inaction on job creation, training, and upskilling is beginning to bite. Reliance on the free market has not achieved any desirable, measurable goals. In fact, business is still luke-warm at hiring and training new staff.

Global finance and accounting firm Robert Half’s director director, Andrew Brushfield, expressed surprise at  the “cautious hiring predictions among New Zealand CFOs”. Really? No sh*t, Sherlock.

So where does that leave us;

  • A National government that is cutting training allowances
  • No government employment-creation programme to speak of
  • No state apprenticeship programme
  • Leaving job creation and training to the ‘market’
  • The ‘market’ being reluctant to generate employment

No wonder unemployment is still at 150,000.

And little wonder that, with 150,000 jobless, and no jobs training, the Christchurch re-build is now hampered by a shortage of skilled tradespeople,

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Full Story

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Full Story

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To illustrate how short-sighted National (and it’s right wing hangers-on and sycophantic businesspeople),  Weltec offers seventeen week (full time) courses in the painting trade,

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Source

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If has been fourteen months since the tragic, devasting quake of 22 February 2011. We could have had a small army of in-training workforce ready to go by now.

FBG Developments managing director, Fletcher Glass,  could have his 50 painters – and more – instead of complaining bittlerly,

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You can’t train skilled tradespeople in two years, and even if you could train 24,000 tradespeople, you would over-saturate the market after the rebuild.  If you get tradespeople from other parts of the country, you will deplete those places of tradespeople, and that will drive rates up. That will make house prices go up, so buying a house would be even less achievable.’

Hiring overseas workers would prevent Christchurch from turning its problem into a nationwide problem. If you need 6000 painters at the peak of the rebuild, that’s every painter in Dunedin and Wellington.” – Ibid

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What absolute rubbish.

I have a sneaking suspicion that Mr Glass , like SeaFIC, is seeking  painters from Southeast Asia because they will accept minimum wage.

So we can add the following to the above list, as to why we have a shortage of trained tradespeople to take part in Christchurch’s re-build,

  • Employer self-interest

As a point of interest, the above media article also conducted a poll. It asked a simple question,

Should New Zealand fast track visas for overseas tradesmen?

Yes, we need more workers urgently
85 votes, 20.4%

No, we should train more NZers
332 votes, 79.6%

Nearly 80% of New Zealanders have enough common sense to realise what we should be doing. Obviously, none of those 80% are represented by any of National’s current  59 members of Parliament.

In case anyone is foolish enough to accuse this blogger of being fiscally naive, I refer to a BERL report, last year,

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Industry training has billions in benefits – study

A new study suggests the country could lose between $7.2 and $15.1 billion dollars annually if the Government withdrew its investment in industry training.

The study by the Business and Economic Research Limited (BERL) sets out to quantify the costs and benefits of industry training both to businesses and to the country.

According to one model, it found a cut in all public funding towards industry training would result in a loss in gross domestic product of 0.6 to 1.8 percent by 2014, and between 2.9 and 6 percent by 2021.

That equated to a loss of between $1.2 and $3.7 billion annually in the short-term and between $7.2 and $15.1 billion in the long term.

BERL said under such a scenario, the loss of skilled labour would have a detrimental effect on the export sector, crimping its capacity and reducing its competitiveness as industries competed for a smaller pool of talent.

The report, commissioned by the Industry Training Federation, said the results underlined how the country’s skill levels could ”positively impact on the quality and value of the goods and services produced, and the standard of living in New Zealand”.

However, it also noted the economy was complex and warned that ”any attempts to prioritise or isolate particular industries, sectors, occupations or skills as being more or less important are economically unsound  “.  – Source

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Training up unemployed New Zealanders who’ve lost their jobs over the last four years of recession; it’s not just a good idea or a “nice to have” – it’s bloody well obvious!

National’s faith in free market forces is admirable. But the rest of us gave up believing in Father Christmas, Easter Bunny, and Superman as we grew up. (Though having Superman around might be useful.)  It is high time that John Key and his Merry Band gave up their quasi-religious belief in the Invisible Hand of The Free Market.

Ideology will not re-build Christchurch. We need many hands – trained up and paid well – to do the work. 150,000 pair of hands!

I leave (almost) the last word to  Dear Leader,

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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. ” – John Key, “State of the Nation Speech”,  29 January 2008

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Wouldn’t that be a fine thing?

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= fs =

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