Phil Goff is Finally Beating the Right Drum
Today we have for the first time seen the sort of Policy leadership that might actually deliver the economic turnaround that could see us catch up with Australia, says the Productive Economy Council.
The policies announced today by Labour could see a New Zealand that generates its own savings pool to invest in its own companies, to create superior profits from the innovation in science and technology, and to earn superior margins for our exports and pay our employees superior salaries, says PEC spokesman Selwyn Pellett.
“The fact that he is looking at savings, banking requirements and monetary policy aligned to stability and growth of the economy is music to exporters’ ears. Finally someone seems to understand that standing on the throats of exporters to stifle internal inflation results in a low performing economy,” says Pellett.
“If the generalities of this speech are turned into solid coherent policy there will be significant debate at the next election between those who want to increase their wealth through asset inflation and those that want to earn their incomes from designing, building and selling our innovative products to the world. Asset wealth creation benefits a select few at a cost to many. It creates no jobs, increases national debt and has us selling off our farms and companies to foreigners, which means profits are repatriated instead of reinvested.
An innovative, export-led economy delivers superior wages, savings and local ownership and reinvestment,” he says.
“Phil Goff is 100% right that the attraction of Australia is about higher wages not lower tax,” says Pellett.
“What Goff has missed out of this speech is a need for a broad based capital gains tax, an increase in the retirement age, and the return on interest for student loans.”
“Goff and Labour have it wrong when targeting those that earn and pay high tax in this country. This group actually pays 70% of the net tax contribution after factoring in the effect of Working for Families and other benefits on the government’s revenues. A tax reduction to this group may well be appropriate,” says Pellett.
“What isn’t appropriate is the massive avoidance of tax we have by a section of society that manages its affairs behind blind trusts and LAQCs. As John Walley from NZMEA has often said, lower, wider and simpler tax policies benefit us all.”
Selwyn says: “If the generalities of this speech are turned into solid coherent policy …”
I say… that’s impossible… I have read thru Phil Goffs speech and it is Jam packed with Generalities, catch phrase jargon speak, cliches and contradictions ….. To the point that it is incoherent and does not come from any kind of deep underlying understanding or knowledge.
Just band aid ideas that try to address symptoms rather than causes.
National are not much better…. and neither are the All Blacks…..
I’m not trying be be overly critical…. but I don’t feel there is much depth to Phil Goffs understanding.
It does not take much to realize that if GDP grows by 3% in a yr and the money supply expands by 15% in a yr…. there are going to be distortions ….. bubbles, malinvestments, mispricing of risk, current acct deficits, speculaton, volatility….etc …etc
In fact, in economics this is very basic and it is hard to believe that we have not learnt from the lessons of history.
To contribute something constructive………..
I have been reading about the German “Economic Miracle” in the late 1940s’…. AMAZING
It had a lot to do with the the strong ideas that Ludwig Erhard had.
http://en.wikipedia.org/wiki/Ludwig_Erhard
His economic philosophy became something called…. ” The Social Market Economy”.
Like most economic philosophies or ideas… they get twisted and hijacked by special interest groups, as time goes…(One needs to study the original ideas.)
http://en.wikipedia.org/wiki/Social_market_economy
If you study Erhards original ideas, some that he was able to implement, there some real gems of wisdom… that in the sharp glare of the “Global Crisis”, are quite profound and of the same quality as Keynes, Freidman etc…
Sure… times have changed…. but the principles of human endevour and the market economy have not, neither has dark side eg, greed , corruption etc.
Recent History has shown that a “Market Economy ” needs to operate within a broader Social context.
Recent history has also shown how critically important a stable Monetary system with a stable money system is.
Price is the transmission mechanism that balances supply and demand… Very simple idea ..but very complex, fluid, responsive and dynamic in reality. ie.. impossible to control without creating distortions.
Erhard understood all this…. He lived thru some extreme Economic times…
His ideas are worth a look at.
In a philisophical sense it is also about the dynamic balance between the Public Sector and the Private sector….. in terms of size, regulation and Social issues.
You will NEVER hear Phil Goff discuss the size of the Public Sector vs Private sector in the context of “Growth and Standard of living”.
Here is a good article. http://www.econlib.org/library/Enc/GermanEconomicMiracle.html