“There is a general consensus across all political parties and government bodies that New Zealand’s economic future is precarious - our exports are low, our debt is high, our relative standard of living continues to decline. As a small, open trading economy with a heavily reliance on commodity exports, coupled with a volatile exchange rate, we are prone to “boom and bust” cycles.

But the public discourse for many years has been limited to the solutions of the neo-liberal right. They haven’t worked. New Zealand Fabians believe that we need a wider debate, and a wider range of progressive options and solutions to consider and discuss.”

Mike Smith, Chair of the New Zealand Fabian Society announces its seminar and lecture series kicking off next month in Auckland, Wellington and Christchurch, over at Publicaddress.net

“He is saying, I don’t like the activity of investing in property to avoid paying taxes, but I’m not brave enough to challenge them or convince them what is in their best long term interests.

He has finally shown his colours. He is a mediocre leader without the vision or the ability to change New Zealand. He is a seat-warmer who is too scared to scare the masses.”

Bernard Hickey reacts to Prime Minister John Key’s outlining of his economic plans today - NZ Herald

“Labour has also to rethink tax, productivity growth and innovation. Like Mr English, it worries about the serious imbalance between exports and the domestic economy, low savings and seriously high foreign debt. Unlike Mr English, Labour is much concerned with “economic sovereignty”.”

Colin James analyses Labour’s shift in thinking on inflation targetting in The Dominion Post

In a speech to Federated Farmers today Labour leader Phil Goff  has indicated that at least one of the major political parties appears to be getting the message, saying:

“… our Reserve Bank policy targets are not well designed to produce a stable and competitive exchange rate, nor to keep interest rates as low as possible. In fact, it often operates the other way round. When there is a surge in domestic demand, the policy response is to increase interest rates. Ironically, higher interest rates attract even more inflows of foreign capital, which then gets lent out and sometimes causes even stronger domestic demand. So New Zealand’s overseas debt increases inexorably, while monetary policy punishes our most productive businesses and first home-buyers - just about the two sectors that we least want to affect.”

The full text of his speech is available here.

“Alan Bollard deserves to be congratulated for quietly leading the world’s central banks towards a new tool for monetary policy that might help New Zealand avoid the tyranny of a high official cash rate (OCR) killing our export sector.”

From The NZ Herald

“If productivity growth were to improve by 2 per cent a year, labour force participation was 3 percentage points higher than it is today, and new migrants added 15,000 to national population annually instead of the 10,000 forecast, net debt would rise to 146 per cent of GDP by 2050. “This is still an unsustainable fiscal position,” the report says.”

Treasury paints a picture of a Third-World future for New Zealand.

From The NZ Herald

“Another plunge into global recession in 2010 or 2011 is being tipped by expatriate New Zealand economist Robert Wade - unless governments tackle the underlying causes of the past year’s crisis.”

From The NZ Herald

The “Mr Nice Guys” like Prime Minister John Key - and US President Barack Obama - who have soared high on the basis of personal popularity and feel-good vibes - are now finding out the hard way that there is more to making a good political hamburger than mere sizzle.

If Key does not want to preside over a one-term Government, he must set about constructing a crucial point of difference by starting to act as his nation’s CEO instead of the prime political firefighter who repeatedly rides to the rescue to save his Government from fiascos caused by his own lax political management.

From The NZ Herald

“Bold tax reforms and changes to the mix of monetary and fiscal policy are needed if New Zealand is to rebalance its economy and close the gap with Australia, according to the Treasury’s head.”

From the NZ Herald

“Talk of a cross-party agreement offers the Government a chance to rebalance New Zealand’s tax system say the New Zealand Manufacturers and Exporters Association (NZMEA).  The tax haven in land and buildings has fuelled non-tradeable inflation and this is too much for the tradeable sector to carry.  The claim that a Capital Gains Tax, where the family home is exempt, is unpalatable has more to do with the self interest of a few than any general rejection.

NZMEA Chief Executive John Walley says, “Things like reducing Government spending and minimising compliance costs are necessary but we cannot expect a balanced economy while property tax havens exist.  Phil Goff is to be congratulated for making an offer of a cross party agreement, adding his voice to those of the Treasury and the Reserve Bank.  Now is the time to balance the tax code and close off this damaging tax haven.”

“Bill English has spelt out the problems with New Zealand’s economy; there is too much household consumption and insufficient investment in the traded economy.  It is difficult to attract productive investment when investments in land and buildings are tax free and the return on tradable activity is so uncertain due to a massively overvalued currency.  Real policy change is needed, not talk or wishful thinking.”

“Alan Bollard also spelt out the difficulties of managing inflation during a housing bubble in his last Monetary Policy Statement.  The high interest rates aimed at stopping the housing bubble attract foreign money damaging the export sector via a substantially over-valued dollar.”

“If the Government is opposed to an asset tax we at least need to hear why – ‘I don’t like them’ does not convey why they are a bad idea for the country.”

From the NZMEA