Posts tagged Economics
Both Labour and National have announced various economic policies for New Zealand over the least few days. (although the media seam more interested in Goff’s hair dye, maybe coz that’s more interesting?)
The mainstream media, and plenty of blogs give plenty of views and in depth commentary, so here’s my back and white take on them both. Before I start the context needs to be set:
- NZ (and most of the world) just out of a global recession
- NZ borrowing $300m a week just to fund current activities
- Govt expenditure as a % of GDP extremely high (ver 40%) due to massive growth in last 10 years (almost 50%)
- NZ close to a downgrade from credit rating agencies due to high dept and future borrowing – something needs to be done (downgrade means higher interest rates in NZ – hits everyone).
Richard’s Black and White Summary
|The summary||Labour: Up to 1st $5,00 tax free||Partial sale of selected Govt assets floated, as part of 2011 election policy|
|Good, bad, other?||Stupid. Aimed at vote catching.||Interesting. Novel. Courageous even|
|The good||Everyone gets some cash.||
Frees up capital for other projects.
Being on selected assets ony , we know what we are voting for.
Means (ultimately) less borrowing.
|The bad||Not feasible. It will cost 1.1billion, and even a new top tax will only collect in 30% of that. The rest is made up with reducing tax evasion, but in fact introducing a new top tax bracket will only make tax avoidance happen more through income shifting. remember Labour also has a policy of no GST on fruit and veges – costing a further 250 million in lost revenue. We have to BORROW this!||
Some wont like “selling stuff”.
In a perfect world we wouldn’t sell anything some would say, but I think AirNZ is a perfect example of how it can (and does) work well.
(our of 5 stars)
|Two stars (only coz some uninformed people will vote for it)||Four stars|
Black and White Version: Labour still has no vision. National shows that you can put options to the people to vote on.