Can you fix it?: Time to help ourselves
We asked you how to fix the economy and were flooded with responses. We'll be running these in the coming days. To contribute to the debate hit the green button below.
Firstly, it ain't broke, and if it ain't broke don't fix it. But it ain't perfect either.
Our economy is not living up to expectations, but have a look around. Most of the world's nations are in serious crisis, but we are not.
We are slowly growing, not screaming for a bail out. Our major economic problems are internal: how to take care of the impoverished without encouraging a dependence on benefits, and how to control the current mess that the education system has become.
I think all of the unemployed should be scrub-cutting, tree-planting and road-building. Cleaning up the countryside for a work allowance would help get people outside, upskilled, and show potential employers that Joe Bloggs is planting native bush three days a week, instead of playing Xbox.
In no particular order, some of the glaring wrongs include:
1. The power companies make huge profits, but dividends are paid to whom? All profits from the power companies should be reinvested in green energy such as solar, wind and geothermal. And these profits should not be so high in years when the cost of living is too high for large numbers of Kiwis.
2. If you work in a country why should you get your tax back when you leave? You have used the roads and general infrastructure while you were here and quite possibly made use of emergency services between causing road accidents and the general mayhem caused by backpackers. With the strong dollar, New Zealand has unfortunately become a working holiday destination where people come here, spend little, work a bit, and leave with their savings topped up, then they get their tax refunded. Often all of the PAYE they had withheld as well as some GST they get refunded on departure.
3. If you own a house to live in and you work in New Zealand you should be eligible for a tax break. If you own another property this is clearly something different that should be subject to capital gains tax etc. Note that this is one house per person, not family. A married couple should be entitled to a holiday house which is useful in the event of a divorce and could reduce the deterrent effect of having to sell one if two home owners chose to marry.
4. I hate, hate, hate Fonterra and the other great New Zealand monopsony Beef and Lamb New Zealand, which are great for the farmers, not for the NZ economy, and certainly not for the ordinary New Zealander. Monopsony is not a typo, it is a very dirty word, it avoids being a monopoly by point of view only, but we have a monopolies commission that lets the three biggest food production sectors force us to bid against the whole world for our products. Well, guess what people, Synlait buy huge amounts of milk for processing and export far cheaper than retail in New Zealand, export quality cuts of beef and lamb sit in Costco and Tesco at half the price they are in Countdown and Pak N Save. That's not right.
5. ENZA. Oh well, at least we can still afford apples.
6. KiwiSaver is pretty much all invested outside New Zealand. OK, I understand why you need off shore coverage for disaster insurance, but surely investing all that money in new buildings in other countries could be better invested here? And, no I don't mean because of Christchurch, although hello! And a few million dollars invested in foreign stock markets and fixed interest bonds could be be better employed to offset borrowing from the international extorters that lend money to governments. The actual truth is far funnier than the kid in the Flight of the Conchords Cure Kids song.
7. If there are offshore oil reserves worth exploring for and exploiting let's not let BP do it, eh? Or any private company. That is what our Government needs to protect, and if we can't do it let's leave it alone until we can. As for onshore oil exploration the same applies, and do not frack our country. The inventer of this method made it sound like a swear word. It is fracking stupid. If we must mine our oil and mineral reserves we need to control this as we only have one country. Some of us still love it.
8. The Aussie government was criticized for just printing extra cash to hand out, but they have the best-performing economy I know of. Anyone who has read any Heinlein knows that it will work, it just takes balls to do it with style, and get some genuine economic stimulation from the spending. After all economics is the greatest confidence game of all, so let's stop putting ourselves down and be proud of where we are and not sell it off in a panic now.
The most important long term things are break up the monopsonies, but the cash thing is the fastest way to fix us. Two to five thousand dollars each would be enough to spark retail, manufacturing, internal tourism hospitality, and small scale construction as well as a massive amount of small debt relief for poor families.
If we do not print enough cash to create a shortage of goods available to purchase then the cash will generate it's own wealth. It just takes the balls. If the amount printed is closer to $5k per taxpayer, then the short term currency devaluation would reverse the trend towards low profit tourism and encourage the valuable luxury tourists who spend money outside the fast food, pub, backpacker and justice industries.
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