READER REPORT:

NZ needs nationalisation

ROLAND ASKEW
Last updated 05:00 26/05/2013
electricity
HIGH PRICES: The power price issue will continue as long as power is treated as a commodity for private profit, writes Roland Askew.

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I think when we debate that wages should be increased, we are missing a point: most businesses in New Zealand are small and don't have the ability to absorb the extra cost of higher wages.

Also, why do we need higher wages anyway? Because costs are going up. So, why not bring costs down to the level of wages?

Good food should not be taxed, bad food should, Power costs too much and should come down. There should be more competition by supermarkets and petrol.

I think locally produced food should be subsidised by just enough to make it cheaper than imported food. Kiwis will buy the cheaper food, supporting local business and keeping money circulating in the country and not offshore.

I think the power price issue will continue as long as power is treated as a commodity for private profit. Of course I am suggesting nationalisation. This may seem a dirty word in our country, but only 30 or so years ago this was the norm. Only when Rogernomics became the new fad did things change. I am not saying the previous system was perfect. But what we have now is unsustainable.

Private transport is expensive as fuel prices keep going up. Having alternative transport forms is useful, but not when it is more expensive. Even with a subsidy, a trip by train from the Auckland CBD to its fringes costs more than by car. Buses are worse. Maybe train ticket prices will come down with electrification (again, fuel prices). Part of the issue is a lack of unification by the different services. Once again, the issue is privatisation.

If we subsidise we probably create a new cost. If we nationalise we would probably reduce profit. How do we compensate for this?

Well, since the 80s, income taxes for high earnings have been cut dramatically, and corporate tax too. Since a small rise in higher wage taxes outpaces a small rise in low wage taxes, why not raise high earnings taxes?

High earners will complain of course, but keep in mind that they are less than 20 per cent of the population. Compare that to the 50 per cent who have only 10 per cent of the total wealth in New Zealand. In fact, due to the point I raised three sentences ago, we could reduce low earning taxes. 

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We could also raise business tax. Businesses will complain, but consider that the majority of New Zealand businesses are small businesses, so only raise company tax and leave sole-merchants, partnerships and possibly cooperatives, alone.

If we want customers to buy subsidised local goods, not only do we need the goods to be cheaper but also there needs be goods in the first place. We have seen a lot of manufacturing moved overseas. How can be keep businesses producing goods inside the country if we want that? Maybe prevent imports from being cheaper? We could apply selective restrictions or tariffs to some kinds of goods to artificially raise their prices. Then manufacturing stays inside the country, as it retains enough demand. 

Why must we stay the course with this Rogernomic/free market paradigm? Are we really better for it? If the market is free, then is it also free of all responsibility or consequence? And why let the market make its own decisions? Do I let random events decide the course of my life, or do I weigh up decisions and make choices? So instead, how about we decide what market is best for us, and follow that path?

Finally, why are our politicians adverse to ideas like these? I can understand the popularity issue. But when faced with a dilemma of two evils, the best decision is to ignore both and choose a third option that benefits everyone. A democratically-elected government has a social and economic contract to uphold with its citizens, surely?


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