David Hargreaves says relying on the old standbys of running a tight fiscal ship while pumping migrants into the country is no way forward - we need governments with ideas and a real plan

David Hargreaves says relying on the old standbys of running a tight fiscal ship while pumping migrants into the country is no way forward - we need governments with ideas and a real plan

How much is a good idea worth?

Actually, I don't think you can put a price on it.

Good ideas can and have built entire industries and fired up economies around the world.

But when was the last time you could remember a New Zealand government having 'a good idea'. 

Well, maybe I'm being a bit harsh there. Yes, I mean I can think of some individual things such as the creation of KiwiSaver for example that were good ideas. But in the scheme of things such things are relatively small beer and somewhat in isolation.

The point is, in say, the last 20 years or so, successive governments have, yes, run admirably disciplined fiscal policies (for which we can all be grateful right now) but there's been no overarching innovation, no 'big idea' to drive the country forward.

And looking out there at the moment, with an election coming up, I don't see any of the political parties offering much in the way of killer ideas. By killer ideas I mean concepts that might be truly transformational for the economy.

I was prompted to write this by ANZ economists' recent update of their migration forecasts, in which they make the point that the Covid-19 crisis has turned New Zealand’s recent model of migration-driven growth "on its head".

When you really think about it a 'model of migration-driven growth' is about as simplistic and unambitious as you can imagine. "What are we going to do?" "Oh, okay, I know. Let's just bring planeloads of people in and drive the economy with the extra spending they provide." Very basic.

I've said so before, but I think I need to say again: I'm NOT against migration. I wasn't born in New Zealand myself. It's just that there needs to be a plan.

What do we want?

Governments need to ask themselves what they want out of migration, what they are seeking to achieve through it, what changes within New Zealand they regard as acceptable through the migration - and there needs to be a more lofty aim than just giving GDP figures a good pump. Remember also, while also this pumping of the GDP figures has been going on, our GDP per capita has languished.

We've never had a proper conversation as a nation about migration and what we want from it. Crucially, we've never settled on some idea of what is the 'right' size for the country's population. Personally I think at about 5 million we are probably now there. But whatever your individual view of the right-sized population, surely it's a good idea to have a targeted range that is seen as ideal. That means town planners etc can have some realistic idea of what infrastructure and facilities will likely be required.

Anyway, migration as a topic comes up in this context because right at the minute - as you might have noticed - our borders are closed (although if you are up to date with the news of Covid-19 cases, you will know the borders are not as closed as we might like to think). Be that all as it may though, the current situation around the pandemic means that there's no realistic prospect of migration-fuelled GDP growth at the moment. And of course international tourism has been flattened.

The borrowing spree

While all this has been going on our current Government has been borrowing up large to provide fiscal stimulus for the economy. 

Borrowing's fine of course - paying it back, not so much.

Now, you can increase taxes. That's one way to attempt to pay back the debt. But bigger taxes are a very blunt instrument. And people are inclined to seek ways of getting cracked over the head and start finding creative ways of avoiding the 'medicine'.

Ideally the way to pay the debt is by genuinely making the economy bigger. That means successful businesses making bigger profits, employing more people, who then spend more money, thus helping the overall economy grow. And if the economy grows the tax take theoretically also grows.

Where, however, are the 'ideas' - the big concepts - that are going to enable this to happen?

Just keeping a tight rein on finances from here is not going to cut the mustard. Pumping GDP with migrants is off the agenda. What?

A government needs to create the right environment

At this stage I may be making it sound as though I expect the Government to be actually doing all this stuff. That the Government should be creating the new industries etc that are going to fuel the economy. Not so. In fact I'm always very leery of the idea of governments of any persuasion attempting to 'pick winners'. They are generally rubbish at this.

What governments can do is create the right environment in which businesses and industries can thrive.

So what is the 'right environment'?

At a very basic level this country really needs to decide what it wants to be. I've seen no evidence over the past 20 years or so of any governments in that time really trying to pinpoint the role of this country in the world.

A suggestion I often hear is that we could, for example, become a technology hub. Given our distance from basically everywhere else, that sounds like a plan since technology is so easily transferrable. But how would we actually do that? And no, I'm not talking about establishment of some half-baked government outfit with funding of $100 million and filled with buzzwords and slogans. That's just a recipe for hosing taxpayers' hard-earned up against a wall. 

No, I mean a real 'idea' for how such a thing could be enacted.

Governments and business on the same page

Governments can't do this stuff and shouldn't try - but they can get alongside smart people and smart businesses. They can enable.

I'm not close enough to the action to know how on the mark the stories are about a disconnect between the current Government and business. Certainly large parts of the business community (if confidence survey results were any guide) threw a hissy fit when the coalition came into power in 2017 and that probably wasn't an ideal start to the relationship.

But governments and businesses and entrepreneurs need to be on the same page. 

We are not going to find a way forward out of the current mess with a much bigger government (courtesy of all the debt) that simply tries to tax the blazes to people and runs a tight fiscal ship.

We need to find a genuine growth engine for the economy.

We need some ideas. Real ones.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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69 Comments

Well NZTE are supposed to be an enabler of ideas from NZ to the world. I've met quite a few of them across the Asia Pacific region and they're genuinely nice people. But ultimately they're not really 'inside' the businesses of those they represent so you can expect so much pound of flesh. These are govt employees after all and not really any incentive to work above and beyond their own self interests.

When you really think about it a 'model of migration-driven growth' is about as simplistic and unambitious as you can imagine.

Migration is important for countries like NZ and Australia. However, it became the be-all-and-the-end-all quite some time ago. Australia is probably more reliant on immigration than NZ and their govt equally unambitious and self serving.

I've also worked with NZTE in North America. Agree, nice people. They will connect you with a warehouse, distributor, or some in-market specialist the NZ government will pay for. But outside of a few ideas, focus groups and contacts they're not offering much.

On the product side, most are ex Icebreaker. A solid success story, solid innovation. But not without its own challenges taking on foreign markets.

NZ inc has been captured/controlled by overseas interests over past four decades, which dictate commerce with the result being expensive living costs and low wages. This has been aid and abetted by ex politicians from both sides, who have either no understanding of macro economics or been corrupted by big business. I suspect much of it is the latter. Unlock the tax havens, and one might find the answer to this.

NZ inc needs to control the supply chain and add value here, rather than export raw product for other economies to benefit. It can be a big step to becoming an exporter of value added product, and the stepping stone to this is selling in the local market; which may not have the scale to deliver returns. That is unless the government subsidies business capable of making that step. This could be in the form of subsidised prices locally or tax credits, or perhaps a mix. Seed capital could work, if exchanged for a shareholding; kiwishare, but this hasnt happened, which hasnt made commercial sense; and the real reasons for not taking this path will be hidden in the closet.

We all now free trade is a myth and its time our government and those in treasury wake up to this fact, and start investing in the people of this country rather than falling prey to the less than fair practices outside interests employ. . .

"Governments can't do this stuff and shouldn't try - but they can get alongside smart people and smart businesses. They can enable."

Good words. Two aspects, though:

  1. Job One is to Get Re-elected. That tends to shade out the 'enabling' because by definition, there are large lags, unquantifiable risks, and institutional inertia in the Gubmint apparatus. Anything achieved is largely invisible until it sparks, costly in the meantime, and very vulnerable to the Optics in an election year.
  2. Getting alongside smart people and smart businesses tends to throw a hard cold light on Gubmint incompetency, un-smart-ness, inertia, staff capture, and general right-hand-left-hand comms failures. Not liked by staff, not comfortable for pollies, zero or negative electoral prospects.

Say it ain't so, commenters.....

My oft repeated pleading to the Government. Have for a National Referendum on annual number quotas for different kind of visas, to be voted only by Citizens.

Agreed. But we cant allow actual democracy can we.

We need more Universities to teach Medicine and create more Doctors. Government should fund them as PPE and get famous Corporate Names associated with them. The fees should be kept reasonable, unlike in the USA and elsewhere. It may entail attracting Medical Professors from overseas to teach here. Now post
Covid NZ is the right environment for such scheme to bring the professionals in to devlop our Healthcare capabilities for the next 50 or so years.

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The number of people they train for medical professions is intentionally limited because it's decided by councils of people in those professions. So they intentionally restrict access to entering those fields of study. And significantly increase the difficulty to gain qualification to keep their roles scarce, expensive and prestigious.

Lower asset prices and less income tax would incent more to actually stay in NZ post training. Those that go to Aussie represent a massive tax loss. They have cost taxpayers thru schooling and healthcare, and subsidized University, but relocate their tax and utilityr benefit outside NZ.

Do you mean we need
(a) more universities to teach medicine, or
(b) existing universities to teach more medicine

Either way, the first thing you need is to get the existing universities to move up the global rankings and get into the top 100. To do that NZ needs to cut back the dash for mediocrity, cut down on the volume of foreign students, invest in the local system, and strive for excellence. What you wish for will then transpire. The current dash for cash isn't doing it. Cut right back to the bare bones and build from there.

Establishing offshore NZ hubs for knowledge transfer and collaboration around areas such as agriculture and technology development should be a no brainer. Unfortunately we are far too insular as a country to realise the potential we could have as an innovation driver by becoming a focal point for international collaboration. Considering how recognised we are globally for such a small population we have the potential to be respected as mediators of innovation. Our consistent rating as the least corrupt country in the world with a recognised strength as to the ease of doing business in NZ is just two of many angles we should leverage globally.
The default laziness however for legislators to simply let more people into the country to stimulate growth shows how distant we are from developing our potential as a high productivity population. Even the great John Key failed here. How could this mindset be changed? Maybe shut out immigration for a year....?

No way , they would steal our knowledge ...we know this when we established high-tech dairy farms in China , they simply copied our model

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Well with the technology revolution we are not going to derive much value from people performing tasks, so its either innovation or deriving value from our land in the form of cultivation, farming and mining.

Fan fact 1: The world cannabis industry is worth $340bn per year.
Fun fact 2: NZ has some of the best cannabis growing conditions in the world.

Ive got more fun facts.

Growing Cannabis in NZ isn't the answer, there are plenty of equally benign climates to compete against us and thats before you start considering growing in controlled climates, its the products derived FROM cannabis that are the road to riches....but we need a strategy to get there....

We can sit around and make rope from all that hemp :-)

RE Cannabis ................ forget it , we simply cannot compete from a climate point of view

Its a tropical plant ideally needing warm conditions like Bananas , pineapples , sugar-cane and tobacco, with loamy well drained soils and temperatures around 28 degrees C plus , its simply too wet and cold here.

Africa has been growing wild cannabis of extreme high quality for thousands of years without even trying to get high quality .......they have ideal conditions in many places dont need hothouses , or electricity , it grows rampantly outdoors.

Ask any South African , they will tell you that Black folk grow it in their gardens where it grows rampantly , like weeds

Cash crop converted to taxable export business, go for it!

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Immigration/Population referendum? Some would say it's significantly more crucial than a flag..........

Way more significant than flag referendum. However, I would prefer elected officials to simply act on the evidence in the long term interests of our country.

David, we don't need anything too visionary. Governments seldom do vision well.
We just need to do the basics right. You know, all the things we have failed to do in the last 20 years, like moving our economy away from it's immigration and housing ponzi base. If housing was more affordable people would have more money to invest/spend.
I also think our environmental performance is a joke. I would like to see much more use of taxation and incentives in this space.

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Exactly, just fix the bleeding obvious, rather than push that all to one side and start on future follies.

Fix/get rid of the RMA in its present form.

Once house prices have fallen to whatever level they go to, then have the legislation in place to remove speculative rentier behaviour and that allows true competition on land supply, consenting, and infrastructure supply.

It is pointless in doing anything that increases demand without fixing land etc. as above as all it would do is put more demand on those constraints and force the price up.

Once that legislation is in place increase our building code levels to first world country status so the savings on the land/consenting/infrastructure side can be invested in building houses that are warmer, drier and healthier.

The flow on from this is more affordable healthy homes, with fewer hospital admissions (and that includes less chance of catching a virus), less energy use, people have more money in their hands to invest in retirement savings, education etc.

The fact that this is still being discussed, just highlights what a totally dysfunctional Govt. and public sector we have.

Totally agree. We certainly don’t need govt picking winners. The population growth strategy hasn’t given us any significant benefits, time to ditch it and consign it to the fate of the other think big projects..

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The government is onto a winner if it can do three things:

1) Reduce the portion of their incomes Kiwis spend on housing;
2) Reduce the time lost to congestion for people going to and from work;
3) Drastically shorten the time people spend dealing with the RMA, Councils and Govt Departments.

I do not have any confidence in the current government or the likely Lab/Greens incoming government to achieve any of this - in fact they seem pretty keen on making points 2) and 3) worse.

Well, National blatantly failed too!
Both parties have been abysmal on this, going back a long time (the Clark-led government included)

National intentionally failed. Labour failed because the media misrepresented CGT intentionally and NZFirst have been a ball and chain to progress.

A cynic might suggest that National ignored while Labour hoped everyone would forget.

My big idea: Innovation/change toward low input-cost agriculture combined with an upswing (capital injections, perhaps even government ownership) in processing and packaging of added-value (finished, non-perishable) food products.

Food/ag is where the NZ future is at given we'll be one of the least severely impacted by hothouse earth/climate change.

Agree.

Good idea. I would add continue to improve agricultural productivity so it doesn’t rely on low-cost labour.

Has NZ separated itself from planet earth??

How about starting off with a resolution that will diversify and explore new markets and not be dependent on any one country for Rock Star Economy.

Think before spending (Though vote bank politics will restrict).

Freebies only to targeted population who are actually affected and are commited to try and run business.

Ironic satire; I hate to point it out but we are colonized by the global financial hegemony which makes us a profit extraction centre...did you ever wonder why our wholesale interest rates stayed so high compared to the likes of the USA and UK post GFC? Our Nation can't propogate GREAT ideas bcause it is kneecapped by lack of accessible capital. Simply put...if you don't got a dairy farm we won't loan you money, stupid. And stupid we stay. To underline my point, not many dairy farmers invest in nanoelectonics, they buy the farm next door and wonder why school grads don't want to work on a dairy farm....ummm...insight....beacause it sucks working on a dairy farm, go milk your cows yourself and BTW I am animal rights concious and lactose intolerant! Meanwhile my friends have jobs in silicone valley. GET THE POINT?

No sorry, missed the point. And come on !! it takes a lot of skill/knowledge/experience to get that milk out of a cow. If it didn't we wouldn't need to import all those highly skilled/highly paid workers from the well known centre of knowledge of every thing dairy - the Philippines. - do they have any dairy farms? Did they colonize us with dairy farms ? Any statues? should we rename them?

Encouraging comments here. I’d like to see a complete overhaul of the education system.... teach kids the skills they need for the 21st Century..... Having listened to Sir Ken Robinson’s talkS on youtube I think this needs to be done urgently..... 1 child has just left school and another in year 11. Both saying the same things we said at school in the 1980’s.... How does this apply to real life. Quite often it doesn’t. Listening to parents who home school their kids and travel the world they encourage their kids to develop an interest in a subject. Rather than teach the subject the child is encouraged to research it themselves then to present their finds via a presentation or by teaching the adult what they have learnt. They learn at their own pace and go as in depth as they need to. No timetable, no fixed working hours, no set school holidays. The Montessori College in Panmure is the only place that comes close to this style of learning. We also need to address the 1000’s of kids who do not attend school because their parents didn’t have a good experience.....Finally on the agricultural side we could really excel due to nz’s growing conditions and fertile soils. Put the focus back on real food and decrease the reliance on crappy food full of fat and sugar produced in factories that is making New Zealanders and the rest of the world sicker each year. Healthy people = Happy people = more productive people. Bit idealogical but it’s the basics. Food, health and education.

Sorry but you are going up against teachers there and they are the most valuable/underpaid/overworked people in NZ. At least that's what I hear in the staff room every morning tea, lunch,and afternoon tea before 3pm on non school holiday days.

This Govt should lower the company tax rate and increase the minimum wage to get economy going.

Agreed. Encourage investment away from property speculation in to productive business. Apply a land tax to discourage property speculation by individuals or so called companies that make that their business.

Lower tax rates should increase business, increase employment and create more revenue for NZers and the government through PAYE and increase our wealth as a nation.

Considering all the comments above and extending a couple. Kate's point re food/ag is agreed, but we cannot and should not be over reliant on it as we have been. Besides farming/ag does not provide good incomes for employees in those industries, as has been commented on before.

David's comment; "Let's just bring planeloads of people in and drive the economy with the extra spending they provide." only touches on the surface. Plane loads of immigrants increase demand for what? Imported goods! So any growth is specious, just smoke and mirrors because we don't actually manufacture much common goods in NZ. That is what we need to change.

On the food/ag side I'm thinking that it is the greater innovation and capital investment in packaging/processing (factory and R&D) facilities that will bring jobs across the wage spectrum (I.e., food and fibre science and technology). Very often when a landholder/farmer wants to introduce a new crop, they themselves have to also establish the manufacturing and processing plant. This being a good example in an episode of country calendar;

https://www.stuff.co.nz/entertainment/tv-radio/tv-guide/117169220/southe...

The lack of capital for these new processing facilities and associated product/packaging R&D is an issue in both food and fibre, I suspect - hence why many landholder/farmers are reluctant to diversify into new (and often higher value) produce propositions.

"The lack of capital for these new processing facilities and associated product/packaging R&D is an issue in both food and fibre, I suspect - hence why many landholder/farmers are reluctant to diversify into new (and often higher value) produce propositions."

Nonsense
Theres capital everywhere with no home to go to
The issue is the "higher value" propositions dont scale up as the masses are getting poorer

Kate - you misunderstand the problem completely. Reminds me of the Labour Party. Our food production is an extraction and a draw-down. If we don't sort that, all other bets are off. You are advocating fancier deckchairs, for sale to those on the upper decks tomorrow. See the problem?

M86 - Actually, his comment tells you that he doesn't understand what underwrites an 'economy'.

Money (indeed all debt-issued tokenism) is a deferred expectation of purchase. Given that true wealth is the possession of stuff (including the energy required to do something to/with that stuff) he's actually advocating a dilution of per-head wealth.

https://en.wikipedia.org/wiki/Wealth,_Virtual_Wealth_and_Debt
https://www.peakprosperity.com/the-trouble-with-money-3/
https://ourfiniteworld.com/2019/12/17/scientific-models-and-myths-what-i...

Soddy is a bit of a wade-through, but it says that what I warn of was known 2 generations ago. And studiously ignored by economists. The Martenson piece I first put up here, when it came out (2012, maybe?) - long enough for this kind of article to be history. The last link is worth every post she puts up, here's an extract:
"A basic issue that often underlies collapse is falling average resources per person. These falling average resources per person can take several forms:

Population rises, but land available for farming doesn’t rise.
Mines and wells deplete, requiring more effort for extraction.
Soil erodes or becomes polluted with salt, reducing crop yields.

One of the other issues is that as resources per capita become stretched, it becomes harder and harder to set aside a margin for a “rainy day” or a drought. Thus, weather or climate variations may push an economy over the edge, as resources per person become more stretched."

I do get it PDK, but what you ignore is the obvious - how big our population is and the average living standard. And that's essentially the point of this article. The problem is we've been taking so many bets against the future we are now in a hole. No one is talking about the one thing at the root of all this - how big a population can we reasonably sustain? David's article and many at the top will argue that there is still time for growth (More on this below), but i believe we are past the max already.

If we are to accept any argument for growth, or any alternative, then we must also consider living standards. If we don't then we must admit that for some in our society, the only expectation is some form of slavery, no matter how it is dressed up (remember Sealord, a Maori owned company argued that they should have the right, because they were Maori, to employ foreign crews at less than the minimum wage a few years ago).

With an increasing population, the demand on our resources can only increase, but how are we to provide for ourselves? Are we to continually import what we require, offsetting the impact on resources to somewhere else, but also how are we to pay for what we import? Even if we slam the door on immigration right now, the population will still grow, it's called procreation. It cannot be stopped without laws to limit the number of children.

So David is calling for ideas, and within the scope of this article we are discussing what is feasible, and what is possible. What also needs to be discussed are the impediments. How can we make what ever work?

See Redcows below.

This is the best of them all (his book is somewhat expensive, but worth every penny):
https://www.worldfuturecouncil.org/wp-content/uploads/2016/01/WFC_2010_R...

Some of the diemma you mention is in there :)

That's in part Is what immunisation and good health care has created, we're fighting everything that is trying to keep our numbers down, soon we'll be fighting each other for resources!!!

I've got to ask, where were these sort of articles questioning the more people is better logic in msm over the last 10-20 years. Why wait for a crisis to look for answers to productivity questions. So many commenters on here having been banging exactly this drum for as long as I've been visiting and while I may consider the general intelligence here pretty good this is definitely not rocket science. I guess MSM hate different more than most. Rant over.
To me the choices are obvious.
Quality food production is our first stop along with quality fibre all done SUSTAINABLY, quantity is not the key and never will be for a tiny country at the far end of the earth. If the world continues to want unsustainable synthetics over wool then we are all f@#$.
Sustainability being the key to everything we then need to based the non Agri portion of the country around developing technology and systems to make living so. And exporting those systems and tech.
Actual real sustainability is the key. No I'm not sure what that looks like but anything else looks like a crisis.

Well said. Very, very, very well said.

:)

Here we have another journalist that doesn't understand how the governments finances operate. Only three days ago we had Stephanie Kelton on this very site, did he not listen to her?

No point. She obviously wasn't taught about the physics of it either. No 'monetary theory'can solve the physical depletion, physical degradation problem. None, OK? Repeat none. You cannot conjure fossil energy, or a corn-cob, with money. It is not endlessly fungible, neither sideways nor per time. Biggest mistake economists make. All expectation to spend needs something to be there to spend on. It's growth is doomed, regardless of the acronym.

But in thinking that you need to tax people and run budget surpluses to pay back government debt can do great harm to the economy and to peoples welfare. Austerity in not a solution to anything, it leads to more poverty, more unemployment, more homelessness and more household debt. We need to stop the endless worry about government debt and learn what it actually represents and that it is not what mainstream economists are telling us.

In order to pay taxes you have to do work to earn money. Work consumes energy. If you aren't working, you aren't paying taxes, and therefore not paying down the national debt. In order for the government to achieve a surplus the plebs have to do "WORK" which consumes resources

And where does money come from? Banks can create it or the government can create it. Only bank created money needs to be repaid by us, government created money does not except through taxation which then deletes it, it cannot repay anything. Government debt is a record of the money that the government has created through its spending but hasn't taxed back and cancelled, it is our net money supply and our net savings. An explanation here as to why the government should run deficits and not surpluses.
https://gimms.org.uk/fact-sheets/sectoral-balances/

I agree with the author. My view is that we need to elevate a new industry or forge a new one that befit to our geographical location and sustainable in the long-term.

To me, this would either be the technology sector or the financial services sector. Both are able to overcome geographical barriers, and have found evidenced success in other smaller economies such as Singapore, Hong Kong and Lithuania. Unlike Hong Kong, we are probably even more integrated to the Western world, does not have Chinese soldiers stationed here, and (comparatively speaking) have much Chinese political influence.

The downside of a technology revolution would be the difficulty of attracting brilliant individuals, when, in the US, people are simply paid many many times the salary they would receive here, especially taken into account of currency differences. We would have a much harder time to start a project like this.

The downside of turning into a financial hub like Singapore would be the potential risks to our pristine reputation, turning our country into the next Switzerland--attracting actual or perceived "dirty" money from South America and Asia.

Eventually, whichever way we go, there has to be change, and there has to be sacrifices. Absolutely no option will be perfect and without costs and opportunity cost. But we need to decide, collectively, what our next 50, 100 years would look like, and we should be known for. Is it going to be a farming hub? The south pacific Silicon Island? Or the next financial hub bridges the South America to the rest of the world?

Which option is the best would also involve which option could have their risks mitigated sufficiently and robustly, can we minimize the environmental impact of mass farming while continue to increase yield? Can we have a robust financial and immigration program to attract the best technology innovators? Can we mitigate money laundering risks to bank for the world?

One thing for sure, as the author has already pointed out, mass immigration is not the answer.

Bring in housing investor DTI requirement, a flat land tax offset thru reduced income tax, and an empty house tax. Incent constructive work, not destructive asset speculation. Simple and effective.

Bankers bonuses and speuvestors are diametrically opposed to what is neccessary, aka the massive asset reset and revised bank lending controls those changes would bring. They need high asset prices driving endless debt. Their profits and bragging on tax free gains is a massive cause in inequity today. NZ must be disincented to stop endlessly injecting itself like mindless junkies with the rush of cheap money, especially the interest debt stacking. Reduced debt and rent will transition to free cashflow to develop other "constructive" activities and the development of new and existing sectors.

Four things.

1. A population goal is the absolute key to every other policy created by all levels of government. There is endless consultation on what our cities and environment should be like, but all of it is useless if we don't have a population goal in mind.

2. Reform of local government to a single level. There is so much duplication of responsibilities it isn't funny. Streamlining DHBs announced yesterday is a good idea, but it depends on if it is actually implemented.

3. We have got to make companies pay royalties for exporting our freshwater. It's a no brainer and an easy money spinner, as long as there is enough left aside for local use. Other countries gain from exporting depletable natural resources, why can't we do the same with renewable water?

4. Financial disincentives for companies who produce products that require single use plastics. The idea that these are recyclable overseas is a joke. It's part of a larger conversation of no longer externalising the environment cost of business.

I'd go further. No draw-down. So no PKE, no fossil energy in food (many calories of oil to one of food, currently), no baleage wrap, no phosphate.....

It would be a very different world.

We can see the discussion problem just upthread, though. A long spiel which still believes in technology. It's a long, long time ago I first pointed out that technology can only facilitate energy efficiencies. We are a long way from mass understanding of that, despite their high-tech vehicles still needing fuel.....

3. Sadly when it comes to a time when the water is short, guess who gets first dibs on it.

There are heaps of people with truly good ideas, but they do not rely on growth as we've known it for so long, so I guess they will continue to be ignored.

Basically we need to act quickly while there is some semblance of a working financial system and supply chain... so go hard on the deficit tab while planning for collapse
1.Councils to stop spraying, pruning , tending parks. Use these spaces to Plant and tend veges for the vulnerable instead. WhenSHTF this will be a godsend
2. Plant fruit trees everywhere rather than manicured pavements, roadsides...
3. Invest in water storage, community gardens,
4. Phase out water toilets, legislate for widespread use of composting toilets
5. Axe recycling... waste of time and resources
6. Legislate for a nz person to own 2 houses max... no company ownership ... ie build community
7. Stop wasting resources on more soon to be stranded assets... if it relies on growth and discretionary spend it's a white elephant
8. Simplify, reduce complexity, build resilience into all systems where possible

Etc etc etc

I would suggest that NZ shuts itself off, tourist-wise, from the outside world for a few years and then only gradually releases publicity about our extraordinary scenery and landscape thereby creating an attractive and irresistible mystique about it. We could then appeal to only the very wealthy to visit this mysterious country. Film producers and top advertising companies would have to pay us to utilize our scenery instead of us having to pay them as happens now. I mean we would have to make our country a lot more difficult to access; I would ban all German and French backpackers who now only pollute our country-side, crowd out more credit-worthy tourists at our best tourist attractions and contribute little financially....they could visit us later in their lives when they have larger bank balances. Hand in hand with this process we could employ many in making the country greener and cleaner to the extent that NZ would be considered a beacon of civilized housekeeping in a generally dirty and overcrowded world.

Science R&D hub without onerous regulation and tax incentives.
Freeing up zones for seafood farming; including seaweed.
Pushing natural fibre products; their properties and environmental benefits.

RE TAX INCENTIVES ............ Kiwis have to realize we live in a highly competitive world all competing for FDI , and everyone offers tax incentives .

No incentives = no investment

Hell even we know this , our entire successful Movie industry was built on TAX incentives offered by John Key , amid shrill and shouts of horror from the Looney Left

Sideways thought from, of all places, the 'School of Life' edited by Alain de Botton. The 'Work' chapter.
Essentially, being as how our current structures value efficiency and speed over the higher bits of the Maslow hierarchy, a pivot to a new emphasis on those aspects of our lives might be worth a crack....

Plus, to stir the pot, gene editing (for pests and crops) and a nuclear shipping line (to ensure transport of our delectables to buyers offshore)....there's a million times as much energy in nuclear fuel weight for weight as there is in FF.....something that tends to get ignored in the 'money=energy' malarky...

Thanks waymad. Looks very timely given my post below.

A question that often raises its head and bothers me....
A main driver of manufacturing and technology is deminishing required labour units for given output. The goal here is to produce more at lower cost. How does this marry with solving unemployment - the former does not serve the later. People counter with “people will find jobs in technology and will need to up skill”. But this ignores the ever decreasing labour unit per output goal provided by high technology manufacturing.

This puts me in a spin. On the one-hand, lower cost goods should lead to more for all... but I think we find it depends on many factors including the nature of the good itself (Apple fruit vs Apple phone). If we take the path of technology efficiency to extreme, do we have a “Matrix (movie) world” where the masses have no particular use apart from consuming? What does this do for the human soul?

Next option is to temper technology innovation with social costs of unemployment. The shareholder financial return model would be supplemented with social (environmental as well) cost of business model. Problem here is (1) would this stymie new invention too much (2) human nature and desire for power (money/resources) would make this model extremely hard to be universally accepted.

Anyway, if someone has similar thoughts and can offer solution/alternative please fire away.

"The shareholder financial return model would be supplemented with..."

Interest rates are near zero. This tells you shareholder return is in effect collapsing ... without growth there is no "return"
Returns now are only due to faked growth
The shareholder return model is dead

ON the labour issue .. the main driver underneath the economy is to lower costs (so we get consumption growth by increasing affordability) ... and to counter diminishing returns (which are unavoidable in all industries). The offshoring of labour and replacing humans with tech is a big part of this, but in time it removes evermore viable consumers from the chain... the pie is really only so big afterall

We tend to confuse two things when thinking about "the government":
1 Most of the time we mean the administration of government, which is essential but messy
2 We tend to overlook the legal framework which it is parliament's duty to continually update and improve

It is easy to see problems in the administration of the day, whichever party one tends to sympathise with. However, David is talking about the willful blindness which both parties have displayed over the last twenty years:
1 Blindness to the downsides of mass immigration without broad consent from the people
2 Blindness to the downsides of high house prices
3 Blindness to the disappearance of productivity growth.

These are serious issues. There seems to me to be several possible areas worthy of investigation:

1 Has MMP caused a failure of representative democracy? Each of the above issues has a disconnect between the worldview of our representatives and the people. Is this partly due to list MPs not having to answer to a local electorate? Are they insulated from ordinary people trooping in through the door every day desperate for help dealing with government created problems? Does this allow them to protect their disfunctional worldview from the people who are denied the opportunity to express their concerns directly?

2 An over-reliance on fashionable ideas of the day as promoted by the special interests of supra governmental institutions? Are these institutions anti-democratic at heart? Has cultural cringe flourished in political and bureaucratic circles? We certainly have had a long parade of sycophantic PMs desperate for glamour on the world stage, to much media applause and adulation.

3 Practical matters. This is our greatest strength. We expect things to work, barring natural disaster. This is totally unlike most of the rest of the world, apart from a few Asian and Scandinavian nations. We have cellphone coverage and fibre across nearly all the country. Europe and North and South America and Africa do not.

4 Much of the thought energy seems to go into the wrong things. For example, there is no need for complex new schemes for new taxes. The current system works reasonably well. Obviously there is room for continual refinement and simplification, but taxation is unlikely to be the answer to the complex issues we face.

5 Reward the productive. Seek to encourage productive endeavours. The current system seeks to regulate, contain and control them.

YES , YES , YES !!

I wrote about this , on this forum during the lockdown

We need to diversify our economy , more arrows in our quiver as it were ..........AND future proof our economy .

How about we do what we did with movies ? Except we do it with Hi-tech ?

Offer incentives to the likes of Google , Microsoft , Oracle , Zoom to set up shop here , except unlike the movie incentives . you have a proviso that you actually establish a long -term base here in a SPECIAL EXPORT PROCESSING ZONE FOR TECH RESEARCH AND DEVELOPMENT

It would be a world first

We establish an IT EPZ North of Auckland ..............a new Silicone Valley .

We have tens of thousands of acres of Future Urban land from Albany to Silverdale for a new Silicone Valley

Ireland did it , and they made some mistakes, but it took Ireland from being a potato -farming wind swept backwater to an IT giant , and CELTIC TIGER

We could learn from Ireland , avoid their mistakes , and develop our own EPZ ............its a unique concept and not hare-brained at all ........it could actually work

We do need to make NZ workers more efficient - and we are doing that through lean and automation.
And if we can bring down prices, then people who couldn't afford our products will then be able to do so - so growing the size of the market.

This does mean that our labour force will have to be more skilled and that those that refuse to adapt will be left behind. Automation allows us to create better product in the factory, so that on-site assembly skills are considerably less than previously.

Unfortunately, although we are looking for more staff, the vast majority of applicant are, for a variety of reason, almost unemployable. The entitled generation has forced us to invest more in machinery than people, but it also means that because of the evolution in our factories, those that refuse to work, can now afford the more affordable products.

Just a pity it's my taxes paying for them to buy my products.

The govt should invest in increasing the efficiency of SME's through tax breaks for automation. Employing low skilled people to do the job of a machine is a backwards step for everyone.