sign uplog in
Want to go ad-free? Find out how, here.

Neville Bennett is disdainful of the the way the John Key administration is governing. Is he right?

Neville Bennett is disdainful of the the way the John Key administration is governing. Is he right?

By Neville Bennett*

Historians may well later decide that the Key administration was significant as the time when New Zealand moved from the state being progressive to one which adopted a night-watchman’s stance.

We are moving to a night-watchman state and I am not sure everyone knows this or is aware of its implications.

I fear it is no good going to Wikipedia for help because entries under 'night watchman state' are written in the context of American political thought.

The idea of a night-watchman state is that it is concerned only with the defence of property.

True that state has defence and police obligations but it is not concerned with much else. It is not concerned with promoting innovation or equal opportunity. It holds the cow so the rich can milk it.

I ran into the term when I was at the LSE Graduate School and was one of the few Pakeha-types around to be harangued by Indian students who resented the way the British had held India captive and had milked it. They pointed out that the Brits had de-industrialised India, forced British products in, and had done nothing to change Indian society, and had spend virtually nothing on education. They had 'drained' India in a variety of ways.

I think they had a point but let’s move on to apply the concept to New Zealand’s circumstances.

If I were asked about the main characteristics of this government, my immediate response would be that it postpones difficult issues. I suppose I have in mind principally the age of eligibility for superannuation.

Phil Goff took a brave but principled stance on this issue in the 2011 election. National could not have believed their luck and rubbished his proposal. Goff lost and is gone, but did we miss an opportunity to discuss our demographic problem and the chance to get an all-party accord? I think not: Phil’s timing was awry, he should have raised the problem well before the election.

It is night-watchman-like behaviour to continue to say that our superannuation scheme is sustainable.

We know that it will be a huge strain on the state, and that some discussion on optimum retirement ages is necessary. As time goes by we are going to have the lowest retirement age in the world which may be absurd as we are massively in debt.

It is night-watchman-like to press for income tax cuts.

The point of this type of government is to hold the cow so that high income earners can milk it. This government has lowered income tax rates in favour of the rich and has imposed a n increase in the regressive GST tax to pay for it. The change is neutral breathes the Prime Minister, but everyone will acknowledge that this involved a massive income transfer from the poor to the rich.

There was no objective justification for the tax cuts on income at the time when the nation was borrowing something like $250 million a week. But hey! National wants the rich to milk the cow even when everyone else is struggling. Much of the “milk” came from increased government debt as gross government debt doubled from 20% to 40% of GDP in the 2008-2011 period.

I think that the GFC was the time to rethink revenue gathering.

As receipts from income, dividends, corporate tax and the like fell in the recession, it was time to think of new sources. This could have been done with some concern for equity as we knew that inequality was increasing.

I made seminal contributions to new notions on these pages, being the first person, I think, to discuss a land tax (which I think is more important than ever as many Canterbury farmers are going to become fabulously rich as the state is hell bent on irrigating their land at no real cost).

I also raised the merits of a 'robin hood'/financial transaction tax. This was ridiculed but is now warmly espoused by the IMF.

I was an advocate of the Capital Gains Tax in the 1990’s and went head-to-head with Don Brash on its merits. I believe that had it been introduced much of the frenzied foreign borrowing and house price rise would have been muted.

Readers may have views on how this government has held the cow for foreign interest to get their share of the milk. I have the view that we have never tried to stop the issue of Euro bonds/samurai bonds etc which gave our banks cheap liquidity and caused the NZ dollar to soar. I think a lower dollar would be in the interest of working New Zealanders/manufacturers etc but a high dollar is in the interests of wealthy New Zealanders who can transfer money overseas, buy expensive cars and holidays etc. We encourage investment here by imputations etc but all dividends in Australia pay quite a bit of tax.

Foreign ownership of land is an important issue which I will merely touch on as I may write in detail at another time. But I feel our government is much more hospitable to foreign ownership than some other countries. I feel one principle is reciprocity: you can buy land here if we can buy your land. The Government has not maintained this against the Chinese and Japanese.

The sale of government energy assets is an excellent example of the behaviour of this kind of state: it wrests resources out of the public domain and transfers them to the private domain. True, the private sector will pay but the price may be low. The private sector will pay precisely because they are getting a bargain. If the private sector is getting a bargain, it follows that the public sector has sold too cheaply. The people lose, the rich get richer.

That is not the end of it. How will the state spend the money realised from its sale of public assets. Will it spend the money to enhance public welfare? Some, perhaps.

But it will also spend some apparently on irrigation in Canterbury. It will transfer a public resource (water) to private hands and make farmers fabulously rich. Canterbury people will have no rivers reaching the sea. Their opportunity to swim in rivers is almost negligible because many have dried up and all are polluted.

So what is wrong about a night-watchman state other than it favours the rich and foreigners? I think it could do much more to encourage sustainable development, encourage manufacturing and reduce inequality in society. It might give young people dignity and a stake in society.

If our young had a stake and opportunity they might even stay here.


* Neville Bennett was a long-time Senior Lecturer in History at the University of Canterbury, where he taught since 1971. His focus is economic history and markets. He is also a columnist for the NBR.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Neville, I wish you were right and that the government was concerning itself only with protecting private property rights.  Unfortunately it doesn't give a damn about private property rights, except of course for politically-connected companies such as Sky City.
The rampant inequality you refer to is actually a symptom of this problem rather than a reason to ramp up the thievery.  The biggest problem for the poor in New Zealand is unaffordable housing, and the government has done NOTHING to address the destruction of private property rights that is the root cause of this.
The best way to "promote" manufacturing, innovation etc is to cut government spending, which will allow for real tax cuts (borrowing to fund tax cuts is economic chicanery at its worst). 
Any other method inevitably involves a transfer of wealth from profitable industries and companies to unprofitable industries and companies that clearly need handouts to survive.

What rubbish.  Government spending is too low, cutting it further is just going to result in poorer infrastructre, poorer health and education services, increased poverty, etc.  All of which works against a healthy private economy.  It is the transfer of wealth to the top and the continued looting of the country for the benefit of the few that are the defining principles of this government.

Neville, I thought this article was excellent, interested in your thoughts on it.
 I dont think our farmers are going to get wealthy, I think they are in for a reality check as cheap finance finds its way to the cheap land of Eastern Europe and spends big on Dairy.
 One corporate has purchased 180,000 hectares in sth Russia with cheap money out of the States, another is developing huge 20,000 cow dairy farms in Estonia.

The article is wrong on just about every point it's trying to make. There's no new content or ideas in it, - typical leftist drivel only.
Instead of more and more robbing of productive people by legalized stealth (aka tax), we need more tax cuts and even more cuts in unnecessary public spending. Go and do something useful and productive instead of "advocating" for new ways of robbing those who works hard!

Rubbish Alex13.
Neville makes a valid argument.  I'm no left winger and I'm certain history will prove Key's policies to be wrong.

Right. More and more taxes and more and more bloated wasteful Govt spending is the way to go.
What's your vested interest? Paid by the state in one way or another?

...... yup , and as for the Tobin Tax ....... the very fact that the IMF is in favour of it is enough reason to run away !
When has the IMF gotten anything right ?
...... they're currently exhorting the USA to be prepared to stump up extra hundreds of $ billions in case the Eurozone needs it !
The clog heads who run the Eurozone have only themselves to blame for the monumental failure of their socialist utopian dream ......

No I'm not paid by the state, Alex13.
Cutting top income taxes made absolutely no sense when in the midst of ballooning deficits.
The cut from 39 to 33% for someone on $500,000 cost the Government over $25,000 per person.  There is not likely to be more than $1 or 2,000 additional tax recovered from an increase in GST from that person as most of their salary beyond the $70,000 at the lower tax rates would actually go towards savings or property or even overseas travel - none of which is liable for GST.  For someone on $2m a year the Govt gave them an extra $100,000 per annum.
The logical and fair tax change (while the economy was so weak) would have been to increase the top tax rate threshold (to say $100,000) and reduce the rate to no lower than say 37%.
We also have a move to austerity which is sending the economy towards depression rather than recovery.
In fact, instead of pushing to boost construction while the economy was weak we had construction fall off a cliff, which has led to housing shortages and a now looming price boom in markets like Central Auckland, this is not good for NZ's economy and is not a path to prosperity.
We needed sensible policy to get things moving, not allowing Labour's crazy policies of allowing councils to tax development to such an extent that no development occurs to continue.
Key's leadership is weak, his knowledge of how to transform the economy is poor.

Excellent, balanced "centrist" viewpoint.
Unforutnately we have MSM morons like John Roughan in the Herald today in love with Key, and unable, or unprepared, to ask the hard questions:

Alex 13
Either you are very foolish or you are merely salting this site with politically motivated nonsense.
However In some ways you comments are correct and should not be dismissed out of hand. This one is spot on.
Instead of more and more robbing of productive people by legalized stealth (aka tax),
The increase in GST to 15 % is straight theft. It reduces transactions as people opt out, leads to further offshoring of retailing etc.Penalises lower income earners, young people, young families etc.
Making PAYE and income tax in general carry most of the tax burden along with GST is robbing those that work hard and who do stuff- like have kids . This tax is being stolen from people who are doing stuff and means that those who are' rent seeking', owners of vast amounts of land etc get a free ride. No land tax for them, no capital gains tax for them etc. Just a free ride on the backs of the rest of us.
So yes you are right occasionally. But Neville is  right most of the time.

Never mind Plan B, one day you'll learn too to recognize what drives somebody's motivation, including that of the article's author. Also, one day you'll realise that any tax is legalized robbery.

Glad you've touched on "legalised robbery". Perhaps on the matter of land tax (on unimproved value) you might like to take off the blinkers and adopt a historical perspective (which underlies Neville B's contributions to this site). Consider for a few moments how, in the course of human history, land came to be in private ownership in the first instance. I will give you a clue, it didn't happen as a result of referenda. Neville B is one of the few who sees the JUSTICE in a land tax. It is merely rent paid to the community in exchange for the right of sole use and occupation of the said land. Unlike you, Neville has the maturity to understand that ownership of land is a different thing than ownership of a cow, car or wristwatch.
In case you don't know, it is an axiom of our legal system that in acquiring property, you cannot gain better title to that property than the person had from whom you acquired that property. Apply that to land transactions and work your way into the past, but I warn you, you might not like what you find. The great instances of "legalised robbery" are not taxes but the private appropriation of community resources with no moral justification whatsoever. This is perhaps what J-P Sartre meant when he wrote "All property is theft".
Try not to label me a socialist, I'm not. I just like to pretend I have some semblance of a conscience.
DISCLAIMER>  I "own" residential and commercial land.

Less rhetoric Alex13.
I disregard parrots like yourself with no ideas who spout wornout slogans which aren't worth lining the wastepaper bin with.
You don't have ideals about how to transform the economy - you have ideals about how to make yourself better off.
Just despicable.

You may have your "ideals", but idealists like you have little idea about what's happening in the real world. My point was / is: a lot of tax collected in this country is wasted in many-many ways (too many to write here about). Therefore, the less tax we pay the less money will be wasted.
As to transforming the economy - I do not pretend to be an expert economist; not that I do not have my ideas, but I do not concern myself too much with the subject. I will, however, say this much: I wouldn't want to live in a country with ever increasing taxes, ever increasing wasting of public money and ever increasing reliance on state handouts. I'd prefer that public spending is cut right down to what's absolutely necessary only, taxes cut accordingly and people are thus encouraged to take responsibility for their financial situation.
And yes, I do care about making myself better off. Everyone should. Do you find it despicable? – Why am I not surprised?

Don't want to waste that precious money do we Alex. After all nobody knows where it comes from, or when we might fritter it all away and suddenly find a shortage.
Some people say that its just made up by banks. That seems unlikely, I mean who would trust those bankers they are not really the sharing types. They would probably just pay it all to themselves in bonuses or something.
Some people say that only gold is money, but I'm not convinced. I'm pretty sure a paper note is money, it seems not.
Some people say that its delivered in government helicopters, well I am yet to see them.
What ever the case its obvious its a scarce resource so it should not be wasted because we might hit peak money at some point. Its all down hill from there.

Alex13, clearly you're not a long time reader of comments here on, because if you were you would know that I am a property developing, waste hating, anti-bureaucratic right winger.
If you seriously believe that National and Key are doing anything meaningful to reduce waste you clearly have no grasp of what is transpiring under their administration.
In my view Key is doing a worse job than Clarke at transforming the economy.
Key spends far too much time swanning around on golf courses and hobnobbing to actually do anything productive - much like his time at Merrill Lynch - a firm which of couse was saved primarily due to the generousity of the US taxpayers and a "forced" buyout by BofA.

You are right: I have no time (or desire) to "live" on this site as some do; I read every now and then only.
I agree that Key has not done enough: he should cut both "public spending" and the tax rates much more than he's done.
As to his previous career, apparently he did quite well and made a lot of money. You do not like that? - Some people do not like property developers either! Who cares!

I have nothing against investment bankers (being a former investment analyst myself), however my point is that Key didn't exactly leave Merrill Lynch in the best of shape - much like how he will leave NZ inc.

Throughout this article is the assumption that if Government takes a more active role in running people's lives and making decisions on their behalf, things will be better.
Mr Bennett is an historian, so it is quite surprising that he seems completely unaware of how few examples there are in practice of a Government intervention actually making anything better, and how many utterly tragic examples there are of lives being made infinitely worse as a result of a Government thinking it knows what's best for people.

How about the development of New Zealand from at least the 1860s on as a nearby example of how public spending has lead to improved standards of living for everyone.  It was all going along pretty fine unitl Douglas and his neo-classical mates threw the bay out with the bathwater.

What is the conclusive evidence that links the progress of New Zealand with public spending ? ...
..... how do you know that without so much government spending the economy would actually be much larger and stronger than it is today , and that Kiwi individuals would have more of a sense of personal responsibility for their lives , and less of an " entitlement " mentality ?

Then threre was Vogel and the Liberals, all using government spending, especially infrastructure, to improve the country.  As happened again under the 1st Labour government.  Without such as these examples of government spending where would we be?  Not in a neoclassical paradise I suggest.

So aptly put, Ms de Meanour.
Neville, like Bernard, seems to believe in the fantasy that the State can solve everything, and that the loss of freedom this entails is a worthy payoff. Neville the historian should know far better what happens in those societies where property rights are treated as negotiable with the State. And this whole notion of 'inequality' they bring up as the 'end' which apparently justifies all tyrannous means, is bullshit from the get-go. Worse, actually, it's a moral blackmail. God this site gets worse and worse.
NotPC had a lovely quote up the other day, about the Ineptocracy that Neville and Bernard would push further and further on us until, like Greece, we suffocate:
Ineptocracy [in-ep-toc'-ra-cy] - a system of government where the least capable of leading are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers. Greece springs to mind.
And for AndrewR, and all the other Statists on this thread, the only economic and political system that has ever provably lifted living standards of all of us, are capitalism and classical liberalism. All other forms just take us back to slavery and poverty. And any system outside the freedom given to every individual through capitalism and classical liberalism, is always elitist. I want no part of that, nor does any free man. I own my life, no one else does, certainly not some elite who would set themselves up as all-knowing. I will not live under the dictatorship of a single man, a hereditary family, or a dictatorship of a majority.
Mind you, the truly sad thing about this piece is, as Kleefer says on the very first comment, if only this government were a 'night-watchman': but that notion is ludicrous.

I do agree with Neville that the GFC was a golden opportunity to overhaul the role of the state , and it's methods of " revenue collection " ( taxation ) ...... Key & English held the status quo and stuck rigidly to their overly generous pre-election promises fact they've added to Clark & Cullens middleclass welfare state , lifting WFF considerably  ..
........ but if anyone wants a prime example of the failure of bureaucrats to dictate economies and to create jobs , just look at the Eurozone .....
And sadly for America , that is Barack Obama's vision , of a larger governmental role in private citizen's lives .....  .... there are no more derisory words in the English language than   " we are from the government , we're here to help you ."

I own my life, no one else does,  
Sad.  John Dunne was, however, right -- no man is an island.
By the way i like the way you don't let actual boring history get in thge way of ideology. 

 Donne was wrong : Stewart is an island !

You are the typical unthinking, thuggish Statist, AndrewR. Yes I live in the village, I am part of the village, but that does not mean the village owns me. It's the difference between the civilised society of individuals transacting and cooperating, and the brute society you force us all to live in.

And for the record, it was John Donne.

While I have some sympathy for Kleefer's view that cutting government spending is the answer; I suspect it is harder to manage significant cuts than meets they eye. Those cuts will also dampen the economy further in what is still close to a recession, and especially if they are from poorer people who spend all their money, and most of it in NZ. So we should always benchmark government spending by department as a share of GDP against our own history; and other similar countries, to ensure government is no fatter than it reasonably should be, but  I suspect the cuts that are achievable won't do much.
What most of our peers (including the US, the UK, Europe, China, Singapore, Japan) are doing is managing their exchange rate down; often by printing money and/or capital controls, to ensure the competitiveness of their industry. Many in Asia (such as Singapore and China) also champion state based capitalism, where the State owns the country's main competitive assets, gets the return from them, albeit managing them at arms length to ensure they are efficient. We are playing into their hands by selling off our prime assets. (The $6 billion that Bill English "guessed" they are worth would be a giveaway of almost criminal proportions for the assets he has mooted selling).
I think Nevill Bennett's description of National as a Nightwatchman government is very accurate. Like some nightwatchmen, you suspect they are dozing off a fair bit as well. Am not sure I am as aligned with Neville on the solutions.  I would change the Reserve Bank's charter to have its prime goal to be a current account in at least surplus. Secondary goals would be full employment, GDP growth, and inflation.
It would be allowed to use capital controls as well as interest rates; and controlled money printing- which I would partly use to recapitalise SOE's among other things. E.g. Mighty River Power alone has over $1 billion in debt. In hedging losses and interest this is costing it between $100 million and $200 million per annum in charges. Print $NZ; pay off that debt- which would have a positive side effect of reducing the NZ$; and save the interest and financing costs. Repeat with others until cured.

"So we should always benchmark government spending by department as a share of GDP against our own history; and other similar countries, to ensure government is no fatter than it reasonably should be,"   
That was the best bit of your post.  We need a restraint on government spending, the parasite has become too big for the host.  Private enterprise and individuls are constrained by the market, local and centeral government need to be reined in to like a constitutional limit. 

double tap!

Newt Gringrich needs a new job ....... he'd be great as P.M. , after all , Americans are the world leaders in finance and in credit creation .....
....... and that's just what New Zealand needs right now , some creative financial solutions ...
.... got a way with the ladies , too , old Newt .... helluva guy ......


I have often wondered whether the taxpayer was going to be bankrolling irrigation schemes in Canterbury, and then have no land tax or property tax to recompense for the huge increase in valuations of those farms.  I didn't really believe that this could really be what is planned, but Neville has confirmed it.
That will have to be the most blatantly corrupt rort that will every have been foisted on the country.  And all right out in the open too!

And aren't the Greens behind the idea too?

Greens for Irrigation? generally I would say no, so unless you have evidence?  Otehrwise it seems to be National are leading this.....on their own.

Why did you need to wonder. They stated as fact that's what they were going to do long before the election with the asset sales windfall. If its so bloody good an idea the farmers can build it.
I have a different interpretation of the night watchmen, my one simply stands at the door with his left hand held low taking the money and his right hand waving goodbye to the balaclava wearers as they leave.

The critics of suggestions made by NB seem to be well to the political right (whatever that is these days). They themselves should note that the most powerful US model (as right wing as they come) has used QE and that is just the same in my book as our Government creating that $300m per week within NZ that they instead borrowed from China and others.
The solution is at hand however. That is the paying back of those loans in NZ$ even before they are due and accepting the lowering of the exchange rate and the lenders would get back whatever they can based on that rate.

And I am an advocate for a non tax deductible financial transaction tax on all Bank (widely defined) deposits with a lowering of GST to 10%

Re: South Island agriculture and water schemes, I say again, this government corruption was the real motive behind its carefully planned nationalisation of South Canterbury Finance and is further connected with the "new" SI bank license. We have a long history of stupid and incompetent governments in NZ but this one takes it all to a new level. Look at broadcasting too!

And they turfed out an elected Council in order to install an administration that would get the job done for them. I don't live in the area but I do wonder what locals think of Environment Canterbury under Dame Margaret's control.

Property & land speculators will hate this recent Auzzie film promoting land tax central to a simpler and fairer tax system:
Neville and Bernard will love it. Hugh will like it too because the end result would allow real property developers to deliver the accommodation outcomes NZ requires.
Have a good break, Les.

The problem in NZ and many other countries is the land has been leveraged. WE need to change the way we collect taxes to better reflect peoples ability to pay but increasing taxes on farm land will cause big problems for the banking industry. What we really need to face, is the government over spending and doing it badly. If we could cut costs to farmers while we bring in land taxes then that would be welcomed by many, however land taxes and no drop in government waste or taxation could create a destructive property collapse.  I have numerous farming friends who borrowed to the max in the 00's and now look a bit green, they need inflation, they need interest rates to stay low and asset values to stay high.  Low interest rates are killing savers who are being forced to take greater risks to maintain income, so savers are in effect being taxed to support borrowers and high asset values.
 Personaly I think our export dependence on agriculture will ultimately be our undoing. I dont understand how we are supposed to support the extra 400k people planned for Auckland, perhaps thats behind the desire for a rapid expansion in dairy products, we need to grow up and get away from our fixtion with growth.
Fix on failure...

Try to repair it before it collapses causes it to expand more and more...

When maximum potential expansion is reached...a funny thing the beginning it's hard to share equally and easy to take more than you give.

At maximum potential it becomes hard to take more than you give and easy to share equally.

Of couse all will fight to keep what they got the best they know how.

Sell to extract yield. 

I think we'll see pigs flying before we see a land tax, or effective CGT, that get used to reduce, remove other taxes and rebalance the tax system, thus the economy, Andrew. Any of that would have be done gradually and purposefully and our legislature is incapable of this, given our electoral context, even if one side or other did show some inclination. Anyway on similar vien these Hudson articles are worth a squint too:


"MH: .......  By not taxing land the government has left all of this rental value free to be pledged to the banks. People think that land tax actually increases the overall burden of homeowners and workers but its just the opposite. If this rental value that’s been pledged to the banks as mortgage interest were taxed then the banks wouldn’t be able to capitalize the rent into a large mortgage loan. Housing prices would be much lower if we had the old fashion land tax like we used to have and also by taxing the land you wouldn’t have to have all of these heavy taxes that are put on labor. For instance in Latvia in 2 weeks they’re having a national election. In Latvia there’s a set of flat taxes on employment that add up to 59% of the wage budget and there’s only a 1% tax on the value of property. So here you have money going into real estate which is untaxed – people will borrow against it – and instead of the government getting this rental value which is created by nature and by the community building roads and infrastructure the banks get it and the government has turn to somewhere else to tax – namely on to employment."



"The Federal Reserve is antithetical to the classical liberal aim of using financial and tax policy to minimize the economy’s cost of production. From the Physiocrats and Adam Smith through Ricardo, John Stuart Mill and the Reform Era, the aim was to minimize land rent (by either taxing it away or nationalizing the land), monopoly rent (by price regulation or by keeping natural monopolies in the public domain) and interest or other financial charges that were payments for special privilege."



..... and what do we do?



BTW, great article Neville, keep up the great work.


Really good comments. Spot on.
A slight aside:
Strange how well Singapore has done since the 1050s. Back then New Zealand Service personal used to love a postingto Singapore- they could live like kings. Now days we try not to stop over on our way to London as a Singapore stop over for a night or two can brak the bank.
They seem to have the state owning all of the land. And the state with a hand in most usinesses of any size and a massive focus on exporting, inward investment of useful businesses- EG Brand new Rolls Royce Engine plant. And promotion of state businesses.
They have a whole lot of stuff that we would not want but they do not have a 100% focus on land speculaton like we do. Thats for sure.

Consumerism is dead as we know it, that is 70% of our GST isnt going to generate the necessary tax revenue again ever.  At some stage, within a decade a Govn will bring in a land tax...there simply isnt an alternative base to tax, PAYE is hammered already and with some areas paying little or no tax they just have to be on borrowed time...

Another way – another culture PM !
….yeah - have a good break and ask you some questions: Who we are and what we want to be as a nation in this complex and complicated world - racing down to the bottom ? It seems to me under the leadership of John Key the government is joining the club.

JK and Co are right on the money. GST is a fantastic mechanism for collecting revenue. It sorts out the cashless society and frankly should be 20%! Corporate tax is always going to be problematic to collect because of smart accountants, big corporate greed.

Reducing government expenditure, cutting the handouts,reducing back office waste puts more cash in individuals pockets, making a leaner and more productive economy. Those that can't handle it or take responsibility for themselves will need to wake up. And frankly its about time - or alternatively f'%^# off to Australia which is where a great many have gone. I say good riddance and keep up the good work JK and Co,

Kane02 – please tell us a little bit more about a productive NZeconomy and where the 170’000 decent jobs are coming from ?
Correct - GST is a mechanism to collect revenue, it is just a matter how much longer the private sector can sustain the pressure of 15% or 20% GST in the current economic climate. Of course that means more closure of valuable businesses also and an increase of unemployment – and then what even more government taxes to pay for the unemployment ??
You are right JK and his buddies are right on the money, for an elite group, but without the understanding how economics and society works.

What  fantastic wins for the NZcurling team on the world champion chip in Europe.
Please, watch the video.

Considering how many Kiwis there are who're bald , it's amazing that we're doing so well at the world curling championships ......
....... large numbers of Kiwi men are bald , too .....

Right GBH - everything in that sport seems so "smooth ass".

No,  you are clueless.....
1) GST is based on consuming, ppl are not consuming so the tax revenue drops.
2) It is also regressive, ie the poorer paid, pay more.
The mantra of reducing govn spending has been going on for 20 if not 30 you really think that having had significant periods of national in power they havnt flogged that to death?  Ditto back office, what happens by sacking a back office worker on say $0k is the front line ppl on more money (and say for doctors a lot more) do the paperwork...making them less front line.....and less efficient.
In terms of responsibility for themsleves the short answer is we live in a society not as we look after each other, and in terms of health and education its cheaper for us to let the Govn do it.

Not quite correct steven. GST is also applicable to "capital goods" and "capital expenditure" and social benefits were increased, and taxfree threshholds raised, at the time of the introduction of GST to compensate. Before your time.

More nonsense ( apart from the corporate tax bit)
They have 20% VAT in the UK (not on food, books etc) and it is nearly finishing the place off. Most retailing is offshored in one way or another. The place is a mess. Not just the fault of 20% VAT but still. High taxes on transactions- which is what a 20% GST would be  causes all sorts of distortions and problems. It becomes far to high a proportion on total turnover for firms left to collect and pay it on (not Google or Amazon etc).  It takes too much money away from people doing stuff- you know all the stuff that actually makes an economy function.
So no JK is not on the right track. He is doing essentially what NB says he is doing although I suspect his motivations are far worse than NB wants to imagine.
Government spends all the money it takes back into the local economy (unless of course it falls into the con of paying interest to foreigners on its own money- what a joke). Borrowing from ourselves locally provides some useful function. Borrowing our own currency into existance from offshore banks has to be about one of the strangest ideas ever invented, and stranger still it goes on unnoticed by the people.
Yes Corporate taxes are going to be hard to collect- eg no GST for Google and Amazon, No PAYE no Corporate Income tax ( either non or very little anyway) In the UK the Government are making noises about going after Amazon- good luck to them.
Saying go to Oz is silly- they are going in great numbers- predominatly young people. What a mess- they do not need any cheering on.
New Zealand cheers young people on in the following ways:
If you make young people:
Pay for their own upbringing (education).
Take on massive debt as children (student loans).
Offshore jobs, and lower wages on a great many local ones.
Make house prices way to high through stupid banking and land policies
Have high GST- yes young people spend more money than old people- they need to to - buy a house, start a family - you know that sort of rediculous wastefullness
Make them pay superannuation for asset rich old people.
Yes they go - and they will not be back. After a while not even for holidays.


Europe and the Law of Sticky Wages (technical)

How is wage erosion going to play out across Europe’s Arc of Depression?

1 hour ago


Sticky wages indeed - but just how far will Spanish wages, for example, have to fall within EMU in order to be at productivity parity with German wages?
To get some idea of the scale of wage deflation I compared the German and Spanish national wage bill in manufactured export goods with the export value of those goods. In other words what was the average export price per euro of labour commanded by the Spanish manufacturing worker compared to their German counterpart.
The result?
Every euro spent on Spanish manufacturing export labour results in an export price of Euro 6.31. The equivalent for the German worker is Euro 7.44
Therefore the Spanish export manufacturing worker is facing a wage deflation of about 18% in order to achieve parity with their German counterpart - assuming that the German worker does not improve on the value of their exports in relation to their wages.
What does this difference mean in political terms?
The answer depends on the trade-off between the Spanish export manufacturing workers' desire to keep the purchasing power of the DM (Euro) in their pockets versus a reduction in hourly wage rate from Euro 14.95 to Euro 11.92


Self-interest, without morals, leads to capitalism’s self-destruction

Interesting points Neville.
I think you may have attacked a straw man though. Reducing income tax doesn't affect those citizens you denigrate as "the rich", by which you presumably mean the wealthy. It does benefit the high income earners. Perhaps they may use their income to invest in more worthwhile endeavours than an oversupply of vineyards in Queenstown and other tax mitigation schemes.
I do like your reciprocity idea re foreign land purchases, that is a neat solution.
I am concerned that monetary policy has been run for the benefit of mortgaged borrowers at the expense of savers and investors. Why did the RBNZ save the indebted and punish the savers? Why reward the profligate and punish the prudent?
As regards the overly high exchange rate this encourages wage deflation and asset bubbles based on low interest rates. The RBNZ seem quite happy to accept the continued gutting of what little remains of the manufacturing sector as they narrowly interpret their mandate and wilfully ignore the damage they cause. Abdication of responsibility there.
Why does the RBNZ not just send all citizens over the age of eighteen a cheque (actually a bank transfer would be better) for 1000 newly printed New Zealand dollars each month the NZD is over 75 cents? It is easy to solve the over valuation of the NZD if you actually want to.

The problem with arguing that reducing or low taxes for the rich is OK is there is no evidence that doing so benefits the economy as opposed to say lowering the tax for the middle income fact looking at teh G Bush tax cuts the opposite seems to be true.
The RBNZ saved the indebted (if they actually have) because if they didnt our economy would implode....the debtors spend money as consumers.....
I dont agree on it being the NZRBs fault that manufacturing is suffering, fixing that is the job of the Government....they have a legal mandate, at best its the Govn's job to widden it...and you voted didnt you.
So did savers whine when mortgage rates were 10+%? no they didnt, swings and roundabouts....
$1000 note, well that is again the Govn's job, its policy.....RBNZ follows ovn policy/law as set by the ppl you voted for.
How about not abdicating the responsibilty for that bad vote you made?

Hmm, you are probably right about it being the governments job to sort out.
I think I was trying to break the impasse that the RBNZ is able to bail out one sector at the expense of everyone else, and to point out that the moral hazard of bailing out the government or the over indebted could be side stepped by sending a payment direct to all citizens.

Increasing the eligibility age
NB says "The main characteristics of this government is it postpones difficult issues. eg "the age of eligibility for superannuation"
What is required is a system that automatically self-adjusts
Can it be assumed that the younger generation will always be less in number than it's preceding generation. Given the existence of genBB, genX, genY and genZ the working hypothesis is there are more genBB than genX, and there are more genY than genZ and that situation will continue on, ad-infinitum, and therefore the retirement age needs to be progressively reset higher. What if it doesn't. What if there are more genZ than genY. Given this weeks discussion about obesity, the potential for reduced life-expectancy, plus decreasing job prospects, there will be a completely different matrix in 25 years time. Does increasing the retirement age solve that riddle?
Younger generations are giving the older generation the two-fingered salute now.
Among the young, Jobless Numbers in USA are reducing while the numbers on Disability Pensions are increasing (at a greater rate). AU's unemployment numbers of 800,000 are disguised by 600,000 on disability pensions. Demographically, there is a shift in the western world where the younger generation are self-solving the problem by not waiting till age 65 and effectively getting their "super" in the guise of disability pensions now. Forever and for longer. Solve that Neville.

Interesting. A disturbing article. More information required.
I realise you may have a self-imposed limit to the length of your article. But, it touches on some aspects too lightly without fully explaining what you have in mind. The different responses (above) would indicate the different understandings that it is capable of producing.
The sleeper (that you allude to) that warrants a full explanation is the question of irrigation in Canterbury. Who is funding the cost of infrastructure? Where is the funding coming from? Is it Central Government? (If so what is the policy) Is it Local Government? (Why?) Is it user-pays? Or is it (as you say) a simple transfer of wealth from broader society to the powerful few? What is the social cost, to society, in the form of loss of amenity, alteration, degradation and diversion of the environment, to the exclusive use of the few etc etc
Is that what you are saying? Please articulate.

I got as far as LSE before I realised it was a party political editorial on behalf of the Labour Party.

we had nine years of handouts from labour to one section of the population and now under the nats we are seeing handouts to the other sector.
nothing changes.

" it follows that the public sector has sold too cheaply. The people lose, the rich get richer."
But of course, that is per definition. Any price is too cheaply as it is bought with freshly created credit and paid for by the people. It's so obvious!
Taxing theft (increasing prices with borrowing against non productive assets is theft) doesn't solve anything, it doesn't stop the theft. Is this taboo or something? Stop borrowing/lending/creating credit(debt,money) against increasing asset prices. Stop increasing public debt which is exactly the same; devaluation of money, transferring wealth. Instead of increasing productivity, income and therefor savings, all our efforts are absorbed by the financial system, a small elite, and blame the retired that we can't afford them.
This is Tiring.

Can anyone here tell me if this statement from the States is also true here?
The standout is that from 1950 to 2010 the hours worked to pay rent doubled. The price of gas and movie tickets relative to the minimum wage was more or less unchanged.

The confound here would be the accomodation supplement.
So any stats would have to be interpreted with care

"I think they had a point"....really "think?".....I doubt you did any thinking on that score!...what's the bet your views on British colonial behaviour would be different had the British govts been largely socialist during that time....!
You don't like National moving NZ away from the nanny state socialism you see as what's best for everyone else.....well hard luck lost...and sadly national are dragging out the change but change is coming.
Socialism landed us with bloated state sector costs...too many paper pushers busy looking reached the point of stupidity where some fatheaded idiot thought it a great idea to use the law to determine the size of shower fittings...even Clark recognised the madness of that and bellowed "NO" to the idiot.
If you want to live in a society managed by socialists where everyone looks the same speaks the same and acts the same under the total control of a shite in wgtn...good luck to you Neville...just try to refrain from demanding the rest of us do as you say....

I'm sure it sounds petty, but how disconcerting to see a blatant misspelling in the headline-
"Distainful"? And no one seems to notice....

oops. Entirely my error. Nothing to do with Neville Bennett. Apologies. (and, thank you.)

There seems to be a theme by Alex13 and Tribeless which suggests the responses are computer generated.
1. A psuedo response
2. Denigration of opposing views
3. One day when you think as I do think as I do.

1. This is a computer-generated message. Do not reply.
2. You are wrong!
3. One day when you think... ... ... ... - program abort due to assumption impossibility...

There is a book I read a few years back called "The Master Hunters", which is the recollections of some legendary deer cullers in New Zealand. You will find the same description of Red Deer populations in New Zealand, where they overshot the food supply and the condition of them diminished significantly.

Reply to Kunst - our business is investing into oz and re would ramp it up further if we had the capital to do so. Net foreign dividends are flowing back to nz. Furthermore we are now running head office operations for our australian client as we have a competitive advantage. This is high value wages, it support, hardware and all the other ancillary stuff that goes with running a business. This is one real world case ... So yes it is happening now.