Bernard Hickey says New Zealand may be increasing the size of its economy by adding people and resources, but is not improving the productivity that will make everyone truly richer in the long run

Bernard Hickey says New Zealand may be increasing the size of its economy by adding people and resources, but is not improving the productivity that will make everyone truly richer in the long run

By Bernard Hickey

How do New Zealanders get richer? It seems such an obvious question, but it's not one we think nearly deeply enough, and one we seem to be ignoring through our actions.

New Zealanders make a lot of wrong assumptions about wealth and income that hopefully our leaders shouldn't copy, but appear to be doing a lot of lately.

Let's cut to the chase first on what most New Zealanders think and do about wealth. Firstly, we get a regular and hopefully high paying job so we can save a deposit and then borrow a shedload to buy a house to live in. Then, if we're lucky, (which has meant living in Auckland over the last five years), we can further leverage those tax-free gains in our equity by buying a few rental properties, and/or investing in our own small businesses.

Once we've got the five rentals, the bach, the business, the boat and the BMW then we can sit back and live rentier-style into a comfortable retirement. We can then supplement a steady stream of rents and untaxed capital gains with a non-means tested pension that rises with average wages, rather than the much more measly inflation rate.

Perfecto! That's how we get wealthy in New Zealand. Or at least that's what the majority of the population has come to believe, despite the earnest exhortations from Reserve Bank Governors and Finance Ministers alike about the need to invest in real businesses to become more productive with every hour we work.

Understandably, Joe and Joesephine Public have just followed their noses and watched what the politicians and grown-ups have actually done themselves. They keep cutting interest rates and allowing tax-free capital gains, while at the same time ignoring the advice of their Tax Working Group that a land tax would change some of these behaviours.

A quick perusal of the Parliamentary Register of Pecuniary interests show most MPs own multiple houses, rental properties and baches. The phrase 'family trust' is the most popular in the document, followed quickly by 'rental property'. For example, Sue Moroney, a Labour List MP who targeted a Kyle Lockwood flag-flying bach owner in a tweet she apologised for this week, owns a home, an apartment, a bach and a rental property.

Yet everyone who has looked at wealth creation in any detail, and that includes the Government's own Productivity Commission and countless other experts, says the only sustainable path to increasing the wealth of New Zealanders is to increase the amount of goods and services we produce every hour. This is productivity and is what eventually increases real wages and supports the prices of assets we own. Asset prices can go up and down in the short term because of capital flows or supply shortages/surpluses or migration or more/less borrowing, but ultimately it's the ability to service a mortgage or a rent with an income that matters.

That's why the Government keeps banging on through its Business Growth Agenda about growing businesses that invest in their people and technology to produce exports. It's why the Productivity Commission has beavered away for the last five years investigating why New Zealand's productivity performance has been so poor over the last 50 years and what could be done about it.

It's still early days, but the Government has yet to really drink the Productivity Commission's Kool Aid. A bunch of its recommendations around competition policy, social services, land use planning and international freight have yet to be adopted, or have been allowed to quietly wither on the policy-making vine.

This is all showing through in the statistics for GDP, wages and in the gap between New Zealand and the rest of the world. No one noticed it, but last week Statistics New Zealand reported that labour productivity grew 0.3% in the year to March 2015, which was well below the already anaemic long-run average of 1.4% seen from 1996 to 2015. For comparison's sake, Australia's long run average over that period was 2.2%. Australia had a capital to labour ratio -- which measures how much technology businesses use and train their staff to use -- of 4.0 over the period, while New Zealand's was 1.7. These numbers may seem small and pointy-headed, but they're the reason why Australia's wages are 30% higher than New Zealand's.

All this is showing through in New Zealand's real income per capita, which fell 0.4% in the 2015 year, despite a 2.5% rise in total GDP for the year. We added more people working longer hours and added plenty of natural resources with a bit more capital, but didn't actually produce much more per person per hour worked. Business investment actually fell 1.1% in the December quarter and rose just 0.9% from a year ago.

It's the same old story. New Zealand has avoided the tough decisions about taxation, investment and competition and has simply bought growth by adding more resources -- more people, more hours, more land and more water. We're not working much smarter or using technology to make us richer.

The best current example is around migration. This week it emerged MBIE and Treasury warned the Government in December that a surge of an extra 50,000 working holiday makers and students per year could lower productivity.

"Migrants are meeting firm demands for labour and skills, but increasingly in low productivity growth industries and lower-wage and-skilled jobs," they wrote, adding they were concerned this would water down the Government's Business Growth Agenda objectives of improving skill levels and productivity.

The top categories for 'essential skills' visas applicants last year were tour guide, chef, dairy cattle farmer, cafe or restaurant manager, retail manager, dairy cattle farm worker, aged or disabled carer, truck driver, aged care nurse and winery cellar hand. Doctors, software engineers, and programmers didn't even make it into the Top 15 visa categories.

The OECD also criticised the Working Holiday Maker and International Student temporary visa schemes too in a 2014 report.

"Both of these are largely unmanaged, and there is little oversight of their working conditions," it wrote. "There seems to be some need of strengthening control in the lower-skilled occupations where competition with New Zealanders is most likely," it said.

Since that warning the student and working holiday maker numbers have surged by nearly 50,000 to over 250,000 a year, including 4,137 successful visa applications for tour guides in the eight months to February 2016.

The economy is getting bigger, but productivity has stalled. That is not a recipe to make everyone richer in the long run. 


A version of this article was also published in the Herald on Sunday. It is here with permission.

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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Everyone can sympathise with the suffering of friend, but it takes a very fine nature to sympathise with a friends success.
BH obviously lacks the latter.

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A very fine nature indeed, espeially if said friend, is being a real dick about it.

Well said BigDaddy.

I've always commended friends who are more successful than me, particular if they have worked hard or even simply been canny. It's the crowing about it that I can't bear. Particularly if part of that success comes as a result of the economic patterns or government policy.

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If only productivity was linked to wage growth, it aint, which is why this is just smoke. What happens is the poor stay poor and the rich get richer, everybody knows thats how it goes.

The productivity of exactly what is actually supposed to rise? The productivity of cow milking, or tourist milking or the creativity of coming up with more bogus courses for bogus students?

Isnt the problem that a lot of New Zealanders are lazy bums by nature, that making money by selling the farm is easier than anything else and that NZ has long ago missed out on being involved into any industries whose productivity can actually benefit from current trends like e.g. digitization? We have no Silicon valley, hardly any start-ups and a government that spends more on a flag campaign than on catching up with the modern world.

Hickey is largely right and may have even picked up the idea around here. NZ has deep structural problems and is probably lucky not to have fallen back more than it already has. Huge investments in education and innovation are required, a government that actually has policy and vision for the future and people with some sense of pride and nation. We have none of those and importing farm hands and petrol pump academics erodes the little substance our country has even more.

Or in short: better keep buying houses or invest overseas. Even if a CGT is introduced it will not change the fact that we have degraded ourselves to a point where there is little of any value to invest in in NZ.

Buy as much Auckland property as possible. Source: Zachary Smith

Sadly I agree, 70 now and about to start selling my Auckland rentals. I purchased my first in 1972, I earned $800 a year and it cost $13000.

I have tried to be good landlord. Other investments, mostly advised by experts have either failed or done
poorly. I have never understood why both local and central govt worked so hard at raising property prices especially here in Auckland.

Good article Bernard.

Your rental in 1972 was yielding about 6.15% but with higher inflation and higher interest rates it sounds somewhat worse than a typical rental today. Interesting about the other investments. The trouble with those is that they tended to rely on flawed and greedy individuals who were beyond your control hence the appeal of self managed property investments.

The trick to attaining early retirement is buying equities after doing your own research first and then managing them yourself. Unlike property investors you first need a good income to buy them and secondly the intelligence to look after it all. Hence higher returns than property which is low risk and low return as any fool can do it.

Strangely enough I think I agree with you. Property doesn't usually give the high returns people believe it does and is often just a form of forced saving and money discipline for many.

Wow it is not often a real estate agent agrees with me Zach.

I concur. I'm about to rent out my house. Even though it will turn a profit the returns are still appalling. I just don't get these folk who are willing to own property at an operating loss and bust their arse to prop it up, all in the hope the price will go up.

That's not investing that is speculating....

Buying equities is simple and with the kiwisaver it's probable that every fool is doing it. There is more than one way to skin a cat, and there are hundreds of ways to early reitrement. There are no shortcuts though, if you take shortcuts, they will bite you in the arse later. You have to save, and you have to keep your eye on the goal.

Gordon,

I had to read your article twice just to make sure that my eyes were not deceiving me. At last, a kindred spirit. I am no financial genius, but I retired at 57(now 71) and manage my own equity portfolio, focusing always on sustainable and growing dividends. I have had one small rental in Mt Maunganui for many years and while I am perfectly happy with it and have seen a significant rise in its capital value recently, its net yield certainly does not match my shares.

The economy is getting bigger, but productivity has stalled. That is not a recipe to make everyone richer in the long run.

Surely that's not the point nor the economic template du jour?

It’s not as if we’re lacking history as to how this works. Some two decades ago the Greenspan Fed’s “asymmetrical” (baby-step “tightening” measures versus aggressive rate slashing and market support) policy approach emboldened speculation and nurtured precarious Bubble Dynamics. “Asymmetrical” then took on a whole new meaning during the post “tech” Bubble backdrop, as the Greenspan/Bernanke Fed held rates at 1% in the face of double-digit mortgage Credit and house price inflation. Confidence that the Fed (and Washington) would never tolerate a housing bust proved fundamental to prolonged excesses that ensured a historic Bubble. Read more

From what Ive read productivity has got better, but where it has its all gone to the top few %. So the Q is why work harder when someone else benefits 100% and you get 0.

Otherwise I agree with the piece.

"
The profound financial innovation that gathered momentum during the nineties beckoned for a major monetary policy rethink. Special precautions were needed to ensure that monetary management was not allowed to compromise market discipline. In short, increasingly speculative and leveraged markets required a shorter leash; the Federal Reserved needed to “lean against the wind.”

The Fed responded to market changes, although it took the opposite approach:"

and we can see that Greenspan after unleashing the parasites then used the public purse to backstop the losses.

The "parasites" as you call them are perpetually unleashed, if the recent directive from a particular command economy apparatchik cannot be ignored.

Bank of Japan Governor Haruhiko Kuroda said Thursday his aggressive easing policy has no “quantitative limit,” rejecting views that the central bank will run out of ammunition.

“There aren’t any such things as a quantitative limit or anything, any numbers we can’t overcome,” Kuroda said during a parliamentary session in reference to his policy stance and the BOJ’s present easing measures. Read more

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You don't need to be a genius to work out why the current arrangements are in place - high migration, high exchange rate, high house price growth, no capital gains tax etc. All of these policy settings favour a rich city educated liberal elite. In the process they rip the rest of us off while promising ever improving conditions which never happen. Its a scam and we are the suckers that buy it at election time. We deserve what we get.

Sort of agree...but Labour are no better, its all about the swing voter "feeling good" so you get re-elected.

"a rich city educated liberal elite" actually I think a more accurate description for the benefactors is "financial parasites". ie city v rural, liberal or conservative, educated or not, poor and middle class, are all being played for suckers.

Yes, its not about Labour or National, its about the cheap holiday in surfers (high exchange rate), cheap restaurant meals/cleaners and services (immigratiion), and of course capital gains (untaxed) - witness labour party landlords. Very hypocritical stuff.

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It's no longer about "left" and "right" in New Zealand as both Labour and National are populist parties - both will present policies to get them elected - not necessarily what is best for the country. I don't believe New Zealanders are willing to suffer the pain that would be required ( e.g. removal of tax incentives on rental properties) to create a more productive country We're now believing our own dog shit .

Most New Zealanders will only look at the headline GDP figures and go "great GDP increased" it must mean we are better off - when in truth New Zealand is slowly going down hill ( and it makes a mockery of the "rock star" economy) .I don't believe New Zealand will willing do anything about declining GDP per capita unless it is forced on us. And the political party's only look to the next election.

Politicians - it's do as I say not do as I do. Hypocrisy abounds.

If you've got to to take a bite of a shit sandwich best not to nibble.

It would take a bold party to make radical changes - and I don't think New Zealand has a politician that is that willing to make changes that are needed.

Radical change has already occurred and is continuing to occur yet the motivation behind this is the desire to crush any chance of any other radical change occurring. In such diverse societies as we have today with people originating from entirely different historical streams any consensus of opinion is practically impossible.

Very true. It makes for some very difficult situations for immigrants, where what is acceptable in the "home" country is not acceptable in the in their "new" homeland. As the saying goes " when in Rome do as Romans do". This mainly applies to social norms and not economic policy.

Even Daesh seem to understand the necessity of money.

The Judeo- Christian ethic of equality should not be achieved by giving to the poor but by taking from the rich.

Hummm..... Yes I agree with you though people will cotton on when they see their children floundering to trying to get on the housing market and expecting the bank of Mum and Dad to help them, that one will bite deep in to the voting public, especially for those home owners considered to be relatively wealthy.

As for the miss conception about us having 'No capital gains' I presume your comment is relating to property. Well we do have Capital Gain for rental properties - all be it if you sell within two years (The so called bright line test). But trust me that's a loop hole that the Government are itching to close, probably straight after they get re-elected.

And if they follow the same direction on this as the UK and other countries, they will probably extend it to ALL rental properties not just the ones purchased after Oct 2015. At least in the UK you can off set CGT tax against your tax free personal allowance, it think that's around £11k now.

Oh and a message to those Ex-pat Brits out there who may still have rental properties in the UK, they're going to close personal allowance loop hole next year for people living abroad.

We also have a capital gains tax on everybody who purchases property with an intention of making capital gains profit.

The problem is determining 'intent'. If owning a rental property where rent does not cover the cost of capital -as determined by the prevailing interest rate -then the government would capture a lot more capital gains tax.

Anyone with half a brain knows the magical words to get out of having an "intention"...they are "a change of circumstances"

Yes but all of these proviso are just loop holes that can be closed at will of the Government. There's nothing to stop the NZ government from turning around and saying 'We really need to collect Capital Gains Tax on all rental property' whether the person who purchased the property was an 'intensional Landlord' or a 'Reluctant Landlord'.

By the way a 'Reluctant Landlord' is someone who has to rent out their property due to a change of circumstance such as moving to another part of the country etc....

So my case in point; the UK closed the 'Reluctant Landlord' CGT loop hole a year ago and guess who introduced Capital Gains Tax fairly quickly after that; 'New Zealand'!!! And at a much higher rate.

And the UK is continuing to crack down on Landlords to gather as much tax as possible and to slow down the housing market, so I wouldn't be surprised if NZ followed (Got to love that Mother child relationship we have with the UK).

Country boy you are so right.
Also high imigration pushes up GDP (more people spending) but does not necessarily up the GDP per capita.

Bernard can talk, he is part of the media that goes on and on about growth and GDP up, GDP sluggish, No growth, deflation and on and on.

But how often do they talk about GDP per capita?

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'Once we've got the five rentals, the bach, the business, the boat and the BMW then we can sit back and live rentier-style....'

Under this model the average wealth declines, resources are squandered, and massive social, environmental and financial problems burgeon to the point of becoming unsolvable, just as we are now witnessing.

However, rapidly deteriorating living conditions elsewhere in the world, which are a result of government-sponsored overpopulation, overconsumption and overdevelopment, mean the stampede of people to NZ will increase, and living conditions in NZ will continue to be made rapidly worse -especially in the major population centres.

NZ has established a dangerous feedback loop whereby bad behaviour is richly rewarded, and is paying the price for such lunacy, just as other countries are.

All Ponzi schemes come to an end, and the present one will, with dire consequences for most people. We just don't know when.

A race to the bottom...

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It's because Key and Woodhouse fell hook line and sinker for the line that the multinationals run. The result is that we have a rigged economy where benefit to citzens does not even make the pecking order for consideration.

The phrase, "for the common good," is anathema to them.

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I do not believe that Key 'fell hook line and sinker for the line that the multinationals run.' All the evidence indicates Key was selected by multinationals as their NZ agent, to facilitate the further looting and polluting of NZ and further exploitation of New Zealanders by corporations: hence the promotion of TPPA, which has very little to do with trade and is very much concerned with expansion of multinational corporations' control of NZ society.

Professor John McMurtry, Guelph University, provides an excellent summary at the link below, and highlights the fact that is obvious to some but unthinkable to many that 'The first duty of the mass media is to conceal'.

http://www.theecologist.org/Interviews/2986750/genocide_ecocide_and_the_...

A few know the truth...

About time they actually did.

But they would have to be awake first, to what is going down and who sold us out.

Selected by the multi-nationals?

I don't think so

Look a little deeper. Trawl through JK's resume. Who he's obligated to

He was chosen. It's called the international Brotherhood

Great article Bernard. Anyone with half a brain knows per capita output growth is the key to long term prosperity. However it requires short term sacrifice to make the transition and it doesn't win votes. Productivity is one of the least discussed issues during election campaigning. Headline numbers are what it's all about for politicians seeking election.

We are stuck with unproductive credit growth to produce economic growth. The outcome is poor reciprocal income growth and household debt continues to pile up. Until Main St wakes up, governments will sit on their hands.

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It's a setup. That loud slurping sound you hear is our wealth disappearing offshore. Because we own so little now there is no point becoming more productive - because any benefit of that will simply slurp off down that same pipe.
Now if we became owners of our own stuff - the result would be different.

KH - classic example is the railways. We sold it and they ran it into the ground then sold it back.

it has to now be back to basics.....................but how will politicians suggest this to NZ who love to binge on debt

Our current set of MPs and politicians would not agree to a simple solution. Stamp duty on property purchases and capital gains on property sales to offset reductions in income tax for individuals and businesses to show Kiwis that production and employment will be rewarded. While at it, also tax the International companies making money here and not paying tax here.
Wait, I am day dreaming.

Onk, onk, flap, flap....

The fundamental predicament lies with the fact that whether we are building houses or operating any kind of business or simply working as employees and 'being productive' we are consuming finite fossil energy resources and generating life-threatening (eventually life-terminating) pollution.

That is the great paradox of the industrial system we are trapped in: the more 'productive' we are, the faster we destroy our children's/grandchildren's futures.

The current set of politicians and bureaucrats will NEVER acknowledge that everything they promote is COUNTERPRODUCTIVE in the long run because they are paid to 'kick the can down the road' and promote the short-term interests of banking cartels and corporations. Hence, everything that matters is continually made worse.

At some stage in the not-too-distant-future 'the system' will be overwhelmed by the 'problems' it has created and continues to exacerbate.

In case you missed it, one of the numerous 'problems' is the unprecedented meltdown of the Arctic:

http://nsidc.org/arcticseaicenews/charctic-interactive-sea-ice-graph/

.

Great article B. The media is partly to blame in that they focus on GDP and usually make no reference to the GDP per capita. Also agree that the politicians don't have the guts to make the right decisions. Need to look at the EIS investment programs they have for investors in startups in the UK and try and set up the equivalent in nz. At the same time gradually reduce/remove the property investor tax breaks.

Joe Public well said. I said this above but you made it more clearer than i did. Thanx

Lets stop buying houses and start trading derivatives that will push up productivity wont it Bernard?

What if it is the belief in being richer (measured in dollars and possessions) that is part of the problem? Being richer than who? In the end we're just fighting against each other to have more. When do we have enough?

Humans don't create wealth. We convert natural wealth (planet and people) into money and stuff. Economic theory and capitalism (any ism) are only systems/tools used to justify and control how this so called "wealth" is distributed. We the people have been sold a lie and it is our own ignorance and apathy that has created the current situation. There is enough money and stuff already in existence that there is no reason (other than ego, greed and selfishness) why anybody should go without.

What if it's the pursuit of "wealth" that is the problem?

"The significant issues we face today cannot be solved by the same thinking that created them" - Einstein

Humans don't create wealth.

My intuition is telling me that this statement is wrong and that indeed the opposite is true. All wealth is in some way associated with human labour. The duration, intensity and cleverness of this labour generates different degrees of wealth. This is what I have noticed in my life.
Quality of tools and access to information are factors too.
Rarely is wealth just lying around or ready to drop into a supine person's open mouth.

Try using human labour and cleverness to make furniture without using any natural resources: that will eliminate wood, all natural fibres, leather, all metals, all plastics made from oil etc.

Try making ANYHTING without using a natural resource. .

While you're at it, try maintaining your human labour without food generated by nature.

The statement: 'We convert natural wealth into money and stuff' is correct. .

The part that is missing is that without energy nothing happens.

It is the quality of the human spirit that determines the outcome not just energy.
Nearly all these natural things you write of have been greatly enhanced by human labour and ingenuity. We saw the potential and improved them beyond all recognition.
They were just raw materials but we breathed our creativity into them and though hard work have created marvelous things. It is so much more than just the sum of the parts which is what I think you guys are implying.

There is enough money and stuff already in existence that there is no reason (other than ego, greed and selfishness) why anybody should go without.

You're not having my stuff, you lazy bum.

But "wealth" is just an artificial construct (like much of our modern society). If all the humans on the world were to disappear - the world would carry on until the sun explodes - and the world is destroyed. The universe will continue. Man is not that important.

In the TV series Lost in Space I noticed there were two things that were incredibly important to Dr Smith. The first thing was Dr Zachary Smith and the second thing was wealth.

Man is the most important development in the universe that we are aware of. Through man the universe has become aware of itself.
And wealth is probably the most important thing to man, the control of which is the real reason behind every war. His very existence often depends upon it.
Wealth or resources will be important if we are to escape that exploding sun. It doesn't sound that artificial to me.

Can you show me what wealth looks like. In front of me I can see a computer, a couple of LCD screens and a keyboard and mouse but I can't see wealth. It is a concept generated by man - its has no physical form - like earth, water or air, but seems like a significant preoccupation of a majority of the human race. Lost in Space as a source of life's goals - I guess you could do worse.

Yes remember the best things in life are free! Well at least for now.....

If the zombie apocalypses occurs what use are your rental properties and share portfolio. Gold won't buy you anything - what will matter then is food , water and weapons. Less flippantly our hunter-gather forebears had no concept of wealth or money, just a few possessions that they needed for day to day living.

Don't get me wrong I understand that the world runs on money and I'm all for acquiring as much as possible but in the end you can't take it with you.

Compare Epsom to Soweto. One is wealthier than the other. If you go to Fiji you immediately see a wealth difference compared to New Zealand. Most normal people can see these differences quite easily. To me it is obvious. A Lexus or a Ferrari have distinct physical forms do they not?

Yes they are both cars - but the value or wealth attached to the item is by humans ( a dog couldn't care less which one they shit in - they would take a dump in either if given the chance ) - at the end of the day they are just a pile of minerals in a particular formation - eventfully both will be worth nothing - scrap.

eventfully both will be worth nothing - scrap.

But right here and right now they are beautiful and expensive examples of human craftsmanship. They are manifestations of thousands of hours of the highest quality human labour and they exit forever in the space-time continuum.
I have to say your attitude seems kind of nihilistic to me. I don't see how it would help me to get more wealth.

By not buying a Ferrari. A Ferrari is generally not an investment (anyway Veyron's are much better). People who are wealthy are generally wealthy because they don't spend unless they have to. Warren Buffet still lives in the same house that he bought in 1958.

I guess we can agree that wealth is different things to different people and it has a spiritual element. Perhaps Conan summed it up:

What is best in life?
Conan: Crush your enemies. See them driven before you. Hear the lamentations of their women.

You would, of course, be aware that Epsom acquired a potion of its wealth by exploiting the precursors of Soweto: Cecil Rhodes, De Beers etc. carried out looting and general exploitation of southern Africa from the late 19th century on, and established the system that kept the inhabitants of Soweto extremely poor.

No, Soweto didn't even exist at the time of Cecil Rhodes. In fact before Europeans arrived that part of South Africa was largely unoccupied. European mining, farming and industrialisation practices attracted Africans from the north seeking work.

Monetary Wealth yes Epsom has more
Cultural / Spiritual / Community wealth - I think you will find its the other way round. The happiest people I have ever met have the least.

Wrong Zach. There is no wealth without the precursor in the form of a natural resource to exploit of some kind. Example: All the fish in the oceans

I think mankind collectively adds knowledge to produce wealth and always have.
Dylan transformed wine into poetry and einstien presumeably transformed hamburgers into science.
That is what we add to resources to produce wealth, the gumbo so as to speak.
Perhaps we shold be measured on what we add, not what we know.
A great discussion though

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Stamp duty all foreign property purchases 15% to cover some of the infrastructure costs needed. Second home purchases and investor purchase stamp duty 10%. Bring in loan to income ratios that banks are forced to adhere to say 4:1. Give first home.buyers a chance in a market where investors currently make up over 40% of the buyers. Also would need govt assistance for first home.buyers. perhaps govt guarantee on part of the deposit. Again schemes like in the UK.

Yes I would be in favour of a Help to Buy scheme for NZ which is designed to help First Time Buyers get on to the housing market.

SpaceX you might find this interesting though I don't think Mr Zachary will approve, sice we all have to chip in as tax payers.

https://www.helptobuy.gov.uk/mortgage-guarantee/how-does-it-work/

Too sensible.Won't fly.

We are already maximising productivity
We spray chemicals all over our food to be more productive
We destroy the environment to be more productive
We genetically modify our food to be more productive
We mass produce unhealthy food because it is more productive
We pollute our water because it is more productive
We destroy everything because it is more productive.

Hey but Bernard thinks we have not done enough damage and need more

Interesting article - in that it does not touch the cornerstones of productivity

It's infrastructure

In response to the GFC, America poured $billions into new roads, highways, and "bridges to nowhere". Australia did the same, pouring $billions into roads, highways, and Building Schools revolution.

The immediate payoff is employment, the future payoff arises from the economic benefits that accrue over time

Australia's Tax System imposes Stamp Duty on all sales of property and motor vehicles, revenue which goes to the States, who in turn pour that revenue stream 100% straight into infrastructure constantly, rail, motorways, schools which is essential to underpin a growing economy

Without it, the economy slowly grinds to a halt and becomes grid-locked

Sound familiar

From what I have read, the current government, as an article of faith, has set out on a course of attaining a surplus, which has been achieved by throttling back expenditure on infrastructure for the last 8 years, at the same time exacerbating the problem by increasing the number of users of frozen infrastructure. Massive annual influx of new migrants will do that

To remain neutral, 1 additional migrant depends on 1 local to depart forever - ain't happening

Fairly obvious

From what I have read, the current government, as an article of faith, has set out on a course of attaining a surplus, which has been achieved by throttling back expenditure on infrastructure for the last 8 years,...

Unfortunately, yet to be reflected in deficit funding statistics. In fact the National government has raised net new public debt totalling ~$53.94 billion, including Friday's $1.5 billion+$200M RBNZ allocation syndicate issue, since they succeeded Labour in November 2008. View Graphic

As others understand it the US infrastructure spending deficit is colossal. Read more

Guys - let's cool off a little here re achieving a crown surplus.

In any organisation - capital expenditure does not come out of operating results, nor does it come out of Crown surplus. Yes it is included in cash flow requirements - but it is not in the operating results.

Reducing investment in say a new motorway will not increase the surplus or operating results in any way.

All economic growth requires resources, so if you are consuming resources you are growing positively. Doesn't matter how you do it. In a conventional sense of course, resource limits might matter.

The myth of progress.

Total bank lending has soared from just $6.5 billion in March 1984 to $407.3 billion [in March 2014]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1161...

Who would have thought...

But look what we got for our money

By an incredible woman, there is a move about her life called 'Love it like a fool'.

http://www.cmnonline.org/pio-article.aspx?ID=5

https://sinisterdisco.wordpress.com/2016/04/03/its-been-a-long-time/
There are some people out there (and who read articles on here) who don't want to 'get rich'. They would just like a home.

http://www.stuff.co.nz/business/78370938/for-sale-40-billion-litres-of-c...

Private rights to our water and the beginning of selling to foreign interests begins in Ashburton in a 'secret' council deal.

Just the beginning folks

Unbelievable. What's bunch of short sighted buffoons.

Indeed, every day possibility of a revolution gains a tiny fraction.

It was approved in 2011 by Environment Canterbury and includes a recharge consent
And remember the government sacked the council and put their mates in charge and this is what you get. An unelected council doing this
Too right "everyday possibility of a revolution"

And it says
"all water taken must be replaced from other sources"
So they take the good clean water and replace it with what? dirty water for the residents to drink.
Ashburton will end up like Flint in America

Meet the mom who helped expose flints toxic water nightmare
http://www.motherjones.com/politics/2016/01/mother-exposed-flint-lead-co...

Industrial civilisation (including all its latest gadgetry) is unsustainable and will collapse in the not-too-distant future (2025 to 2040) because:

1. all the easy-to-extract oil was burned decades ago and i.c is dependent on increasingly difficult oil and so-called unconventional oil with low EROEI and high carbon dioxide footprint.

2. environmental destruction increases with time and is cumulative.

3, the ability to grow food and transport it to cities is increasingly compromised; the food that does arrive is of an ever-lower quality;hence people living in cities get sicker as time passes.

4. i.c. is a heat engine and planetary overheating, a direct consequence of burning fossil fuels, is underway and cannot be halted (though ceasing to use fossil fuels and thereby terminating i.c. would reduce the overheating).

Since there is a considerable time lag between the emission of pollution and its full effects -the effects are both instantaneous and cumulative- most people still have not recognised the predicament, and many deny it out of gross ignorance or on purely ideological grounds. .

By the way, electric cars and windmills are not going to save i.c. because it takes fossil fuels to construct and maintain them, and fossil fuels are to necessary construct and maintain roads and the electrical grid.

Could not agree more so no point in trying to save the planet now. Time wise more like 2050 if you ask me. People and governments are just not prepared to make the changes needed, too unpopular and almost Nazi in the extremism required and they would just get voted out or not voted in, in the first place. The younger generations will see the writing on the wall and it will only accelerate the rush to the finish line. My advice, just enjoy life while you still can.

Sadly you are correct, except for the date. Peak oil is about now and it is effectively all gone by 2050 and we need oil to feed 7+billion ppl. So really we will see more and more Syria's once the actual total output drops. My view is 2030 as a ballpark is far more realistic. but its really hard to know.

Oh, BH, Godwin has struck this here thread. It was off the rails (made from steel, torn from Gaia's screaming bosom by Men with Large Pointy Implements, and smelted with coal torn from.... but I digress).

It seems just appropriate to close off the thread with a bit of Poesy:

https://www.youtube.com/watch?v=L9EKqQWPjyo

People are crazy and times are strange
I'm locked in tight, I'm out of range
I used to care, but things have changed

. DP