Its incorrect to assume right wing politics is about growing the cake and left wing politics is about sharing it.

Cullen is intensely aware of the need to achieve growth - I've talked with him about it personally. In his view, he needs growth more than Key does, because of the increasing costs of health and education.

The classic divide between left/right is really about where the power lies. There are endless methods of trying to achieve growth, from both wings - the private sector, the public sector, printing funny money (thanks Social Credit) allowing unions, crushing unions...

The current Government has invested in skills and workers rights - this has led to the lowest unemployment in the world.

National intends to focus on giving employers more power, and give resources back to the private sector in re-invest.

After five years of Labour Government, our Nation is ranked #1 in the world for easiest countries in the world to do business. The OECD has spoken glowingly about Cullen's stability in economic management - it has kept interest rates down. I think we've already got the business side right, lets make sure we get the other things right in our society, Public services such as health, education, getting people saving and helping them to buy their own home - these are the things Labour is promoting.

It's just that seems like more of a distribution of incomes issue than a taxation issue, now that I think about it.

But what you said right after that, I agree totally with. What a lot of people don't seem to realise is that although you can be considered 'rich' in this country, it doesn't mean you have a comfortable life-style.

The housing prices, I would contend, are massively over-stated, and you can't really use that to measure standard of living....but when push comes to shove, people have to pay what a market wants. While you may be 'statiscally' rich, in the real world, there is every possibility that you could be just scraping by.

So while a tax-cut may 'apparently' benefit the 'rich', just remember, a lot of people out there who aren't eleigible for handouts who have to connect the dots for themselves. And sometimes, they need all the help they can get.

You're talking in the specific terms of Labour vs National, whereas I'm talking in the more general terms of left wing vs right wing. A good example of my theory in action is the United States in the 1920s, which was pretty damn close to unfettered capitalism but also a period of massive growth. And don't mention the Great Depression, IINM that was because of a lack of controls such as the federal reserve.

A notable exception would be Stalinist Russia, which experienced massive economic growth for a period of time. I would however argue that it's a lot easier for developing countries (such as Stalinist Russia, or modern China) to experience massive economic growth, because they have a lot of catching up to do.

In the case of New Zealand, I would be quite reluctant to ever give much credit for a growing economy to the government (regardless of who it is), as the small size of our country means we are very vulnerable to global trends, so the effect of the government is somewhat analagous to a man rocking a boat in a thunderstorm. It's no coincidence that our economy is doing well at the same time as Australias is doing well.

Market forces have a hell of a lot more influence than the government, but governments always take the credit when things are going well (and blame external forces when things are going badly). This isn't just Labour mind you, this is any government with a healthy sense of self-preservation.

[rant]I'm in the lowest income bracket and Labour isn't doing shit for me. Helping the poor my ass, seems like I have to squeeze out a few babies before I can get any of my money back. Anyone got a uterus I can borrow?[/rant]

There has been an element of good luck to the current economic climate - international commodity prices for our primary goods have strengthened, and in a post 9/11 world a lot of NZ'ers came home and we are a great location for tourism.

However, if the worst thing your opposition can say about your economic management is that you can't take full credit for how good things are going - I think they rightly have an uphill battle to convince people its time for a change in Government.

But of course, one could always say that if National had been in charge, things would be even better than they are now. Not that I'm saying that mind you, I don't really give a shit either way, but it's entirely possible.

Look at it this way: imagine there's an alternate universe where National won the last election. Now, thanks to the good world conditions, the economy manages to do well under their leadership. Even if the economy did worse under their leadership than it did in our universe where Labour has been in charge, they would still be saying exactly the same thing you're saying. Which is why I can't trust what you're saying, because I have no 'government neutral' basis to test it against, and also because you (no offense) appear to be a Labour mouthpiece who would sing their praises regardless of the situation. Hence, when looking at the left vs right situation, all I can trust is long term historical trends, over a number of different countries, to find where the best position is, because the effects of external influences averages out.

The worst thing I can say about the government is that they have us in the Kyoto Protocol, which I hate (from both an economic and an environmental standpoint).

None taken - I am a Labour Mouthpiece until the after the election. I think of myself as quite a constructive critic of all the political parties - except 99 MP party, who I want to destroy for good - but I am a Labour Party member and it is 3 weeks out from an election.

Had National won the last election, we would have been in Iraq, and under threat of terrorist attack. Less NZ'ers would be coming home and less tourists would be visiting. Our economy would not be in as good a shape.

We would not have had the modern apprenticeship scheme, and our skills shortage (which is chronic as it is, thanks Shipley) would be dire - constraining our economy.

Its not just about how much your being taxed, its also about your ability to grow and business always relies on society to be there.

In a non-partisan way I'm glad to see that National has come to its senses about skills-training, they seriously stuffed up through the nineties.

Even if your doomsday scenario is true, it's still quite likely that, unless National were to have completely bollocksed things up, the economy would still be doing well enough for them to have said "We are t3h r0x0r", just like Labour is doing now. We would have never known if they had done better or worse than Labour has, just like we don't know if Labour has done better or worse than National would have done. All we have is speculation.

I do agree with you that Labour is better for education/training, this is typical of the left in general. OTOH the right is better at harnessing those who are already trained or educated, because of the incentivizing effect of low personal and business taxes.

BTW, if we had gone to Iraq, we might be closer to that free trade deal, for the low low price of a handful of soldiers and civilians. This will sound chiched (sp?), but I personally don't like the idea of possible terrorist retaliation being something to consider when we make our foreign policy, our decisions shouldn't be influenced by cowards. I for one am not afraid of being killed by terrorists, nor would I be if we did go, because I pay attention to statistics. That said, the other reasoning against going to war is much more sound.

</my last post till sunday>

Pharmac is the real impediment to a FTA with the US.

America signed an FTA with Vietnam for godsakes, (and they don't have one with Poland, who are their closest ally) how much you like their foriegn policy has no bearing on how they treat you in trade matters.

Pharmac buys cheap generic drugs that contravenes American regulations relating to drug patents.

An FTA with America would actually restrict this critical area of our trade.

An FTA with the US, while the Bush administration is in charge, simply isn't worth it, as they won't sign a deal which looks anything like free (let alone fair) trade.

So then Scuzza, why do you support free trade deals with countries like Chile and China?

OTOH, brown nosing the yanks has its advantages. Just ask Musharraf or Kadafi.

As for the downside of an FTA, I assume that would be offset by the upside, or else the government wouldn't be trying to get one in the first place.

If we were given unfettered access to the US' agriculteral market, (and they removed the subsidies on their agriculteral sector) we'd probably increase our growth by 2% a year.

Thats the FTA we want, and its the FTA the US will never sign.

Given enough time we should eventually be able to come to an agreement that benefits both parties... that being the idea of a FTA. It wouldn't be fair to expect the US to sign an agreement which benefits us to their detriment.

I'd say the political concessions we'd need to make to get an agreement would far outweigh any inconveniences to the US...

I mean they're hardly going to revoke subsidies for their farmers, are they? :brash:

Each side will make sacrifices, knowing that the benefits they gain outweigh those sacrifices. Like any other FTA I imagine.

[QUOTE]Each side will make sacrifices, knowing that the benefits they gain outweigh those sacrifices. Like any other FTA I imagine. [QUOTE]

Um, not really - the benefits don't always outweigh the costs.

We would stand to make $1.4 billion dollars more a year under an FTA.

There are certainly things I can imagine I wouldn't sell out our country for a measly $1.4 billion dollars.

:clap:
Exactly, lifting the nuclear ban is hardly worth an FTA that wouldn't include any sort of agricultural provisions.

When I say 'the benefits will outweigh the costs' I am not speaking strictly in monetary terms. If there is no way to have a mutually beneficial arrangement then it won't happen. Of course, it's the governments call as to whether the benefits outweigh the costs (whichever government that ends up being), and it may have different ideas of how things weigh up.

That's just it. Australia jumped, it wanted to be the first kid in the playground with the shiny new bike. But they failed to get any Free Trade allowance for their sugar industry, for which the US is a huge market.

New Zealand has to be careful we don't get too ahead of ourselves and sell the farm to save the house. Bush has stated that he will increase subsidies to farmers, completely contradicting the stance of the WTO. So while the US refuses to acknowledge free-trade principles for our primary export commodity, then any talk of free-trade is a waste of time.

Yeah, definitely agree with you Sloanie on both what happened to Australia and us being careful. If we exclude the total exposure of both nations agriculture industries from a FTA, NZ is going to get TOTALLY FUCKED in that the United States will be able to use us as a dump for all their other industries and wipe out the last vestiges of manufacturing and Kiwi-owned service industries here in NZ.

Hell, if the subsidies for American farmers didn't change, we could actually have to start importing American meat! Imagine how ridiculous that would be, yet it actually seems to be a relatively viable possibility considering the fact that American farmers are subsidised through their teeth.

Quote your sources please.

I'd be interested to see how the ERMA affects peoples opinions of how easy it is to do business in NZ.

I expect any link to changes in poverty to be related to how we spend what money we have, rather than changes in the amount of money we collect. Thus such a link does not need to be proven because it is not required for a reduction in poverty.

How substaintial is this amount? Especially since the majority of the tax cuts focus on personal income, not company? You cannot be sure that all the money saved will be taken out of the economy or not. I suspect that most New Zealanders won't instantly send every spare dollar overseas. Nor do I expect every company to send their profits overseas. The company I work for is 100% NZ owned, and many others are largely new zealand owened. Every small company will benefit from these cuts, albeit only slightly, and that money won't automatically go out of NZ to investors in other countries.

Is too tired to consider merchant banking to argue....so I'll just agree.

This just in - Brian Easton argues against tax cuts: http://www.scoop.co.nz/stories/HL0508/S00216.htm

Opinions?

Borrwing faster the the rate of GDP growth?

Not cool.

It looks like the most comprehensive rebuttal of the Nats' tax policy yet. I wonder if it'll get much coverage...

Naw, there's mudslinging to be had!

This amount is very considerable, it's probably at least 50 billion a year, probably a lot more (This is something the treasured economists of the extreme right like Adam Smith never actually took into account, the phenomenon of capital mobility that is). This is where Winston Peters actually has it right on NZ First's economic policies (limiting foreign ownership in NZ strategic interests and a whole raft of other things).

You're always going to be in a situation where you have foreign companies exploiting our resources that they will ultimately profit more than us and steal large chunks of our money, or else they wouldn't even be here in the first place. And the fact is you don't even need these multinationals in most cases.

Note that most small companies will not benefit from these tax cuts: as the tax cuts will hike interest rates and inflation, they will end up worse off in the long term, as Brian Easton argues very coherently.

But hey, remember kids, lowering taxes solves all economic problems and we don't need to debate it's economic rationality, because it makes sense because Don Brash and John Key are really experienced and they know exactly how much money they're going to have over the next three years.

As far as I can tell, Easton's argument is that if we drastically cut taxes as National plans, the government will soon have two options:

1) Raise interest rates to curb inflation and thereby kill the housing boom, and most likely slow the rate of economic growth right down; or

2) Drastically cut government expenditure - which will have to be in key areas like health, education and social welfare, since those are most of government spending - to offset the inflation.

Labour cut taxes heavily without cutting expenditure in the 80s, and as a result National eventually had to slice up the health and education system in the early 90s. The bottom line is, National's proposed tax cuts will either screw the economy, or come at the cost of major public service cuts, or both.

Seeing as you somehow know this figure, what is the counterpart figure for money that stays in NZ?

Heres a thought. Fundamentalist Christians who support Nationals tax cuts. Tax cuts mean giving more money back to the individual and letting them decide how or what to spend it on. Some will spend it wisely and some will watse it. You could say that this is encouraging what Darwin called survival of the fittest?