If National wins ...

[elZorro]

Appreciate the work Snapper, at least you're making a good argument.

But it looks to me like National's policy is to borrow when they are in office, until the debt is around 30% of GDP, no matter which cycle they're in. If things are going well, they can reduce taxes to the higher paid, and even if the economy is not going well, they'll take any benefit that Labour has left behind. Look at the longer-term graph from 1986, and you'll note who is in office when the effort goes into reducing the debt below 30%. Labour, 1999 to 2008 . As GDP has climbed lately (higher new house valuations, finance fees, high immigration) the debt percentage graph has started curving back a bit. Don't be fooled, National is still borrowing quite a lot and will soon have to repay some maturing bonds, which will push it back up. They'll leave a big mess by 2017.

[Major von Tempsky]

Yawn! I've pointed out once before....they teach it in Economics I from Samuelson (ok, there's probably a newer guy with a different name these days saying much the same thing with a few additions) but the National Debt doesn't get repaid, it gets rolled over (good stuff at such low rates of interest). Occasionally it is repaid to some extent as an instrument of monetary and fiscal policy to reduce liquidity in the economy. If a country is extremely improvident and borrows mainly or solely overseas without any thought to maturities and cashflow planning then they end up the creek without a paddle(think Greece and Argentina) but that's not NZ and our borrowing in mostly or solely domestic. Overseas direct investment in NZ is not borrowing, its a private sector decision and if they get it wrong through stupidity they go bankrupt.
Besides which have a look at the table of lenders and you'll see a whole lot of investors looking for a safe investment, superannuation and insurance companies etc.

For every left wing nitwit hiding under the bed at the thought of the Government borrowing (they don't when a Labour gov't does which is just a measure of their hypocrisy) there's half a dozen economically literate people laughing at you.

[Daytr]

FP, we vote on similar lines i.e. policy rather than be dogmatic in regards right & left.
Although in some respects the Lange/Douglas era in were more right wing than National at the time.
Labour are struggling with a forming an identity in regards what they stand for, at least publicly anyway .
National however remind very much of Muldoon's era, with their big capital projects, particularly roads .
Their environmental policy is seeing NZ go backwards. They are now pushing for things like seabed mining!
They lack direction on combating the NZ diabetic epidemic . Of course they should introduce a sugar tax.
Even if the evidence is yet to be convincing that it reduces consumption over time, at least it would help fund the health costs.
Obviously a sugar tax alone isn't going to resolve the issue. Have warnings, like cigarettes etc.
Regulate the products.
Doing nothing is not an option .
Again National, left floundering .

My vote is always cast against the party I think will do the most harm. With every new Labour leader we seem to get a new bunch of policies, so who knows - maybe I'll vote Labour again one day. I'm quite sure Labour will not be in a position to form the next government, but that doesn't mean I want to see National sleep-walk to victory. Yes, they probably will need Peters, a complete toss-pot but a few baubles in his direction will do the trick. To sum that up - I don't really care which party wins, but I very much care what the policies are. In my life time Muldoon's National were probably the worst govt. and 1984 to 1990 Labour were the best.

[fungus pudding]

FP, we vote on similar lines i.e. policy rather than be dogmatic in regards right & left.
Although in some respects the Lange/Douglas era in were more right wing than National at the time.
.

Douglas modernised the economy and that was long overdue, particularly after almost 9 years of Muldoon - the most interventionist PM ever. Life in NZ had become as financially controlled as the Soviet Union. What amazes me is how rigidly Labour voters stuck with Labour while they introduced sensible policies that they had always opposed. And it took the NZ party to oppose National and bring about the change of govt.

[elZorro]

I like the way you right-wingers rewrite history, you're all so full of it.

Douglas didn't have the smarts to write those neo-liberal polices, that was the work of Treasury boffins. The period from 1984 was brutal, and many lost their jobs. Some of you guys sailed through, but you're in the lucky minority, so have a bit of respect.

All through the Clark era when Labour were redressing these unequal imbalances caused by neo-liberal policies, the National cry was to refund taxes. In other words, the repayment of external debt was secondary. When the GFC fully hit, along with the earthquakes, NZ was in a very safe state to lend to. If National hadn't had that headroom, it would have been a lot harder. Even now Bill English is careful to point out that we are in a good spot compared to other nations with our external borrowing. So what you are saying, MVT, is that the level of borrowing doesn't matter, it'll get rolled over? Bill doesn't think so, he's keeping it locked down to 30% of GDP.

However if Labour hadn't ignored National cries from the cross-benches and prudently paid back almost all of NZ's historic debt, we'd now be paying the interest on 60% of GDP, not 30%.

Labour grew our economy with real expansion, National is trying to do it by sleight of hand with immigration and house prices. National's big export hope, dairying, is on the ropes. Large companies throughout NZ are feeling the pinch and are trying to bluff their way into 60-90 day terms with all their smaller suppliers. This grinding down of the economy has a way to go yet. The market is solving the issue of less external income, they'll wring some profits out of smaller enterprises and workers instead.

[fungus pudding]

I like the way you right-wingers rewrite history, you're all so full of it.

Douglas didn't have the smarts to write those neo-liberal polices, that was the work of Treasury boffins. The period from 1984 was brutal, and many lost their jobs. Some of you guys sailed through, but you're in the lucky minority, so have a bit of respect.

Did treasury write 'There's got to be a better way' as well or did Douglas manage it by himself? Wallace Rowling certainly thought so.
As far as losing jobs - did you ever stop to think how many jobs would have been lost if Douglas hadn't restructured the economy? No? Didn't think so!

[elZorro]

Did treasury write 'There's got to be a better way' as well or did Douglas manage it by himself? Wallace Rowling certainly thought so.
As far as losing jobs - did you ever stop to think how many jobs would have been lost if Douglas hadn't restructured the economy? No? Didn't think so!

I'll look up the historical details if you think I need to, FP. Just so much bluster. And the rest of what I wrote, would that be accurate then, I take it? Feel free to debate those points too.

[westerly]

Yawn! I've pointed out once before....they teach it in Economics I from Samuelson (ok, there's probably a newer guy with a different name these days saying much the same thing with a few additions) but the National Debt doesn't get repaid, it gets rolled over (good stuff at such low rates of interest). Occasionally it is repaid to some extent as an instrument of monetary and fiscal policy to reduce liquidity in the economy. If a country is extremely improvident and borrows mainly or solely overseas without any thought to maturities and cashflow planning then they end up the creek without a paddle(think Greece and Argentina) but that's not NZ and our borrowing in mostly or solely domestic. Overseas direct investment in NZ is not borrowing, its a private sector decision and if they get it wrong through stupidity they go bankrupt.
Besides which have a look at the table of lenders and you'll see a whole lot of investors looking for a safe investment, superannuation and insurance companies etc.

For every left wing nitwit hiding under the bed at the thought of the Government borrowing (they don't when a Labour gov't does which is just a measure of their hypocrisy) there's half a dozen economically literate people laughing at you.

I would rather the words of Brian Gaynor ( http://m.nzherald.co.nz/business/new...ectid=11468289) than the bored ramblings of a right wing economist.
Interesting how the right are so worried about the left they have to resort to name calling and derogatory remarks to boost their criticism of posts they disagree with.

[Daytr]

Well MVT claims to be an economist, but has been caught out on many occasions on some pretty basic economic history and theorists that any economist should know. I must admit if was to dream up a avatar I think it would be more exciting than an economist.

There has been some discussion on here re tax avoidance. Seems NZ is right up there in regards tax havens and right under the nose of the government.
Thank god for leaks otherwise we would never uncover these things .

Again National caught napping & we are on the UN security council for gawds sake!

http://i.stuff.co.nz/business/indust...nting-scandals

[elZorro]

Did treasury write 'There's got to be a better way' as well or did Douglas manage it by himself? Wallace Rowling certainly thought so.
As far as losing jobs - did you ever stop to think how many jobs would have been lost if Douglas hadn't restructured the economy? No? Didn't think so!

Wikipedia says that Roger Douglas changed his tune in the leadup to the 1984 elections quite a lot, and attributed the new thinking to a Treasury paper and Treasury advisors.

A new direction, 1983–1984[edit]

At the end of 1983 there was a marked change in Douglas’s thinking. He prepared a caucus paper called the “Economic Policy Package” which called for a market-led restructuring of the economy. The key proposal was a 20 per cent devaluation of the dollar, to be followed by the removal of subsidies to industry, border protection and export incentives. The paper doubted the value of “picking winners” and saw only a limited place for government funding of economic development.^[21] His colleague Stan Rodger described the paper as a “quite unacceptable leap to the right”. It immediately polarised opinion in the Labour Party.^[22]
Douglas characterised the policy package as restrained and responsible, and an appropriate response to the country’s economic difficulties.^[23] He acknowledged the contribution to the package of Doug Andrew, a Treasury officer on secondment to the parliamentary opposition, among others.^[24] W H Oliver noted the close alignment of the package and Economic Management,^[25] Treasury’s 1984 briefing to the incoming government.^[26] His assessment was that Douglas was predisposed towards the Treasury view because its implementation required decisive action and because greater reliance on the market solved what Douglas saw as the problem of interest-group participation in policy-making.^[27]
Division in Labour over economic policy crystallised when a competing proposal was submitted to the Labour Party's Policy Council. Its proponents included Rowling and others who had resisted his replacement as leader. It argued for a Keynesian use of monetary and fiscal policy. It was sceptical about the ability of the private sector to promote economic development. Economic restructuring was to be led by the government, which would act within a consultative framework. In this way, the social costs of restructuring would be avoided.^[28]
There was stalemate in the Policy Council. As the 1984 election drew closer, Labour’s deputy leader Geoffrey Palmer drafted a compromise that contained elements of both proposals. The Palmer paper was broadly worded, and it made no mention of devaluation. It anticipated some form of understanding between government and unions about wage restraint. It allowed for extensive consultation about economic policy and stated that necessary structural change would be gradual and agreed.^[29] When Muldoon unexpectedly called an early general election, the Labour Party adopted Palmer’s paper as its economic policy. Lange said that Labour went into the election with an unfinished argument doing duty as its economic policy.^[30]