Dom post article: The technocrat’s tax
Give an independent body (akin to the RBNZ) the ability to set tax rates
Discuss (but preferably read the article first 🙂 )
Archive for month: February, 2009
Scepticism, values, and the “blog brand”
There is one thing I would like to make clear to people when they read our posts – we are sceptical people.
Even so, I like to think we are equally cynical about government and private institutions when we discuss things.
On top of that – we often try to put our scepticism to one side to discuss “idealised” versions of both government and private institutions. This does not mean we favour one over the other – it just means that in order to study the failure on one independently we need to make unsatisfactory assumptions in other places.
As a result, if our “implicit value judgments” on government/market failure/success upset you remember two things:
- Value judgments can differ: So we can disagree without having to get upset about it,
- Even if the example is wrong, the concepts underlying them can help to illustrate what is going on: Government isn’t perfect – but assuming that it is allows us to see the institutional failings of markets, and vice versa.
Now we frame our blog as relatively “pro-government”. This implies that we solely tend to focus on areas where the government could succeed rather than when it could fail – not that we believe governments are truly less likely to fail than the market. The distinction is important.
If you believe government fails more than we do – tell us in the comments or even write your own blog posts. Trust me, there isn’t enough time in the day to study every side of an issue – so we will be very happy to see other people taking the other side
Where’s the issue?
One of the two key proposals of the job summit is to institute a nine day fortnight for manufacturing workers. Presumably the idea is to increase the flexibility of working hours and thus increase the number of people in employment.
The obvious question is, ‘what is the market failure here?’ Employers and employees are free to choose their working hours. Employers may employ more people for fewer hours if they so wish, yet they seem not to. Why then would we force people to work fewer hours? Read more
Cynical on the job summit: So sue us!
I realise today that we came off as cynical about the job summit. Jobs are important, and there are issues that businesses and the economy have to work through.
However, the type of discussion we saw through the Herald today was not the sort of thing that we were hoping for: The biggest issue seems to be a nationwide cycleway!!
Now before you tell us off for being too negative I would like to point out that we did talk about possible government reactions on February 11th – at the behest of the Inquiring Mind blog. It can be found here. Our recommendations were:
- Move forward infrastructure when there is a hole in employment,
- Improve the structure of taxes (something we will discuss tomorrow),
- Integrate skills and education policy with unemployment policy.
Ideas that stick to this theme will be useful – but adding additional, pointless, infrastructure spending or arbitrarily fiddling with structural policies in the economy is not the way to sort things out. However, as the different members of the job summit gave their speech’s, the useful updates from the Herald site gave us the impression that these were just the sort of policies that are being looked at 🙁
If you believe the “fest” was more successful, then tell us. Within a few weeks it will be clear whether it was – once we see the set of policies released by both government and big business in response. I am not holding my breath …
Cycleway or Hydroslide?
One of the more interesting ideas to come out of the jobs summit is a cycleway across the whole country, I find this comment on the stuff article to be particularly insightful:)
If you’re looking for ideas with tourist potential, I think a hydroslide the length of NZ has much more potential than a boring old cycle-way… If I was a foreign tourist looking for a travel destination with a difference, I think hydroslide is a better seller than cycle-way.
Also, imagine going over Cook Strait in a hydroslide. You could get out and play with the dolphins. You wouldn’t be able to do that if you had a big metal bike with you.
More suggestions …
And some more …
Other ideas include:
* $10,000 interest free loans to new house buyers;
* Government-funded crisis managers to help companies in strife;
* A fund from the sale of government bonds to add liquidity to the consumer finance market;
* Tax holidays for struggling businesses; and
* The Government offering loan guarantees to small and medium sized businesses.
Why give home buyers money? What is the social benefit from someone buying a house!
Are we actually facing a liquidity constraint in the consumer finance market? I didn’t think we were? Households have decide they WANT to cut back spending given uncertainty.
Guaranteeing loans?? Sure, that is a great way to make sure we get productive investment going 😛
Crisis help and tax holidays are potential goers – although, there would need to be more detail before I could say I agree with it.
Update: At 2.15 Bill English said NZer’s will decide whether this is a “talk-fest” or a “do-fest”. What he means is that NZer’s need to be adaptable because this is a permanent shift. This is true.
However, if the whole adjustment needs to be done by NZer’s, what is the point of this “talk-fest”? Note I call it a talk fest because he is practically saying that the adjustment needs to be done by people outside the meeting, and that policy can’t really help.
Update 2: From here:
Those in the building industry have asked for subsidies for wood frame homes arguing it will boost both the construction and forestry sectors
The lobbyists are having a FIELD DAY!!!