Matt Nolan

Discussion Tuesday

/5 Comments/in /by

Double-barrel question today – make sure to answer them separately, or point out if you are only answering one part.  The answers to both questions are not obvious btw:

In New Zealand, the government is now a larger part of the economy than it was under Muldoon.

In New Zealand, the government should be a larger part of the economy than it was under Muldoon, given the changes in technology and social structure.

Once again, remember that these are points for discussion – I am not saying I agree or disagree with them.

Matt Nolan

Beware the seductive simplicity of the Spirit Level

/13 Comments/in , /by

I see that the Spirit Level authors are in town, and as a result there was a recent Herald article took aim at income inequality in New Zealand, relying strongly on the book ‘The Spirit Level’.  A conversation about the inequalities society believes are fair, or at least justifiable, is a good thing.  However, the Spirit Level’s claims that simply targeting measures like the Gini coefficient will make everyone better off is a misleading, and dangerous, place to start this conversation.

Read more

Infometrics

VSR: Very silly regulation?

/7 Comments/in , , /by

When discussing it’s new monetary policy Labour was keen to explain why they felt a change was necessary, and why a variable Kiwisaver contribution rate should be investigated.  However, to investigate such a policy it is important to ask some specific questions – this is what Gareth Kiernan did in this article (Infometrics link).

In announcing its new monetary policy proposals, Labour has shown an admirable ability to think outside the square. …. Unfortunately, there are a lot of problems with Labour’s idea and the assumptions behind it.

His list of 10 questions are:

  1. Should KiwiSaver be compulsory?
  2. Does New Zealand really have a savings problem?
  3. How good is Australia’s compulsory savings scheme for their economy?
  4. Do compulsory savings programmes actually increase savings anyway? 
  5. What effect do compulsory and limited-access savings have on the robustness of financing decisions?
  6. Is New Zealand’s permanent current account deficit really a problem?
  7. Are our ‘high’ interest rates really caused by our rigid monetary policy framework?
  8. How much of our mortgage interest payments go overseas?
  9. Does the export sector really need a lower exchange rate?
  10. What about compliance costs for businesses?

His answers to these questions give a case for why the VSR may not be good policy at all.  What are your thoughts?

 

 

 

Matt Nolan

National’s not alternative budget: Budget 2014

/9 Comments/in /by

There is excellent commentary on the Budget here (Kiwiblog, Economics NZ) and really cool visualisations by Keith Ng here (his post here).  I suggest looking at those, it is much better than anything I can offer here.

However, I can’t help talking.  And looking through the budget documents I felt that something has been confirmed for me:  The National party has a stronger focus on social justice, equality of opportunity, and outcomes for the ‘worst off’ than either Labour or the Greens.  This came out here:

While the Labour and Greens alternative budgets were focused on industrial subsides (the “Green energy bank” is a form of industrial subsidy) – subsides that will benefit those who have the money to invest in the first place – National has come out with a budget focused on families/parenting, and a sixth budget that boosts real expenditure on education and health (at a time when the government was generally hesitant to spend).

Read more

Matt Nolan

Budget day warmup

/1 Comment/in /by

I realise people are probably pretty excited about the Budget later today – as that is something some people tend to get excited about.  I remember my family used to buy copies of the Budget documents, and go on and on about them – although I’m fairly sure I never saw them actually read them 😉

Still, to have you prepare here is my ‘policy platform’ from 2011 – not sure it would be too different today.  Also, here is Brennan McDonald making the argument for incrementalism – which is probably more sensible than my policy platform 😉

Update:  Just saw an article by the NBR about my post on the ACT Budget.  Was good fun, I’m happy with the quotes they took – as I do want to point out that there is space for the types of policies they are discussing, the GDP justification was just such misinformation it vexed me.  More importantly though, I see they are still using my Google+ photo instead of my work photo in their articles – that is hilarity.

Matt Nolan

Green’s Investment Bank

/14 Comments/in , /by

The Green party has announced a “Green Investment Bank” to help facilitate investment in green industries (release, discussion, paper).

I am not against it per se, and given they are saying that in the first year they will have a working group to determine the details there isn’t too much I can dig my teeth into here.  As a matter of principle I am:

  1. Against industrial subsides
  2. For policies that help to improve matching and adjustment to changing economic reality

This policy is doing a bit of both, so I would need details before I can say much.  But the money quote for me from the policy document is this: Read more