Saturday, December 5, 2009


Here is a post from Whaleoil, pinched in it's entirety.

Pinched because (a) it's hugely important and (b) because Whaleoil does not appear to have asked the Herald the obvious question. "Did you infact refuse to publish Dr Brash's response to Garth George's commentary and if so why?"

Adolf will be writing to Mr Murphy to ask that very question.

Now here's the post. Fascinating for its insight into the travesty we call Antique Media.

Don Brash wrote a letter to the Herald regarding the serious errors about the 2025 Taskforce report that Garth George had in his column. The Herald has refused to publish it, proving once again that the repeaters and the editors of our media are seeking to control the message.

According Don has asked that I and other publish his letter. I have agreed.


Garth George was way off beam in his attack on the first report of the 2025 Taskforce.

Leaving aside the personal invective, he claims that the “biggest absurdity” in the report is the proposition that New Zealand can and should catch up with Australia. He says that “there is just no comparison between the two countries”, with Australia having five times our population, 32 times our land area, and huge resources of minerals. Well, those are factual statements about Australia, but they ignore some important facts which he would be aware of had he read the report.

First, there is no correlation between living standards and population – if there were, India would be super-rich and Singapore would be poor.

Second, there is no correlation between living standards and land area – if there were, Russia would be super-rich and Finland would be poor.

Third, there is no correlation between living standards and mineral wealth – if there were, the Congo would be super-rich and Japan would be poor.

In any event, a recent World Bank study showed that, in per capita terms, New Zealand has more natural resources than almost any other country in the world.

For most of New Zealand’s history, our standard of living has been very similar to that in Australia – sometimes a bit ahead, sometimes a bit behind. And the Taskforce didn’t off its own bat decide that catching Australia again by 2025 would be some good idea: the goal was set by the Government itself, and the Taskforce was set up both to advise on how best to achieve the (very challenging) goal and to monitor annually progress towards achieving it.

Too often in the past, governments have announced grandiose commitments to lift living standards – such as the last Government’s commitment to lift us into the top half of developed countries within 10 years – but then totally ignored those commitments, hoping that nobody would notice it. It is to the Government’s credit that they made a commitment and then established a mechanism to hold them to account.

Garth George accuses the Taskforce of recommending a whole range of things which we do not recommend. For example, he accuses us of recommending a flat personal income tax, and notes that if such a tax were established a whole range of low income people would have to pay more tax. But whatever the merits of a flat tax, the Taskforce did not recommend such a tax. What we did say was that, if core government spending were cut to the same fraction of GDP that it was in both 2004 and 2005 (29%), the top personal rate, the company tax rate, and the trust tax rate could comfortably be aligned at 20%. Under such a tax structure, all those earning above $14,000 a year would pay less income tax, while nobody would pay more income tax.

Nobody seriously argues that government was vastly too small in New Zealand in 2004 and 2005 (the end of the Labour Government’s second term in office), so why the ridiculous reaction when the Taskforce suggests reducing government spending to that level?

Mr George also suggests that we recommended abolishing subsidised doctor visits, and implies that we are advocating an American approach to healthcare. This is again utter nonsense. We suggested targeting subsidies for doctor’s visits at those who need them, either because they have low incomes or have chronic health problems.

He suggests that we favoured removing subsidies for early childhood education. Again, not true. What we said was that those subsidies – which have trebled in cost from $400 million a year to $1.2 billion a year over the last five years – should be focused on those who need them.

The recommendations of the 2025 Taskforce are actually totally in line with orthodox thinking in most developed countries, and are almost entirely consistent with the recommendations of the recent OECD report on New Zealand.

Don Brash
Chairman of the 2025 Taskforce


Ackers said...

Oh dear. Garth George and Don Brash. The return of the living Zombies!

"Before the committee members and their allies gained political power in NZ in the 1980s, there was no significant gap between Australia and New Zealand. The two economies had grown in parallel ever since the arrival of Europeans, and both faced very similar challenges. The gap the report were supposed to close was the product of the radical free-market policies implemented by Douglas, Caygill and others in the 1980s and the mismanagement of monetary policy by Brash in the 1990s. Australia took a more measured approach to micro reform and chose more sensible central bankers, producing much better outcomes.

The absurdity of appointing such a committee is even greater now that the theoretical basis of their policies has been destroyed by the financial crisis. The centrepiece of the policy framework was comprehensive financial deregulation, along with policies like privatisation that depended on the assumption that private capital markets were the best possible guide to the allocation of scarce capital. All this depended on, and reflected, the effiicient markets hypothesis, a theory now abandoned by all but the most dogged and dogmatic of its proponents.

Unsurprisingly, the committee came up with no new ideas, suggesting massive cuts in public spending, more deregulation and so on. About their best idea was congestion pricing for road access to major cities, something Ken Livingstone beat them to some time ago.

Who would be silly enough to appoint such a committee. The National Party is happy enough to leave the Brash years behind, and Labour certainly has no interest in promoting Cargill. The answer, unsurprisingly, is the free market + statist law and order ACT party, which demanded this as part of its price for entering a coalition government.

This political zombie is well matched by the zombie economics it has dished up."

Redbaiter said...

The Herald is a poisonous scab on NZ's skin. It has never ever in my experience been ready to publish anything that seriously counters its wet liberal NYT ideological base.

Disgusting that Mr. Brash has to turn to the blogosphere to counter the uninformed rubbish of Garth George.

The Herald has been known to do such things so often. Seriously misrepresent someone and then deny them a right of reply.

Discredited cowards and propagandists posing as journalists.

Inventory2 said...

The Dead Tree media goofs it again. It has not been a stellar month for Mr Murphy and his esteemed journal - outed by Cactus Kate, and now this.

Today's news; tomorrow's fish 'n' chip wrappers!

Anonymous said...

just watch how fast kiwiblog gets this up on it's pages.....

showmethetaxcut said...

Thre trouble here is that Garth George seems to have simply regurgitated the leftwing media take on the report rather than actually reading the bloody thing.

Anonymous said...

And now Brash comes right out and admits it: Hellen's 2005 policies were right, and we should just adopt them all for NZ


Key's policies are Hellen's policies from 2008

Brash's policies are Hellen's policies from 2005

Heh: Roger's policies are Hellen's policies from 1984.

Especially ironic since Brash actually won the 2005 election, but was cheated of government by the Maorimander and Labour's massive overspending.

Adolf Fiinkensein said...

Ackers, why do you take so many words to demonstrate you are such a dick? Did you actually read Don Brash's letter?

Adolf Fiinkensein said...

Furthermore, Ackers, if you go back and read Dr Brash's Orewa speech you will find he was as badly misreported and misrepresented by your leftist media friends then as he has been by the curmudgeonly George this time.

Psycho Milt said...

What? Garth George talking bollocks? Forgive my lack of surprise.

Disingenuous response from Brash, though. For example, he implies the taskforce is only recommending govt spending be cut back to where it was 4 or 5 years ago, which very few people would reject - neglecting to mention that the taskforce is suggesting that only as a first round of cuts.

Bottom line: Aus has higher productivity than us because it doesn't have our capital shallowness. And it doesn't have that because it avoided our low-wage, de-unionising approach to the labour market, because it implemented compulsory superannuation savings and so on. We went for low wages and a de-unionised workforce, set up compulsory superannuation savings only in the last few years and put our sharemarket and finance sector in the hands of thieves.

Brash's suggested way out is to further reduce workers' pay and conditions, scrap superannuation savings and shrug our shoulders at the fact that real estate is the only sensible place for NZers to put their money. And then he acts all surprised when people not driven by ideology reject his nutbar advice out of hand. Really, Don? Are you really surprised?

Anonymous said...

Is Phyco Milt the one and same Garth George? Seems to read from the same hym book. Both outright liars.

Anonymous said...

I thought the percentage of unionized workers in oz ran at about 19% with nz at about 18%, not much of a difference . . although much of that unionization percentage wise is in the public sector, i would expect.

If unionization was such a panacea to improved productivity, the govt of the last 9 years in nz could've adopted compulsory unionism, returning nz to national awards the lot, instead of just frittering around the edges with the ERA.

baxter said...

ACKERS......I had to have a good laugh at this comment by you.."Labour certainly has no interest in promoting Cargill."..............I doubt that any Hack has been patronised to the extent that Caygill has.Liabour appointed him wherever there was a soft dollar to be made. When a demonstrably independent Electricity Commissioner was sacked for disobeying CLARK who was the Yes Man appointed in his place.

Ackers said...

Adolf, just reading the executive summary is a barrel of laughs. It's as if the GFC hadn't happened.

You'll be thankful Keys is much smarter than Rodney and as we know has far more integrity.

Talk about damaged goods and a bunch of discredited economic illiterates having 1 last bite at the cherry.

Adolf Fiinkensein said...

Ackers. how long has your mate KRudds been PM?

David said...

Adolf, looks loke a prod was needed and worked. Check the letters in the Harald on Monday 7 December. cheers