The Chch earthquakes were a bloody tragedy - but they are also an enormous opportunity and the Govt

Rachel The other big issue at the moment Mr Shearer is the high New Zealand dollar, and Labour has you know rested much of its economic policy on amending the Reserve Bank Act. How would that work under Labour?
David Well the way that the dollar has gone up, vis- -vis other currencies has meant that many of our exporters are not doing well. We export to live, and if we export and our exports are doing well, then New Zealand does well. Right now the United majorca hotel accommodation States, the European Central Bank, Japan, South Korea, have all effectively devalued their currencies and ours are still very high. It makes it very difficult for our exporters to be able to compete in those sorts of bargains.
So they ve all got very low interest rates obviously. So would Labour want to see the OCR lower, would Labour want to do what the United States and ECB is doing and intervene majorca hotel accommodation in the foreign exchange markets?
David Well what we ve said is that the Reserve Bank Act needs to be amended so that inflation is not just simply the one target, so that we actually broaden that outlook, so it gives the Reserve Bank the ability to be able to take a look at how exports are doing and how our exchange rate is doing.
David Well it s not for the politicians to run the exchange rate, but what you do need to have is a wider toolbox for the Reserve Bank to be able to make those sorts of judgements, and if they re only concentrating and focusing just on inflation, which was an issue, well it s still an issue but it was certainly the big issue 15, 20, 25 years ago. But it s not so much the issue today. When you look around the world today how it is we re going to be able to compete, our exchange rate is killing us.
Alex Yeah but basically what Labour s effectively saying is you want them to cut interest rates so that the pressure comes off the funds coming into New Zealand, to try and get the exchange rate right. Isn t that the point of what Labour s saying with their policy?
David Well it may involve the interest rate coming down, but what we are saying is that rather than politicians becoming involved in setting exchange majorca hotel accommodation rates, what we are saying is that the Reserve Bank should have more ability rather than the very narrow .
Alex This is exactly majorca hotel accommodation what s happening though, Labour is saying we don t want the exchange rate at where it is on the market level. It s there because of market dynamics at the moment. Labour s saying we don t want it there for the market dynamics. That s politicising the Reserve Bank Act again.
David No I don t think that s the case. What many people are saying, including the IMF are saying that our exchange rate is overvalued by the IMF at 15%. David Parker has been in the United States recently talking to Joseph Stiglitz, [and] the head of the IMF; A whole bunch of economists who are saying the era of focusing solely majorca hotel accommodation on inflation is now over, and we need to be looking at a wider range of economic measures and therefore giving the Reserve Bank the ability to actually take .
David No, what I m saying is, is that inflation is one aspect, but it s not the sole aspect. It was the sole aspect 20 years ago, but today we ve got other pressures on our economy, and that s about exchange majorca hotel accommodation rates and actually growing our economy.
David No, there is not magic bullet, but this is one issue that we are exploring and putting out there because it is where other countries are going to and we are needing to take real notice of that. Now if you look at many other countries as I said, they are already doing that. This government is currently saying, no were just gonna leave it up to the world market, we re gonna be okay. Well actually that s not the case.
But coming back to your point, what we need to be able to do, is not only just to focus on, just on exchange rates obviously, but it also is about making sure that we are investing in productive enterprises, and that is run a Capital Gains Tax that we ve been talking about. Universal savings so that there s more capital to be able to be invested in businesses. There s a whole series, I mean Superannuation which we re worried majorca hotel accommodation about, growing so that it s starting to soak up government expenditure.
Alex That brings up a really important issue as to why the exchange rate is so high. Is because foreign funds have been flowing in to fuel the housing market. Labour says that s because of a lack of a Capital Gains Tax. That s got nothing majorca hotel accommodation to do with the Reserve Bank does it?
David No, this is what we re coming back to Rachel s point about a silver bullet, there are no silver bullets. There is no silver bullet but there are a series of measures that we can take to readjust our economy and refocus our economy towards productive enterprises rather than speculating .
David Absolutely, it s not one or the other, it s both. I mean there s a whole bevvy of things that we re able to do. And what we re saying, and what we are very different from where National is going, is National is saying we can t do anything more it s hands off. What we re saying is no no it s not hands off, we can make some big changes, and this is the very big difference between us and National, some big changes around monetary policy, taxation, savings, superannuation.
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If I have learnt one thing.... It is that Politicians are almost always wrong... majorca hotel accommodation When he says inflation is no longer an issue, because it hasn t been for the last 15-20 yrs..... then I reckon that inflation WILL become an issue.... and probably not long after they change monetary policy away from inflation targeting and broaden it to include things like employment and exchange rates...
If Labour wants to refocus the economy towards productive enterprise then maybe they should consider addressing the real problems that the productive sector has. On one hand Labour boasts that they always had a budget surplus (well when you can demand income via taxes at your will you can create majorca hotel accommodation any situtation you desire). However NZ s current account has had deficits for years and Labour did not address majorca hotel accommodation this on their 9 year shift.
Productive enterprise cannot keep funding Govt spending and dig us out of the debt hole at the same time. It is the inefficiencies within the Government and the size of Government that is directly attributing to NZ s problems. But it appears majorca hotel accommodation no Political party has the necessary will to make the appropriate changes.
I think other issues are the problem but sticking majorca hotel accommodation to your point the trouble is that the (im)balance has been built up over decades and these are all middle class jobs and salaries. The people involved are pretty much useless in terms of productivity and need to go through a period of retraining into more productive vocations. So large numbers of people with a substantial drop in income while they train is going to do wonderful things for our ponzi housing majorca hotel accommodation bubble isn t it? It simply can t be done without collapsing it and probably taking a few banks out with it. IMO it will mooch along until there is simply no one left willing to lend the money that keeps it going.
When they had the bank mergers going on in the mid 90 s I was living in a small city. The redundancies that occurred resulted in basically a collapse of the local housing market as a dozen or so bank managers had to sell up and move to find work. We are talking 30% or more losses in value here.
I am absolutely in favour of reducing benefits, right across the board. First up in interest as that is a completely useless, unnecessary majorca hotel accommodation and immoral source of income. All unearned income should be targeted in fact, including tax.
Scarfie - I think NZ is particularly well placed to make the moves in reducing Govt spending right now. I hear you on the re-education side - however Chch rebuild and Aucklands housing fiasco are two areas where employment opportunities majorca hotel accommodation are everywhere.
Stop bringing in foreign labour and get kiwi s working here. So many opportunities could be created right here and right now. It s not only the building rebuild, there s roading, sewerage lines, subdivisions and a plethora of employment which should be utilised in the transition phase of reducing Govt employee numbers.
There is not enough urgency within Govt to take the bulls by the horns and turn the economy back around. No one in business could operate with this kind of half arsed attitude. Gerry Brownlee looks completely inept at handling the earthquake and we can t afford this type of blundering.
The Chch earthquakes were a bloody tragedy - but they are also an enormous opportunity and the Govt has shown terrible majorca hotel accommodation leadership. Many of the employment opportunities would most likely come from apprenticeships etc that could have been started. You are still going to have a large number of clerical type positions become available which would suit some of the less hardy individuals. If some of these public servants had to take a wage cut in transferring majorca hotel accommodation they wont be able to borrow as much for housing so you can create a little swing to the downside at the same time which is all good.
Austerity is highly counter-productive, it was shown to be in the 1930s and shown again and again in the GFC. How many examples of Govns cutting put in front of you does it take to show its disaster? infinite I d guess.
My suggestion is a transfer from unecessary Govt employess to productive employees. They may not earn quite the same income as their Govt jo