Sunday, December 29, 2013

Surely not more good news?

As 2013 rolls towards its end, we keep getting bombarded with good economic news. The latest suggests that the year that starts on Wednesday is going to be a ripper; Michael Fox reports on Stuff:

Financial experts are united - next year could be a golden one for the New Zealand economy with all signs pointing to a prosperous 2014.
Commodity prices are booming, businesses are at their most confident in 20 years, the economy is among the world's fastest growing, jobs and wages are predicted to rise and that confidence is filtering through to consumers who are starting to open their wallets.
New Zealand's GDP growth was at its highest in four years in the last quarter at 3.5 per cent on the previous year - higher than Australia (2.3 per cent), the US (1.8), Britain (1.5) and Japan at 2.4 per cent.
Compared with Australia, once our largest trading partner but recently overtaken by China and whose economic growth outside the mining sector has relatively flatlined, our positive outlook is more stark.
However, living up to their billing as experts in the dismal science, economists are also quick to warn against overconfidence, pointing out that no boom lasts forever. 

New Zealand led the world into recession. Our economy was already going backwards at a great rate of knots when the government changed in November 2008. With his last defiant act, the buy-back of Kiwirail, Michael Cullen cleaned out the cheque account, having already emptied the savings account. His gift to Bill English and John Key was the infamous Decade of Deficits.

That Bill English will have the books back in the black four years ahead of schedule is commendable enough. But now New Zealand is being held up as an example to the global community of how to manage your way through tough times. Mr English was the right man to be in charge as the world plunged into a Global Financial Crisis.

We quite agree with the economists referred to above; no boom lasts forever. But the boom that is just three days around the corner would last a lot less if a big-spending, big borrowing, big taxing LabourGreen government was to be elected late in 2014. Bill English deserves another term to get the New Zealand economy onto an even more solid footing than he has already achieved.


bsprout said...

Oh dear, KS, some imaginative rewriting of history. This National led Government have borrowed far more than Labour and have extended Government debt to a whopping $71 billion.

One of the biggest losses in Government revenue was caused through the tax cuts to the rich (our wealthy get taxed far less then in Australia and our poor get taxed more).

If you want to talk about big spending, what about the $12 billion dollar Roads of National Significance, most of the motorways in this scheme fail proper cost benefit analysis.

We also have the economic drain of the leaky buildings, Nationals removal of regulations in the 90s has caused an $11 billion on going nightmare.

The so called recovery is only benefiting the already wealthy with levels of poverty amongst working families growing.

We need steady sustainable growth, based on a long term strategy. We need to have a smart assessment of our resources and industries and look at adding value to primary commodities. We need to burst the property bubble and shift investment in to the productive sector.

So much to do and this Government is not the one to do it.

Keeping Stock said...

The relentless flow of good news must be soul-destroying for you bsprout. How about coming up with something original in response, instead of the hoary old chestnuts of half-truths and fantasy that you present as fact.

PS: Did you see the pictures of road chaos north of Auckland on Thursday and Friday? Proof, if it were ever needed that Puhoi to Wellsford is one of the most-needed highway reconstructions on the books. And every time Julie Anne Genter or sundry Labour MP's call it the "holiday highway", the north of the North Island becomes even more of a fortress for National. The good folk of Whangarei and points further north are sick and tired of the Left's politicisation of their road access to Auckland, which under nine years of Labour became shamefully bad.

bsprout said...

I thought it was called the holiday highway because of the increased congestion at holiday time, a fairly accurate name I would have thought. ;-) We have a similar problem down south with our our one lane bridge south of Queenstown that experiences 1 hour queues. The new bridge construction has been delayed yet again to fund the RoNS.

No one is denying the problems but the solutions don't always involve building major motorways. we should learn from the Australia's experience.

We down south are also suffering from the 25% cut in the funding for our rural roads, which actually support economic activity. The current road building strategy was thought up by National before feasibility studies were done and most failed cost benefit analysis until the system to assess viability was changed to include the Government's priorities:

Julie Anne Genter has a number of practical solutions to the Puhoi-Wellsford road that just involve useful upgrades at specific points to mitigate the congestion issues. The current plan is a clear case of overkill.

Julie Anne has economic and transport credentials that should not be discarded lightly as Stephen franks learned:

Keeping Stock said...

Nice try bsprout; but you know as well as I do the reason for that appalling nickname.

bsprout said...

KS here is a key statement from the project summary:
"The proposed Puhoi to Wellsford project will deliver travel time savings of
approximately eight minutes between Puhoi and Warkworth, and seven minutes
between Warkworth and Wellsford on a standard day. However, during the 10 major
public holiday weekends it is anticipated that travel time savings will be more
significant because of the congestion currently experienced on this route."

We are building a major motorway to save around 15 minutes on a standard day and manage holiday congestion. This could be easily improved with a few adjustments on major intersections and some bypass roads near towns.

Julie Anne continues to quote and compare independent reports on the Auckland rail loop and this motorway and you would get far more bang for your buck by putting the money into the rail loop.

I expected a longer break before we started debating again but it is 25 degrees (feels like 30) in Invercargill and too hot to work in the garden.

Keeping Stock said...

Goodness; does the Auckland rail loop now include a stop in Kaitaia?

You may hang of Ms Henter's every utterance, but I live in the real world ��

bsprout said...

By the way KS, I did note your attempt to deflect the discussion away from the other points I made in my original statement, as they are probably harder to argue against ;-)

Carlos said...

An acquaintance is a Civil Engineer working on a number of World Bank roading projects in third world countries.

The World Bank has a maxim:

"It is not the wealth of a country that builds its roads, its the roads that build the wealth of the country."

Current cost/benefit analysis would be unlikely to pass bsprout's or Julie Anne Genter's critical gaze. Those projects would be stopped immediately.

The World Bank also claims that the citizens pay for the roads, whether good or bad, in one way or another.

The 50 million dollars that John Key allocated to building cycle trails throughout NZ would also fail bsprout's cost benefit analysis. Who has not not noticed the huge upsurge in people cycling those trails, and also the huge increase in bicycle riding generally about our urban areas. Cycles are being bought in numbers not seen probably ever in NZ. Cafes and other small businesses are sprouting up (this is a positive term used in this sense!) all around the country to cater to those of the trail-riding fraternity. Interestingly, it did not take a ban on cars or oil based products to engender this new interest in the pleasures of cycling. Nor does John Key need to claim credit for this response to his early policy. (Nor do the Greens and their ilk offer any praise for this initiative, but it is not necessary, everybody else is praising it.)

Incidentally, your johnpemberton doesn't happen to be former Social Credit Party candidate, then Democrat Party candidate John Pemberton by any chance, bsprout?

Keeping Stock said...

@Carlos - bsprout could never bring himself to give John Key or National credit for anything. Instead, he seems to have the hots for Ms Genter.

Carlos said...

Understandable that they do not want to give any sort of praise to the enemy. They know only too well that this would then be linked to and presented as some sort of general endorsement over and over again no matter how irrelevant to the topic being discussed.

Keeping Stock said...

By the way KS, I did note your attempt to deflect the discussion away from the other points I made in my original statement, as they are probably harder to argue against ;-)

Good Lord bsprout! Accusing me of thread-jacking my own post; the cheek of it. It was YOU who went off at a tangent, trying to run interference to the news that the economy is on a roll.

Yes, we know it doesn't suit the LabourGreen narrative to have the economy prospering, but even NZIER is now on board with the recovery, which LabourGreen normally cites as the ultimate economic authority.

Face the fact my good friend; good times are right in front of us.

bsprout said...

Carlos, there is a huge difference between spending $50 million on cycle trails and $12 billion on roads. Roads are also useful, however my argument is where the spending should be focussed and how much. The RoNsS will cost us around three times what the Government raised through the asset sales and one would have thought some return on the investment would be necessary. Both the Transmission Gully and the Puhoi-Wellsford projects are the equivalent of using sledgehammers for a job needing a nut cracker. Meanwhile Southland earns 11% of New Zealand's export income, is hugely reliant on a solid road infrastructure and yet we are funded on a population basis (2% of total funding) and have had 25% cut from our road maintenance budget. The Southland District Council is having to convert sealed roads back to gravel.

"Instead, he seems to have the hots for Ms Genter."

Oh dear KS, you have lowered the tone considerably, are you really implying that Stephen Franks and others impressed by Julie Annes knowledge of economics and transport are just being influenced by her appearance? Tsk tsk...

Keeping Stock said...

The "hots" in a policy sense only bsprout; you know I'd never imply anything else :)

Carlos said...

bsprout's repetitiousness seems to go unheeded.
Perhaps this is the incorrect forum if action is required.
Rather than coming across as persuasive, the dialogue, by its constant repetition, has a whining aspect which cannot be helpful in attracting support to whatever cause bsprout is promoting.

The rest of the country seems poised for a positive year in 2014, so any negativity in Southland may be self-fulfilling (unless they just need better representation of their aspirations).
Negativity is unappealing . It is so destructive.

Keeping Stock said...

The National Party has a very positive message for New Zealanders Carlos. Green Party members and activists like our friend bsprout will do anything to stop it being disseminated, but this blogger will be relentlessly positive in the New Year; except when commenting about the Greens!

Anonymous said...

Poor old bs. He gets bodyslammed by facts all the time on his own blog.

The feller does not even know the difference between gross and nett.

He should be ignored or treated with complete contempt.
Seems to be one thing you do well here.

And do not swallow the economic coolaid.

The times they are a changing. We will be longing for the dream of false prosperity before the end of 2015. NZ is merely the best of a bad, bad bunch. Nats, labgre - will not make a difference.

Ray said...

"The Southland District Council is having to convert sealed roads back to gravel."

" He should be ignored or treated with complete contempt."

And locked up for lies like the one above.