Even If the Economy is Doing Well, the People May Not Be Listener: 29 November, 1997.

Keywords: Regulation & Taxation; Social Policy;

The table below shows the government’s current spending on employees, goods and services. It does not include spending on transfers such as social security benefits or debt servicing. It includes spending by local government as well as central government. The most important items are health and education, but there is also spending on government administration and advice, on law and order, on the environment, on the arts and so on.

Listener 15 November 1997.

Keywords: Social Policy;

That 92 percent of voters rejected the proposed Retirement Superannuation Scheme tells us just how out of touch officials are with the public. Instructed to devise the best possible scheme, they chose a privatisation of New Zealand Superannuation akin to ACT’s 1996 election manifesto proposal. Despite a massive advertising campaign, support barely exceeded the ACT election share, indicating just how ill-advised the proposal was.

From In Stormy Seas, p. 200-208.

Keywords: Growth & Innovation;

Capital(1)

Here we use the term (fixed) capital to mean physical items such as land improvements, buildings, plant and equipment. It excludes land, and it excludes inventories (physical stocks). Sometimes physical capital is thought of as `stored labour’ to distinguish it from the ongoing labour which accompanies its use. The term `capital’ is also used for financial assets. In principle these are matched by physical capital after the netting out of liabilities. Financial capital is not a concern of this chapter.

Social Policy Journal of New Zealand, November 1997 (9), p.171-179. (1)

Keywords: Distributional Economics; Social Policy;

While it is easy to be compassionate over the magnitude and situation of the poor, it is not in their interest for researchers to be as equally sentimental in the analysis and measurement of poverty. Estimates which are not developed rigorously may be misleading, and may be so in a way which could be used against the interests of the poor. Where an estimate of the numbers of the poor is overly generous, the resolution of reducing poverty appear excessively expensive, and may delay the facing up to the issues. Wrong assessments of the composition of the poor may result in policy targeting the wrong groups. Thus policies based on faulty data are likely to be inefficient and wasteful, and in the end to be manipulated against the interests of the poor.

Thus it is incumbent on social scientists to scrutinize the work on poverty, to ensure that it is seeking high standards of analytical rigor. A recent paper by Stephens, Waldegrave and Frater (Stephens et al, 1995 – henceforth SWF) provides a useful basis to do this, albeit some of the problems it raises appear elsewhere.

Otago University Press, 1997. 343pp.

A detailed look at the New Zealand economy in the twentieth century, and in particular its course since World War II. This is not just a history but a narrative about a problem’, defining, and ‘hopefully contributing to an understanding that will aid to its solutions’.

In Stormy Seas asks pertinent questions about some of our favourite national myths. The intial chapters examine the ongoing debate about the New Zealand economy, looking at such factors as external impact and internal response, the business cycle and growth, and problems of financing investment. Structural transformation, the farm sector, industry and energy, efficiency and flexibility, and ‘the market’ are all explored before the book closes with a discussion of the aftermath of Rogernomics and the decade of greed. (Publisher’s blurb)

Listener 1 November, 1997.

Keywords: Business & Finance;

The 1987 crash was devastating to the New Zealand financial sector. Debts of many corporations now exceeded the market value of assets, which had been bought at greatly inflated prices (or in the case of financial assets, were valueless when the issuer went bankrupt). Moreover, the financial sector makes it money from financial dealing. The margin charged on any deal is narrow, but when there are plenty during a boom, the pickings are rich. After a crash, deals dry up, and so does the revenue of the financial sector. Many institutions went to the wall, and their workers joined the unemployed from the productive sector. Except for those who specialised in corporate liquidations, the rest took pay cuts, and returns on their investment were low and zero. Some firms just squeaked through.