Friday, 25 May 2012

Bill's Bigoted Budget

"Stimulus? Hah! That's A Good One!" Finance Minister, Bill English, like an Eighteenth Century quack, has only one remedy for his unfortunate patient: "Bleed him, bleed him, bleed him and then bleed him some more!"

“THE SOFT BIGOTRY of low expectations” is a phrase attributed to George W Bush. It’s more likely author, however, is Michael Gerson, President Bush’s speechwriter. Some of the other, equally memorable, signature lines he supplied were “armies of compassion” (to describe America’s faith-based charities) and “axis of evil” (to describe Saddam Hussein’s partners in tyranny). Regardless of who authored “the soft bigotry” phrase, it makes an excellent starting-point for a discussion of Bill English’s fourth budget.

Whatever else might be said of Sir Roger Douglas and the economic programme which bears his name, as New Zealand’s finance minister he always aimed high. Indeed, There’s Got To Be A Better Way – the slim volume on economic reform he produced in 1980 – opens with a comment from no less a philosophical earth-shaker than Friedrich “God is Dead” Nietzsche.

The quotation is taken from Nietzsche’s Human, All Too Human, published in 1878, in which the German philosopher declares that: “A nation usually renews its youth on a political sickbed; and there finds again the spirit which it had gradually lost in seeking and maintaining power.”

The image of a nation weakened by a debilitating illness; its people divided, confused and dispirited; was clearly a powerful motivation for Mr Douglas. New Zealand, he warned: “stands on the brink of economic ruin”. It has “stifled innovation for mediocrity”, and, as a result, the country “is losing thousands of New Zealanders, most of them young, each year.”

The Finance Minister-in-Waiting’s anguished cri de coeur: “New Zealand is a nation that has lost its spirit, the fire in its belly!”, is followed by the question: “How much further will New Zealand sink before we start to fight back?”

All of which, surveying New Zealand’s present predicament, possesses a very familiar ring. The big difference, of course, is that our present Finance Minister lacks his predecessor’s fervent belief in New Zealanders’ ability to make big decisions and absorb big changes. Mr English’s budget is a bigoted budget – not only because it evinces the bigot’s signature incapacity to entertain any ideas but his own, but also because, in the Bush/Gerson sense, it holds such offensively low expectations of its recipients’ capabilities.

It is a budget of “cant’s” not “cans”. For everything it gives, it makes a parsimonious virtue of taking something away. If New Zealand, to employ Nietzsche’s sickbed analogy, is a weak and dispirited patient, then Mr English must be cast as an Eighteenth Century quack, whose only answer to his patient’s declining health is to “bleed him, bleed him, bleed him and then bleed him some more”. The same leech-craft that is killing Europe, is being touted by Mr English and the Prime Minister as our own unfortunate country’s sovereign cure.

Is a more competent physician waiting outside the door? Is the Labour Opposition ready to stride into the sick room, cast back the dingy curtains, throw open the windows to fresh air and sunshine, and bid the patient, in the words of John 5:8, to: “Rise, take up thy bed and walk”?

Sadly, there is not. Labour’s David Parker bustles about with his sheaf of papers, muttering dutifully of thrift and probity, sounding for all the world like a provincial family lawyer, concerned about his ailing client’s unpaid debts, and anxious to settle the terms of his will.

Only the Green’s Russel Norman shows the slightest sign of possessing the Nietzsche/Douglas spirit. He, unlike Mr Parker, will not bow down to the deficit idol. The Greens co-leader simply refuses to go on heaping sacrificial victims (beneficiaries, public servants, the sick, students) upon the corpse-strewn altar of “Returning the Government’s Books to Surplus by 2014/15”.

Given the chance, I believe Dr Norman would cast back the curtains and throw open the windows of New Zealand’s economic sick-room. With the highest expectations of his fellow New Zealanders’ recuperative powers, he shows them a vista of blue skies and green fields, and invites them to get out of bed.

This essay was originally published in The Dominion Post, The Otago Daily Times, The Waikato Times, The Taranaki Daily News, The Timaru Herald and The Greymouth Star of Friday, 25 May 2012.


Anonymous said...

With the economic consensus finally breaking and a very real discontent starting to be expressed on the streets again the very last thing we need is a snake oil salesman like Norman taking the steam out of any movement for change.

He has obviously had some tuition in ecomomices but we need to look carefully at what he is actually saying.

First he wants to fully commidify nature by putting a price on all its compoments so the market can then fix climate change. Thats because the market works so well at everything else like feeding the hungry and housing the homeless etc I guess.

Then he thinks Green Capitalism will magic up hundreds of thousands of jobs if you chuck a bit of money at R and D.

And so it goes.

Hes actually just pushing an old fashioned social democrat agenda - and the social democrat economic experiment has failed.

That wouldn't be so bad on its own but his Green Capitalism poses a very real threat to us all.

Why do you think the mainstream media has fallen in love with him.

Its not because he has any solutions but simply because he has plan c to protect the capitalist elite when Nationals plan a and Labour plan b eventually backfire.

Brendan McNeill said...


The deficit, either in NZ or abroad, is more aptly described as an elephant than an idol. If being crushed by an elephant has caused distress, it's difficult to see how 'throwing open the windows of the sick room' is going to do anything for the patient, without first removing the elephant.

Keynesian economics may be (may be) a valid solution when countries have low levels of debt, both public and private, but today it's the bond markets and rating agencies that determines a countries creditworthiness. Increasing debt simply increases the interest rate at which one must borrow to cover the annual deficit, until a nation reaches a 'tipping point' at which time it can no longer afford to borrow, and has no ability to repay what it owes.

Witness Greece today, Spain tomorrow, and likely many others once the dominoes begin to fall.

We have very simply, been living beyond our means for years, in the hope that the 'next generation' will pick up the tab.

In Europe they won't because this generation has failed to produce the next in sufficient numbers.

In New Zealand they won't because they will be too busy supporting those on State funded welfare, primarily National Superannuation.

Given these circumstances, debt reduction at both a personal and National level appears a sensible strategy.

Paulus said...

I believe that Russel Norman will make a fine Finance Minister (and Dep PM) after the 2014 Election. He has vision for New Zealand.

Patricia said...

Brendan why can't we just print the bloody stuff instead of borrowing it. Don't talk about that bogey man "inflation" because what is the difference in borrowing and paying it back and printing the stuff and paying it back. The country needs so much new infrastructure that now is a time to start. Not only would it bring our brightest back home but there would be jobs for the unemployed.

Loz said...

Twenty three of Twenty Nine British Cabinet members are millionaires

David Cameron is also fond of saying "we" have been living beyond our means". As a multi-millionaire he has considerable means that he hasn't out-lived. The somewhat worn statement is really a polite way for people with means to highlight that others have experienced a quality of life that is beyond their own private resources.

To remedy "living beyond their means" the “cabinet of millionaires” are cutting support for the blind and disabled… presumably so they may be returned to an life that's more in keeping with their inadequate means. That's what the phrase is really about. If you don't have means, your entitlement to life itself is questioned. As with elsewhere, pensioners, teachers, nurses, the unemployed, solo mums and children are the ones who are to wear the costs of the free market catastrophe so those at the top will be spared from tax they have avoided for decades.

Greece is not about people "living beyond their means". Greece is about the sacrificing the most basic entitlements of humanity by those who want for nothing. The profits being taken by financiers and speculators by inflicting savage misery upon innocent people are ghoulish.

People are taking their own lives because they have nowhere to turn yet the message from the elite is for even further "austerity" for those who have nothing already.

Yesterday a 90-year old Greek mother and her 60-year old son jumped hand-in-hand as a result of their desperation and absence of support. I've copied the note that was left by the son below. It seems to be more poignant after reading Brendan’s condemnation of superannuation and welfare.


“For the past 3 to 4 years my mother has suffered from Alzheimer’s and has had schizophrenia attacks. However, the nursing homes do not accept so overburdened patients. The problem is that I hadn’t foreseen the crisis so I don’t have enough cash in my account, although I have real estate assets I sell from time to time, I’m left without cash and we can no longer eat. I borrow money from my credit card with 22% interest even though the banks themselves borrow with 1%. I have other running costs. I can no longer live this drama. There’s no solution. Does anyone have a solution?”

Gerrit said...

Patricia ask why we just dont print the stuff.

Easy, NZL is not a self sufficient nation (economic entity) but instead relies upon imports and exports to survive.

Print lots of money and who wants to sell to NZL, goods and services in return for a monetary denomination without boundaries and values.

Instead of NZL dollars, the sellers will want to be paid in "hard" currencies.

To get access to that currency requires exports to be paid for in that "hard" currencies.

Now you have two monetary systems, internal printed stacks and stacks of import worthless currency and external tradeable "hard" currencies.

Printing money only works in self sufficient economic entities.

Self sufficiency is something we must stife for (create jobs by allowing mining for example) but printing money is not going to bring that about.

Brendan McNeill said...

Hi Loz

First up, you would have to look very hard to find any condemnation of National Superannuation or Welfare in my response to Chris's article. It's just not there.

I was stating factually, that those benefits will consume more tax payer money into the future, and that observation contained no value judgement at all.

Second, in any free society, you will find both extremes of wealth and poverty. That is the price you and I both pay for our personal liberty.

To the extent that you want uniformity of 'outcomes' and equality of economic status, you limit and restrict freedom. Freedom to succeed, freedom to fail.

I sense your desire to create greater equality of economic outcomes for New Zealanders. Are you equally willing to advocate for less personal and economic freedom? Because, that is most certainly what it will take to achieve that goal.

You might also want to consider the fact, that a good way to guarantee that the flood of Kiwi's leaving for Australia turns into a Tsunami, would be to create a more authoritarian society with less liberty, and restricted financial opportunity for our best and brightest.

Do I hear you arguing in favor of that?

I didn't think so, and nor should you.

If you love liberty, then you are going to have to accept that there will be extremes of wealth and poverty in our society, and even with a highly socialized environment that we have here in NZ and also in the UK, inequality is still going to be an economic reality.

There are no easy answers to the problems facing western nations. We have lived in comparative luxury by global standards for so long that we think we are 'entitled' to continue living this way. That is why Governments have borrowed beyond their ability to repay, in order to sustain the delusion that our present standards of living can be maintained.

Who wants to be the politician to 'call a halt' to the good times?

This is one of the weaknesses of democracy that is now being exposed.

New Zealand (and the UK) belong to a handful of countries in the world that function in an open and inclusive economic environment, where you don't have to be a friend of politicians, or dictators or the army, in order to start a business, or get ahead financially.

Let's celebrate this fact, and take our medicine now while we are not having the prescription dictated to us by our trading partners and our creditors.

Debt reduction is always prudent, unless the debt is secured by a tradable asset that produces an income well in excess of the rate of interest repayments.

From what I can tell our debt is primarily fueling consumption. That is unsustainable.

Even big Government projects, like the $1.5B broadband spend is questionable. If there was a viable return on this investment, Telecom or Telstraclear would have made the investment years ago.

It's a 'spend and hope' strategy by this Government, and we cannot afford too many more of those!

Dean Ooi said...

What ails New Zealand? The list meanders on. Let a new migrant from a faraway land with fresh eyes and a cool mind tell you, out of love, for your own good, if you promise to keep your cool.

Parochialism: you are too in love with the past and too afraid to meet challenges. The world has moved on while you are still arguing about pulling the cathedral down or keeping it, whilst hundreds freeze. Your views on religion are outdated and you don't realize it.

Profligacy: most of you have no sense of thrift or you are too miserly. You live like princes and princesses on borrowed money. You drink and smoke too much (not to mention drugs). You are obsessed with sports (rugby in particular) and neglect what's really important, like how to be smart and good in school and catch up with the rest of the world and gain some long-overdue respect. You are spoilt. You had it too good for too long, while the rest of the world festered. Pay-back time has come. The majority of you are angels from Heaven, but the few who clamour and insist on their views spoil it all, and you let them do it.

What is wrong with a little development? You have so much land and resources. Let those who have money and are keen to invest come in. Don't be so petty as to quibble over their nationalities. You evince your racist streak so unsubtly.

Why do you begrudge the truly poor and pander to those obscenely rich? To see people struggle to stay alive and warm in this land of plenty truly sickens me. Many of your rich are happy to give but you let the few fake ones bully you into giving them unfair dues, by promising you money and their vote.

How about being serious about the booze epidemic for once? How many more innocent young must die or be maimed or have their future and health ruined before you will do something? Raise the duties and alcohol limit. Your booze is dirt- cheap compared other commodities and too readily available. If you can't even solve such a simple matter, I will conclude that you lack sincerity or chutzpah, in which case you are not fit to rule. I shall forthwith withdraw my support for you.

You are too soft on your criminals. For a country your size, your crime rate and incarceration numbers are abysmal; just that you do not have eyes to see. You do not teach your young good moral values, either because you are too PC or you don't know what these values are or don't think they are important, until your own kids get enmeshed in crimes and you wonder what happened, what did you do wrong?

If you are mad with me for saying all these, you've just proved me right. It is because I care about you that I voice my feelings. I am eternally grateful to you for taking me in; where I came from was also a paradise but those who ran it turned it into Hell, through sheer greed, bigotry and stupidity. I don't wish to see you commit the same folly, because yours is such a heavenly country.

guerilla surgeon said...

An interesting post, a series of half-truths and straw men, and then an effort at the end to make sure that any criticism is seen as racist. I don't know actually where you come from, but it seems to me one of those Asian societies which tends to prefer authoritarianism to freedom. Singapore, Malaysia and Indonesia? You also evince that subtle racism that characterises some Asian cultures. Does the fact that it is more subtle make it somehow more acceptable?
But still, while a bit of what you say might be true much of what you say is completely wrong. For instance we are too soft on criminals? Interesting in that societies which are very tough on criminals such as the US, have a far higher crime rate than we do. Societies such as Norway, which are even softer on criminals than us, have quite a low crime rate compared to us.
In this country, I suspect crime has more to do with poverty than moral values. In Asian societies where people may be a more fatalistic about their economic circumstances, and subscribe to one of those more fatalistic religions, then poverty might be accepted as one's lot in life. I hope that never happens here, even if it would lower the crime rate.
Obsessed by sport? You have figures to show that we are more obsessed than other countries? Or is this just another casual observation and stereotype? I suspect the latter. Other, more successful countries in ours are just as obsessed I think – just different sports.
Development is another matter. Unfortunately development has consequences which are complex, long-term, often unintended. We already individually have quite a high carbon footprint, I would hate to see us become as developed and overcrowded as other countries. Already development is straining the world's resources. But that's a philosophical position I guess we could argue about for ever. Anyway, racist or not someone has to point out your errors.

Dean said...

Thanks G.S. It was meant as a creative satire, to poke fun, stimulate thoughts and mildly entertain, so please don't take it too seriously or personally. Kiwis are known for their sense of humour. I learned to write only after coming here. I am grateful to Chris for this space to practise writing. Besides, you also pride yourself for freedom of speech, as long as it is civil, right? The racist comment is more a joke than an accusation. Enjoy your Sunday, mate!

Sparky said...

To Gerrit,
We can print money but it must be spent only on infrastructure, i.e. within our borders. It cannot be used to purchase goods from overseas. By doing that inflation rears it's ugly head.
Much of our current infrastructure was built by just that; printed money!
The problem we have now is that the Govt. does not control our money, it's controlled by the Reserve, a cluster of private banks.

Gerrit said...


Totally agree but infortunately the raw materials and capital plant and equipment required to create the infastructure needs imports goods.

You simply cannot buy the equipment and capital plant (trucks, cranes, rail lines, locomotives, tar, pumps, surveying equipment, etc, etc,) without overseas "hard" currencies.

As I said we are not self sufficient enough to consider printing money for infastructure without the inflationary spiral of seeing imports sky rocket.

We dont even have our own crude oil to create diesel to run plant and equipment.

I guess we can go back to the post war years days, not import and let local manufacturing meet the shortful. That time we had ex USA surplus WW2 materials to utilise.

But not today.

Loz said...


Wealth is no more a result of virtue than poverty is of sin. Franklin Roosevelt said in the last Great Depression that “the test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”

If a person is injured in a motor vehicle, anyone who chooses to drive past is liable to be criminally charged with Failure to Render Aid. Some exist who might argue that being forced to provide assistance is an infringement on their liberty and freedom, regardless of the impact of their "freedom" on the lives of others. Society still views these people as criminals as we have a personal responsibility to the welfare of others that transcends self interest.

One in Five of the people in Greece are below the poverty line which means they are without food, shelter and medical support. The Desperation, misery and loss of life because of this crisis is far worse than any single motor accident. Why should a failure to provide assistance to people in such dire need be any less criminal?

On Monday a 38 year old lecturer hanged himself and a 35 year old priest jumped to his death. On Wednesday a 35 year old shot himself in the head. At the start of the month a 77 year old pensioner also shot himself in the head outside parliament. His suicide note read: "I see no other solution than this dignified end to my life so I don't find myself fishing through garbage cans for sustenance,"

It doesn't look much like freedom to me.

You stated this is the price "we" pay for personal liberty but it's actually paid by someone else. How much undeserved poverty, untreated illness and avoidable death amongst others is acceptable for your personal liberty? If death and suffering is imposed by a government is there any moral difference if it occurs when a government or systems refuse to prevent it?

This "austerity" is purely being administered to those in need by those who certainly aren’t. There are easy and logical answers that the wealthy don't want to discuss. The only answer to hunger is food and the only answer for sickness and disability is medical assistance. The question is really if the first priority of a nation is to the welfare of its people or to those who have private control of it's resources.

You state that "in any free society, you will find both extremes of wealth and poverty" yet throughout history the periods that have held those extremes are times of dictatorship and slavery. Most would say the freest, happiest times in this nation were actually the times when the extremes did not exist. A freedom to fail, a freedom to starve and a freedom to die in poverty are not freedoms at all.

Roosevelt's insight in regard to liberty during the last great depression shouldn’t be forgotten. “The liberty of a democracy is not safe if the people tolerated the growth of private power to a point where it becomes stronger than the democratic state itself. That in its essence is fascism: ownership of government by an individual, by a group, or any controlling private power.”

Anonymous said...

"Given the chance, I believe Dr Norman would cast back the curtains and throw open the windows of New Zealand’s economic sick-room. With the highest expectations of his fellow New Zealanders’ recuperative powers, he shows them a vista of blue skies and green fields, and invites them to get out of bed."

Great Wordsworthing, idiotic analysis.

Brendan McNeill said...

Hi Loz

You stated: "Wealth is no more a result of virtue than poverty is of sin."

I don't recall arguing that it was, however in a free society, I'm sure you would agree that not all 'life style choices' produce the same outcomes.

For example, theft and murder, which are sins listed in the 10 commandments will ultimately lead to prison and poverty.

Likewise, the virtues of honesty, and diligence are likely to lead to consistent employment, and comparative wealth.

I would suggest that virtue is preferable to sin, and will lead to more desirable outcomes, both economically and socially.

However, in a dictatorship, or where there is military rule, theft and even murder may lead to economic prosperity, at least for a season. That is not the system that we or the Greeks live under.

All humane people feel sorrow and compassion for those on the poverty line regardless of how they arrived there. We both know that sometimes having crap parents is the primary reason for individual poverty, at least initially.

Let's be frank. We have almost 25% of our nations children living in comparative State funded poverty because of the immoral actions of their parents, where they were conceived outside of marriage, and the support of a two parent family.

Yes, I know that some mothers have been abandoned and abused by violent partners, and they are not personally to blame for their situation, and they deserve to be supported, but one 1/3 of DPB mothers start out as teenagers who have never been in a stable relationship.

Now, we don't have to have laws to punish this kind of sexually immoral behavior, and neither should we, but I see no reason for the State to encourage it and reward those who make these choices by supporting them financially.

You say that we (maybe you mean me) don't carry the costs of sinful or immoral behavior engaged in by others. Well, you are completely wrong. Those of us who are taxpayers are funding these parent(s), and their children. We are funding the criminals passing through our criminal justice system, we are paying higher insurance premiums than we might otherwise need to because of theft and burglary, and we are at a greater risk of personal violence and injury because of immoral and sinful behavior, and no doubt we are paying higher health costs because of sinful and immoral behavior.

Now while suicides and deaths are deplorable in a free society, how do you feel about the 20 Million deliberately staved to death by Stalin? The 15 Million by Chairman Mao? The 2 Million by Pol Pot? Just to name a few.

I put it to you, that the price we pay for liberty in human lives, is incomparable to that paid in these kind of totalitarian and authoritarian societies.

I agree that one life lost is too many. But imposing totalitarian outcomes in the name of the people will cost considerably more than we experience today, either here or in Greece.

Loz, New Zealand is a socialist paradise, where a financial safety net exists for everyone.

The Greeks have been foolish, and the deaths you refer to is the price being paid by individuals, families and a nation that has deliberately continued to elect politicians who promised them a lifestyle that they could never afford.

They were crap choices, and they will most definitely lead to poverty for the Greeks, and possibly many others who have equally foolishly loaned them the money.

Again, its not inconceivable that you and I and all Kiwi's will be forced to pay the costs of the Greeks immoral behavior - borrowing money they knew they could never repay, as defaults impact on the worlds economy.

Best they get out of the Euro, and start again.

Best we learn our lesson from them without repeating those mistakes ourselves, especially while there is still time.

We definitely do not want to further open the bedroom windows to invite in more debt.

Dean said...

With reference to 8.18 above, I realize I could have gone too far with the creative juice flowing at will. It was immature and full of conceit. I wish to say I mean no disrespect. I am grateful for being a part of this great land and its great people. I apologize unreservedly if I caused any offense or misgivings. I'd be very grateful if Chris could please remove it.