Foundation for Economic Growth - Newsletter

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Last Updated: Aug 15th, 2008 - 11:26:43

Newsletters : 2005 Newsletters : 19 August 2005
Thought for the Day

They always say that time changes things, but you actually have to change them yourself.

Andy Warhol
American Artist
Aug 20, 2005, 10:07

 Newsletters : 2005 Newsletters : 19 August 2005
Election Policies Should be Viewed Through a Growth Lens
Our leaders should be concentrating on growing our economy so that we can have a standard of living at least as high as Australians. If we really had good leadership we would get a standard of living higher than the Australians. Our standard of living has nothing to do with how much gold we have in the mine or how rich our government is. It is entirely to do with the earnings of the average citizen.

Unfortunately we are still losing ground to our Aussie mates. We should be asking our politicians what they propose to do about this problem. I don't suppose that any of our politicians like to see us getting poorer relative to the rest of the world but it is only if they have an understanding of what economic growth is and how we can get it that they will become true leaders.

We were the second or third richest people on earth from 1900 to 1950. Our leadership unfortunately took us down to number 37th on the list of wealthy countries. It matters not how hard we work if our leadership wastes our efforts with excessive taxation and wasting our wealth on hip hop tours. The incentives must be properly aligned. If they are not the country will tend to drift further down the world wide wealth list. This effects everyone.

So talk to your local politicians and ask them what they are doing about getting our growth rate up so that we can stop the brain drain. A recent OECD report shows that two countries have many many more ex-citizens living in other OECD countries than the other counties. Those two unfortunate countries are Ireland and New Zealand. You can see how Ireland is doing elsewhere on our web site. Roger and Ruth made a difference and we have had 12 years of good growth which last year was around 4.5%. Unfortunately our growth is due to slide to 2% or less over the next two years according to Treasury predictions. The troubling thing is that this is caused by government policy and we are being offered more of the same.

Roger Kerr has some interesting things to say about growth this election - good reading.


Aug 19, 2005, 11:43

 Newsletters : 2005 Newsletters : 19 August 2005
Letters to the DomPost
Well, Labour's latest election bribe/lolly scramble has set off our letter writers. So incensed were Jan and Peter that they wrote these letters immediately after seeing the headlines in this morning's paper.

Labour providing more middle class welfare and state dependency and did you notice another headline - Greenies propose a tax on bigger "gas guzzlers". Don't they understand that ordinary market forces are pushing up the price of petrol which will incline people to use less and this forms an automatic rationing effect. Imagine these two parties in power together - Helen and Jeanette in lockstep from their regal limousine - taxing as hard as they can and distributing their lolly scramble to all their selected groups. I haven't seen such largesse since our good old socialist days in the 1970s. I guess since OSH has been stopping lolly scrambles for children, Helen and Michael have decided to have one for their favourite kiddie winkles.

Here is the first letter:

Labour’s latest election bribe, the extended Families Package, should finally expose the hollowness of its expressed primary goal to move New Zealand to the top half of the OECD by 2010.

I hope that this latest attempt to bribe us with our own money will be seen through by the electorate for the anti-growth measure that it is. It is a further example of middle class welfare and as such will further entrench state dependency with its incentive destroying characteristics, which in turn will further lower our already reduced economic growth prospects.

The 1991 Fiscal Responsibility and the 1989 Reserve Bank Acts have been remarkably successful in constraining governments. Having effectively limited their ability to indulge in deficit spending it is now clear that there is a pressing need to exercise further constrains, at the other end of the spectrum, by limiting their powers to tax and spend.

Of course every cloud has a silver lining. In this case it has me helped immeasurably by providing some home grown examples to assist in my study of Public Choice theory; In particular the tendency of political parties to favour special interest groups at the expense of the population as a whole.

Peter Gallagher

And here is the second letter:

Dear Sir

I am outraged that the Labour Government's tax take now enables them to offer support to people with families who have incomes up to $100,000. I firmly believe that all New Zealanders should have incomes of a level to enable them to enjoy a good lifestyle and access to all the services they need at the various stages of their lives. But taking more and more from one section of the wealth creating part of the economy and giving it to another is not the way to achieve this.

Growing the economy is the best solution for everyone in the long term. The Government's solution announced on
Friday 19th sends all the wrong messages and provides all the wrong incentives. As a steady contributor to Cullen's tax fund, but now with no dependents, if Labour is returned to office I will not be working harder to increase my income. I will work less and play more golf. I wonder how many other income earners will do the same?

Your sincerely

Jan Hains

Aug 19, 2005, 10:32

Can we fix it?