A new Treasury paper published on Friday suggests productivity growth will likely be slow in the coming years and could lead to downgrades in long-term fiscal and economic forecasts.
It’s a headache the coalition Government is eager to fix, although so was the previous administration.
Shortly after securing the finance portfolio in 2017, Grant Robertson gave a TV interview in which he said one of the main things he wanted to be judged on was lifting productivity.
A lot has happened since then, but improved productivity growth hasn’t been one of them.
Productivity growth in advanced economies has been slowing since the turn of the century and New Zealand has been among the worst affected.
OECD countries grew their labour productivity by 2% per year in the 1990s but have slowed to 0.8% since the 2000s. NZ’s growth averaged 1.4% up to 2013 and has been just 0.2% since.
Dominick Stephens, Treasury’s chief economic advisor, said the productivity slowdown was a key factor behind the economic revisions provided alongside the Budget Policy Statement.
“This matters because sustainable improvements in our living standards depend upon productivity,” he said.
Finance Minister Nicola Willis also came under pressure to ditch the tax cuts after these fresh forecasts showed the Government could stay in deficit for years if they went ahead.
This fresh Treasury paper warned the trend that caused the downgrade was likely to continue and would be factored into the next Long-Term Fiscal Statement late next year.
If it takes the view that productivity will continue to lag, paying for expensive policies such as superannuation, infrastructure renewal, and better core services will get that much harder.
There are some reasons to think productivity could accelerate, such as the sudden arrival of artificial intelligence technologies, but many more reasons to think the opposite.
Treasury highlighted a bunch of possible drivers including weak innovation, a slowdown in global trade, poor education outcomes, and the possibility it has been measured wrong.
“On balance, looking across the drivers, the challenges seem to outweigh the opportunities,” the paper concluded.
What can be done
The Coalition Government has policies intended to tackle some of the productivity problems, such as education, directly.
The amount of New Zealanders with qualifications has been increasing, but businesses have been reporting a decline in the availability of skilled workers.
This could be due to a mismatch between the degrees Kiwis are getting and what employers are looking for — or possibly a fall in the quality of the qualifications being achieved.
A 2023 report found NZ was one of a group of OECD countries in which school kids' abilities in reading, science and mathematics had declined over the last 10 years.
While this wasn’t likely to be having an impact on productivity yet, as this cohort currently makes up only a small portion of the workforce, it was “concerning” for the future.
One of the first pre-announcements from Budget 2024 was the rollout of $67 million to retrain teachers to use a structured literacy approach to learning to read.
Erica Stanford, the Minister for Education, said evidence showed this method was the most effective way to equip children with reading skills that would improve their future.
The policy goes alongside a requirement to teach an hour of reading, writing and maths each day, as well as banning cellphones and rewriting parts of the curriculum.
Whether these policies will work is a question for education experts to answer but the National-led Government sees it as part of a suite of productivity policies.
Deglobalisation
While education challenges can be fixed domestically, other negative productivity drivers are outside of government control.
Deglobalisation has become a mega-trend reshaping economies and reducing efficiencies. Global productivity slowdowns have coincided with a trade plateau.
“While trade barriers were generally on a decreasing path throughout the 20th century, this trend has reversed over the past decade,” Treasury said.
These comments were echoed by Foreign Minister Winston Peters, in a speech on Wednesday, who said there had been a significant shift in the international order.
Rules were becoming less important than power and economic efficiency had been deprioritised behind security and resilience.
“Given the golden age of trade liberalisation has passed, the Coalition Government is committed to making incremental trade and economic gains and creating opportunities – large or small – everywhere,” he said.
Treasury said international trade and investment can support productivity through knowledge and technology sharing, economies of scale, and increased competition.
“This static or declining integration in the world economy is likely to be an important part of New Zealand’s productivity story,” it said.
Less globalisation will pull down global growth and increase production costs, which will particularly hurt small, trading economies such as NZ.
While the Coalition Government has promised to lift productivity and prosperity for New Zealand, this paper shows they may need to work hard just to avoid going backwards.
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"The answer lies in a concerted and sustained effort from successive governments, with businesses, and individuals able and willing to respond. Attracting overseas investment, reducing red tape to encourage innovation, and improving educational outcomes are all crucial components of the recipe.
Also important is helping those without jobs to find work and shifting people out of low-productivity roles"
https://www.nzinitiative.org.nz/reports-and-media/opinion/new-zealands-…
https://www.kiwiblog.co.nz/2024/05/the_massive_importance_of_productivi…
"It’s a headache the coalition Government is eager to fix, although so was the previous administration."
Can't be that much of a headache for decades of governments. They wouldn't have let productivity slide since the early 70s if that was the case. But hey, there's always another unproductive property boom to help extend the procrastination.
Find somewhere with only old fogies and sourpusses, like yourself, to play in the sand pit with, jeremyr.
We now live in a two parents (and sole parents) working world - get used to it and quit name calling the parents. They'd rather it were not this way, I can assure you!!!!!
Kids get sick - lots.
Nah. Your wrong. I’m in my forties, three kids. They are not at High school, all primary. My wife doesn’t work. Kids don’t get sick, never have. It’s what you feed them and the amount of sleep they get and the lifestyle that counts. Feed them rubbish and let them stay up late, sure they will get sick, most likely they will end up thick too, but that’s all on you. You will learn this once you leave university and find out about the real world.
My wife doesn’t work.
There you have an answer to a whole lot of health and social ills - many mothers and fathers both have to work.
Sadly, your situation is not the norm. And at 40+ you likely bought a home when houses were at a very reasonable price to income ratio. Hence, you don't need two incomes to pay the mortgage.
I'm retired. My kids are your age. They too are lucky as they got into the housing market perhaps when you did, and their mortgages are way, way less per week than what they could rent their own houses out for. Again, there in lie a big difference between yours and the FHBs in this country.
Not everyone is you. Empathy is a great quality; sarcasm is one of the worst.
It’s about planning. You say you are a planner, You should know. I was actually late the housing market. I planned it that way. It was goal of mine to provide a proper upbringing for kids since I was quite young. I believe it’s just as possible today as it was earlier, as long you plan for it.
Spoken like someone who has never run a productive business in their life. I don't want sick people coming in and making everyone else sick also, thereby reducing productivity for even more people than the original person who was sick.
But then again Jeremy has demonstrated time and time again that logic, analysis and evidence are not really his thing. Let's go with old man reckons eh...
Selection top 10 productive countries and their sick leave entitlement
Sick leave in SwitzerlandSwitzerland offers employees generous paid sick leave conditions in the event that someone falls ill at work. For sick leave, many employers will have sickness benefit insurance. This insurance covers employees for up to 720 days of illness.
Germany
For six weeks your employer pays your salary then health insurance kicks in. If you have children
According to the so-called Children's Sickness Benefits Act, statutory health insurance pays benefits if a doctor confirms that the child is ill and requires supervision, care or nursing. In this case, one parent is allowed not to go to work.
Each parent can stay at home for 30 days per year for each child to look after them during sickness. That makes a total of 60 days for both parents per child. Single parents are entitled to stay home for 60 working days per year and child. If there are several children, the entitlement is a maximum of 65 working days per parent (a total of 130 days for both parents) or 130 days for single parents.
Norway
If you are an employee, you receive your normal salary, and the employer gets reimbursed by NAV. The employer pays out of pocket for the first 16 calendar days.
You were working at least four weeks before you got ill
You can hand in a self-certification for a limited period. This means you don’t have to see a doctor. Maximum length is three consecutive days four times in a 12-month period. When you have used all the days, you have to get a sick note from a doctor.
Yeah, but it’s not. He is actually wrong, by some margin. He is right that there are schemes to compensate, but they are generally paid out of taxation, and although they are there, they are not used just because they are available like the lazy do in NZ. Most NZers would not survive in these countries, they would be quickly sacked for being lazy and not attending work.
No I am in the private sector. I have worked in the public sector.
Having had first hand experience of the private and public sector I don't see one being more productive than the other. They have different objectives. The private sector's objective is very very simple, make profit first and foremost.
The public sector does not have the luxury of just making money, it has to provide for all the gaps where making money is either not possible or outright harmful to society. It has to constantly refocus it's efforts on different outcomes depending on who comes to power while still maintaining a base level of competence in all the things that might be required of it, in case a politician decides that's the thing they now want to do.
It can be incredibly frustrating working for and with the public sector but more often than not that has nothing to do with individual staff members and their personal effort/competence and more to do with the chopping and changing of political whims and staff having to respond to whatever media outrage they have chosen to pick up on any given day.
Yes, worked for both sectors and that sums it up nicely. The objective of improving profit is a whole lot easier to plan for and execute successfully. Whereas, when I was a regulator, the objective (almost like a 'golden rule') was to stay off the front page of The Herald - ridiculous but true - in other words, don't embarrass your Minister.
I did make the front page of The Herald (LOL) but as regulatory decision-making goes in radio spectrum management (a highly competitive notional resource to manage) - sometimes there is no alternative and you just have to take the heat.
I dont see the same output from the youngsters that previous generations had... Older folk have more 'go' in them ... and the shame is the younger folk I see are becoming seasoned at dodging 'hard work' ... they cant even pack a lunchbox.... productivity massively increases from them half an hour before knock off....lol
We haven't had a grasp of productivity essentials for decades.
Rather than spending on essential productivity-boosting infrastructure like transport, green energy, and well-designed city densification, precedence goes to vanity projects like stadiums and virtue signalling like the co-governance elements of three waters that caused the government to completely lose control of what was (and still is) an essential initiative.
Our educational systems are inappropriate for productivity, among other things.
- 8 independent, competing, hugely politicised universities for a country of 5 million-odd people fatally dilutes expertise and credibility, and we are not selective about turning out graduates: we desperately need engineers and medical people of pretty well every stripe - but do we need more lawyers, or accountants for that matter, considering what AI is likely to do to those professions?
- While amalgamating trades and other vocational education is a really good idea, the plan had no clearly articulated goal, the execution looked near unplanned, the central organisation looked like jobs for the cognoscenti, and it became an omni-shambles product of doctrine rather than evidence - and what comes next?
We have public policy that is averse to the rapid, iterative change that allows productivity innovation: we always have to ask for permission in an environment where everything is regarded as contestable by organisations with no interest other than the ability to extract money from what should be public good developments. As such what could be quick, cheap, low-risk, instructive experiments that teach you a lot become elephantine and monstrously expensive to execute, so we just keep doing the same inefficient and ineffective things, as the overheads are the same as a mega-project - where the risks are far greater.
Our small market makes it far harder to leverage volumes - but it's not impossible by any means. A smart business would work to amalgamate it's demand with (say) Australia or Singapore for better pricing on imported content. In terms of our horrible building efficiency, we could also import complete, non-cookie-cutter factory built houses for assembly here, provided vested interests can be kept at bay and training inertia can be overcome (looking at you, central government).
"Not invented here" is our prevailing mentality: we have got to learn from nations who get this stuff right and pry the cold, dead hand of BAU away from the way we do things. It's frustrating to watch (say) building technologies that have been successfully in use for 40 years overseas get hailed as "new" - that said, the acceptance of reputable overseas approvals on building products could be a huge boost to productivity, provided the local industry is capable of the change needed to learn how to use them. Not sure about that last.
A very good point , but I'd go on to add that if we wish to improve our nation's productivity then we're long overdue to strip away government & big business monopolies ( looking at you Fletcher numbskulls ) and usher in competition ... be it the education system , building products , healthcare ... our entire lives are constricted and burdened by vested interests maintaining a power base that enriches them but which impoverishes us , the battlers on Struggle Street ...
Interesting points, thanks.
Singapore also did a good job of encouraging productivity by dealing with the housing question and making it affordable (in fairness, as NZ did for today's older generations) and encouraging people to build businesses instead of lazily speculating on existing housing.
We ultimately have simply encouraged all money into speculation on existing houses rather than rewarding those with skills and enterprise.
I'd have thought their biggest potential Coalition initiative to improve productivity would be in David Seymour's new Ministry of Regulation.
My profession (planning) is totally encumbered in terms of its own productivity by the legislation and the planning rules that flow out of it.
One small example I used with my students was the Auckland viewshafts rules/regulation. I have no idea how much the implementation of this rule has 'cost' the community - costs being survey requirements, built environment/development foregone/stifled; planners needing to review the associated documentation; etc.
Not being an Aucklander, I've often wondered how much the wider community (i.e., people-on-the-ground) treasures these viewshafts?
Didn't realise that you were involved in planning Kate.
Not sure if you've ever come across this before but it's an excellent (and hilarious) presentation given to a bunch of San Antonio officials in the 90's. So frustrating to see that everything the presenter rails against has just become more common.
One of my favourite videos on YouTube.
https://www.youtube.com/watch?v=NMvwHDFVpCE
The essential gist of it is that planning regulations are directly opposed to building the things people actually want. Everything people love about many places is now illegal. Developers know what people actually want from a community but aren't able to provide it due to regulations.
...An example of some of the humour (https://youtu.be/NMvwHDFVpCE?si=srwnK7H73WPeVZK1&t=584)
it's not that these planners don't care about people obviously there's a sidewalk code somewhere here but you know perfectly well from experience that only indigents are to be found in places like that. If you actually see somebody halfway decently dressed walking on the sidewalk you stop to help them out because obviously some problem. It is actually that kind of environment is it is embarrassing to be seen walking - admit it - in a place like this only the underclass is found as a pedestrian here - there's a sidewalk but it's a completely unworkable sidewalk now
Thanks for the links - will watch, sound like a lot of fun (and planners need lots of humour in their lives!).
I taught it for 12+ years. We know the issues in academia and I know I and my colleagues strive hard to teach collaboration and enabling - not throwing glass in front of our clients. But then our students get into the workforce and something must 'change'. Council are so, so fearful of liability - being the last man standing and/or spending wads of ratepayers funds on legal arguments. Consultant planners aren't too bothered with the ridiculous complexity of plans - as that means more time, more chargeable $$$$.
All comes down to writing better law (the overarching statutory instrument) and hence, better regulations (plans).
Seems like we've spent so much effort on enabling the building industry to avoid responsibility for its actions that we end up with councils over-regulating to try to prevent all the different possible ways the industry might shortcut process and quality to make a little more money.
Yet another paper about productivity that makes almost no mention of our tax system.
Consider this equation: Production = Land + Labor + Capital + Entrepreneurship.
Now consider the need to dig a foundation. You can use 10 men with shovels, or one man with a digger. The 10 men represent a Labor only solution. The one man and a digger represent a Labor + Capital solution.
10 men = low productivity
1 man + digger = higher productivity
So where does tax fit into this? Well, just for starters, diggers wear out. We account for this using depreciation. Depreciation is a business expense - a non-cash business expense - so it reduces the businesses profit so the business pays less tax.
In developed economies overseas capital expenditure (CAPEX) on items like the digger is encouraged because depreciation rates for tax purposes are higher and/or exist where none does in NZ. I.e. businesses are encouraged to use their capital to purchase plant and machinery (and training) that increase productivity rather than paying them out as profits to the owners.
So if NZ wants to have a real conversation about productivity we MUST include the tax system in that conversation. To virtually ignore it as Treasury is wont to do is idiotic.
Quite frankly, any conversation, paper, article, speech, etc. that doesn't include continual references to our tax system, and why overseas countries have better tax systems that encourage greater capital investment, and why our tax system needs to be changed, is simply just waffly whining. Treasury et al - take note!
(One should also note that overseas - their banking systems have specific banking entities that likewise encourage investment in plant, machinery and training. A subject for another comment.)
Ah, the old false trope that people on worksites just stand around watching other people work. Ever worked on a construction site? Or a construction site on the road?
There is some truth to the overkill of how much traffic management is needed on urban roads but that's more to do with New Zealand urban roads having very high speeds. Higher speed = higher traffic management costs.
https://www.1news.co.nz/2024/04/25/council-turns-off-facebook-comments-…
That’s rubbish. Higher traffic management is an absolute farce. It’s about laying as many cones as possible because they are charged individually. Yes, people on contraction sites are lazy and there are far too many of them, mostly roading. That’s where the term shovel leaners comes from.
Treasury have at least started to work out what a meaningless measure productivity is. Let's look at the labour side, which gets all the attention.
Labour Productivity = GDP(P) divided by total hours worked.
GDP(P) is the difference between the money a business / sector spends on goods and services (not inc salaries), and its operating income. So, if a business buys $1m of goods and services (e.g. imported goods and transport / warehousing etc) and chalks up $2m of sales in NZ, they add $1m to our GDP(P).
If that business paid out 11,000 hours of work, then labour productivity would be $1m / 11,000 hours = $90 / hour. This was about the average labour productivity in NZ in 2023.
NZ increased its productivity through the 1990s and 2000s. How? Simple. Companies increased their GDP(P) without increasing hours of work as much. How did they do that? Did they invest in cutting edge training, fantastic labour-saving technology? No, sorry. They just got more profitable by increasing their operating income more than their operating costs. How was this miracle achieved? Oh, this is good, stay with me...
The biggest single driver of productivity improvements through the 1990s and 2000s in NZ was the selling off of state-owned industries like postal services, telecommunciations, electricity, water, waste etc. These sectors had to become profitable - so they quickly added billions to GDP(P) (which is a measure of profit or surplus). At the same time, they laid off loads of workers - sending the number of hours worked down by millions. This combo of increasing profits and paying out for less hours sent productivity flying upwards. Electricity companies averaged 10% real-terms increases in labour productivity between 1990 and 2000. Now, here's the kicker. A lot of these profits were generated by deferring maintenance - the new companies laid workers off and didn't look after the basics. They just milked the assets they had been gifted and shovelled dividends at Government and shareholders. From 2009, as the infrastructure crumbled, workers were hired back in large numbers, hours paid went flying upwards, and productivity plummeted as a result. You can see this really clearly here.
The other big contributor to our productivity gain 1990 - 2010 was our old mates the financial sector. But, how did they achieve this? Easy, banking profits (GDP) increase with private sector debt, and we racked up massive debts between 1990 and 2009 as we went through a few housing boom cycles. Remember, we increased private debt from 70% of GDP in 1990 to 150% of GDP in 2009. Since 2010, private debt has been steady at 140% - 145% of GDP, so bank profits (and therefore labour productivity in the finance sector) have been pretty stable.
Other factors on the upside pre-2010 included wholesale and retail - importing cheap stuff from China and selling it for more, while spending relatively little on staff. Construction during the pre-GFC boom was also a major positive influence - again, because profits boomed.
A key drag on labour productivity since 2010 has been the growth in hours worked in health, social care, and early years education. Caring for kids and older people is labour-intensive and not as profitable as selling houses or milking energy assets. Labour productivity for education is $50 per hour - real estate labour productivity is $900 per hour (lol)!
Now, once you appreciate that most of our productivity improvements were achieved by increasing profits GDP(P), the logical question to ask is, 'But, how did all of these sectors get more profitable in the 1990s and 2000s - how was this miracle achieved?' The answer is a few paragraphs back. The banks pumped billions of dollars of freshly printed credit money into the economy to support the house price explosion, and those dollars were spent into the economy and banked as profits. This increased our GDP. Workers wages went up by less than profits - so labour productivity went up.
Once private debt reached 150% of GDP in 2010, households and businesses could not take on any more debt (relative to the size of the economy) so increases in private debt stabilised relative to GDP, and companies were no longer able to rack up those labour productivity-boosting surpluses.
So, how could we emulate everyone's favourite productivity miracle - Ireland. Obviously, you just become a corporate tax haven so that global corporations bank their profits within your boundaries - sending your GDP to the moon without requiring anyone to work at all. Now, what could possibly go wrong?
A nice summary of what has happened. (And what happened was copied from overseas where the process was trialed many, many years before Kiwis thought it would be a good idea to do the same.)
But it all happened within a system that both allowed for it to happen, and even encouraged it to happen.
re ... "Treasury have at least started to work out what a meaningless measure productivity is. Let's look at the labour side, which gets all the attention."
A meaningless figure? Not sure I'd agree.
Macro-economic analysis, as you've provided above, explains what has occurred in aggregate.
But decisions are not usually made at that level (even though governments and voters like to think they are). The aggregated result is the result of thousands of individuals making their own decisions (or so they'd like to think). This is a reasonable description of Micro-economics.
Thus when we have systems, including a tax system (or urban planning system), that affects and distorts how individuals make their decisions, we have a micro-economic problem. And productivity in NZ, be it labour or capital or any other measure, remains a massive problem, both at a macro-economic level but mainly at a micro-economic level, because we persist with systems that are well past their use-by-date.
Labour Productivity, in and of itself, is just another measure. Evaluating it in isolation is absurd, as you rightly point out. But 'meaningless' it is not.
Yes, fair challenges, I could have put that better. I have spent most of my career working out how to increase outputs for less inputs. So, yes, I recognise the importance of labour productivity at the micro level. Labour productivity tells you how efficiently you are using people time to achieve a given level of output. This makes perfect sense at the process or firm level, but aggregating it up to the macro level to create an overall index number for a country and then attaching importance to that number seems crazy to me. Capital productivity has the same issues - it is highly variable across sectors (agree strongly on your tax point btw).
Changes in the aggregated 'macro' headline productivity number tell you more about (i) the changing sectoral make-up of your economy (including how much you have off-shored labour intensive work); and (b) how much Govt debt / bank credit are being pumped into the economy to generate a surplus. Any efficiency improvements at the sector or firm level are lost in the noise.
"... aggregating it up to the macro level to create an overall index number for a country and then attaching importance to that number seems crazy to me. "
Crazy to me too (but it keeps the likes of Treasury busy).
At an industry / practice / per generic widget / per service / etc. level, where like is being compared with like, they are extremely useful. Alas, also closely guarded so outside analysts have to work with what's publicly available. 'Competition' - and the secrecy that goes with it - has it's place but also its downsides. This information can be found tho as I expect you know. But, sadly, few NZ businesses I've worked with seem interested in getting it. Just beating your NZ competitor enough to keep the order book full seems to be enough for them.
All of Jfoe's points plus yours about the tax system (incentive) and "competition" are all factors and yet they're merely symptoms.
It all leads back to economic theory and the human programming - "making money", the profit model that siphons upwards (leading to credit creation at the bottom and inflation), our idolising and worship of a false wealth - the monetary and financial system. Capitalism that values nothing but capital and we humans have collectively become a product of our environment.
Universities pump out degrees with no connection to the market but baristas must have a diploma. Accountants, lawyers, economists "required" because of the sheer scale of unreadable laws and regulations (preachers and bible anyone) yet necessary medical and education services can't be met. So the incentives and values must be flawed. And the University invests in property and overpaid chancellors much like a corporation and then hits the same financial deficiencies. Education at earlier ages is not encouraging or nurturing the individuals inherent gifts and abilities, temperament etc to meet the needs of the individual and the collective. A military industrial model designed to produce what?
There must be a correlation with the expansion of the FIRE sector and productivity results. Private equity firms, fund/asset managers, multi-nationals, owning all the brands purely for the purposes of extraction. Share buybacks and financial manipulation to boost the numbers.
Macro/micro economics is all bullshit if it's the economics that is faulty in the first instance.
Add the planetary issues and it's obvious that it's a human values problem. Our education, intelligence, rationality, logic is flawed. If that's created our problems it certainly won't solve them.
"the significant issues we face today will not be solved by the same thinking that created them". This is more obvious now than it ever was. Innovation and technology will not save us when we lack the WISDOM to use them intelligently for the benefit of humanity and planet rather than the benefit of productivity, profit, and money.
The aggregated result is the result of thousands of individuals making their own decisions (or so they'd like to think). This is a reasonable description of Micro-economics.
Thus the crux of the issue boils down to human nature. Like children testing the boundaries and skirting them for their parents, we still have the culture of trying to bend or live just within the rules enough to extract as much money as possible. This is precisely why we need regulation to ensure these things do not continue to happen, and individuals learn that the system is supposed to be set up to avoid kicking the can as has been done, as the chickens will come home to roost.
A question...
Do Treasury (and by extension the Gov) in fact know what constitutes NZs output or even that which is required?
Taking our health system over the past few decades it appears the answer would be no, as there appears no effective method of evaluating or providing for the level of labour/expertise required to provide a given level of service...or even what that level of service may be.
We let low productive sectors such as tourism, hospitality and retail import as many wage slaves as they want and expect productivity to magically improve off their grunt work.
In other words, we expect low-skilled workers from third-world countries to help make our economy more productive.
'Allow an army of dole bludgers'?
Let's look at that.
So, let's say that your my neighbour's son. He is a tradie and was laid off last month because demand has dropped off a cliff. He has a partner, who works shifts at the hospital, and a small child who goes to ECE a few days a week. They rent in Tawa. They are trying to work out how to make ends meet. He is claiming benefits and (I presume) accommodation supplement because otherwise they'd be on the street. He is finding it hard to secure regular work because competition is fierce and he can't be as flexible as others because he needs to help out with ECE pick-ups and drop-offs. They can't afford to live on his partner's salary alone. He is stuck.
So, are we 'allowing' him to claim benefits? What is he supposed to do? There are 134,000 people unemployed in NZ and well over 200,000 people looking for more hours or more secure work. There are about 18,000 full-time jobs advertised nationwide at the moment. Do we withdraw benefits and force people onto the streets? Will that persuade them to go and live on a shed on a fruit farm and send a few dollars back to whatever tent their family are living in?
There are intergenerational unemployed, 1000s of them, making all sorts of excuses why they can’t work, and they have to sponge off others. They need to be out picking fruit and doing jobs like that that need doing. We import people for they too because these people are too lazy. What we shiis really have is a limit on the amount you can sponge if you are able to work, like 6 months or a year over your lifetime, excluding pension of course. That will motivate people to stop having kids that we all have to support and get people back to work, that sound be a nice productivity boost.
Your example includes a child. The child is significant in the working mother's WFF and accommodation benefit but the harder she works (incrasing overtime) the less the family gets. Apply a generous universal child benefit and then the dole bludgers can be identified and treated accordingly.
Luxon was on the radio this week stating that the reason MPs pay rises were set by an independent panel was that it wouldn’t be appropriate for MPs to set their own pay rises, the implication being that they may act inappropriately. Why is it then ok for multiple property owning MPs to implement housing policies that benefit their own financial situation. This government is incentivising non productive housing asset holding through tax cuts, while loading commercial property owners with increased tax. I thought National were the party of business, they seem to be the party of speculators.
Has there ever been any proper quantitative analysis about how the bad transport network actually affects productivity. My car has an average speed recording and it sits around 56kmh. This is over 10's of 1000's of kilometres and I live semi rurally and spend more time on open road than in town. We were recently in Portugal and when you Google mapped a place to drive to it would give you a time of travel which equated to roughly and average of 100kmh. If we could raise that average speed in NZ to 80kmh how would that actually impact productivity. I'd imagine it would be quite substantial given so much of our industry relies on moving from place to place.
The problem here is that transport policy seems to be based on Labour being pro public transport and National being pro roads. We fluctuate from pot holes to unreliable train and bus services. I drive a lot for work but I would use a train from Auckland to Tauranga or Pokeno to Auckland if it was reliable, as I hate sitting in traffic. There is no point raising speed limits in Auckland and Tauranga when the traffic moves at a maximum of 50km an hour. Some cross party work on transport would be nice.
"when you Google mapped a place to drive to it would give you a time of travel which equated to roughly and average of 100kmh"
Huh? Do you mean travel between two points on a motorway? You could never average 100km for urban trips. Their motorway speeds limits is 120km so technically on a longish trip you could average 100kmh BUT their motorways are built to different specifications than ours, they don't run through the middle of town centres for a start.
Well how could we get some of those great motorways? Portugal has half the land size and twice the population, so abandon the South island and focus on the north island. Make all New Zealanders move to the North and then double the population to approx 10m. Then we need some hefty tolls to pay for them and to find a benevolent international organisation like the EU to fund/finance them for us ...
Here is a good summary of the state of the motorway situation in Portugal, be careful what you wish for.
https://www.ft.com/content/59949c24-0a3a-11e3-9cec-00144feabdc0
As well as a symptom of recession, analysts see Portugal’s empty stretches of motorway as evidence of ill-advised public spending that contributed to the country’s debt crisis.
Many motorways were financed through public-private partnerships, contracts in which Portugal’s international lenders consider governments assumed too great a share of the risk. These PPPs, used to shift payment on to future taxpayers,
EU funding also contributed to the glut of motorways. Since 1986, Portugal has received €96bn in EU structural and cohesion funds to help it catch up with core Europe – to which Lisbon has contributed a further €86bn. A big share of this – about 25 per cent of regional development funds – has been invested in roads.
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