The ACT Party says it would make it government policy to view all policy decisions through a productivity lens.
This would contrast with current emphases on identity, the Treaty of Waitangi, and the climate, it says.
ACT would set an explicit target for New Zealand to be in the 10 fastest-growing economies in the OECD, and would do this with a range of policies to boost productivity growth.
This was announced in a major economic policy platform for the party on Tuesday.
"The current cost of living crisis is a really a productivity crisis," the party says.
"New Zealanders faced lower wages and higher costs before the (current) inflation set in. Our productivity growth has been woeful for 50 years.
"Yes, Kiwis work hard. We have some of the longest hours and labour participation rates in the developed world. Productivity is about working smarter to produce more wealth for the hours of work and dollars of investment that go in. Unfortunately, New Zealand productivity has declined for 50 years."
It says the problem will get worse in future, with more expensive pharmaceuticals, high costs of caring for an ageing population and the difficulty of attracting skilled people in a global “war for talent”, among other problems.
ACT says higher productivity can help solve these problems, yet it has been mentioned on only rare occasions by the current Government.
To change this, ACT would put productivity at the centre of everything, aim to be one of the 10 fastest growing economies in the OECD, cut taxes to encourage work, saving and investment, remove red tape that it says is strangling initiative and reduce barriers to overseas investment in New Zealand businesses.
GST would be shared with local councils and old rules and regulations would be thoroughly examined. The farming sector would be helped by repealing the ban on genetic engineering. Also to go would be the Zero Carbon Act, He Waka Eke Noa and the Significant Natural Areas Act.
"Productivity is not everything, but it’s nearly everything," ACT says.
"New Zealand’s productivity has been on a long slide, and yet successive Labour and National governments have not even paid lip service to it. In order to have the things people in first world countries expect, government’s attitude to productivity will need to change."
111 Comments
I really like Seymour's plan to issue "Stop notices"
Some things the government does should just stop. It's make work. Those people should instead be making stuff, that the people need. You know, be productive.
A local group I am involved with had $2.5 million from ??? MBIE maybe. So about $100 million across the country. For wellbeing.
They planned to give pensioners a Christmas hamper. I asked " would I be getting one, or delivering them"
Still not sure of the answer.
$100 million FFS.
There's been plenty of research over the years about NZ's poor productivity, and reasonably consistent conclusions - misallocation of capital into residential housing, too much low-skill migration, very low levels of R&D investment.
ACT policies of wide open borders and re-instating tax incentives for residential property investors is hardly going to help with that. They're also going to get rid of the "corporate welfare" of tax credits for R&D.
We already have a land tax, it is called rates.
There will never be a land tax. The only people that talk about it are TOP, and will get nowhere near the decision-making table ever.
If the worst was to happen. and a land tax did happen, that would mean every householder would be punished by a punitive tax. and every renter would just have the tax passed on to them via higher rent.
People keep referring to this crazy land tax thing as a way to keep property prices down. The way do that is to do something drastic like make investment property purchases, cash only. No debt allowed. The attraction of property investment is quite simple. You don't have to be very smart. returns are tax-free (the capital gain (if any) is after the specified number of years, and the market is generally stable. If you make it cash only for investments, then that takes a big chunk of the market away, as the leverage available from using debt is gone. That removes speculators from the market and negates the need for a land tax. Cash-only purposes should obviously not apply to new builds as that increases the inventory and further enhances market stability.
Ultimately the land/property tax is irrelevant as pointed out by Jeremy above.
The problem is property speculation in the housing market which has been driven by loose bank lending. The solution is to properly regulate bank lending so it supports investment in places we want (businesses) and restricts it in places we don’t (leveraged property “investment”).
Quite simply really.
There's been plenty of research over the years about NZ's poor productivity, and reasonably consistent conclusions - misallocation of capital into residential housing, too much low-skill migration, very low levels of R&D investment.
What rarely gets much attention is the big driver of malinvestment is when an economy reaches a certain level of maturation, and investment funds have few places to go.
So it may very well be that unless there's some breakthrough technology in the future, what we have now in NZ could be all the real wealth we have. Maybe not even, if the global economy gets cancer.
China is showing us the way because it's doing the same as advanced economies, just way quicker. Over capitalisation in high speed rail. Thousands and thousands of expensive graduates in STEM subjects, with no jobs to go to. Over construction of buildings with no occupants.
Lets look at two examples of their progress. China developed stealth fighter tech all by itself, in record time, tui of the week. Huawei developed routers from nowhere right down to the Cisco branding on the boxes. Just way quicker....cough cough.
Will say their IP theft is first class though.
Huawei spent 1/4 of it's gross sales into R&D, it's rather unfair to call them IP thieves.
If you have lived in China you would know, everything happens instantly, from your restaurant order, to plumber callout, to building equipment etc, while in NZ, you need to wait 3 months for cancer surgery, or spent 4 years to Get Wellington Moving [Nowhere].
Anyone who says the Chinese manufacture industry is easy to replace are ignorant to the fact that, China still have the world largest manufacture industry.
A "Stop Notice" is saying they will cut through the Gordian Knot which so impedes getting anything done. We are stuck within endless bickering and processes so throughly that the people are not being served.
https://en.wikipedia.org/wiki/Gordian_Knot
".... It is thus used as a metaphor for a seemingly intractable problem which is solved by exercising an unexpectedly direct, novel, rule-bending, decisive and simple approach that removes the perceived constraints....."
First targets for stop notices are things that cost but produce no benefit. "...He told the story about the New Zealand America’s Cup Team who referred every decision they made back to one question, “does it make the boat go faster”. So if there was dissension in the team and someone suggested a team building day, they would ask “will it make the boat go faster?”. And if not, no team building day......"
We could start mining coal again instead of importing 750,000 tonnes of dirty coal from Indonesia and other countries. We have 400 years supply in the West Coast alone. OK coal burning is the worst green house offenders but how many carbon miles does it cost to ship it in from offshore while were still burning it??
re ... "I cannot see other ways for NZ to step up a ladder in personal income."
Maybe by investing in things that actually create something rather than selling existing houses to each other?
Digging existing stuff out of the ground to sell as a raw material doesn't actually create much new. If we dug it up and created something to sell that might be a different story. But it's a story that is brand new to NZ. Our brains stop thinking at the raw material stage.
NZ's income comes from exporting minimally processed agricultural resources. The step up in personal income is easy to achieve if we stop growing the population faster than the wealth. If hypothetically NZ had a population of 2.5 million as it had not so long ago then would total productivity suffer and if so by how much? I reckon if NZ population had stayed at 2.5 million then exports might be reduced by 20% so personal income would increase by 60%. Which is roughly where the Benelux countries are.
China's efforts to control their population growth explains why they are twice as rich as Indians. It's either that or autocracy beats democracy.
I think it will too. I like the conviction they have. I don’t agree with all their policies, but there are a lot that I do agree with such as their stance against race based policies.
There are a lot of fed up people after 6 years and national could learn a thing or two from act.
The tax that a government collects should be just enough to provide adequate services for taxpayers. No more, no less. Any additional revenue over and above should be returned to taxpayers via lower taxes.
This notion that we can increasingly employ idiots for the sake of making it look like there is lower employment and creating idiotic ministries for the specific purposes of gaining sop votes at the expense of the taxpayer is completely ridiculous, and should really be illegal. Woman's affairs, Pacific peoples ministry, and Maori health are all a pointless waste of money and all need to be closed down, very quickly. The list of these ministries employing layabouts who deliver nothing useful is large. and ripe for the picking.
The staffing levels within the public service need to be decimated. The average salary however needs to increase to incentivize high-performing individuals into the public service to clean up the mess and convert the remaining ministries to be more efficient and deliver to expectations.
Go ACT. Shut it down. now!
Yes, quite right. It's not the amount of tax that we're paying, but the non-productive and inefficient way our dollars are being spent. My experience is that many public servants don't actually deliver anything. They employ consultants to do that for them. So we are paying 2-3 contractors to actually do the work for every public servant employed.
Go Seymour, drain the swamp.
Yes, I agree that is also true. But these are private companies that exist to make a profit and it is up to their owners to govern, and govern correctly or they go broke. That does not now and never has given the government of the day some sort of right to waste everyone's money and achieve next to nothing. If I invest in a private/public company, and they fail to deliver, the management gets fired. as do the employees (hopefully before bankruptcy so that the situation can be rectified). The same goes for governments and their departments. This is the exact scenario with the current administration.
Women's issues, Pacifica issues, Māori health are all important. So they should be central to govt which means not hiving them off to stand alone ministries. Having ministries implies leaders of significant political parties are unable to represent all Kiwis. So under Jacinda we needed a ministry of 'men's issues' and if we get a Māori dominated cabinet then we would need a ministry for pakeha and another for Asian immigrants and their descendants. Ministries should be doing significantly important work that applies to all Kiwi families: Education, Health, Defence, Foreign affairs, etc.
The government spends its currency into the economy first and then it taxes it back out again and if is running a deficit then it stores the rest up in treasury bonds and which are our savings held in the domestic currency. Cutting government spending doesn't leave us with more money but less. We spend the governments money and it never spends ours as taxpayers are not the currency issuer.
https://www.levyinstitute.org/pubs/Wray_Understanding_Modern.pdf
Our wages have only grown in real terms over the last twenty years because the flow of bank credit into the economy has been so huge. Our standard of living is built on the spiraling debt of mortgagors, grossly over-valued land, rampant ecocide, and cheap labour overseas. We are f'ing around and we are being found out.
ACT have zero to offer in terms of tackling our actual challenges. Their primary purpose is to enable the wealthy to have a last party at our collective expense - to make super profits from our human and natural resources before the proverbial hits the fan.
Our house prices have to drop or young will leave, they won't so they will. My girls looking at Melbourne Uni, then stay.... I am sad but realistic, nothing to stay for at the moment even under Nat/Act, country needs a rebalance and it may need to be very painfull for the correct structural reforms to occur.
Desperate times call for desperate measures.... the reason ACT is polling so well is that 18% of NZ WANT NZ to step to the RIGHT, but dont trust Nats to be more then just Labour blue.... great result in that poll for ACT, and ensures that Winnie is history. I can see 20% on polling day... for Act and Labour
While government is squarely in the frame for our poor productivity, how much does business itself understand productivity tools and methods? Beyond the issues like scale problems, transport, logistics, oligopolies, and infrastructure, even basic methods and technology to boost productivity and add value seem to have passed NZ by.
Looking at you, building sector. Materials and methods they've been using successfully for 40+ years in North America and Europe keep being hailed as "new" and "fringe" here - while we keep putting up needlessly bespoke and expensive sticks and fluff.
Our materials are undergoing a constant amount of change, to be environmentally friendly, faster to put up, cheaper to make, or to comply with new codes, etc. Very few products on a 2023 building site are the same as they were, even 20 years ago (most more like 5).
Technology has changed so much in most businesses in NZ, it's just been so gradual no one notices. I've seen the time to perform many functions fall off a cliff.
Trouble is, a lot of its expensive to implement, and not every worker survives well financially once their jobs made obsolete.
I've worked all over the world. I can honestly say NZ management is the worst in the world.
Short-sighted, terrible at investment "maths", always looking for get-rich-quick-solutions, never holding and building up businesses, obsessed with ticket-clipping, extraordinary lazy once they're 'okay', totally lacking in creativity, heavily invested in the 'old boy networks', terrible at measuring productivity, overly obsessed with 'optics', have no idea about evaluating risk, terrible at analysis, think government should be doing everything, refuse to keep learning and developing themselves, etc, etc.
If, for example, you exchanged Dutch management with NZ management, the Netherlands would be a 3rd world country within two generations while NZ would be one of the richest.
Many of our biggest companies are owned by aussie or offshore head offices, the tail does not wag the dog..... managers here are farmers not hunters. We used to talk about how leading edge our EFTPOS network and banking was... then we didnt do Fintech as , well we had it all and open banking was not really necessary..... now we are so far behind, the offshore fintechs are coming into NZ at incremental cost as they where supported by their banking regulators. Want to buy a house?
No mention of R&D? Seems like another party looking at productivity through an ideological lens. Theirs is just "government is evil", so heading towards libertarianism (which doesn't work anywhere its tried, cos its the stupidist idea you have ever heard of).
You can tell its ideological because nowhere did they mention R&D, the biggest contributor to productivity improvements over time, by giving a heap more funding to universities especially. Nowhere did they mention forcing more competition in our big cartel markets (cos that would hurt their mates, *cough* *cough*), nowhere did they mention pushing immigration settings to only allow highly skilled (cos again it hurts their mates).
Pure ideological spin.
ACT would put productivity at the centre of everything, aim to be one of the 10 fastest growing economies in the OECD, cut taxes to encourage work, saving and investment, remove red tape that it says is strangling initiative and reduce barriers to overseas investment in New Zealand businesses.
And that is why I will vote for Act.
Basically all the productivity reports I've read about NZ indicate that excessive amount of investment in residential property is a key contributor to our relatively low productivity. However ACT want to add more red tape to development by repealing the MDRS. I would ask them to rethink that decision through their productivity lens.
Thats what I can't work out when ACT suppoerters say they will fix the housing crisis.From their policy pages;
- Restrict the right to object to neighbours who are directly affected by the project
- Allow neighbourhoods to vote to exempt themselves from many planning rules
- Create a new Planning Tribunal to determine compensation for affected neighbours who hold out from negotiations to loosen planning rules
- Reduce the need for consents when infrastructure projects use a Code of Practice to manage environmental effects, saving billions of dollars and reducing years of delay.
These changes would dramatically reduce the cost of building new homes and the infrastructure required to support them, while still protecting the legitimate interests of direct neighbours.
Then they rally against the MDRS...like you said,their rich backers in the leafy suburbs don't want intensification in their backyard,but it should happen every where else.
Productivity... To what ends? Shall we be amazing at producing things and GDP like China is, but forget what it's for
Productivity is output per unit of input. Useful if you're running a factory floor but not useful if you're not completely clear on customer/society needs and aspirations, especially where those are changing rapidly
"Productivity... To what ends?"
Productivity so more people can afford food and necessities in life,
Productivity so there is more money to pay teachers and the medical profession proper wages
Productivity so that our brightest young Kiiws don't need to go overseas to get a decent income
Productivity so that the government has enough money to build more hospitals, schools, prisons, infrastructure...
Productivity so that today's have-nots don't need to burglar and steal to make a living
So like a good capitalist, advocating for productivity for financial return, to then have the option to then spend that on improved standard of living?
Are these the most precious parts of your life? Would more of these create a better life, or just a more comfortable one with more optionality?
Finance capitalism basically sought to break away all of the public infrastructure. Most financial fortunes and financial fortunes in history were made just in the way that Zola had described, by prying thefts from the public domain.
But the financial capitalism doesn’t say… You don’t have to steal it; you actually make it your policy, giving away the financial domain in the way that President Yeltsin gave away all of Russia’s natural resources, public utilities, electric companies, anything that yields an economic rent that can be just easy income without any investment. And you financialize it.
You’ve had, for the last – really since the 1980s, but even since World War 1 – this movement to prevent industrial economies from being low cost. But the objective of finance capitalism, contrary to what’s taught in the textbooks, is to make economies high cost, to raise the cost every year.
That actually is the explicit policy of the Federal Reserve in the United States. Turn over the central planning to the banking system to essentially inflate the price of housing, with government guaranteed mortgages, up to the point where buying a home is federally guaranteed up to absorbing 43% of the borrower’s income.
Well, you take that 43%, you take the wage withholding for social security and healthcare, you take the taxes; the domestic market shrinks and shrinks. And the finance capital strategy is exactly what it is in the United States today, in Europe. Shift all of the money away from the profits of industrial capital that are reinvested in making new means of production. To expand capital into a shrinking economy where the financial sector intrudes more and more into the economy of production and consumption and shrinks the economy. Link
So... monetise the commons, financialise potential revenue streams from that, privatise both.
Alt view - If I were dying tonight I wouldn't give a thought to real GDP per capita. I'd be reflecting on how I've lived my life, my relationships, spending my best moments with loved ones.
Sure, NZ isn't financially as productive, but that's a property of how we've designed our systems.
Societies and ecosystems aren't factories, so to artificially reduce the systems conversation to optimise for a productivity measure instead of for outcomes is poor governance.
David is everything he complains about personified;
Student,career lobbyist/politician & TV personality...and no kids,no wife...he is really in touch with the common man.
https://en.wikipedia.org/wiki/David_Seymour_(New_Zealand_politician)
David Breen Seymour (born 24 June 1983) is a New Zealand politician serving as the Member of Parliament (MP) for Epsom and leader of ACT New Zealand since 2014.
A graduate of the University of Auckland, Seymour worked in public policy in Canada,[1] before returning to New Zealand and contesting for election to Parliament. He entered the House of Representatives in 2014 as ACT's sole MP, after which he was elected as party leader, replacing Jamie Whyte. He was re-elected in 2017. He led ACT to its best-ever result in the 2020 election, winning ten seats.
Seymour has embraced libertarian social policies since becoming party leader, such as supporting the legalisation of euthanasia, and introduced a bill on this issue. Seymour has appeared extensively on television (including a dance contest, Dancing With the Stars) during his leadership.
but will he be leader of ACT into the next election, if the support starts to wane (which it will this is his highpoint) during the three years a lot of new Mps will start to look at the new guys that have been parachuted in high up as an alternate saver, his success this time could be a road to him having to move on, I found it interesting this time he managed to move 2 of his mps out and put the other 2 very low so that they looked like not making it back but that has backfired somewhat
This time around he will have an even bigger group to deal with and he does not have the experienced Wips to keep them in line so will be very very interesting. the one factor in his favour is they will all be list Mps so can resign and be replaced. he can use his 90 day no cause termination clause in their contracts when he brings it back
Agreed E46,he looked like he was on the sponsors meds,shifty eyes...more of a concern was that pharmac and whom got the newer treatments/drugs would have a 'productitivity' quotient applied to who got these drugs....implying you have to be worth spending money on so beneficiaries,superannuitants who are extremely non-productive will not be worth investing in.I guess raising the super age + reduced access to medicines could improve the productivity over all by reducing the average age of the country.
Remember to apply the Americas Cup focus he talks of...will giving giving grandad these expensive meds allow him to 'paddle the waka faster' if not,sorry grandad.
Plenty of low hanging fruit out there for productivity gains. How much (time & money) are consumers and businesses spending paywave so banks can profit off each transaction? The tech is staring us in the face and we have to insert our card to save a couple bucks. Rubbish system.
Surely any real, sustained improvement in our productivity as a country will come primarily from the private sector, not government. If you look at one of our most successful companies- F&P Healthcare, they spend around 10% of their turnover on R&D. Government needs to help enable more R&D through a range of policies of which tax breaks must be one.
I get sick of the whining from the private sector. Case in point is the development sector. Always whining about something, usually regulation. Seldom do they look at themselves.
Simplicity Living show what can be done with some innovation and smarts. Then again, the guy that heads them up is an engineer rather than an ex builder or managerial journeyman.
Even Roger Douglas who founded ACT thinks that they have now gone troppo. https://www.interest.co.nz/public-policy/123080/act-party-cofounder-rog…
Did anyone notice that Labour shut the country down for over two years and paid people to do nothing while businesses folded up. They said we don’t need tourism anymore, except maybe high paying tourists? They’re turning productive farmland into “carbon farms” which generate no wealth or jobs for the larger community. Meanwhile, they paid a king’s ransom for pharmaceuticals like comirnaty & all the useless boosters, paxlovid, molnupiravir and C19 monoclonal antibodies, much if not all of which is unnecessary. It seems to me that Labour couldn’t have done more to destroy productivity if they tried.
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