Tuesday, February 23, 2010

One of the least likeable traits of a politician….

With a series of operational failures in the Telecom XT network it was inevitable that sooner or later some bright spark in the Beehive would suddenly rate themselves as a telecom technician. … just what kind and with what level of competence is utterly irrelevant.

And thus it came to pass that on the third outage, Leader of the Opposition Goff sprang to his hind legs and announced that the government should “do something”. In due course the Minister reported that he had held “discussions” and it appeared (this must have come as a shock), that he could not, in fact, “do anything”.

The reason for this was that Telecom was a private company – implying of course that if it wasn’t he would have been able to “do something”. Both the conclusion and it’s origin were duly deemed “unacceptable” by the “doers” on t’other side of the house and failure to “do something” was said to shriek of “no accountability”.

Herein then lies one of the great virtues of privatisation…. it is one of the very few policy moves which, from time to time (not always as various rail foamers will leer at you about) helps ensure that those who can “do” and those who can’t “preach”.

Tuesday, February 16, 2010

Tax changes – how to miss the point – even when you invented it

To the extent that there is virtue in the tax changes proposed by the National led government, which, according to the PM is to be instituted only if no one is left worse off by increasing consumption tax (GST) and reducing income tax, it lies in the improved efficiency benefits such changes would bring.

In general terms then the idea is (in the somewhat idealistic political imagination) that one can reduce income tax while increasing GST at such rates that one cancels the other out – with any remaining “inequalities” fixed by fiddling with the many benefit regimes.

Would this “revenue neutral” change be worthwhile? The logic has to be that, if it could be achieved (a matter for another day) and assuming the benefit fiddling was very minor, “yes” since it would increase efficiency through improving incentives to work (lower income tax) while making the business of consuming (and paying tax on consuming) more a matter of choice.

Other benefits we all share might flow from the fact that the lower are income taxes, the greater is the IRD success in collecting taxes and, in spite of the inverse applying with increased GST, its more readily enforceable nature allows net gains (gains through lower income tax – losses through increased GST avoidance) to be picked up.  Efficiency benefits flow too from reducing the activity of tax lawyers and accountants.

There are complications in the detail but the principle here is clear enough – and yet the debate has come nowhere near this…. in the media or, even more curiously, in the statements issued and advocacy generated by the champions of the reform itself.

A reasonable question is why? A possible answer is that at present the media and politicians are more focussed (boringly in my view) on the politics of all this than on the economics of the welfare changes we might gain (or lose for that matter).

Wednesday, February 3, 2010

Let’s hope…. and goodbye Europe extends beyond climate nonsense…

By Dr Benny Peiser

28 January 2010

The failure of the UN climate summit in Copenhagen is a historical watershed that marks the beginning of the end of climate hysteria. Not only does it epitomise the failure of the EU’s environmental policy, it also symbolises the loss of Western dominance. The failure of the climate summit was not only predictable – it was inevitable. There was no way out from the cul-de-sac into which the international community has manoeuvred itself. The global deadlock simply reflects the contrasting, and in the final analysis, irreconcilable interests of the West and the rest of the world. The result is likely to be an indefinite moratorium on international climate legislation. After Copenhagen, the chances for a binding successor of the Kyoto Protocol are as good as zero.

The extent of the debacle and the shift in the balance of geopolitical power was demonstrated by the fact that the final accord was made without the participation of the European Union. The exclusion of Europe is a remarkable symbol of the EU’s growing loss of influence, a green bureaucracy that was not even asked whether they agreed with the non-binding declaration of China, India and the USA. Although the Copenhagen conference was held in a European capital, the negotiations and the final result of the conference were totally outside European involvement.