Joshua2 forwarded:
THE REAL LESSONS FROM NEW ZEALAND
<snip> total bullshit
The reality ...
[with permission]
------
Subject: The real truth about New Zealand's economic situation
Well I'm a New Zealander so I can tell you what is *really* going on here.
I've seen way too much nonsense written by non-New Zealanders. And I
include the offerings by supposedly reputable magazines that I've read
which are frankly appalling and which any New Zealander can see were not
written by someone who has set foot in the country. Here's the truth:
That laissez-faire was introduced into New Zealand is a myth. What occured
in 1984 was mild deregulation and a programme of privatisation in select
industries, which, while hardly far reaching, were both extremely
successful and beneficial. Deregulated industries have surged far ahead of
where they were previously, increasing peoples' standards of living
substantially. Import licenses had artificially restrained trade and
priced many goods beyond peoples' incomes. Within a short while of the
changes the purchasing power and standard of living of NZers (having the
number of radio stations on offer multiply by 10 for instance) had risen
sharply. Privatised industries have provided far better service. The old
state telephone monopoly (to name just one operation) was guilty of Soviet
style operations, with weeks of waiting for a phone to be installed. Now
it occurs in hours and there are similar improvements in all facets of
their operations. That's the good part.
Why did it occur? Mostly due to the extremism of Muldoon's price and wage
freeze and the country's debt situation leading to a belief (especially
amongst big business) that statism had gone too far so there was an effort
to swing back the other way (big business switched sides and backed the
Labour party for the first time). The reforming effort was extremely
inadequate with no momentum at all to really alter things properly beyond a
few select industries, the state was interested in expanding its domain and
people were only really opposed to the most severe socialist actions. The
philosophical beliefs in NZ were (and are) strongly for socialism and so
the government's making up for loss of control of one area by dictating in
two new areas was largely unopposed.
So what has happened since 1984 is that more measures in the negative
direction have occured than in the positive. Very significantly tax rates
have climbed, while there are less nationalised industries to maintain.
While the governments have claimed (and rightly so) that many things should
be user pays such as doctors fees and parts of education and so have
removed funding, they take the tax money that used to be spent on that
anyway! and then raise tax rates again. The Goods and Services Tax of 1986
(12.5%) has been particularly odious, with extremely high compliance costs
for business. Services provided by government have been continually
falling sharply since 1984. Education has doubled in cost in fifteen years
while the system has been collapsing in terms of performance as one might
expect of a mature state-run system. Every five years approx I notice a
significant decline in the standard of school graduates and the curriculum
is continually being dumbed down. One in 60 New Zealanders is in a queue
for a major surgical operation. Year after year the bill goes up for
government providing less and less. And the proceeds of the asset sales
have disappeared into an administrative black hole. Is it laissex-faire if
the state don't pay for doctor's visits but they keep the tax money that
would have paid for it anyway?
On top of increased tax and poorer government interference in industries it
should have no role in, the amount of regulation in NZ since 1984 has
*increased*, substantially. So much for laissez-faire. We are the most
regulated we have ever been. There are regulations for everything, you
need special permission for cutting down a tree on your property for
instance. Which, increasingly, you might not get. And every regulation
has compliance costs. I've talked to a lot of people who have left
business because there was too much regulation and they're now involved in
easier things - like driving a taxi.
Also the last decade has seen the most losses of freedoms that there have
ever been. Property rights have taken an enormous hit. Our police force,
which in the 1980s I would have rated as clearly one of the top ten in the
world, has now developed a very dangerous culture and they have been given
numerous powers which they have no right to have - 24 hour arbitrary
detention, mandatory photo drivers licenses which act as ID cards, etc -
and they spend most of their time collecting revenue from traffic fines (so
that they can be self funded) rather than dealing with the terrible crime
situation (we have the highest burglary rate in the world - a lot of people
no longer bother reporting them now).
NZ is in the process of adopting an Apartheid system, which judges people
based on race. Already much has been done to institute this racism, quotas
system for Maori at universities for instance and payout after payout to
corrupt Maori leaders acting 'on behalf' of their people.
What's the aggregate of all of this? A few positive changes were made in
the mid-80s that provided clear benefits in a number of areas but the
overwhelming emphasis has been on expanding state power. The current
government is headed by all the Communist intellectuals of the 60s and 70s
(and a fair number of old Communist Party members) though no-one seems to
mention it here. The economic situation looks poor. 300 people a day are
leaving our shores, mostly because of the new government. Looking
long-term this will continue. The last 40 years have involved two main
economic themes: a loss of trade for NZ as world trade patterns have
altered and an increasing lack of competitiveness and productiveness. The
cause of the latter is an *appalling* education system combined with
socialistic attitudes. The whole apathy of socialism has taken hold, there
is the
welfare mentality, the lack of ideas, the moral vacuum, everything you
expect when freedom is no longer respected.
Now to answer a few particular points from the awful article quoted:
The high youth suicide rate is due to socialism as described above
(although this is very much a simplification) and the high violence is a
similar result of a loss of moral values. A minor part of the increase
must be attributed to increased poverty. This poverty was inevitable as we
lost our privileged trade position and became increasingly unproductive.
However the poorest portion of the population did suffer unfairly. Why?
When the labour market was deregulated this was a positive. However it led
to an unnatural situation where the supply of labour was relatively free
but the demand for labour was still repressed because government regulation
keeps both the number of companies and the number of jobs they can provide
artificially low so reducing the bargaining position of the poorest of
workers. If laissez-faire had really been embraced there would be many
more companies and jobs and poor workers would have higher wages as a
result of increased demand for labour. So in a way the poor have suffered
but not in the way people always describe.
Obviously more jobs will not occur when business is increasingly regulated
and taxed.
The quoted unemployment figures are *very* clearly intended to be
manipulatively deceitful. Switching from actual unemployment figures to a
far wider "workless and wanting work" figure is comparing oranges with
pumpkins and saying 'see look how big the pumpkins are, they're not as
small as our oranges used to be.' The truth is that unemployment is a
little above the 1984 level, when many people were employed to do nothing
in government departments, the old socialist story of low unemployment
merely through paying people to do nothing.
Productivity fell in the 90s due to furthering government control of business.
The author states that many of the most destructive policies are being
reversed. However one example he gives, renationalisation of Accident
Compensation Insurance, will actually directly cost the country millions of
dollars as economists have made very clear. Innovation by private
companies was, in a short space of time, producing significant savings and
efficiencies over the centrally planned state system. The Labour Party
does not care, they must put power back into the hands of one of their key
support groups - union leaders. Also, to be against free trade as a
general rule is to be economically illiterate, tariffs penalise New
Zealanders in other areas (for instance by making them pay more for less,
so they have less left over to spend on other NZ-made goods) and reinforce
the very problems they're supposed to solve. Everything the author is in
favour of will further exacerbate NZ's problems and also cost money, though
he conveniently does not say where this should come from. The answer is
from capital gains tax and death duties which will be introduced in a
couple of years and which will be the nail in New Zealand's economic
coffin.
The author pretends to be against ideologies but he is very strongly
pushing one of his own, his strong socialism comes through very clearer,
particularly at the end. Ironically he says that the 'unfettered
application of ideology is inevitably destructive'. Well then he might
have tried to find out the facts about NZ's situation rather than brazenly
trampling all over the truth with his ideology to arrive at the conclusion
he seeks.
I hope the above has provided a somewhat clearer picture of what has really
occured in New Zealand.
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