1992

Another Year
As 1992 draws to a close and another election year looms in 1993, it’s opportune to reflect on the economy and its likely future. 1992 has seen the beginnings of economic recovery, led by the export sector and supported by a rise in commercial investment, particularly by export-oriented firms. There has also been a rise in consumer demand, although it has been more patchy this year than ...
23 December 1992 - politics - Gareth Morgan

The Exchange Rate Crisis
Reserve Bank Governor Don Brash is defending the value of the currency as vigorously as any of his European counterparts have done in recent months. But will he fail, as most of them have done? Strong selling has continued despite his efforts, pushing the currency below his mandated minimum of 53 on the Trade Weighted Index, so he will have to tighten again. On the face of it, he can ...
16 December 1992 - money markets / policy - Gareth Morgan

Taxing Logic
Minister of Finance Richardson has overridden private sector objections to her proposed international tax regime which, as it stands, promises to impose NZ tax on the tax paid by NZ firms overseas. The argument goes that the government has no interest in equalising the percentage of profit paid in tax on foreign and local investments. It takes the view that foreign taxes are of no benefit to ...
2 December 1992 - taxation - Gareth Morgan

A New Opposition
Last week’s publication of the Alliance’s policy document raises the question of which opposition party provides the most credible alternative. To date Labour has had the role of opposition as its own preserve, irrespective of the quality or quantity of any policy initiatives it’s promoted. That’s changed there’s contestability in opposition now that the Alliance has presented a well ...
24 November 1992 - politics - Gareth Morgan

In Search of Something To Inquire Into
The political case for an inquiry into government’s relationship with big business has become compelling even if the judicial one hasn’t. Leaving aside its legitimacy, the Peters campaign with its loose cannon nature and “despicable” character attacks, has managed now to inculpate those, commonly perceived as recipients of economic privilege, with tax avoidance. This can only enhance ...
18 November 1992 - politics - Gareth Morgan

For A Few Dollars More
In the Wellington Central election campaign Labour candidate Chris Laidlaw has extolled the benefits a “small” rise in taxes would deliver in terms of preserving free education and health systems. The idea that the problems of publicly- provided education and health can be solved by more bucks being thrown at them while pathetic, is traditional NZ politicking. That the provision of ...
11 November 1992 - politics - Gareth Morgan

Political Cycles
The political change in the US is not a purely domestic phenomenon. To a large degree the policy changes that the US commenced under Reagan have been mimicked in other capitalist economies, including NZ. The unambiguous result in the US has been an electoral tiring of policies which emphasise economic efficiency at the expense of redistributional interventions. The electoral sentiment is one ...
4 November 1992 - politics - Gareth Morgan

Under The Emperor’s Clothes
So often we’ve looked at Japan’s economic performance with envy, sometimes bewilderment as it delivers new lines of consumer products to the world, sustains full employment, buys up foreign assets in a large way, and threatens to overtake the US as the world’s primary economic power. But lately the gloss has come off their economic miracle and the fragility of Japanese magic has been ...
28 October 1992 - overseas economies - Gareth Morgan

Blind Man's Bluff
Like a herd of stuck swine, second hand house dealers have squealed with indignation at the Infometrics analysis of last week that pointed to the likelihood householders would be diluting their exposure to housing over the next twenty years. The case for that finding is pretty sound and fairly well-recognised by all but the pushers of real estate it seems. While it is common for vested ...
8 October 1992 - housing / property - Gareth Morgan

Pounded Into Submission
The humiliating currency experience for the British over recent weeks illustrates the folly of weak commitment to price stability. The British failed to defend their currency within its EMS band by not resorting to higher interest rates to ward off speculative selling. Instead they relied upon the collective obligations of the EMS central banks to buy pounds to defend the rate. But that ...
7 October 1992 - money markets / policy - Gareth Morgan

Aussie Economic Reform: Cold Feet
Faced with the prospect of a strong dose of rationalist economics should John Hewson win power in the upcoming election, Australia is getting cold feet. Ever the skilful politician, Paul Keating is enunciating loudly the costs that will be faced by Australians during the transition to Hewson’s world of diminished privilege and flatter tax burdens. For example, last week saw a vitriolic ...
30 September 1992 - overseas economies - Gareth Morgan

An Inflation Rectangle
“Inflation is dead” has been the catchcry for some time, but that did not stop most forecasters being caught out by a lower than expected inflation figure for the September 1991 quarter. It was the second time within a year that had occurred - last December’s result also surprised by not showing the oil shock-induced effects expected. These undershoots are testament to the strength of the ...
16 September 1992 - money markets / policy - Gareth Morgan

Get Smart
The furore over the suitability of a smart card to monitor financial activities of State wards tells much about what is limiting economic growth. Rather than being hesitant about use of a smart card to monitor the finances of those utilising State aid, a government concerned with State waste would aggressively use technology to ensure consumption of funds provided by others, is done ...
16 September 1992 - welfare - Gareth Morgan