1994

The Spirit of Competition
There was a time when the travelling public’s choice at Christmas was a flight on a state controlled airline, a sea journey in one of the state’s scummy Cook Strait ferries, a trip in a government owned and operated train or bus, or a driving in a pretty expensive and shoddy car. Sounds like something out of Eastern Europe, but it was New Zealand not so long ago. Despite the absurdity of it ...
14 December 1994 - markets / regulation - Andrew Gawith

Don't Dump Don
As the RB struggles to get back the initiative on inflation, doubts must arise as to whether the sacrosanct 2% upper limit to the agreed target zone won’t be violated. Under the terms of the RB Act such a sin would compel the Governor to walk the plank as it would be tantamount to “an inadequate performance in ensuring that the Bank achieves the policy targets”, to quote that revered monetary ...
7 December 1994 - money markets / policy - Gareth Morgan

Habits Die Hard
The calls by the building industry this week for government to fund a training programme for recruits to alleviate their labour bottleneck, should not be heeded. To the extent that the industry requires additional public moneys to be spent, their call creates a precedent that cannot be allowed. With the pace of economic activity it won’t be long before manufacturers, telecom and computing ...
30 November 1994 - industry policy - Gareth Morgan

Tax Cuts - Political and Economic Implications
The fiscal fortune continues to mount and with it the certainty that income tax cuts are imminent. That the two Opposition parties have not announced significant tax cuts as part of their medium term strategy reveals something of the awkward position economic recovery places them in. On the one hand it’s hard to oppose economic improvement yet it’s hard for parties which support ...
22 November 1994 - govt spending / budget - Gareth Morgan

Monetary Policy Limitations
One of the ironies of using monetary policy to prevent inflation is that at times it achieves this objective via constraining the pace of economic activity. On these occasions monetary policy can exacell)ate the causes of domestic inflation. The means via which tighter policy slows the economy is higher real interest rates. But herein lies an irony which renders monetary policy as the ...
16 November 1994 - money markets / policy - Gareth Morgan

Lost In Space
Last week Labour launched an economic policy which neither manages to build on the economic revolution it implemented under Rogernomics, nor manages to provide, in any coherent fashion, the centrally planned economic model, as the Alliance has. Labour’s document of compromises may well be an understandable result from their last couple of years of identity crisis, but as a practical approach to ...
2 November 1994 - markets / regulation - Gareth Morgan

Globalisation As Inflation’s Panacea How Probable?
The thrust of the New Age, low inflation argument is that lower barriers to international trade and capital flows will ensure resources move quickly to areas where price-pushing supply shortages occur. Hence inflation in future won’t be the problem it has been in the past. A supporting tenet of the “no inflation problem” argument is that the great information technology wave is lifting ...
26 October 1994 - overseas economies - Gareth Morgan

Welcome To the Car Manufacturing Asylum
Last week saw publication of yet another lobbying tome by NZ assemblers repeating their call for higher protection. New Zealanders are well used to the intellectually light practices of local assemblers thinly disguising self interest as national interest in a variety of protection plans forwarded to government. Over the years car assemblers have established a reputation second to none - ...
18 October 1994 - industry policy - Gareth Morgan

Addressing The Bias in Tax and Social Policies
Recent estimates calculated for Australia have measured the value of work done in and around the home as equivalent to 58% of measured GDP. This compares with earlier estimates of the non-monetary portion of the economies of NZ and Canada of around 50%. Recognition of these production and consumption activities within conventional GDP measures has yet to be made. While attempts to measure ...
12 October 1994 - families - Gareth Morgan

More Bobs For The Poor?
University lecturer Bob Stephens’ and cleric Charles Waldegrave’s research effort concludes that for a mere $900m we could eradicate poverty in NZ. The implication of their study is that all government has to do is sign the cheque and paradise is restored. If only those in power weren’t so mean was the tenor of the authors’ published conclusions. But this combined analysis from gown and ...
28 September 1994 - welfare - Gareth Morgan

Another Boom/Bust In Prospect
The upward revision of their economic growth forecast by the Reserve Bank was acknowledgment they had underestimated the strength of the upswing. In that regard the Bank has not been alone - indeed there are even commentators maintaining a view of interest rate falls being imminent. That imminence is clearly fictitious as activity continues to surge. Two factors are driving rates - ...
21 September 1994 - money markets / policy - Gareth Morgan

A Poor Solution
The conclusion that poverty in New Zealand could be eliminated by handing over $900m to those earning less than 60% of the median household income, is frighteningly simplistic. However, this appears in keeping with the study from which this conclusion emanates. It was based on around 100 households in the Wellington region who were asked to define poverty for themselves. They came up with the ...
7 September 1994 - welfare - Gareth Morgan

The Balance of Payments Bogey
The rampant pace of economic growth over the last year or so has had little deleterious impact on the balance of payments deficit. This is a most unusual turn of economic events for New Zealand. Normally fast economic growth blows a big hole in the deficit and before you know it the IMF is on the phone generously offering tips on how to drive the economy less dangerously. The problem is ...
31 August 1994 - industry policy - Gareth Morgan