Matt Nolan

Budget day warmup

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I realise people are probably pretty excited about the Budget later today – as that is something some people tend to get excited about.  I remember my family used to buy copies of the Budget documents, and go on and on about them – although I’m fairly sure I never saw them actually read them 😉

Still, to have you prepare here is my ‘policy platform’ from 2011 – not sure it would be too different today.  Also, here is Brennan McDonald making the argument for incrementalism – which is probably more sensible than my policy platform 😉

Update:  Just saw an article by the NBR about my post on the ACT Budget.  Was good fun, I’m happy with the quotes they took – as I do want to point out that there is space for the types of policies they are discussing, the GDP justification was just such misinformation it vexed me.  More importantly though, I see they are still using my Google+ photo instead of my work photo in their articles – that is hilarity.

Matt Nolan

Green’s Investment Bank

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The Green party has announced a “Green Investment Bank” to help facilitate investment in green industries (release, discussion, paper).

I am not against it per se, and given they are saying that in the first year they will have a working group to determine the details there isn’t too much I can dig my teeth into here.  As a matter of principle I am:

  1. Against industrial subsides
  2. For policies that help to improve matching and adjustment to changing economic reality

This policy is doing a bit of both, so I would need details before I can say much.  But the money quote for me from the policy document is this: Read more

Matt Nolan

Discussion Tuesday

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Another one:

Bankruptcy law and limited liability is essentially a form of “worst case” insurance for those who set up and own businesses.  As a result, firms who take on this structure should also have to take on an insurance premium.

 

Matt Nolan

Labour’s alternative budget

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I suppose that this was Labour’s alternative budget.  They’ve taken the policy documents they’ve put together recently and stuck them together in a blog post.  Fair enough, it is a good idea to put together policy documents so why not – I really like the idea of detailed policy documents by the opposition as well, so good work on that!

As a result, I don’t have much to say about it (the monetary policy has been discussed here and here – I should look into the others at some point and do posts), I summed up my view on Twitter:

However, there is one bit that gets on my wick a bit, it did for the ACT release as well – this rubbish about targeting an “unemployment rate”.   Read more

Kirdan

Monetary policy 2.0?

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Labour wants to upgrade monetary policy, preserving inflation targeting but asking the Reserve Bank to reduce persistent external deficits. To help, the Reserve Bank might get to vary contributions to an enhanced Kiwisaver scheme and go a little further with macro-prudential policy. Getting kiwis to save more is probably a good thing. If successful, interest rates would be lower and ease the exchange rate a little. But the evidence-base is weak and there are many leaks since implementation and accountability frameworks are not clear. Better to leave the Reserve Bank to do what they do best – implementing flexible inflation targeting.

The problem as defined

Many commentators point out that New Zealand has high real interest rates and that the exchange rate is overvalued relative to an economy less reliant on borrowing from abroad (see below). That makes our exports less competitive and promotes consumption of imported goods over domestically manufactured goods.

The problem: high interest rates and an overvalued exchange rate

The problem: high interest rates and an overvalued exchange rate

 

Our persistent negative external balance – that nets our borrowing and imports from overseas against exports – largely reflects our savings choices. Of course, an external balance can also reflect imports of capital equipment for investment in the real economy but most likely reducing the external balance would reflect a useful rebalancing of economic conditions for New Zealand.
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Matt Nolan

ACT’s alternative budget

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As of now I’ve only seen one alternative budget come out prior to Thursday’s Budget – the ACT party’s one (Stuff,NBR).  Good on them for releasing an alternative budget, I like to see that sort of thing.

However, I have to admit I was a little more than ‘very disappointed’ with the quality of the content.  If your view of the ACT party is fragile, I would suggest not reading this post.  Anyway, here we go.

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