Monday, June 04, 2007

Some answers to Jeanette's questions

"Firstly, at what level did they plan to cap greenhouse gas emissions and who will the get permits?"
None, as a country with a growing population and economy, it would be unwise for the state to set as a goal capping greenhouse gas emissions, which may cost the standing of living of the population. Most countries in the world are not intending to restrict economic growth because of this one environmental concern, neither should New Zealand - but the government should adopt economic policies that get out of the way of environmentally friendly developments and end the socialist way that some key infrastructure (especially roads) are managed, funded and charged for. This will benefit the economy and the environment.
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"Secondly, how much bigger are they prepared to allow the dairy industry to grow given its damaging effects on water quality, water allocation and climate change?"
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Given that the New Zealand dairy industry has a lower climate change impact than the dairy industries of many other countries, as much as it can grow without state intervention. Issues of water supply will be dealt with by the privatisation of waterways through farms and the institution of property rights over water. This will incentivise the cleaning up of rivers and streams. If you don't want the dairy industry to grow, then stop drinking milk and eating cheese, yoghurt et al.
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The statement that "Climate Change is the biggest looming threat to our economy and our civilisation" is sheer nonsense. The biggest looming threat is a failure to achieve agreement at Doha on trade liberalisation and a new wave of environmentally driven protectionism on trade and travel, that effectively destroys many export markets and the tourist industry.
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“The third question for John Key asks what he intends to do about the people he has labelled as the ‘underclass’. Will you make a public commitment now that benefits levels will not be cut and the conditions for receiving them will not be made more stringent under any government you lead? Will workers still enjoy the options of seeking collective agreements? Will the minimum wage be frozen at the level you inherit or will it continue to rise? Will we see bulk funding or vouchers introduced in education?”
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How about cut taxes, make the first $10,000 everyone earns tax free in the first budget. Cut GST from 12.5% to 10%. In other words, let people have all of their money while they struggle on low incomes.
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What do you intend to do about the underclass, Jeanette, with your own time and money? Answer that question before you force others to spend theirs.
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Benefits should be kept at current nominal levels and eligibility be tightened as the economy grows. Time limits on benefits would be helpful. What have benefits done for many of the underclass other than give a whole cross section a lack of motivation to do anything other than persist in their situation? Why is it caring to force New Zealanders who work hard for themselves and their families to pay for those who do not?
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Of course workers will have the options of seeking collective agreements and individual ones, we are not into banning things like you are.
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The minimum wage should be abolished as an incentive to encouraging more jobs, especially seasonal unskilled work like picking fruit. We don't believe in banning jobs.
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There should be vouchers in education as a first step. You'll be surprised, Jeanette, how the underclass often do want their kids to do well, to be well educated, but find the schools which treat all kids the same aren't that good. They want to choose the education their children have - "their" children, not yours, not the state's. You're doe eyed naivety that all schools should offer equal education is about as brainless as expecting all rental homes to be of a similar standard or all restaurants. Vouchers are one step forward, and by the way, private and integrated schools should be set free to set their own curricula. Parents, by and large, can make the best decisions for their kids on this, despite what you think.

7 comments:

Kevyn Miller said...

I must disagree with you comment "the socialist way that some key infrastructure (especially roads) are managed, funded and charged for."
The development of roads in this country has always been funded on a substantially user pays basis. Rates were originally a very good way of capturing the increased land values arising from road improvements, including special rates for properties that benefited most directly from the installation of streetlights, footpaths and bridges. Rates supplemented revenue from selling Crown land. Of course this relationship weakened between the 1870s and 1920s hence the introduction of the petrol tax as a more effecient form of user pays to stop the proliferation of toll gates.
The only real problem with the petrol tax is that it has always been regulated by parliament instead of being set by the board administering the highway system. The petrol tax did vary with vehicle weight in the same way that road damage did when we only had gravel roads. Now that most traffic is carried on sealed roads the tax really should be ditched in favour of electronic tolls which can reflect demand variations in time and space. That would send the right signals to those affected by congestion to change their road use to other times or places (ie locating national distribution centers in Palmerston North instead of North Shore, etc).
The petrol tax was introduced in 1927 at the request of the Main Highways Board, and M. J. Savage & J. A. Lee were the only pollies who objected to "the pricipal that user shall pay". If there had been an equivalent of an electricity meter for cars there would have been no need for the petrol tax. As we now have that technology it is time we abolished the petrol in favour of electronic tolling.

libertyscott said...

It's hardly a consumer/supplier relationship though. The supply of roads is determined bureaucratically, and the price is by and large an average price than does not vary according to quality of road, level of demand or the cost of supplying that capacity (the cost of capital is ignored).

It is socialist when roads are not treated as an economic good, but something to buy favours for (though NZ is better than most).

However you are right about road pricing, the gains from this would be considerable in terms of reduced congestion and better resource allocation. Roads are still the most socialistically provided economic good in the economy, moreso than health and education!

Craig D said...

Great comments Scott.

It's irritating that parliament lets Jeanette live in her economic fantasyworld.

Put up the minimum wage AND increase benefits?

In one fell swoop, you've just made it impossible/undesirable for beneficiaries to get off welfare (fewer unskilled jobs available and a marginal tax rate discouraging paid employment)

David Seymour said...

Very good blogging mate!

Chris Bishop said...

great work as per usual

sustento said...

3 questions for you if you don't mind.

Do you think there should be a global cap on greenhouse gas emissions given there is some increase in global temperatures that would make life rather difficult?

Do you believe that people should pay the full costs incurred by their activities including adverse environmental costs or should the taxpayer have to pick up the tab years down the road?

In your tax shake up would you support a tax on land to replace income tax and a basic income for all to replace the welfare state?

I'm glad to hear you're enjoying life in London.

libertyscott said...

"Do you think there should be a global cap on greenhouse gas emissions given there is some increase in global temperatures that would make life rather difficult?"

If there was an increase that would generate net negative effects on humanity and the cap would be less destructive than those effects, then yes. However, you need to demonstrate that government intervention to institute such a cap is less destructive than what you are trying to prevent.

"Do you believe that people should pay the full costs incurred by their activities including adverse environmental costs or should the taxpayer have to pick up the tab years down the road?"

This should be up to property owners. You can pollute as much as you like on your own property, as long as it doesn't trespass onto others. Similarly you can sue for trespass onto your property. The atmosphere may be managed differently, but environmental costs are only a cost if they damage something that someone values. It would be hienously expensive from a transaction cost point of view to recover all environmental costs, but I am happy to enter into a debate about to deal with specific issues. There are tradeoffs to be made.

"In your tax shake up would you support a tax on land to replace income tax and a basic income for all to replace the welfare state?"

No. We have taxes on land, they are called rates. While tax exists a low flat rate of income tax is probably the best proxy for the amount of state protection people buy for the criminal justice system and defence. Basic income for all IS the welfare state, and it could be a transition towards voluntary welfare over time. However, if there is a basic income for all, why would many people work?

Thank you for your comment.