This is the last Economic Bulletin for the year. The next Bulletin will be at the end of January. We hope to have that in a new format. Thanks to those who have commented on and contributed to the Bulletin during the year, and best wishes to all for the new year.
CTU Economic Bulletin
The Hobbit controversy teaches us some stark lessons about globalisation and how best to respond to it. As an example of foreign investment in New Zealand it is probably one of the better ones, apart from its very short life. The principle of some government assistance is not necessarily a bad one - the real question is how far we should go with such handouts and our ambition as to what we can achieve with them.
Tax changes unfair, unhelpful
The tax changes that take effect on 1 October are unfair. Their justification lies in economic arguments about encouraging growth, savings and investment. The evidence for them helping the economy is weak, with one or two exceptions. Minister of Finance Bill English has described them as "the most significant tax reform package in New Zealand for nearly 25 years". That takes us back to the 1984-1990 Labour government which flattened the income tax structure, introduced GST, and reduced company tax (sound familiar?), with remarkably little to show for it in terms of economic success and too much to show in terms of increased and damaging inequalities. That is hardly a good advertisement for these changes.
With unions under attack with threats to shackle their access to worksites, it is timely to look at the results of the valuable annual survey of bargaining trends reported by the Industrial Relations Centre (IRC) at Victoria University of Wellington.