CTU Economic Bulletin

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  • Tax changes unfair, unhelpful

    September 2010

    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.

  • August 2010

    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.

  • July 2010

    The Prime Minister made a number of claims when he announced the extension of the 90-day trial provisions to all employees. At time of the announcement, the government made a deliberately delayed release of a Department of Labour research report, apparently to support the law change. The research was unbalanced, surveying only 13 employees, but it does not provide evidence for his claims. Instead it provides cause for concern. If you want to read the full report, details are below, but here are highlights. A longer analysis is available on request.

  • June 2010

    Paul Krugman, a heavyweight among world economists, wrote on 27 June:

    We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression [of the 19th century] than the much more severe Great Depression [of the 1920s and 30s]. But the cost – to the world economy and, above all, to the millions of lives blighted by the absence of jobs – will nonetheless be immense.

    To all appearances here in Australasia we are on the way up. New Zealand is slowly climbing out of a deep hole, unemployment has peaked, manufacturing is starting to find its feet again, exports are increasing and the economy growing. But sustained recovery is very dependent on seeing no more surprises from the world economy. So why is Krugman so pessimistic?