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The Scientific Proposition: Global Warming
Dr Willem de Lange takes a hard look at the evidence
Living at the expense of everybody else
Hon Richard Prebble on the unsustainability of current government spending
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Catching Australia by 2025: An Alternative Approach
Sir Roger Douglas has his own vision of how to regain trans-tasman economic parity
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If New Zealand wants to match Australia's Gross Domestic Product (GDP) per capita by 2025, then we will need radical changes to our current fiscal and regulatory policy settings. This is especially true because we are aiming for a moving target – Australia never entered recession and has been growing while we have been going backwards.
In fact, substantial changes will need to be made to merely avoid a fiscal catastrophe – with forecast Government expenditure set to increasingly outstrip forecast Government revenue in future years.
The problem lies not so much in determining the appropriate path, but in convincing the Government to actually undertake the required actions. Finance Minister Bill English has often spoken of the need for fiscal restraint, of the problems caused by excessive levels of Government expenditure, and of the urgent need for greater levels of efficiency in the public sector.
Unfortunately, we have seen little action. A Government that seeks to protect property rights, ensure contracts are honoured, and provide a fair and impartial system of arbitrating disputes will go a long way in providing an adequate framework for entrepreneurs to create economic value. When the Government moves beyond these core functions, problems arise.
The revenue required to administer the current size of Government creates massive deadweight losses – the deadweight loss associated with taxes increases at a faster rate than revenue itself. In addition, Government expenditure has decreasing marginal returns – an increasing size of Government returns less on each marginal dollar spent.
Moreover, as the level of expenditure grows, so do the personal benefits of engaging in negative-sum rent-seeking behaviour as compared to the benefits of engaging in positive-sum entrepreneurial activity. It has been estimated that a ten percentage point increase in Government expenditure as a share of GDP reduces the annual rate of growth by 1 percentage point per annum.
This alternative budget presents a way to decrease the overall level of Government expenditure from its current 37.3 percent of GDP to 27.7 percent of GDP within one year. In addition, the size of the deficit would be reduced from the Budget forecast of $7,948 million to $802 million. This deficit is smaller than the size of the cyclical deficit, and is therefore not a long term problem.
In future years, Government expenditure would increase at a slower rate than economic growth, seeing the Government's share of GDP fall below 25 percent relatively quickly. Government expenditure would be expected to be below 20 percent of GDP within 15 – 20 years, as it would grow in line with inflation rather than overall levels of economic growth.
- (Read the full story in the print edition of Gauntlet)
Rotten Buildings, Leaky Homes (Part 1)
Architect Roger Hay discusses the origins of the leaky building crisis
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There are various urban myths about the ‘actual cause’ and the extent of the rotten buildings problem. Most are wrong, as they are not factually based, let alone grasp the complex sequence of technical factors involved.
The problem is serious in its extent, but it is far more serious in the way it came about. In fact, there is just one primary technical cause, that only occurred because of a complete failure of technical governance.
Failure of technical governance refers to four successive governments making four sets of serious technical policy mistakes. These mistakes were all due to one government’s initial naive creation of a vacuum:
• in its policy intelligence about the basic responsibilities and standards in building technology, and
• also in its policy understanding of how these responsibilities and standards should be best developed and ‘regulated’.
The consequence of that policy vacuum is that central government itself, including Parliament, directly paved the way for the rotten buildings crisis, and so should now take full responsibility for removing the rot and paying for the damage.
- (Read the full story in the print edition of Gauntlet)
Saving the World at Copenhagen
The real aims of the draft agreement
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Why Labour can Win
How Phil Goff could be New Zealand's next Prime Minister
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China: Stumbling in the Pacific
China’s incoherent South Pacific policies
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Securing the Outer Perimeter
The US response to Chinese Expansion in the South-western Pacific
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Fearful of Copenhagen
The Death Spiral for Climate Alarmism
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Global warming responses: a dogs breakfast
International carbon trading has been a huge success, for fraudsters
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A Failed Promise
Wind power has far more problems than solutions
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Sustainability: Just a buzz word?
Sustainability means anything to anyone
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Local Government and General Competence
Can Local Governments do anything they like?
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Emissions Tax: The least worst option
An ETS is poor policy and a Carbon tax is better?
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Saving Globalisation
Mike Moore on why Globalisation and Democracy offer the best hope for Progress, Peace and Development
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