Roger Douglas says the Government should use the Covid-19 crisis to attack economic privilege and reduce inequality

“There is never someone more socialist than a wealthy capitalist in a time of crisis”

Stuff:  Sir Roger Douglas says house building and spending cuts key to fixing Covid-19 shock

Former Labour Finance Minister Sir Roger Douglas says the Government should use the coronavirus crisis to attack economic privilege and reduce inequality.

But, unlike his contemporary Labour colleagues, Douglas said this should be achieved by reducing stimulus spending, including on things like the wage subsidy and infrastructure building.

The Government’s current policies, in particular the wage subsidy were “unfairly advantaging big business and the professional elite”, he said.

Douglas said this money would be better directed “towards assisting the newly unemployed – namely workers, their families, and small business owners”.

Douglas told Stuff his paper was about reducing handouts to big businesses and dealing with entrenched inequality and poverty.

The theme of the paper was better targeted spending and debt reduction.

The most radical proposal was to “identify, and eliminate, unnecessary spending, privilege, and waste” from the Government budget totaling $15 billion.

This would mean cutting or reprioritising 18 per cent of the last budget. That’s roughly the amount spent of superannuation each year.

Douglas was particularly critical of the way that large businesses with healthy balance sheets had been claiming the wage subsidy, which has now paid out more than $10b.

“Why haven’t they been required to fend for themselves and their businesses?

“Why, when the good times suddenly come to an end, have they gone cap in hand to the Government?”

Douglas said it was an example of “the old maxim rendered true — there is never someone more socialist than a wealthy capitalist in a time of crisis”.

Douglas said the key to getting housing right was “making a large quantity [of houses] available”.

The Government had to go into section development, while making sure land was released for building by reforming planning laws. There was plenty of land out there, but not enough capital to develop it.

Low-income people could be helped into housing through a shared-equity scheme, where the Government would take on part of their mortgage.

I’m not sure whether Grant Robertson or the Government will be looking to Douglas for advice.

Last year Robertson was even asked whether he would follow Douglas’s example and resign after presiding over a budget that was leaked.

Robertson responded, “In my life, I have made it my ambition not to follow what Roger Douglas does”.

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37 Comments

  1. Blazer

     /  5th May 2020

    There is a lot of irony in -‘ Sir Roger Douglas says the Government should use the coronavirus crisis to attack economic privilege and reduce inequality.’
    He is easily the main instigator in creating this ‘condition’ in NZ with the so called reforms of the 80’s.
    This was the era of Thatcher,Regan and the acceleration of globalisation ,resulting in todays present clusterfuck where politicians are owned by the financial/business sector and captured by meaningless platitudes justifying extremes of wealth.

    Hopefully these are signs of an epiphany ,of the type experienced by Malcolm Fraser ex aussie P.M and to a lesser degree Jim Bolger ex Nat P.M .
    They seemed to accept that their view of the social construct of the world was fatally flawed.

    Reply
  2. David

     /  5th May 2020

    Douglas highlights the fact that everytime there is a government intervention it always the big end of time that it works out well for, think Fletchers and the earthquake, and that is what a lot of his and Thatchers reforms were aimed at..removing privilege and levelling the playing field.
    He is pretty much advocating the what Labour promised they would do in using the state to free up land to build on and provide a housing option for the private purchaser to buy. We need more housing and it provides loads of jobs.
    An idea should be worth listening to if it has merit and not dismissed because of the person.

    Reply
    • Blazer

       /  5th May 2020

      ‘removing privilege and levelling the playing field.’….so after 35 years, how successful have these ‘reforms’ been in achieving those aims…do you think…rate them out of 10…10 being ..tops.

      Reply
    • Gezza

       /  5th May 2020

      This idea seems to have foundered on the inability of the government to figure out HOW to do it.

      Reply
      • Blazer

         /  5th May 2020

        so we can file Rogers reforms under…’wishful thinking…or maybe …’meaningless platitudes’…then.

        Reply
        • Gezza

           /  5th May 2020

          *Some* might. Let’s see what others think.

          Reply
          • Blazer

             /  5th May 2020

            so what do YOU think?

            A do as I say,not as I…do ..situation!

            Reply
            • Gezza

               /  5th May 2020

              I think I know insufficient about how to fix it & am thus prepared to hear & consider ideas.

              One thing life has taught me about politics is that simple solutions often turn out to be far more complicated to successfully implement without unforeseen adverse impacts than is evident when they are first proposed & adopted.

            • Blazer

               /  5th May 2020

              @Gezza….lets hope someone comes forward in the next 35 years who knows…how!

            • Gezza

               /  5th May 2020

              I think the problem is that it’ll have to be someone who’s got the gonads to take a hit at the next election because they’ve put NZ’s interests ahead of their own. Rare beasts in politics.

            • Gezza

               /  5th May 2020

              And I also suspect a contributor to this perennial inaction is our election cycle, which is too short.

              The first year of any new govt seems to be spent trying to sort out with coaltion partners which promises they each made to electors they can both agree to make CG implementable policy, how to afford & fund those blatant vote-buying promises the major partner made to get enuf voters to put them in the driver’s seat, & setting up werkinggruppen to tell them how to do other things they want to but haven’t got enuf support or experience or intellectual firepower to do among their ranks.

              The second year is when they might have some spare overhead to get down to the nitty gritty of working out how to implement any major changes or new policy directions the major party has always intended or promised – the political legacy stuff.

              By the third year, they’re back into working out what bribes they can offer the voters to give them another 3 years of rinse & repeat.

            • Duker

               /  5th May 2020

              The work of the bureaucracy expands to fill the time available… Australia federally struggles to serve out 3 years , most of the states have 4 yr fixed terms.
              The UK has 5 years , more recently fixed terms and then unfixed, doesnt seem to make a difference
              Its like Scotland has MMP for its parliament but managed to have SNP with a majority of seats but less than 50%

            • Gezza

               /  5th May 2020

              It’s not the space-filling tendency of the bureaucracy that matters to the voters. It’s the results.

              A good government led by a competent leader controls the wastage & delays inherent in bureaucracies thru good, solid, competent Ministerial oversight & stewardship/management of their departments.

              What happens now is that the voters don’t clearly see any lasting results of governmentp policies because the electoral time frame is too short. This means that inept governments can & do claim that they need more time to produce the results they promised, that have not eventuated or – have even gone backwards – so the populati is faced every 3 years with the choice of whether to give them another rinse & repeat short-term-planning-only electoral term.

  3. Peters wants to dictate to companies more:

    Reply
    • Blazer

       /  5th May 2020

      Great idea.
      Private equity funding takeovers is especially insidious and adds no value.

      Dick Smiths…anyone.

      Reply
    • David

       /  5th May 2020

      Hate to say it but Peters is right. The how is the big thing given all he was elected on slowing immigration and stopping foreign sales of land which have both risen.

      Reply
    • Duker

       /  5th May 2020

      Not Just here . Australia has actually already moved to restrict more foreign takeovers.

      Australia tightens investment rules on foreign takeovers
      Canberra warns that companies hit by coronavirus could be targets of ‘predatory behaviour’

      https://www.ft.com/content/fda7e3cf-a605-4697-9bc0-6fe91b739eb9

      So no , its NOT wanting to dictate to companies at all, its protecting local companies from FOREIGN takeovers.

      Reply
      • David

         /  5th May 2020

        Its not protection its confiscating private property and having the state dictate who you can sell your asset too. You will be free to sell it locally for less though.
        I agree with a temporary halt for 12 months though, blanket ban it.

        Reply
        • Fight4nz

           /  5th May 2020

          So you are saying private property, by virtue of being privately owned, no longer can be considered part of the democratic sovereign nation in which it is located? Any protections or other measures taken by the elected government for the greater good eg wage subsidies, tax reductions or preventing foreign takeovers – economic or military- is confiscation? There is no context to taking on private ownership it is just mine, mine, mine, mine, mine.

          Reply
          • Pink David

             /  5th May 2020

            ” Any protections or other measures taken by the elected government for the greater good eg wage subsidies, tax reductions or preventing foreign takeovers – economic or military- is confiscation? ”

            Anyone who uses the term ‘greater good’ is about to rob you.

            Reply
  4. duperez

     /  5th May 2020

    There’s a cartoon somewhere in the story. The reformed gang leader, patch discarded, tattered sleeve hanging out of the rubbish bin.

    The gnarled wizened face that’s seen and organised brutal bashings for years, provided great stimulus for establishing women’s refuges, been peddler supreme of drugs and their misery for years, rogered many, offering sage advice.

    He’s lived his lot to the fullest and got his underlings to do the same but now wants to start up an advice and counselling agency. He has the ability to see the possible errors of others’ ways.

    Grant Robertson at the door, with hordes behind him with only two words. The second is ‘off.’

    Reply
    • Gezza

       /  5th May 2020

      😳

      🤔 Have you had mushrooms for breakfast ? 😐

      Reply
      • duperez

         /  5th May 2020

        Farmer mate down the road has truckloads growing in his run-off but hasn’t dropped any in today on his trip back to base.

        You don’t need any to have the mind magically going down other roads. I mean what the hell? Subsidies “unfairly advantaging big business and the professional elite?” C’mon, what happened to ‘trickle down’? 🤔

        I’m looking forward to the Mike Hosking interview with David Seymour. “You have to admit David, he is right isn’t he?” 🙂

        Reply
  5. Alan Wilkinson

     /  5th May 2020

    Bob Jones has a post on this for his business area:
    https://nopunchespulled.com/2020/05/03/commercial-rent-subsidies/

    Reply
    • Duker

       /  5th May 2020

      Yes . At least he can talk from a position of knowledge.
      Regarding those Malls , I thought their method of rent meant they took an agreed portion of sales. Banks etcin a mall would be different. That way they were always replacing those whose sales falter with fresher higher sales outlets. If you have a fixed rent each year it tends to stifle the up and comers and the ones with long existing well known names are creaming it but become stale.
      Maybe thats not now the case.

      Reply
      • Gezza

         /  5th May 2020

        The Mall covered shopping area our NW is part of has a few longstanding vacant shop spaces & occasional short-term tenants. The scuttlebutt is that they ask too much in rent so I assume there is some other financial incentive for the owners to be so intransigent.

        Reply
        • Alan Wilkinson

           /  5th May 2020

          The likelihood other tenants would demand rent reductions?

          Reply
          • Gezza

             /  5th May 2020

            Maybe. I just assumed that final lease agreements are subject to negotiation & confidential to the parties, minimising that risk?

            Reply
            • Alan Wilkinson

               /  5th May 2020

              I can’t see any other motive.

            • Gezza

               /  5th May 2020

              I wondered if chronically empty shops might confer some other benefits like tax write offs?

            • Duker

               /  5th May 2020

              If you lower the rents with a new lease then the valuation of the land and buildings might be affected. Depending on the loans secured against the asset it might breach lending covenants and the owner have to come up with more money.
              The above situations probably is the reason why RJ talks about managing the tenants difficulties where possible – obviously if a good tenant- so they can continue in business.
              I ve seen some malls that have been well managed for years and then sold to new arrivals to NZ and go down hill fast. Its common for the what are now smaller malls and of course demographics in an area can change.
              There was one in South Auckland with the streets around the area at night becoming a red light district

            • Gezza

               /  6th May 2020

              That sounds possible. Thanks for that.

    • Blazer

       /  6th May 2020

      that’s one of his rare,better commentaries.
      Be better if he diluted the ego though.

      Reply

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