|
You are subscribed as |
Unsubscribe
|
View online version
|
Forward to a friend
|
|
|
||||||||||||
|
||||||||||||
|
||||||||||||
|
|
||||||||||||
|
||||||||||||
| Dr Bryce Wilkinson | Senior Fellow | bryce.wilkinson@nzinitiative.org.nz | ||||||||||||
|
A falling exchange rate does two things at once. It changes incentives and conveys information. The incentives work as the textbooks say; buy less of what costs more. Unchanged world prices now convert into higher New Zealand prices. Exporters earn more for each sale, and tourism operators might get more overseas customers. But most of us face higher prices on unchanged incomes. The information aspect is what should worry us. Markets appear to be telling us something unpalatable about New Zealand in particular. First, the fall is across the board. Our dollar fell by 2.6% or more against all 17 of the currencies the Reserve Bank reports on daily. Second, its value fell a lot against the Australian dollar whereas usually they largely move together. Its value of 81 cents Australian on 30 September is the lowest since early 2013. It averaged 90 cents over the last decade. Neither the Reserve Bank nor Treasury saw this coming. The Bank's September projections saw the trade-weighted index averaging above 66.6, and Treasury fiscal forecasts published this week put it at 67.7. On 30 September, it stood at 64.1. None of this need last. Currencies overshoot, and if the dollar quickly regains lost ground, little harm is done. But there are grounds for concern. The dollar fell the most sharply in the days around the Reserve Bank’s decision on 2 September to lift the Official Cash Rate a bit. Perhaps that lift was too timid. The higher prices will concern the Bank, if the fall lasts. The greater portion of the overall currency fall came later. One factor could be the wanton populist threat to supermarkets and others, with no finding of relevant unlawful conduct. Other possible factors include general election uncertainty, growing public debt and continuing deficit spending. Treasury's fiscal forecasts released on Wednesday did not move the currency dial. Budget 2024 chose a prolonged, uncertain path to end deficit spending. That created a credibility problem and the credit rating agencies have not been impressed. The next government faces the same need to attract overseas capital because New Zealand is a large net capital importer. Governments need to think about the implications of that. Policy credibility is key. |
||||||||||||
|
||||||||||||
|
||||||||||||
| Dr Michael Johnston | Senior Fellow | michael.johnston@nzinitiative.org.nz | ||||||||||||
|
Like any caricature, Dickens' portrayal of Victorian English schools no doubt contains truth. But a close look at New Zealand's early school system reveals a rather different picture. Dame Elizabeth Rata is making a documentary lecture series on the history of New Zealand education. The four episodes published so far focus on the 19th century. New Zealand's nascent school system was an essential element of nation building. Like the young nation itself, New Zealand's early schools were rooted in the classical liberal value of equality. A standardised syllabus aimed to give children across the country equal access to knowledge. Unsurprisingly, the country that later became the first to give women the vote placed strong emphasis on educating girls. There was an equally strong commitment to the education of Māori children. The Native Schools Act of 1867 saw schools established in Māori communities across the country. Māori had a strong say in how those schools were run through school committees. Instruction was in English, which many Māori wanted. Being educated in English gave young Māori access to wider civic and economic participation. For those of lower status in Māori society, education was a path to greater social equality. The Education Act of 1877 made schooling fees-free and compulsory for children aged seven to thirteen. Families more than two miles from a school were exempt, which spurred demand to establish schools in remote areas. In today's terms, the 19th-century school curriculum was 'knowledge-rich'. Teachers used direct instruction approaches now associated with the science of learning. Literacy teaching emphasised phonics. For reasons Dame Elizabeth will explore in forthcoming episodes, that was all largely abandoned in the late 20th century, at great cost. In many ways, New Zealand's reforms of the past three years bring education full circle. Phonics instruction is back. So is a knowledge-rich curriculum. Students learn best when teachers connect new knowledge to what children already know, in rich, interesting contexts. The new curriculum is structured to support that approach. Tedious, disconnected teaching like that favoured by Gradgrind does not work. But as New Zealand's educational pioneers were aware, knowledge is essential to prosperity and democratic participation. Even Gradgrind was half right! Listen to Michael's conversation with Dame Elizabeth on our podcast and watch her documentary lecture series on her YouTube channel. |
||||||||||||
|
||||||||||||
|
||||||||||||
| Nick Clark | Senior Fellow | nick.clark@nzinitiative.org.nz | ||||||||||||
|
Five weeks out from an election, bottom lines are everywhere. Almost every minor party has one. Some have several.
The bottom line is a strange beast. A party leader announces it with a stern face, and it tells voters, 'On this, we will not move.' Then it is released into the campaign dressed up as a binding contract. A minor party might declare that it will not enter government unless a specific tax is established or abolished, a ministry is created or shut down, or a practice forced on everyone or banned. Typically, the major party it is most likely to partner with has already declared the opposite. Both sides then spend the campaign assuring reporters that the other side will come around. Neither side actually comes around. Coming around would spoil the performance. Instead, the bottom line gradually becomes a 'priority', then an 'aspiration'. Its final fate is to become a footnote in a coalition agreement, to be 'explored over the term'. A bottom line is a price tag, and everyone knows prices can be haggled over. The smaller party sets it high to look tough. The larger party attacks it so any later concession looks generous. When the deal is signed, both parties can claim to have held firm. In a sense, both have. Neither ever intended to hold on to anything except power. Informed voters understand the game. They treat parties’ bottom lines like retailers’ claims of final clearances. Interesting, but not worth believing completely. But when both main parties are polling under 30 percent, as they are now, the small fry are no longer so small, and their demands are harder to brush aside. The big parties have noticed. They have responded by borrowing the small parties' trick. Chris Hipkins’ bottom line is that Labour's capital gains tax will be the only new tax under a government he leads. He will be Prime Minister and Barbara Edmonds will be Finance Minister. That disposes of the Opportunity Party’s land tax, the Greens' wealth tax and the latter’s designs on the finance portfolio in one terse statement. Christopher Luxon’s bottom line is that New Zealand will stay in the Paris Agreement, whatever ACT and New Zealand First think about it. In the past, a major party's word settled the matter. This year, it is just another bottom line – terms and conditions apply. |
||||||||||||
|
||||||||||||
| On The Record | ||||||||||||
Initiative Activities:
|
||||||||||||
| All Things Considered | ||||||||||||
|
||||||||||||
|
|
||||||||||||
Unsubscribe me please |
|
Brought to you by outreachcrm |