Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


David Cunliffe's proposed crony capitalism

Jamie Whyte
ACT Leader

David Cunliffe's proposed crony capitalism

On Friday David Cunliffe declared that in government Labour would plan the economy. “Government should back positive Kiwi businesses, not leave it to the wolves of international trade … That also means attracting industry to New Zealand regions that need it most. Industry policy has become a dirty word. It isn’t. Regional development has also fallen by the wayside. Labour will bring it back. We want good jobs in every region of New Zealand.”

The obvious folly in this policy is the wilful misallocation of resources. The regions that most “need” government help in attracting investment are those that, for whatever reason, are least attractive to investors.

Investors do not act from feelings of regional malice. If they prefer region A to region B, that is because they think the return on the investment will be higher if made in A than in B. To make them instead invest in B, Mr Cunliffe will have to give them enough taxpayers’ money to compensate them for the loss this entails.

The taxpayers' money spent on this regional subsidy is then no longer available for other investments or to consume the output of other firms. So, to get the regional distribution of investment that suits his tastes, Mr Cunliffe will reduce aggregate economic output.

The less obvious problem with the policy is the explosion of "rent-seeking" or crony-capitalism that this policy will cause.

In a free market, firms must attract capital from willing investors and make profits from sales to willing customers. In Mr Cunliffe’s planned economy they will be able to relieve themselves of this burden provided they can convince government bureaucrats that they will promote regional development or are a “smart green business” or possess some other virtue that willing customers and investors have allegedly overlooked. Then the crony firms can extract their profits from helpless taxpayers.

Corporate head offices will start relocating to Wellington. And Courtney Place restaurants will boom on the lobbyists’ expense accounts.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell:
On The Inadequate Response To Sexual Violence Prevention

On combatting sexual violence, the government has finally begun to undo some of the problems that were of its own making. Early in March, ACC launched the Integrated Services for Sensitive Claims scheme – a package aimed at improving the attitudes of ACC staff towards sexual violence victims, and offering them more substantive support.

Hopefully, this will help to reverse the damage done with the insensitive, punitive ACC policy put in place by the incoming Key government in 2009, which in some parts of New Zealand, saw 90 per cent of sexual violence victims being turned away by ACC. More>>

 

PARLIAMENT TODAY:

"To Help Families Get Ahead": April 1 Changes Kick In

Prime Minister John Key says Paid Parental Leave, the parental tax credit, the minimum wage and Superannuation will increase, while average ACC levies will fall, and more people will be helped in to home ownership... More>>

ALSO:

Climate: Ministers Exclude Emissions From ‘Environment Reporting'

The National Party Government has today revealed that the national environmental report topics for this year will, incredibly, exclude New Zealand’s greenhouse gas emissions, the Green Party said today. More>>

ALSO:

No Retrial: Freedom At Last For Teina Pora

The Māori Party is relieved that the Privy Council has cleared the final legal hurdle for Teina Pora who was wrongfully convicted of murder and sent to prison for 22 years. More>>

ALSO:

Germanwings Crash: Privacy Act Supports Aviation Safeguards In New Zealand

Reports that German privacy laws may have contributed to the Germanwings air crash have prompted New Zealand’s Privacy Commissioner to reassure the public that the Privacy Act is no impediment to medical practitioners notifying appropriate authorities to a pilot’s health concerns. More>>

ALSO:

Treaty: Taranaki Iwi Ngāruahine Settles Treaty Claims For $67.5mln

The settlement includes a $13.5 million payment the government made in June 2013, as well as land in the Taranaki region. The settlement also includes four culturally significant sites, the Waipakari Reserve, Te Kohinga Reserve, Te Ngutu o te Manu and Te Poho o Taranaki. More>>

ALSO:

Gordon Campbell: On A Funeral In Asia, The Northland By-Election, And News Priorities

Supposedly, New Zealand’s destiny lies in Asia, and that was one of Foreign Minister Murray McCully’s rationales for his bungled reforms at MFAT. OK. So, if that’s the case why didn’t Prime Minister John Key attend the state funeral on Sunday of Singapore’s founding leader Lee Kuan Yew? More>>

ALSO:

Werewolf Satire: Not Flag-Waving; Flag-Drowning

The panel choosing the flag options has no visual artists at all. Now, I’ve kerned the odd ligature in my time and I know my recto from my French curve so I thought I’d offer a few suggestions before they get past their depth. More>>

ALSO:

IPCA Reports: Significant Problems In Police Custody

In releasing two reports today, the Independent Police Conduct Authority has highlighted a number of significant problems with the way in which Police deal with people who are detained in Police cells. More>>

ALSO:

Inspector-General of Intelligence and Security: Inquiry Into GCSB Pacific Allegations

The complaints follow recent public allegations about GCSB activities. The complaints, and these public allegations, raise wider questions regarding the collection, retention and sharing of communications data. More>>

ALSO:

TPPA Investment Leak: "NZ Surrender To US" On Corporates Suing Governments

Professor Jane Kelsey: ‘As anticipated, the deal gives foreign investors from the TPPA countries special rights, and the power to sue the government in private offshore tribunals for massive damages if new laws, or even court decisions, significantly affected their bottom line’. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news