Head2Head

By: Bryan Bruce Investigates
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  • Summary

  • An Aotearoa New Zealand based podcast series featuring interviews with community leaders and influencers about the big issues facing us today and what we could do to solve them and create a better tomorrow.

    bryanbruce.substack.com
    Bryan Bruce
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Political Science Social Sciences
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Episodes
  • Episode 27- Economist Dr Ganesh Nana-on challenging Government fiscal policy.

    Episode 27- Economist Dr Ganesh Nana-on challenging Government fiscal policy.
    Nov 22 2024
    Last week a group of economists wrote to Prime Minister Luxon and Minister of Finance Willis to express their concern at the Government’s approach to fiscal policy, and their alarm at the consequences for the people and communities of New Zealand.In this episode of Head2Head I talk with the group’s lead spokesperson Dr Ganesh Nana.Here is the letter in full.Tēnā koe e Pirimia,re: Your Government’s fiscal policyWe write to express our heightening concern at your Government’s approach to fiscal policy, and our alarm at the consequences for the people and communities of New Zealand.We would welcome the opportunity to discuss in more detail, more directly with you as soon as possible, the immediate and long-lasting harm that your Government’s approach to fiscal policy is creating.We summarise our concerns below under four headings.* Reduced current and projected spending is needlessly exacerbating the current recession* A focus on government debt is far too narrow, as it ignores the impacts on private sector debt and external debt* The accumulating harm risks a long-lasting hollowing-out of business capacity and capability* Fiscal policy is in direct conflict with the Government’s stated export targetFiscal policy is needlessly exacerbating the current recessionCurrent and projected reductions in government spending appear to be central to the Government’s fiscal policy. The economic rationale for this approach is unclear. Rather, there appear to be few considerations outside the short-term impacts. For example, your Government’s cancellation of key infrastructure projects and sinking-lid cuts to the public service are powerful contributors to the current severe and prolonged recession. This is substantially worsening the contractionary effects on the economy of the Reserve Bank’s use of the Official Cash Rate to contain inflation.It is important to recognise that even prior to cutting back expenditure, government consumption spending was close to 20% of GDP. This covered spending on health, education, defence, administration, justice, transport, and culture. In addition, deferrals and reductions in projected infrastructure spending has further reduced employment and intensified the economic recession.There is ample evidence that government spending, including the necessary infrastructure and allied networks, has for many years fallen well short of that required for population growth and demographic changes. The Infrastructure Commission has stated that New Zealand has a $104 billion infrastructure gap at present – and that this picture will significantly worsen given current spending projections.These accumulating shortfalls put the nation in a poor position to improve its long-run economic resilience and to prepare for future challenges. If nothing is changed now, this under-funding simply passes the burden of adjustments, and investment spending, to future generations.Failure to correct this course will lead to higher economic scarring, with the costs borne by those with the least ability to pay, as has been demonstrated repeatedly in New Zealand’s history. It will also undermine the resilience of the private sector – particularly exporters – and will continue to constrain the capability of firms to scale up.A focus on government debt ignores impacts on private sector debt and external debtSimilarly, the fiscal policy focus on reducing government debt lacks a clear economic rationale. Irrespective of the debt measure adopted, international comparisons of government debt in comparison to GDP remain in New Zealand’s favour. Credit rating agencies continue to view the government’s debt situation without concern.Bluntly, there is no government (or public) debt crisis in New Zealand.The New Zealand economy’s ongoing problem is private sector debt. Importantly, private sector debt is being driven upwards by your Government’s fiscal policy in pursuit of surpluses for itself and its aim of rapidly reducing public debt.Standard economics shows the relationship between public and private sector financial balances. When total domestic saving (both public and private) is insufficient for domestic investment (both private and public), the gap needs to be filled by drawing on foreign funds. The overall current account (or external) deficit is a measure of this gap and requires overseas borrowing or asset sales to foreigners to finance such a deficit. With the banks acting as intermediaries, the resulting increase in liabilities is reflected on both the private and public sectors’ balance sheets.These connections – in particular, between the Government’s fiscal stance, the size of the current account deficit, and the consequent size of the nation’s external debt – are glaringly missing in documents describing the economic impact of fiscal policy. There is little explanation of how fiscal policy focussed on reducing government spending would reduce New Zealand’s external ...
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    32 mins
  • Head 2 Head with Shamubeel Eaqub - Episode 26 Dollars and Sense.

    Head 2 Head with Shamubeel Eaqub - Episode 26 Dollars and Sense.
    Nov 21 2024

    Why is borrowing to give tax breaks stupid? How could we use some of our superannuation fund to build housing? What’s an economy for anyway?

    Shamubeel Eaqub has the gift of making economics understandable and often gives voice to common sense solutions for some of the problems that beset us today.

    He has worked as an economist in leading international banks and consultancy in Wellington, Melbourne and Auckland and he is now the Chief Economist at Simplicity KiwiSaver.

    He is a columnist, media commentator and a thought leading public speaker and author who has published three books: Generation Rent (2015), co-authored with Selena Eaqub; Growing Apart: Regional Prosperity in NZ (2014); and The NZ Economy: An Introduction (2011), co-authored with Dr Ralph Lattimore.

    If you are a Free Subscriber please consider upgrading to Paid. The current government has cut all funding for public interest journalism and the broadscasters are showing little interest in supporting independent investigative documentaries which is why I started this Substack.

    Your $9 per month subscription will help me keep working as public interest writer, podcaster and film maker- to speak truth to power and give a public voice to those who have none.

    And thank you to my Paid Subscribers. Your support for my public journalism work is much appreciated and has allowed this podcast to now become freely available. Please restack the item if you like it and recommend bryanbruce.substack.com to your friends and whanau.



    This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit bryanbruce.substack.com/subscribe
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    26 mins
  • Episode 25 - Gareth Hughes on Alternative Economics

    Episode 25 - Gareth Hughes on Alternative Economics
    Nov 15 2024

    Gareth was a Green MP for 10 years and is now the Director of The Well Being Economy Alliance of Aotearoa which not only examines the neoliberal status quo that drives our current economy but looks a the many alternative economic models we could adopt to have a fairer society.

    WeAll have an upcoming conference : Economics in the Public Good ( see details below)

    He is is the author of A Gentle Radical, a biography of the late Greens leader Jeanette Fitzsimons which was published two years after her death in 2022.

    If you are a Paid subscriber please know that your support for my public journalism work is much appreciated. If today’s post reaches 50 likes from you, I will make it free for everyone to read.

    If you are a Free Subscribers please consder upgrading to Paid. The current government has cut all funding for public interest journalism and the broadscasters are showing little interest in supporting independent investigative documentaries which is why I started this Substack.

    Your $9 per month subscription will help me keep working as public interest writer, podcaster and film maker- to speak truth to power and give a public voice to those who have none. Thank you.

    It’s time to redesign our economy to deliver wellbeing for nature and all our people.Join us at the Economy for Public Good Conference in Pōneke Wellington, we’ll weave a shared purpose for moving beyond a broken ‘business as usual’ economy.If you’d like to build bonds and share ideas with people inspired to create an economy where people and nature thrive, this one day hui is for you.The conference will feature Dr Katherine Trebeck as international keynote speaker, thought leaders discussing the big ideas for Aotearoa 2040, practitioners sharing stories of the new economy in action, and in-depth interactive training and breakout sessions.Tickets for this in person conference are set at only $100 and numbers are limited.https://www.weall.org.nz/economyforpublicgood#EconomyForPublicGood#TimeToRedesign



    This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit bryanbruce.substack.com/subscribe
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    18 mins

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