Govt recession plan wrong - Sir Roger

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Fri, 13 Mar 2009
News: Politics | Economic downturn

The ACT Party's annual conference opened in Auckland tonight with a message from its founder Sir Roger Douglas - the Government's strategy for dealing with the recession isn't going to work.

"Pretending we can avoid the pain of economic contraction may make us feel better in the short term, but pretence will add to the pain we feel when the inevitable adjustment occurs," he said in a speech to delegates.

"Borrowing beyond our means, to increase the amount of spending, is what households have done over the past 10 years, and has led to our current recession.

"Now the Government wants to try the exact same strategy to get us out of the recession."

Sir Roger said New Zealand's economy had been shrinking since the beginning of 2008 because of failed government policies.

"We have been moving in the wrong direction - we've moved from a government geared towards growing our wealth to a government geared towards redistributing it," he said.

"This pushed us into a recession and now the financial crisis will hurt us further."

Sir Roger had a list of lessons on how to handle the recession.

Among them were:

* Don't blame the free market. If a company fails it is because consumers do not want to buy its products.

* Reverse the trend towards low productivity growth by making the labour market more flexible.

* Making work does not make people wealthy. The proposed cycleway will divert people from productive work to less productive work. "That is a recipe for poverty, not prosperity."

* Lower taxes across the board to encourage people to work more.

* Aim high for prosperity. Beat Australia by 2020, achieve sustainable economic growth of 5 percent a year.

* Don't protect the public sector, it should carry the cost as much as the private sector.

Prime Minister John Key will get the chance to defend the Government's policies when he speaks at the conference tomorrow.

ACT leader Rodney Hide will speak in the afternoon and the conference winds up in the evening.

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Sir Roger on recession solution

Submitted by Kevin Campbell on Tue, 17/03/2009 - 7:37pm.

You cant spend the same dollar twice. There is no future in taking a dollar off the private sector (i.e. productive employers where the tax actually comes from) to give it back to the private sector in the form of a non productive job somewhere else.
That is a recipe for poverty. It is wiser to invest that first dollar to best effect in a productive job for the long-term benefit of the country and its citizens.
Roger is at least two steps ahead of anyone in Labour or National thats for sure.

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Sir Roger on recession solution

Submitted by linbow122 on Sat, 14/03/2009 - 3:28pm.

I see Sir Roger Douglas is still blinded by his Damascus discovery of New Right economics. I thought he would have become a little wiser with the benefit of age.
I suggest he read 'From Third World To First' the autobiography of Lee Kwan Yew, former Singaporian president. Mr Lee held the view that the mass importation of any ideology, economic or otherwise, by any country, is fraught with risks. He writes that each country has demographic characteristics that must be factored into new policies when they are introduced. He writes that; population, geographic area, climate, distance from particular markets, influences of neighbours, resources available, and even the psychological natures of citizens, will all have a pronounced effect upon desired outcomes. Mr Lee identified himself with all leanings of the political spectrum, from hard right to hard left, and everything in between. He did whatever was needed to achieve the greatest benefit for his people. He held to the view that people who just apply someone else's ideology, lacked the necessary intellect and/or psychological stability to make useful analyses of demanding situations. Judging by Singapore's results, he may have known a thing or two. Sir Roger, and others, could do worse than learning something about Mr Lee's methods.

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