Monday, July 04, 2005

Infrastructure Investment

This speaks for itself really.

A record $21 billion in capital spending on transport over the next ten years. This is exactly the sort of money that would be gobbled up by the tax cuts that the right are irresponsibly touting at the moment.

The great American economist J.Galbraith talked about this kind of situation in the late 1950s when, in spite of a great deal of "private prosperity", he observed great "public squalor" as essential economic and social infrastructure became increasingly run down.

Our hard won surpluses can be frittered away on the electoral bribe of tax cuts, which probably won't even add up to all that much for your average working family, or we can invest in the economic infrastructure that is the basis of future prosperity. In business it's called investing in "plant", and any firm that doesn't adequately invest in plant over the long-term is setting itself up to fail.

National's record in the 1990s was to do just that, and in Auckland we are now suffering because of the "public squalor" that resulted. This government is now spending 10 times more on transport in Auckland that National was in 1999.

Labour is the only Party fighting this election that is actually prepared to invest in New Zealands long term economic prosperity.

9 comments:

Anonymous said...

How does National's policy, if there is one, which is proving less likely by the day, match or better Labour's?

Whaleoil said...

How exactly do you know that this is exactly the kind of money that would be gobbled up by tax cuts.

Really you take the cake sometimes.

How about you write some of your own word instead of spouting Dr Mike press releases.

Anonymous said...

With all the money labour is apparently spending on infrastructure Mikey, they should be able to get a good deal on stones with which to dispatch all the adulterers and homosexuals as advocated last night by the good Dr Choudary, lol.

Anonymous said...

Whaleoil - do you know what's National's policy is?
Does National?

Whaleoil said...

Actually yes, I do know what their policy is. Suggest you go to www.nationaltv.org.nz and watch Maurice Williamson's clip...very enlightening....

Whaleoil said...

Oh and check this out too... http://www.buildroadsnow.org.nz

Anonymous said...

New Zealand needstobeglassed

kiwik said...

I lived in Auckland 1998-99 and I LOVED it there. Hope I'll go back sometime to visit all my kiwi friends. NZ is a wonderful country. I'll keep this blog on my list.

Michael Wood said...

Of course Labour's programme of infrastructure development does make use of borrowing to some extent. Net Crown debt is (I think) forecast to remain at around a stable 20% under current economic forecasting.

The difference is that Labour is also saying that the current generation of taxpayers, given good fiscal conditions, do have some responsibility to also make a contribution - we have after all been shirking it for the past 20 years!

Let's use your house example. My wife and I do currently own a house, and yes we do have a mortgage. We use financing because we don't have the capital to fund the purchase ourselves. However, had have been fortunate enough to have a big enough dollop of cash to buy the house upfront, we would have been crazy not to! By having to debt finance we will pay hundreds of thousands extra in servicing costs over the long-term.

Why do you think it is a sensible fiscal strategy for the government to choose this option when it can minimise those servicing costs by using the current strong balance sheet to pay for a number of important initiatives?