Thursday, 12 June 2008

Latest terms of trade confirms NZ is a wealthy country

NZ’s terms of trade, as reported in the NZ Herald, is the best for 34 years. The terms of trade, which measures export values versus imports, rose 4.1% over the last 3 months, and in the year previous to that 11.3%. The growth is mainly due to soaring prices for dairy products exported overseas, and increasing costs of imports due to rising oil prices.

As the NZ Herald put it “the increased purchasing power of the export dollar makes New Zealand a richer country”. Fundamentally NZ is a wealthy country. In 2007 national income rose 5.1%. There's been sustained economic growth since 2000. The wealth, however, has not been shared around. The rich have been gorging themselves while the relative wealth of middle to low income earners has stagnated or fallen. There are real signs that the economy is heading for problems, as a result of the global economic crisis and the bursting of NZ’s housing market bubble. The wealthy elites now want workers and other grassroots people to tighten their belts and be "realistic" about what the country can afford. This would be injustice heaped on injustice. There should be no poverty in NZ today, and we should be rushing to fund public solutions that will cut greenhouse gas emissions. Finding the $400 million a year needed to make tertiary education free should be no problem at all. That's why the demands being put forward by RAM are simply common sense:

  • Remove GST tax from all our food.
  • Mobilise for climate security, like public transport funded by road budget.
  • 2% interest state loan for a first home.
  • Lift minimum wage to $15 per hour & legalise workers’ stolen rights.
  • Free tertiary education & student living allowance to stop the ‘brain drain’.
Campaigning to achieve them will be taking it to the rich in this country and will be a step towards shifting the power balance.


Politik said...

RAM are dreamers! cut income and increase outgoings? yeah that'll work. It sounds like a bloody tui add.

Vaughan said...

Politik may have missed the point of RAM's demands. People living in Manurewa, Mangere, Lower Hutt, Raumanga (working class suburbs throughout the country) understand that this country is wealthy - they don't need economic figures quoted in the Business Herald to tell them that. They know a rich minority has grown fatter under Labour and National governments of the last two decades, and that they've been left far behind. So RAM's demands are common sense because they’re the very least that grassroots people know should be possible. This then is a strong basis for building a movement, which is what will be required to challenge the wealthy elites and win one or more of RAM's demands, or similar ones.

To pay for these demands (the point Politik is rather clumsily trying to make) means, of course, a transfer of wealth from the rich to the grassroots. How might that be done? Reversing the billion dollar tax cuts and tax breaks Labour gave to companies in 2006 and 2007? Moving to a more progressive income tax scale? Introducing a financial transaction tax? If the Labour Party, National, and anyone else says this country can't afford RAM's demands, then RAM - if it campaigns steadily and forces the media to take notice - will be able to explain how it can be done. And this will be common sense to people as well.