In previous articles, we have raised the spectre of poor infrastructure and servicing in the NZ economy. We drew attention over the last few years to train stoppages, power outages, road quality, economic regulation, the high cost of food, petrol and electricity.
It all reaches a crescendo with the Day 1 of the World Cup Rugby. The World Cup was supposed to be a boon for tourism, and to focus attention on the country. It has certainly done that, but it has not exactly been a positive. The highlights so far:
1. Train stoppages which caused 'green' patrons to miss their World Cup game
2. Binge drinking highlighting what rugby is really about - an excuse for a drink.
This is Western culture at its best. Working hard doing some job you don't enjoy, for the sake of some intoxication over a game.
This week we have witnessed further news of an ongoing stream of New Zealanders going to Australia. Our neighbours have just come back from the Gold Coast. They could not speak more highly of the place. Contrary to all the media talk, if you are employable in NZ, you will get a job in Australia. Those that can't here, can't get there.
There are several problems in NZ. Conservative politics which suggest there is too much regulation in NZ. Contrary to this 'economic rationalism', there is actually too little. The reason there is too little is because the only way business can make a profit here is by:
1. Relying on government sponsored extortion, i.e. The privatisation of electricity which locked in high electricity prices by pricing capacity at the 'high cost' margin, i.e. Never mind that 70% of capacity was free when it was a government asset. A boon for the government upon sale? No, actually the benefit went to investors as electricity prices rise endlessly in this 'non-competitive' market regime.
2. Plan old business extortion where you offer poor service, make misrepresentations, over-charge, etc. We have had so many such issues in NZ, that it truly places NZ on par with the third world.
3. Government extortion is another game played in this market, where governments attempt to extort wealth from private investors in order to conceal their failings. Take a look at this extortion by Wanganui District Council. In this case, its a foreign businessman being extorted by the government.
NZ would be a very pleasant place if government could actually orchestrate growth and deal with the embedded injustices and social problems. Don't expect any of those developments with a pragmatic PM. I recall a libertarian businessman being enthusiastic upon the appointment of John Key to the NP leadership. What was he thinking?