B3.2.1 Defence Against Silly Questions
Description
This article is from the New Zealand FAQ, by Phil Stuart-Jones and Lin Nah with numerous contributions by others.
B3.2.1 Defence Against Silly Questions
Lyndon Watson wrote:
"Look in on sci.economics and sci.econ.research.
In response to yet another request from abroad about NZ's supposedly
interesting economic past and present structure, Lyndon Watson composed the
following.
What is it with these idiots from Canada? This garbage seems to come round
three or four times a year - is some fool teaching it to students there?
Some notes for these twits (and their teachers) -
1. New Zealand was not subsidized from England, or anywhere else.
2. The nation did not at any time go bankrupt (or default on its
debts, or become subject to IMF or World Bank or any other outside
economic direction).
3. Our terms of trade worsened catastrophically in the early 1970s (not
the 1980s) as a result of (a) the oil shock that also affected
our trading partners and (b) the erection of tariff and quota
barriers against our trade by the U.K.
4. The Labour government of 1972-75 and the National government that
followed it tried to deal with adverse terms of trade by borrowing
in foreign markets, with the result that by the early 1980s we had
(and we still have) a debt ratio that looked bad even by Third World
standards.
5. The Labour government of 1984-90 and the current National government
have restructured the economy by abruptly stopping all state
subsidies, removing nearly all tariff and quota barriers against
imports, greatly reducing income tax and substituting the Goods and
Services Tax on the sale of goods and services, greatly reducing the
the state's involvement in trading activities and social services,
and the reform of labour laws to promote individual workplace
agreements.
6. The removal of subsidies and import barriers saw many incompetent
and uneconomic businesses, many of which were reliant on subsidies,
fail and the official unemployment rate exceed 10% of the workforce.
7. After a decade of restructuring, our net terms of trade are in our
favour and the official unemployment rate is the fourth lowest in
the OECD (currently just over 7% for the country as a whole, 5.9%
in most of the South Island). A major current problem is the
shortage of skilled workers in many industries."
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