First there is his obsession with govt expenditure. Many of the countries he would have us envy, those way above us in the rankings, have far higher government expenditure. The first issue about government expenditure is ‘efficiency’. Yes, in general, bureacracies can be inefficient or become inefficient and there are overheads in administration; but that occurs to varying degrees in many organisations with some of the largest and most wastefull occurring in the commercial sector (the MBA program at Stanford used examples of New Zealand management as cases studies of inefficiency; and parts of New Zealands bureacracy sets a world wide benchmark; no accident compensation scheme on earth can compare with ours for efficiency).

There are many examples, apart from the obvious ones of health and education, where government expenditure out performs any private alternative. Only a handfull of New Zealanders could buy their own ‘streets’ to run in or a large estate to run over. It is far more efficient to have a Mt Victoria reserve, or a Hagley park to run through. Our public spaces are priceless; lets appreciate the value we do get for government expenditure.

The second issue is about allocation ; allocation of the nation’s resources. Are they being used optimally? A tax cut in Singapore might go into investment or savings. The last large tax cuts in New Zealand went disproportionately into SUVs, and ‘hairspray’ consumption (and off course fueled our addiction to real estate). Every medical specialist in the country is pointing out how much we could gain if more was spent in their area. Many of these cases are far better established than our need for greater consumption of petrol, where a lot of the tax cuts in New Zealand would go, If only some of these cases were true, then a shift from government to private consumption would make us worse off.

Again on procductivity, lets check with some better respected and more contemporary economists. It was in mid 1987 after three years of Rogernomics, that New Zealand’s productivity started to lag behind Australia’s. The simple solutions of the 80s, when we did shed many inefficient departments and production, and simply cut expenditure, are no longer adequate in the complex world of today. The so called productivity gains during the 90s were a symptom of contraction and consolidation. As factories shed staff, it appeared that productivity increased. There was low capital investment in new plant, as the policies Roger Douglas espoused had led to our wages falling as we became a low wage, long hours, economy. A study by the IMF into the reasons for our poor performance found that low capital intensity explained 75% of the gap between our productivity and pay and Australia’s.

Had Roger Douglas’s flat tax been implemented, there would have been far fewer students reading Salient or taking holidays in a more backward South Pacific basket case.

Just my two cents