https://www.newshub.co.nz/home/politics/2023/06/chl-e-swarbrick-blames-labour-for-nz-s-gang-problems-says-they-lacked-courage-to-implement-advice-they-commissioned.html
Labour is spineless, she isn’t wrong. Also what happened to the inquest into the supermarkets? Nothing was done.
Also what happened to the inquest into the supermarkets? Nothing was done.
This really pissed me off. The government doesn't have the power to overrule the Commerce Commission, but there are other options.
When Chris Hipkins came in, I was saying he should introduce legislation to break up the supermarkets. He would have differentiated himself from Ardern, and won over people from all sides of the political spectrum. People are really feeling the squeeze, and they know the supermarkets have a lot to do with it.
It was a wasted opportunity politically. And something that actual needs doing. Maybe they'll announce it before the election, but I'm not holding my breath.
Honestly it makes me very angry when I think about the missed opportunities that could’ve been taken in the last few years. Labour was sitting on an unprecedented amount of political good will post COVID19 and I swear they just pissed it all away. They could’ve done more.
Jacinda turned up her nose at every opportunity to use her popularity to do some good. To her, making real change wasn't worth losing a few percentage points in the polls.
Hipkins can't follow in her footsteps if he wants to win. People want things to change.
I think you are mistaken about how many people want the radical change people online are demanding.
I'm not talking about radical change. Things like CGT are a no-brainer. I've never heard someone make a coherent argument as to why we should leave a tax hole that every other wealthy nation has closed. A hole that encourages people to invest in non-productive assets.
That's why everyone knew the Tax Working Group would recommend a CGT - because it's the first thing any tax expert says about our system. And yet Jacinda couldn't even bring herself to do that.
How has the CGT worked out in the other countries? Is there no inflation in those countries, do they have a fairer taxation system? Do they have better income inequality?
If you're expecting fixing a single loophole in tax law will solve all those problems at once, I've got some bad news for you.
But obviously that's no reason to leave a loophole there. As I said, any expert in tax law will tell you that it's stupid not to have a CGT. And I've never heard a remotely convincing argument for having a hole that encourages investment in non-productive assets.
My impression was that Labour's overwhelming majority after 2020 has also been extremely fragile, largely made up from soft National voters who were disillusioned by National's leadership problems, and tightly connected to the Covid response.
This doesn't excuse not doing anything, but the dilemma for Labour from a political perspective was that as soon as it started addressing anything besides Covid people started to remember they had other options.
I like MMP a hell of a lot more than what we had before it, but one of the interesting things with FPP was that governments could still win with a minority of support if they had their tactics right, and this is a big part of why there was such a push to shift away from it. Muldoon's National came out of the 1978 election with 51 seats from 39.8% of votes compared with Labour's 40 seats from 40.4% and Social Credit's 1 seat from 16.1% of the vote. In 1981 he did it again, winning 47 from 38.8% to Labour's 43 from 39.0% and SC's 2 from 20.7%. This was the era of Think Big, with massive borrowing and spending on some huge but often very controversial government projects.
By comparison, MMP often devolves into two big parties scrapping over a handful of swing voters, who resist change, whilst taking their base for granted and hoping they don't lose too much of it to the parties more on the fringes, but even if they do they assume they can make a deal with those fringe parties. Parties are constantly watching the polls, and opposition leaders from both major parties are repeatedly getting rolled if they don't appear to be getting the popular support high enough. To-date since MMP began (with the exception of Helen Clark who remained in opposition after '96), no major party leader has remained leader to the following election after leading through an election loss. Some opposition leaders have even been rolled before having a chance to contest their first election. That's quite different from FPP, where it'd be common for a party to keep a consistent leader through several lost elections before sometimes finally winning an election. (MMP also makes leadership changes more possible because when you can simply go to #1 on the party list to be guaranteed re-election, any MP can be a candidate rather than only those holding a safe seat.)
Governments and oppositions under MMP are terrified of losing short term popular support because without it, they definitely can't win the next election, and significant change of nearly any kind tends to lead to loss of at least some support - at least amongst people who reliably vote.
Break the duopoly. There are various ways to do it. The recent report from Westpac has some decent ideas:
"Our view is that the reforms do not go far enough to effectively stimulate competition," writes Paul Clarke, an industry economist with the bank.
"We acknowledge that breaking up the existing retail hegemony is complex, fraught with unintended consequences and may impose short term costs on customers. The industry, sanctioned by regulators, has actively pursued economies of scale through mergers and acquisitions (and hence horizontal and vertical integration) since the early 1980s.
"The impact has been to give the duopoly the kind of control that makes it much easier to set prices at the checkout till.
"This consolidation process needs to be reversed if Government is looking to improve the lot of the average Kiwi over the longer term."
The report recommends the Government set out a strategy road map that identifies the key milestones that need to be achieved to level the competitive playing field. That would need to be backed up by appropriate legislation: "The sector will not unbundle voluntarily."
Westpac's report argued that the first step is the vertical separation of the supply chain – creating a clean break between manufacturers and wholesalers, and then between wholesalers and retailers.
"That means that the duopoly will have to choose where it wants to operate and sell off those parts that it doesn’t," it says.
The second step is horizontal separation at the retail level. Both Foodstuffs and Woolworths NZ would be forced to sell off some of their individual retail brands to independent retailers, possibly extending as far as the selling off specific outlets.
"Again, that assumes the existence of buyers, who may be put off by the big structural changes occurring within the sector. While that is a big assumption, new entrants may be enticed by attractive returns that are on offer."
Finally, the Government must create the conditions to encourage online grocery shopping. "Digitalisation is fundamentally changing how goods destined for retail are supplied and how retailers and consumers interact with each other," the report says. "The idea of supplier ecosystems that dropship directly to customers on behalf of online retail is already here, and there is no reason why, with some modifications, that cannot be extended to grocery shopping.
It cites the exampled of online supermarket Supie, which it says is clearly making waves. "Other new entrants are needed."
Honestly I don't know what people expect to get done. Do you think that the government will ever order supermarkets to charge less? Do you think they will centrally control the prices of anything?
People talk about competition but again what they are going to do? Order another company to open up a supermarket next to every countdown or new world?
People seem to think we live in some authoritarian dictatorship or something.
Antitrust legislation and enforcement are a core component of a functioning economy, and have been a prominent feature of western economies for more than a century. It's nothing to do with authoritarianism. It's about fostering competition. Have a look at the suggestions Westpac made in my other comment for some ideas about how antitrust action might look in terms of the supermarket duopoly.
I read your quote and I hope you are honest enough to admit that it's full of caviats and says in the short term it will lead to higher prices and more pain for all involved. No government will survive this kind of action. Forcing countdown to sell off brands like 4square etc aren't going to end up with more competition anyway so the government will have to start pointing at individual supermarkets and say "you must sell this to somebody" and then cross their fingers somebody buys it. But not just anybody, new world, paknsave etc aren't allowed to buy it so some other business must show up pay out a shit ton of money to buy just one supermarket and hope it can compete. It's ridiculous.
Read it carefully. It says it may lead to temporary price rises. It's complex. But leaving it as it is is a disaster and leads to long term worse outcomes. There's no way that's a good move.
That's why antitrust actions are considered a basic staple of a functioning economy. Read about them if you don't understand why they're a necessity. It's well established. There'll be heaps online.
Read it carefully. It says it may lead to temporary price rises. It’s complex.
I am glad to see somebody in this place admit it's complex. So far everybody has claimed it's simple as shit. Just have to government wave a magic wand and make food prices lower, make house prices lower, make fuel prices lower, make taxes lower, give a raise to nurses and doctors and teachers and make racism disapear.
Prices will go up if for no other reason than you are going to lose economies of scale. I don't think any economist would dispute that.
So far everybody has claimed it’s simple as shit. Just have to government wave a magic wand and...
No one is saying that here. Please stop building straw men.
Prices will go up if for no other reason than you are going to lose economies of scale. I don’t think any economist would dispute that.
Any economist worth their shit knows that when a market is controlled by one or two players - like the current supermarket industry in NZ - they will use that position to stifle competition. This leads to over-inflated pricing, and far-outweighs any economies of scale. We know that's happening now because the supermarket industry is much more profitable than comparable industries in NZ, and businesses in the same industry overseas. If you're not convinced, read the Commerce Commission report. It gives far more evidence than either of us could bring up here.
No one is saying that here. Please stop building straw men.
Many people here are saying it. In fact most people are saying it.