An alternative economy?

If one has read the print media, online media or watched the television news of late, they will have seen the stories about economic gloom. The stories about trade wars being started by the United States President Donald Trump, the increasingly messy state of Brexit and so forth all raise potential “red flags”. So, what about potential “green flags” with regards to economic development?

For awhile now I have been convinced that as long as National or Labour are in office, conventional, almost tunnel vision like economics will be the serving of the day. Bland, boring, and potentially missing significant opportunities to develop a more sustainable economy without causing job losses.

I have a vision of a quite different economic direction to the one that the politicians of the last two generations have insisted on steering New Zealand through. It stems from an understanding that the current reliance on tourism, agriculture and niche industries is not sustainable. New Zealand might look relatively calm in a stormy international sea, but it ignores the fact that we are quite vulnerable for several reasons (among others):

  1. Our exports rely too heavily on a few major industries
  2. An all in trade war would be damaging for everyone and New Zealand would not be exempt
  3. Customers overseas are becoming socially conscious and starting to research the history of what their countries are importing to make sure nothing detrimental such as animal abuse, slave labour or environmental negligence was involved

New Zealand has vast opportunities before it to develop green industries, but also to smarten up existing ones as well as completely new ones. A few examples:

  • Developing mineral recycling plants to retrieve and make reusable the gold, silver, copper, etc from Waste Electrical Equipment and Electronics (W.E.E.E. – also and hereafter known as e-waste)
  • Develop medicinal cannabis products for dispensation – public support for medicinal cannabis is now very high
  • A potential biofuel stream exists, from which we could be investigating alternatives to Unleaded 91 and diesel – several years ago Kiwi Rail did a trial with a biodiesel blend; using strands of the waste stream such as cooking fat and fuel waste, green waste and so forth

Obviously feasibility studies will need to be conducted to ascertain what will work and what will not. The relevant industry groups such as Federated Farmers, Automobile Association will need to be consulted on proposals that are relevant to them. Assessments of their economic viability will need to be carried out should any of these ideas or others not listed be found to be possible in New Zealand.

With these ideas come potential challenges. Little groundwork has been done on where Waste to Energy plants could fit in the overall New Zealand energy scene. Likewise with biofuel, a failure to tackle it in 9 years of the National Government means we are about 15-20 years behind European nations such as Denmark, the United Kingdom and others. It is also true that industry figures will need to be won over and resistance is inevitable in some quarters. But all potentially visionary ideas have to start somewhere, somehow.

With regards to cannabis reform and the associated socio-economic benefits, New Zealand politicians are inching towards medicinal cannabis. There seems to be an aversion to simply getting on with developing the appropriate legal framework. This would also give known cannabis growers something legitimate to do instead of supporting the black market, something that is already starting to happen in the East Cape area.

And then there is taxation. When I was in New Zealand First at one of the Annual Conventions I attended there was a debate during policy remits about whether a Spahn tax could be employed, possibly in place of one of the existing taxes. I also noted last year when doing research for my Graduate Diploma from the Open Polytechnic, the existence of Pigouvian taxes. Would, rather than – or to complement an emissions trading scheme – a Pigouvian tax on carbon emissions be some sort of disincentive to pollute? Whilst not being an economist, and freely admitting that it is possible that none of them will work, simply knowing that such taxes exist makes me wonder if anyone has investigated their suitability in a New Zealand context.

Does economic policy really need to live within the narrow confines of raising and lowering income taxes, increasing G.S.T. every so often and continuing to try to develop industries that are nearing their peak in New Zealand? Not necessarily.

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