Welcome to the June newsletter for The Policy Observatory. This month we outline some of the work David Hall has undertaken on the transition to a low emissions landscape. We also profile the latest Briefing Papers.
The Policy Observatory’s David Hall has been working on a series of projects about the role of forests and investment for addressing environmental problems such as climate change, soil erosion, and declining biodiversity. These projects have included designing a financial instrument for increasing afforestation, and a forthcoming discussion paper on an integrated landscape approach that involves native, plantation, and mixed forests. Other projects have been undertaken for outside clients such as the Auckland Council, the Ministry for the Environment, and the community trust Foundation North. We now have a webpage that briefly outlines these projects and links to their outputs. This page will be updated with new material as it emerges:
The Briefing Papers website hosts papers on a range of policy topics. You can subscribe to new posts using an RSS feed, or have them sent to your mailbox. This month we have a trio of papers related to the budget, discussing the issues of government spending and debt.
The 2018 budget: Politics & economics. By Geoff Bertram.
Economist Geoff Bertram writes a Keynesian critique of budget 2018. First, he points out that fiscal priorities are political, not economic, using the budget allocation for the Americas Cup as an example. He then gives a Keynesian analysis of imbalances in the economy: when an economy’s balance of payments are persistently in deficit, as New Zealand’s are, running a government surplus has the effect of pushing up private sector debt. The current fiscal strategy of running surpluses may make for a strong government balance sheet, but this is not the same as economic strength for the nation.
Is the government Austerian? By Brian Easton.
Brian Easton explains the term ‘Austerian’, which is a portmanteau of ‘austerity’ and ‘Austrian’ (from the Austrian School of Economics), and asks whether the current government can be characterised that way? While it has less of a small-government ideology than the previous administration, the Budget Responsibility Rules and fiscal prudence are keeping government spending in check.
Accounting for the government. By Brian Easton.
This is a follow-up paper to Is the government Austerian? Since 1989 government accounts have been framed with dollars in and dollars out. But what if they were framed with the different purposes of government spending? Would that make it easier for governments to break away from the idea that taxation and government spending are bad? In this paper, Brian Easton suggests four broad purposes of government spending. If income and outgoings were clustered by these types, and labelled accordingly, it might communicate better, for example, that borrowing is good when it applies to capital spending.
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