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  • rmacculloch

The biggest issue of Election 2023 will not be debated (since both Nats & Labour have no answer)

Both our major parties agree that the single biggest issue in this election will be the cost-of-living, as predicted by DownToEarth Kiwi back in 2021, way before National & Labour woke up to the fact (when we ran a headline, "The Next Election will be a Cost-of-Living Election). Surveys now show voters' number one concern is cost-of-living.


So what plans do National & Labour have to reduce the cost-of-living? Take a look at their websites. Labour want to address such issues by increasing benefits; National want to by cutting taxes (though not by much). Both parties want to take cash out of one person's pocket and put it in anothers so they can better "afford" to pay a bill. Yet those bills will still be the same size. Neither party has a plan to reduce the cost, nor price, of anything.


The remarkable feature of both parties "policies" is no mention of how they will increase competition & choice. Yet it is competition & choice that drive prices lower & increase quality. We face lack of competition in domestic air travel where Air NZ dominates, construction where Fletchers dominates, food where the two supermarket chains dominate and banking where the Big Banks dominate (aided by Big Media, which gives their Chief Economists a daily platform to advertise by letting them gabble on about nothing).


In the public sector, the same problem exists. The Education Department, under Hipkins "leadership", didn't want Charter Schools competing with State schools to enhance competition & choice. In health-care, private providers are not able to compete alongside public ones, without you having to pay out of your own pocket for the former. However, other nations have designed systems to allow choice & competition between public & private providers, so you can choose where to go, with the bill covered by social insurance.


However neither Labour nor National have anything useful to say on these issues of competition & choice that lie at the foundation of our cost-of-living problems & falling quality of public-sector services. In this sense, listening to the election debates between our two big party leaders will be a waste of time. By the way, what does the White House have to say about competition? Something not to be found anywhere on the Kiwi Labour & National Party websites, namely:


"Healthy market competition is fundamental to a well-functioning U.S. economy. Basic economic theory demonstrates that when firms have to compete for customers, it leads to lower prices, higher quality goods & services, greater variety & more innovation .. When there is insufficient competition, dominant firms can use their market power to charge higher prices, offer decreased quality & block potential competitors from entering the market - meaning entrepreneurs & small businesses cannot participate on a level playing field & new ideas cannot become new goods & services.


Research has also connected market power to inequality. In an economy without adequate competition, prices & corporate profits rise, while workers’ wages decrease. This means large corporations & their shareholders gain wealth, while consumers & workers pay the cost. The pandemic has further underscored the dangers of an economy that depends on a few companies for essentials, exemplified by the supply chain problems we face when a small handful of corporations creates bottlenecks for a critical product".


What is the moral of the story? A vote for either National or Labour will not lower the cost of living in NZ. Our two party duopoly has become the counterpart of the oligopolies that exist across a swathe of our economy and which are even being protected by those two parties.


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