Local authority functions and finances and incentives for intimacy

Over the last couple of days we have had the announcement of impending legislation requiring local authorities to “stick to their knitting of supplying infrastructure, libraries and museums”.

The Prime Minister and the Minister of Local Government both imply that the activities of councils in looking after the social, environmental, economic and cultural wellbeing of the citizens are responsible for the extra cost burden and rising rates.

Not so. Last time I looked at the financial statements of our council I found that it is the infrastructure of sewerage, stormwater, water and roads which is taking up the bulk of the expenditure. Our own council plans to spend $100 million in stormwater infrastructure over the next 20 years for our town of 5000 inhabitants. They cite climate change as being one of the factors, together with a growing population and an ageing infrastructure. Our town is built over a swamp.

I don’t think the Prime Minister or the Minister of Local Government mentioned the extra expense in dealing with climate change. Nor did they mention the continuing growth of population in this country or the GST that ratepayers have to pay. And 12% of council’s expenditure is for servicing loans to private banks issuing them with money. Unnecessary when they could create their own Rates Vouchers (but that is another topic). But what strikes me most is when I think of this in association with today’s Listener article on the growing social trend of single person households. New Zealand it says now has 23 percent of households as single person households, this percentage is growing and it is a global trend.

OK so for every house we have water reticulation, sewerage reticulation, and stormwater management. Basic infrastructure, the council’s main expenditure. If the number of single person households is increasing and the population is increasing and the standards for sewage treatment and water quality keep rising, then it stands to reason the costs will keep rising.

For every extra dwelling that is occupied, there is a house, its furnishings, a fridge, a washing machine, a motor mower and probably a car. More purchases, more expense. Not the Council’s expense but it does add to per household expenditure if the trend is to single person households. But the council has to pave more roads. This means buying more bitumen, which being an oil based product, has already risen in price by 95% in the last decade. And the cost of pipes has risen fast.

I have yet to hear of a politician at local authority level who addresses the issue of how to economise on infrastructure investment through giving incentives for households to have more than one person occupying them. Already we have a welfare system which penalises intimacy. You get more income from WINZ if you separate. We all know why. A stupid welfare mess is part of the problem which can only be solved with a citizens income.

Given the realities of local authority finances, it stands to reason that political parties must build in incentives for efficiency in housing. Efficiency is what Nature does best. Nothing is wasted.

 

Change the Money System to combat climate change

Tuesday, 15 November 11

The New Economics Party candidate for Wellington Central, Laurence Boomert, said that along with other policies, redesigning the money system would be a powerful way of combating climate change.

Reacting to a recent International Energy Agency report which saidon planned policies, rising fossil energy use will lead to irreversible and potentially catastrophic climate change’, he said that all international climate change conferences had broken up because governments were scared economic growth would falter.

“So we need an economic system which doesn’t require incessant growth on a finite planet. It is time we asked the right question. The force that requires us to gobble up more and more of the planet and turn it into goods is a structurally unsound money system and it needs to change”, he said.

“We design our money as interest bearing debt money. This type of money requires economic growth or the whole house of cards will collapse, as it is doing in Europe right now”, he said.

The IEA report said emissions globally jumped 5.3% in 2010 he said and on current path we are all committing mass suicide.

He said the New Economics Party would introduce a carbon tax on coal, oil and gas at source and not wait till it is burnt into the atmosphere. “The potential buyers of Solid Energy would have to be frightened if our party was in power.”

 “We would limit expansion of airports, impose an aviation fuel tax, and reduce our oil country’s imports by 4-6% a year. Motorway building would cease overnight and we would only focus on improving our current roads and the coal would remain in the hole.”

 

For further comment phone Laurence Boomert 027 258 8807

 

 

 

 

A Perfect Storm of Crises

A PERFECT STORM OF CRISES

Resource Depletion:
The world’s rapidly growing and modernising population is consuming the earth’s limited natural resources at an ever-increasing and unsustainable rate. Here are some major concerns:

Peak Oil production

Peak oil production brings the end of economic growth

Energy is the resource that powers all human and economic activity and oil is the energy source we depend upon most. Global production of conventional crude oil peaked in 2005 and unconventional oil from oil shale, (and) tar sands and cropping is barely making up the shortfall while creating new problems for water, land, food systems, wildlife and the atmosphere.

Peak Coal and Natural Gas

Coal fracking uses too much water

Coal and natural gas reserves are extensive, but as more accessible, higher quality sources are depleted, growing practices like mountaintop removal for “dirtier” coal and hydraulic rock fracturing (“fracking”) for shale oil and natural gas carry high capital and environmental costs which limit their future viability.

Peak Everything Else
Population pressure and modernisation is rapidly depleting many, if not most, of the resources we use to sustain civilisation. Fresh water, arable land, phosphorus for fertilizer, seafood stocks, lithium, gold, rare earth metals, rainforest products and other resources are close to, or already past, peak production. When the easiest and cheapest resource stocks are gone, the rest become more expensive and generally come at a higher environmental cost.

Climate Change:

Climate change is nonnegotiable and if we get it wrong this time there is no second chance. The critical threshold of the ratio of greenhouse gases in the atmosphere has been reached, and only drastic measure to reduce this ratio will avert a perilous future.

Increasing high levels of carbon dioxide and other gases in the atmosphere have trapped more of the sun’s energy over the past century and have warmed the earth’s oceans, landmasses and atmosphere. The warmer atmosphere can hold more moisture and has more energy to drive mass air movements and power more frequent and violent tornados, hurricanes, floods, droughts, snowstorms, heat waves, dangerous hail and lightning storms, and record rainfalls.

Flooding in Bangkok 2011

We can expect:
Increasing crop failures like those  in Russia due to extreme heat and drought; in Pakistan due to extreme flooding; and in Australia due to extreme heat, drought, and floods.
Increasing death, destruction and economic devastation as more powerful tornadoes, floods and hurricanes afflict larger areas of the planet.

2.     More forest fires and wild fires as droughts become longer and more severe.
3.     Greater damage from pathogens and insects as naturally balanced ecosystems begin to break down.

Drought affecting crops in New Zealand

Economic Turmoil
The global financial system is currently in a state of terminal breakdown. It’s been on life support for the better part of half a decade, and the costs of keeping it on life support are spiralling out of control. While most agree that the global economy nearly collapsed in the spring of 2008, few acknowledge that nothing has fundamentally changed to prevent this from happening again. Recent bailouts of fragile European economies like Greece, Ireland and Portugal (like the bailouts of American financial institutions) increased the debt that first caused the defaults and likely set the stage for more economic chaos not far down the road. The IMF is warning of a dangerous new phase but as expected their prescription is “repair” when it should be “redesign”.

We can expect:
·       High inflation or deflation, both harmful
·       Scarce capital or credit for job creation or infrastructure projects
·       Dramatic cuts in government services as debt liabilities grow and tax revenue shrinks.
·       Growing ranks of unemployed as families sink into poverty and unemployment
·       Possible or even inevitable global economic collapse.

Also, the bewildering array of derivatives – exotic financial instruments that create money but not real wealth, – are now monetarily valued to far exceed the value of all real goods and services on the planet. As the hard physical limits to growth begin to appear in the forms noted above, the entire growth-dependent financial system may be headed for a very hard landing.

Economists are part of the problem

The remedies advocated by economists are at best suspect.. The New York Times Magazine headlined “How Did Economists Get It So Wrong?” while Business Week featured “Why Economics is Bankrupt” and “What Good Are Economists Anyway?” The Guardian talks of “Rescuing economics from its own crisis” and Atlantic Magazine headlines were “Will Economists Escape a Whipping?” “Why Economics Failed” and “Have economists gone mad?”

Infinite growth is not possible on a finite planet

The mechanistic approach to economics sees the rights of the individual as paramount and the sustainability problem as simply a matter of balancing competing economic, social and ecological considerations. On the other hand, a systems perspective suggests things are not quite this simple.

Solutions where the government pumps money into the system, will not solve our economic woes. As United States has recently discovered it only increases the debt and extends the suffering. As Europe is about to discover, you can’t solve a debt problem with more debt.

How come economists get it so wrong?

Because of increased trade, technological innovation and our ability to exploit the cheap, abundant energy of fossil fuels, New Zealand has had a prolonged period of economic growth with more production, more food, more people and more income. But energy is a prerequisite for all economic activity.

At the core of many of our problems is our monetary and taxation system.  Any economic system must include an accurate accounting of its environmental and social effects.

Our monetary and banking system runs on interest bearing debt. Without increasing debt it is hard to “grow the economy.” Economist Ken Boulding once said “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist”.

The worst thing that could have been done in 2008 was for the National Government to borrow money ($300m a week) from private banks at interest. It is only going to cause more debt., increasing a debt burden currently $102,000 for each man, woman and child. Unfortunately there is no magic solution that will turn back the clock to an era of abundant resources and easy growth.

It doesn’t take a genius to understand there is something very wrong at the heart of the global economic system. We have a parasitic investment banking class sucking at the heart of main street business and at ordinary people.  The system’s dependence on exponential growth also causes environmental harm and unsustainable demand on natural resources.

Globalisation and the harshest form of capitalism have eroded the bonds of community, created vast gaps of wealth between the richest and the poorest, and impoverished the natural environment.  In New Zealand twenty percent of our children live in homes of beneficiaries. Too many of our youth are unemployed and not being effectively educated or trained.. Maori suffer most from all this.