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John Key’s disaster capitalism

Written By: - Date published: 1:07 pm, May 9th, 2013 - 31 comments
Categories: capitalism, grant robertson, jobs, john key, national, poverty, uncategorized, unemployment, wages - Tags:

The latest Household Labour Force Employment statistics are out, and on the surface, look good for John and Bill.

James Weir and Hamish Rutherford, breathlessly report on Stuff today that:

The job market stormed ahead in the March quarter, with unemployment tumbling to 6.2 per cent in the March quarter, compared with a revised 6.8 per cent in the December quarter.

In a rebound from bad figures in the December quarter, there were 38,000 more people employed this quarter – up 1.7 per cent, Statistics NZ said. That more than reversed the slump in the December quarter when jobs fell 23,000.

However, right down at the bottom of the article is the most telling result:

Canterbury’s unemployment rate is now down to 4.3 per cent. Excluding Canterbury from the national estimates shows a much weaker labour market, Statistics NZ said, with both the employment rate and labour force participation rate falling over the year.

This is good news for Cantebrians.  However, I agree with Labour’s Grant Robertson that,  “Disaster recovery is not a plan for jobs“:

The Government cannot continue to rely solely on the Canterbury rebuild to fuel job growth, says Labour’s Employment spokesperson, Grant Robertson.

“Today’s jobs data shows unemployment has fallen to 4.3% in Canterbury – driven by the earthquake rebuild.

“But excluding Canterbury, around the rest of the country unemployment is 6.9% – or an estimated 6.6% on a seasonally adjusted basis

“The truth is that the Government has no idea how to stimulate the economy and job growth.  It is relying on the country’s worst natural disaster to drive job growth.  That’s not sustainable and it’s not a credible economic plan in anyone’s book.

“In Auckland unemployment actually rose in the March quarter to 7.3%.  In Northland it is 10%.  In Wellington it is at 6.8%.  The economy under John Key and Bill English is not creating jobs outside of the Canterbury rebuild.

And these latest statistics tell us nothing about how lwo NZ wages are, or about our appalling wealth/income gap. NZ doesn’t compare so well internationally with average income and the size of the income inequality gap, as of 2011.

OECD Better Life results for NZ

In New-Zealand, the average person earns 18 601 USD a year, less than the OECD average of 22 387 USD a year. But there is a considerable gap between the richest and poorest – the top 20% of the population earn five times as much as the bottom 20%.

And on income, NZ is just below Portugal and Greece; below Australia, Ireland and Finland.

31 comments on “John Key’s disaster capitalism”

  1. Coronial Typer 1

    National does not need an ‘economic development plan’ when it is concentrating on installing shareholding in public companies as the new Kiwi Dream – even if only a few attain it and the rest of the middle class might only ever aspire to it. National believes, like US Republicans, that instilling the belief in wealth-freedom is enough.

    Plus subsidise farmers and home owners, of course.

    So the corollary question to the post of course is: will Labour/Greens make ‘economic development’ more powerful nationally than National’s ‘I dream of unattainable wealth’.

  2. Gosman 2

    The trouble is lefties can’t have it both ways. I remember a number of comments arguing that the Government couldn’t use the Earthquake to excuse poor economic performance. Now the economy is doing much better suddenly it is mainly to do with the Earthquake rebuild.

    • Arfamo 2.1

      The economy is now doing much better? Jesus. You have a simple mind. I don’t think even the government has reached that conclusion on the basis of these figures.

    • Coronial Typer 2.2

      Since National has kept almost every major social programme throughout the GFC and earthquake, the last crown Labour held was the nationbuilding crown. With the rebuild of Christchurch, National are (by fate) at least sharing that crown as well. The field is open for Labour to say what will make us richer, not just “less poor”.

    • lprent 2.3

      It is hard to see how you could not see that these are both the same thing.

      A one off injection of insurance money to rebuild a city does nothing for the underlying economic system. It benefits the internal economy in terms of jobs and local activity. It will probably increase imports that we have to pay for with exports. Does nothing for exports. It will improve the governments revenue position short term through more employment, but does nothing to ensure there are jobs available after the rebuild is complete.

      Basically the governments performance is piss-poor when you look at the exports required to pay for required imports.

      { Downgrades estimate of Gosman’s economic intelligence – ummm can’t get much lower }

      • Gosman 2.3.1

        That would apply to basically any economic stimulus package unless it was focused on the export sector. It would also apply to policies which shift the spend in the economy away from investment towards consumption e.g. increasing benefit levels. It would be ininteresting if you are against those type of policies as well.

        • tricledrown 2.3.1.1

          allowing the NZ dollar to continually go up in value is taking away exports increasing consumption

    • xtasy 2.4

      Go(o)sman –

      Hah, after the quake and damage has come the much delayed rebuild. So yes, the opposition has every right to point out that these developments play a major role in statistical figures.

      The government DID use the earthquake and GFC to explain their poor performance, and they DO now use the earthquake rebuild to explain the figures again.

      Take the earthquake in Christchurch out of the equation, and take note of the GFC never hitting NZ that hard anyway, as it was not so much exposed to it, and also enjoyed the trade with then still fairly strong Australia, then one can easily see, that National and their mercenary supporters have done stuff all to get NZ moving ahead economically. It is at best a stalemate!

      Yes, that increased milkpowder, baby formula, log and a few other commodities with Mainland China also saved the NZ economy from worse. Increased manufacturing has largely been due to these exports, not much else.

      NZ remains to be a rather backward economy in many respects, more aking to second or third world countries, rather than a developed first world country.

  3. King Kong 3

    I can see why Robertson would be pissed off that more Kiwis are in gainfull employment.

  4. tracey 4

    Irony alert

    Did key keep a straight face when he said this, and the journalist who printed it?

    This morning Mr Key signalled strongly Mr Gilmore should quit.

    He told Radio Live he had not received an honest answer from mr Gilmore about the dinner at the Hanmer Hotel where he allegedly told a barman who refused him alcohol he would have the Prime Minister fire him.

    When Mr Key was asked if the backbench MP should quit, he said: “If he can’t reconcile what happened on that night in the way that he’s described it to me, then the answer would have to be ‘yes’.”

    While interviewed on Radio Live he described Mr Gilmore’s story as being like “quicksand”.

    • SpaceMonkey 4.1

      I guess Key now knows what it is like to be on the receiving end of some the drivel the public have to put up with coming out of his mouth. I look forward to Key telling the truth whenever and without loss of memory.

  5. tracey 5

    Did this figure include students in summer jobs?

    • Gosman 5.1

      I think the increase was more around full time jobs but it includes all types of work I believe.

  6. Enough is Enough 6

    You just have to look at the trends and where unemployment was tracking to before the quakes.

    If Christchurch was not being rebuilt and Australia was not a short flightaway and Labour had not left the country in such a brilliant state we would now have unemployment at levels similar to Grece and Ireland.

    if you have a job today thank those 3 facts for it.

    • donmcdazzle 6.1

      Labour leaving us in such a brilliant state? Their performance was good during their tenure sure, but look at the hospital pass they gave future govts with their mass spending policies. That can’t be overlooked (Free student loans and Working for families for example). That certainly isn’t leaving the country in a brilliant state.

      NZ has weathered the GFC better than the vast majority of other countries, despite people painting a doom and gloom picture. I don’t give National any credit for how we’ve performed over this period. I also don’t give Labour any credit for how we performed prior to the GFC. NZ has gone well despite, not because of the govts (both sides) interventions.

      • One Anonymous Knucklehead 6.1.1

        Cognitive dissonance much? One of the reasons NZ weathered the GFC well was down to Labour’s management. The reason we had a double-dip recession was because of National’s austerity (but not for casinos) policies.

        • donmcdazzle 6.1.1.1

          What specifically did they do then? And please don’t say they balanced the budget because they blew that away with interest free student loans and working for families that had to be inherited by the following govt.

          • One Anonymous Knucklehead 6.1.1.1.1

            Which they couldn’t afford because they cut the top tax rate. You may regard WFF as a bad thing, but tax breaks for parents are a feature of many modern economies, so I suspect your objections are ideological rather than pragmatic.

            As for Labour, they reduced public debt, among other things.

            • donmcdazzle 6.1.1.1.1.1

              Ok so you mentioned cutting debt (which I said not to mention but anyway), what are some of the ‘other things’ that they did?

              • infused

                Good luck getting an answer from that knucklehead.

              • One Anonymous Knucklehead

                Really, Infused?

                Don, your assertion that they “blew away” a balanced budget is utter nonsense, no wonder you don’t want it pointed out, but sorry, you don’t get to declare whole areas off limits for discussion. They balanced the books, period. The National Party has racked up debt to pay for tax cuts, and the dumb bastards still believe that austerity cancels recessions.

                The list of Labour’s achievements is a long one. To my mind though, the improvement in our GINI coefficient is probably the most important item, but for another example, you will find Wayne Mapp below extolling the virtues of the FTA with China.

                • donmcdazzle

                  Cheers OAK, I wasn’t aware of the GINI coefficient metric for NZ.
                  I just am not going to give Labour the credit on that one, neither am I about bringing down govt debts. The fact is the worldwide economy was booming in the mid 2000’s, and that obviously plays a far greater role in the success of our economy than any input the govt of the day can have. Sure, one govt can do certain things better than another for certain groups, but the overall health of our economy or of our budget is far less about what the govt does and more about what is happening in Asia/US/Europe.

                  The tax forgone by cutting the top tax rate certainly did/does not offset the amount spent on WFF by the way, that’s a redundant argument.

                  For the record I’m not a Labour detractor or a National supporter, I’d say I dislike them in equal measures.

                • infused

                  Yeah, they balanced it to 0. gg knuckle.

            • Murray Olsen 6.1.1.1.1.2

              WFF was not extended to non-working families and showed that Labour was every bit as keen to stigmatise beneficiaries as NAct is. Student loans should not exist at all. The rich use them to speculate, while the poor get an albatros around their necks for years.

              Labour may have done a few things a bit better than NAct, but they did nothing to start bringing down the neoliberal structure that they themselves built, beginning in 1984. They left it in place, laying the foundations for the NAct austerity attacks as soon as the GFC gave them an excuse.

    • Wayne 6.2

      The assertion by Enough is Enough could no possibly be correct (except perhaps the Christchurch rebuild).

      By and large people leaving for Australia reduces demand and probably increases unemployment. Most of those who leave are skilled and were in jobs. When they go they are not here to buy things. The opposite also applies. NZ usually gets an economic boost from increased immigration.

      The last five years has seen exports to China increase fivefold. This could not conceivably be claimed by Greece or Ireland. The fact that both Aus and NZ have done Ok in the last 4 years is largely due to being in the Asia Pacific. Of course minerals face no tariff barriers, but agricultral exports do. That is why is has taken a while for NZ to get the full China effect, since it takes a while for the tariff and quota reductions of the China FTA to kick in on these exports.

      The China FTA has been a major saviour to our economy, as was obvious from the date it was signed. Probably the best strategic move by Labour in its last term of office (though naturally opposed by the Greens and NZF). The TPPA will also yield large gains, though not of the scale of the China FTA.

  7. vto 7

    Earthquake observation # 322;

    There are so many jobs in Christchurch that there are billboards and even homemade signs pinned on street corners advertising for workers in places.

    Thanks earthquakes…..

  8. Drakula 8

    One thing that nobody has mentioned yet; the cost of the Christchurch rebuild. The Nats thought it would be 5 to 30 billion it is now approaching 40 billion.

    But to Christchurch Mayor Bob Parker ‘that’s a good thing for Christchurch economy it will mean plenty of jobs.’ A bit like Key think, yes he might be right in the short term but in this real world things are finite, not infinite sooner or later the credit is going to run out. Two things the government should have done pronto (1) a price freeze and (2) an earthquake Tax above say $70,000.

    You may say that it is all very well looking back at all this in hindsight but just before the quake Julia Gillard did just that levy a tax on the wealthy to raise money for the Queensland floods.

    Now the Christchurch rebuild is just a gravy train, the price of land, homes and contracting services has sky rocketed.

    So what will happen when (not if) the insurance companies run out of cash, collateral and credit?

    • Draco T Bastard 8.1

      So what will happen when (not if) the insurance companies run out of cash, collateral and credit?

      That’s the big question. IMO, even the re-insurers can’t afford to pay out for Christchurch.

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