Written By: - Date published: 11:16 am, April 10th, 2008 - 38 comments
Categories: economy, election 2008, labour, national -
Tags: economy, election 2008, labour, national
The Reserve Bank produces a series of helpful tables of economic data. One table compares our growth to that of Australia, the US, Japan, and the UK. Here’s a graph comparing growth across the countries between National and Labour’s periods in government.
National has a pathetic track record on growth. Under them, our economy grew 1% a year slower than Australia’s, slower than the US’s, and barely faster than the UK’s.
Since we tossed them out, New Zealand has grown faster than Australia, the US, Japan, and the UK. The gap in GDP per capita that opened under National has been partially closed and wages have grown after stagnating under National.
But it is still not good enough. To make up the ground we lost under National we need growth to continue and stronger workers’ rights to ensure the benefits of growth go to those who make it happen. That requires a Government that is committed to high employment and high wages, and has the competency to deliver.
Labour needs to do more; National has proven they simply are not up to the task.
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Scoopit!
Come on IB, give it a try! Haven’t you always wanted to call someone a villainous fool-born foot-licker? I know I have…
No, Steve. Again your economic illiteracy is showing.
Fact: National inherited an economic disaster in 1990. New Zealand suffered several major, external, economic shocks during the 1990s. Despite this, New Zealand’s economy improved radically, to the point that every major economic indicator had improved dramatically over the period. Dramatic rises in unemployment were stalled and turned around; inflation and interest rates were at their lowest levels in a generation; economic growth was the strongest it had been in fifteen years; crown debt was declining dramatically, and government was in surplus for the first time in over a generation, and New Zealanders were staying in New Zealand.
Fact: Labour inherited a strong economy with sound fundamentals in 1999, and has not suffered any significant external economic shocks since 1999. New Zealand’s economy has grown steadily since that time. It is clear, however, that New Zealand is ill-prepared for the effects of the sub-prime crisis, with all the major forecasters predicting a downturn in the economy over the next few years. Every major economic indicator, from inflation to interest rates, to unemployment to debt reduction, and New Zealanders are heading overseas in record numbers.
To discount external factors shows a degree of ignorance that I never thought even you were capable of, Steve. Well done. You’ve surprised me.
Possibly the most important thing to note with these data is that they clearly show the NZ economy is more dynamic and exposed that the US and Australian economies. Most of NZ GDP is domestic consumption and we have low-levels of trade intensity (principally in commodities) therefore the external factors have a more pronounced impact.
I think Steve’s post proves the lie coming from National that it’s the better economic steward, however no government is able to claim full credit for growth or buffer NZ from international trends. What Labour has done however is implement policies to enhance business performance – they might be policies National may now support, but they are policies National hadn’t e.g. investing in workforce skills, increasing tax incentives for R&D and opening new markets through trade agreements. Though it’ll be unpopular with the less informed and more reactionary readers here, there’s also an argument that that increases in the minimum wage improve productivity by encouraging firms out of low-wage, low-value added business.