Rob Salmond points to the reality of the to different approaches to the economy. Labour looks at increasing jobs, wage growth, and having the government run surpluses. National looks at a 1% wage growth after inflation after years of falling real wages and no drop in real unemployment as being a sign of a healthy economy? Yeah right.
Today David Cunliffe announced Labour’s economic targets for its first term. They are important and ambitious. Labour is pledging to reduce government debt by running surpluses every year, and also to lower unemployment to 4% in its first term.
I don’t doubt Labour’s ability to run surpluses. The buoyant global economy leads to increasing demand for our exports, which increases tax revenue and decreases demand for transfers. Any decent finance Minister can run good surpluses in that environment. And David Parker will be a top-notch finance Minister.
The unemployment target is an ambitious one, and in my view one that only one a left-leaning coalition government can achieve. labour alone has at least six large-scale, economically sound policies that will create jobs. They are the upgrades to manufacturing generally, the forestry sector, monetary policy, specific programmes in housing (KiwiBuild) and electricity (NZPower), and a CGT moving investment into productive sectors. This is a plan that can create the tens of thousands of jobs our communities desperately need. National cannot and will not match it.
Meanwhile, Steven Joyce was on Q+A yesterday defending the results of National’s plan. Real GDP growth at the moment is around 2.7%, thanks in large part to the global post-GFC recovery and the Canterbury rebuild. But the very best number Joyce could conjure up for real wage growth was 1%.1
Even using Joyce’s own numbers for a moment, this shows that most of the growth in the economy is simply passing wage-earners by. It is going elsewhere. That is National’s legacy: strong growth for the fortunate few, lagging and insipid growth for everyone else, leading to a larger and larger gap between the rich and the rest.
The contrast with Labour’s multi-pronged jobs plan is stark.