Great to see David Cunliffe confront Bill English. After Cunliffe pointed out that the economy grew by an average of 3.2% a year under Labour compared to 2.6% in the 1990s under National and -2.2% last year under National, there was this question:
Cunliffe: how does he reconcile his statement that between 2005 and 2008 “the economy grew by less than 1% a year” with official statistics that show the economy grew at almost twice the rate he claimed?
English: I think he’s retailing a story from a couple of weeks ago on one of those left-wing blogs. And the problem there is that he is using nominal growth in the economy when the standard measure is real growth
Well, nice to see you’ve noticed my work, Bill, but you’re lying and you know it.
The numbers I have used (and the ones Labour must have used) are inflation-adjusted – they come from table 2.1 of the Stats NZ GDP release. Contrary to what English told the House, the 1.7% is real growth – ie. 1.7% over and above inflation. (click here to see my calcs on the right in full size and what would happen if you used nominal figures, from table 4.1 instead, you get 5.4% on average).
See, it’s actually English that got it wrong. To get 0.9%, he compared September Quarter to September Quarter, not September Year to September Year.
Why is comparing quarter to quarter wrong? Well, say you want to compare daily river flows. Do you compare the flow of the river between 6 and midnight, claiming it tells you the difference in the amount of water that flowed down each day? No, you compare flow over the whole days. If you want to compare annual GDP you compare GDP over the whole years, not just isolated quarters.
English knows by now that he has made a mistake/been lying. He knows that I’ve got it right and Labour has got it right. He was misleading the House in claiming that the dicrepency between Labour’s numbers and his was due to using nominal numbers. The real reason for the difference was his use of the wrong numbers, which gave him the wrong result. The fault is his, and he is trying to mislead the House to cover for it.
Final words to Cunliffe:
Is the Minister aware that over the 9 years of the Labour Government GDP growth averaged 3.2 percent, which is higher than under the previous National Government and obviously his own; and is he further aware that that strong and sustained expansion was achieved at the same time that net debt was cut to zero, gross debt was cut in half, unemployment was less than half the current rate, thousands of New Zealanders were lifted out of poverty, and the minimum and average wages rose every year; if so, why does he not just admit to New Zealanders what is patently obvious: that he is shonky in his use of figures, and he has no plan for growth?