Do Nothing Key desperate to claim credit for something

Written By: - Date published: 1:00 pm, October 19th, 2010 - 27 comments
Categories: Economy - Tags: ,

The Nats are trying to take credit for the fact that annual inflation in the year to September was the lowest since 2004. What exactly did they do? Dig into the numbers and the cause of the lower inflation is a weak global economy, not National. Already, inflation is climbing, 1.1% this quarter, and will break 5% next year thanks to the GST hike.

Here’s what Stats has to say about their inflation figures:

The most significant upward contributions came from higher prices for cigarettes and tobacco (up 14.5 percent), petrol (up 5.8 percent), milk, cheese, and eggs (up 10.1 percent), and electricity (up 3.7 percent).

The most significant downward contribution came from lower prices for audio-visual equipment (down 24.6 percent) and meat and poultry (down 3.5 percent).

Did National do anything to make audio-visual equipment, meat, or poultry cheaper? Nope.

And, no, National hasn’t kept down increases in government charges:

For the year to the September 2010 quarter, the non-tradable component increased 2.5 percent. The most significant upward contribution came from cigarettes and tobacco.

The tradable component increased 0.3 percent for the year to the September 2010 quarter. The most significant upward contributions came from petrol and from milk, cheese, and eggs.

Can anyone point to the policies that this government has undertaken that have affected inflation? No, of course not because they don’t exist. What really happened is that prices in the trade-exposed portion of the economy didn’t climb due to the weak international economy. Nothing to do with National at all. But then what do you expect from a do nothing government other than for it to take credit for something it didn’t do?

It is as stupid to credit National with low inflation caused by a lacklustre global economy as it is to blame Labour for the last oil spike, which pushed inflation to 5% in 2008.

And anyway, the last quarter’s inflation was actually high at 1.1%. The prime reasons for the increase? “The most significant upward contributions came from higher prices for vegetables (up 19.7 percent), local authority rates and payments (up 4.4 percent), other private transport services (up 8.4 percent), electricity (up 2.8 percent), and milk, cheese, and eggs (up 5.2 percent)”

One thing National has done is increase GST, and as a result inflation will surpass 5% in the next year. I wonder if they’ll be leaping to take credit for that.

27 comments on “Do Nothing Key desperate to claim credit for something ”

  1. M 1

    What this country needs is:

    Jobs, cleaner environment, public transport, fair distribution of wealth

    Key: Yeah, right

    Bugger, I was wrong, he should be Chief Fuckwad

  2. Colonial Viper 2

    Low inflation in a heavily recessionary cycle is only one step away from an ugly deflationary depression.

    WhyTF Key and English is trying to claim credit for this situation is beyond me.

  3. Bored 3

    I seriously doubt that you are right about inflation going anywhere near to 5%, as I have said we are worldwide facing an incredibly large deflation. Readers will confuse rising prices for certain items with inflation, as you note there are very large falls as well as rises dependent upon the good in question. What you are talking about is not inflation, it is affordability. Which may mean in the case of necessities rising those without surplus disposable income will begin to suffer. You are right, NACT have no plan, they basically are listening to the Reserve Bank and other neo lib high priests whose God has failed .

    To get a good picture of what is going on I recommend anybody who can listen to an MP3 download this, its pretty scary and very realistic http://www.radio4all.net/index.php/program/44211

  4. bobo 4

    “Key promises ‘free’ foreshore” , wow another Keyism but isn’t a large part of the low inflation figure due to a recession and wage freeze the last 2 years ? recession ! yeah, high five National ! Not one MSM comment or questioning of Keys spin on the news yesterday….. Key can announce any shit he wants at the moment to an apathetic media more concerned with Sonny Bill William’s six pack.

    Whats next
    ?
    “Key says , high murder rate helps lower unemployment”

    “Teacher Strikes increase national standards- Key”

    “Key thinks High kiwi dollar goes further for kiwis holidaying in Hawai”

    • Vicky32 4.1

      Whoever Sonny Bill Williams is – I heard a lot about him on telly last night, but couldn’t bring myself to pay attention!
      Note that the rises are all in necessities – eggs, milk, cheese, petrol – electricity…
      Deb

  5. TightyRighty 5

    A strong international economy never stopped labour for taking the credit for the credit and property price fuelled growth they oversaw.

    • Colonial Viper 5.1

      Goff has said publicly that mistakes were made allowing a property/debt bubble which smashed the real economy. And that the GFC changes the picture for all of us. 2 years in Opposition and Labour has completely rethought its positions in light of current events.

      NAT – not so much. Backing the same old Tired Tory Formula.

    • Bright Red 5.2

      so, tighty, you’re admitting that it is invalid for National to claim credit for the inflation rate.

      cheers.

      • TightyRighty 5.2.1

        Not at all, Nationals carefully considered fiscal policies have meant the economy isn’t facing the same inflationary pressure it used to from ever rising, poor quality government spending under labour. So they can claim credit for the lowest inflation rate since 2004.

        • Colonial Viper 5.2.1.1

          I used to think the Right knew about economics but evidently not.

          carefully considered fiscal policies

          Was that the $240M being borrowed per week or the $1.7B bailout of SCF that you were referring to here?

          • TightyRighty 5.2.1.1.1

            well funny you should mention both of those. The $240million a week is a hangover from the last government, and is also lower than it would otherwise be under labour. aren’t we down to about $200 million a week. Remember, interest free student loans, Working for Families and universal super and welfare all cost money.

            the $1.7B bailout of SCF? well, if mister Michael Cullen hadn’t of been so generous with his DGS, then SCF wouldn’t have been bailed out to the extent it was, and it would have had to pay for the honour of being so. Less than $5B on your books? join the scheme for free. The real cost of the SCF bailout however is approximately $0. The assets of SCF exceed $1.2B and the DGS has brought in around $600 million, almost entirely from the big 4 aussie banks and our little battler Kiwibank. So therefore, the government still has around $100 million in the kitty to shore up any other dodgy finance companies welcomed in to the DGS on michael cullens private guest list.

            • bbfloyd 5.2.1.1.1.1

              T.R…an up to tour usual standard contribution… trying to tie as many different threads together to attempt to create the impression of perspicacity… the result is just a mish mash of party political drivel. not sure why you bother, unless it’s because you can’t help yourself… you can get help for that kind of thing now….. unless that’s been cut by the nats as well.

              • TightyRighty

                must be only be a mildly stupid day for you when you try and confuse party political drivel (foreign investments? seriously? for a trade reliant nation?) with actual fact. apart from that nothing really to offer is there bb? so maybe a normally stupid day for you.

          • Sean 5.2.1.1.2

            So they can claim credit for the lowest inflation rate since 2004.

            Yes they can claim it, but that doesn’t mean they did it, or it is a good thing. Here are some points about the lowest inflation since 2004.

            Thank you Keith Ng.

            • Carol 5.2.1.1.2.1

              Cunliffe questioned the Nats on the inflation rate claims in the House today. There was some counter-claims about the blames/claims for the impacts caused caused by the big recession. Cunliffe asked about Key’s claims that the tax switch would result in all New Zealanders will be better off it as the result of the switch. Then Cunliffe referred to reports just out, of rises in people going into debt, and asked if these people will feel better off after the tax switch. Key replied that this rise in debt was due to the recession that Cunliffe had already acknowledged was having an impact.

            • TightyRighty 5.2.1.1.2.2

              I read Keith, he missed out some good points though. Inflation isn’t necessarily a bad thing, it is a good indication of the growth of the economy as long as it isn’t distorted. I think the thing that can be pulled from the figures is that this inflation is useful as it is driven from the real economy, not the false economy of ever rising house prices against which the public can borrow more.

  6. Draco T Bastard 6

    Well, if NACT want to claim credit for causing the GFC…

    I have no problems with that 😆

    And in Jonkey’s case it’s actually true.

  7. the sprout 7

    Do Nothing Key desperate to claim credit for something

    great headline, sums up my thoughts perfectly.

  8. Nick C 8

    “What really happened is that prices in the trade-exposed portion of the economy didn’t climb due to the weak international economy. Nothing to do with National at all.”

    So you’re happy to blame National for low economic growth, but you attribute low inflation to the global economic crisis?

    • Colonial Viper 8.1

      Low inflation is a serious danger during a deep economic recession. Another economic shock and a deflationary depression will result.

      • Nick C 8.1.1

        “And anyway, the last quarter’s inflation was actually high at 1.1%”

        “inflation will surpass 5% in the next year. I wonder if they’ll be leaping to take credit for that”

        So will you be congratulating National for this?

        I think not. For some reason no matter which way its spun National is always evil.

        • Colonial Viper 8.1.1.1

          National is always evil.

          Actually, a good descriptor of a party consistently willing and able to do whatever it takes to push the wealth and resources of society away from the many who produce it to only the few who own it.

          By the way, Labour Conference speakers were pretty clear that inflation, as the major monetary policy target, is pretty meh. At most it should be in a basket of other targets such as employment.

  9. Treetop 9

    The Federal Reserve in the US is worried that inflation is two low and unemployment is too high. I suppose this equates to a slim job market and very little interest on personal savings.

    • Colonial Viper 9.1

      No, interest on savings is not the problem (e.g. for most people lots of debt and insufficient savings is their backdrop). In a deflationary cycle the difficulty of paying off business debt skyrockets as prices fall and businesses fail to be able to make their loan repayments. Massive business failures and layoffs will occur, banks gain hard business assets and land at cents in the dollar.

      The only people who do well during a deflationary cycle are those who are debt free with plenty of cash/a strong steady income on hand.

      For everyone else, its standing on the side of the road in suits waving ‘Will Work for Food’ signs.

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