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Excellent question

Written By: - Date published: 8:57 am, December 9th, 2009 - 8 comments
Categories: john key, national/act government, Parliament, unemployment - Tags:

An excellent question from Labour yesterday, using some familiar numbers:

Hon Annette King: When he was reusing ‘unreliable, highly volatile, and potentially misleading’ [Paula Bennett’s words] figures yesterday, was he aware that unemployment drops around this time every year and that this year we are experiencing a smaller than usual seasonal drop of just 2.6 percent, when the average drop over the same period for the last 9 years was 5.2 percent?

And a very odd non-answer:

Hon JOHN KEY: Yes, but it is worth noting of the data yesterday—
Hon David Cunliffe: Why is Bill smiling?
Hon JOHN KEY: Why should there be no road rage on my cycleway? I think it is a good idea.
Treasury’s prediction for all of 2009 was that unemployment would rise, so despite the assertions of Annette King, that is not the advice we had from Treasury.

The government has been sprung claiming credit for a seasonal drop in unemployment.

dole by monthIn a panic, Paula Bennett has put out a press release presaging an increase in people on the unemployment benefit over December (which she conflates with the unemployment rate, sigh). Bennett does not have to be a fortune-teller to predict that the number of Kiwis on the dole will rise between November and January, it happens every year. Bennett describes this as a temporary anomaly from a downward trend. The reality is it is the seasonal drop that has been the blip. It is only half the average size of the normal September to November drop.

Unemployment is still rising when you account for seasonal variation and it will continue to rise well into next year There are over 250,000 jobless Kiwis and another 125,000 who can’t get enough work. Soon, there will be over 400,000 jobless and underemployed.

National doesn’t want to acknowledge those facts. They just want to preen and crow over imaginary achievements while thousands of Kiwis lose their jobs.

8 comments on “Excellent question”

  1. Tim Ellis 1

    Treasury’s bad case scenario had unemployment hitting 10%. Labour predicted it would hit 10%. It now looks like it’s going to be far below that. Labour and writers here at the Standard say that National has done nothing to dull the effects of the recession, yet we are now on our way out of recession. Labour and Standard writers have said National should have spent more money, but they won’t say where the money would have come from. Labour have said they are concerned about National passing on debt to future generations, yet they were prepared to load more and more spending on future taxpayers for no obvious benefits.

    If Labour had any traction in the polls then the media might put some of their policy positions under scrutiny. I think Mr Goff and Mr Cunliffe should be relieved that nobody is paying any attention to their shonky financial promises.

    • sk 1.1

      Still waiting for your reply, Mr Ellis

    • Marty G 1.2

      The thing about downside scenarios (or ‘bad side’ as you call them) is that they are extremes to the bad side. And the downside scenario was 8% at the budget. Actual numbers are pretty close to Treasury’s main projections.

      The rest of your comment is just a rant. But we have explained many times how jobs can be created and how the cost of creating those jobs can outweigh the cost of having a person unemployed and on the dole.

    • Zaphod Beeblebrox 1.3

      Errr so you feel the government doesn’t need to worry about the future? As long as unemployment comes in lower than the worst case that’s ok- ourkids will do just fine with the education budget shrinking and our manufacturers and exporters with poor productivity.

      PS there’s more to an economy than government debt.

    • Kevin Welsh 1.4

      So you are an expert on unemployment now Timmy?

      Outside your cubicle, deep in the bowels of the Westpac machine, the reality of the glorious capitalist economy we live in is apparent, the pain level WILL be heading up a notch in the new year.

      How do I know? Because I listen to the business men who cross the front door of my employer every day. I listen to our company’s accountant and I listened to what the head economist of the BNZ said at a private gathering in Napier recently.

      There is a large number of businesses just hanging on by the skin of their teeth at the moment and when you thrown in reduced trading days in December and January, wages and holiday pay for those two months, debtors taking longer and longer to pay, cash flow will be drying up and you have a recipe for a dramatic increase in unemployment in the first half of next year.

      And when these comments are coming from dispirited drinkers of the Nact Kool Aid, then I give it some validity.

      • lprent 1.4.1

        I’d agree with all of that. I suspect that next year is going to be a really rough year economically for business. With this pack of incompetent ‘relaxed’ clowns in government it will also be worse than it should be for far too many kids and adults as well.

  2. tsmithfield 2

    To be fair though, it was an actual drop in numbers. Not just the numbers climbling at a slower rate as could have been the case with a seasonal effect if unemployment was still climbing dramatically.

    • snoozer 2.1

      the drop is tiny compared to normal. It is the seasonal effect being countered by a recessionary rise.

      Look at marty’s graph. See how the number on the dole flatlined at the start of the year, when there is normally a drop? At that point the recessionary rise in unemployemnt was strong enough to totally counter the seasonal effect. Now, the recessionary increase is easing but is still enough to halve the seasonal drop.

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