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Farrar tries to cover for do nothing govt, and fails

Written By: - Date published: 5:38 pm, January 16th, 2010 - 69 comments
Categories: economy, phil goff, spin, unemployment - Tags:

Phil Goff has picked up on the point I made yesterday: while unemployment is falling in Australia due to the $42 billion stimulus package implemented by the Rudd Government, in New Zealand unemployment is still rising while this do nothing government sits on its arse, and unemployment here is now higher than in Aussie for the first time in a decade.

David Farrar, trying to cover for Do Nothing Key, responds to Goff:

“So why does Australia now have lower unemployment? Because New Zealand went into recession, and Australia did not. And no this was not a post credit crisis recession. New Zealand’s economy started shrinking in the first quarter of 2008, and kept shrinking until the second quarter of 2009.

Now people may be wondering who was responsible for the economy in the first quarter of 2008. Well a Phil Goff was an Associate Minister of Finance. So when Phil wonders why Australia now has lower unemployment than NZ, he doesn’t have to go far to ask how come.”

You’ve got to be kidding me. There was a worldwide recession, David. Australia only avoided recession by a hair’s breadth thanks to the stimulus package. New Zealand entered recession in Q1 2008, the same quarter as the US, Canada, Denmark, Ireland, and Slovakia entered recession. It was the beginning of the global recession due to record oil prices, the housing bubbles bursting, and the sub-prime crisis/credit crunch, which threatened the global financial system. At the same time, we suffered a major drought. Yet, David wants us to believe (I don’t think for a second that he believes it himself) that this was the fault of the Associate Minister of Finance.

Come on, David, shows us how that works. Show us how Associate Finance Minister Phil Goff caused the recession. Show us the cause and effect logic. At the same time, I’m sure you can provide us with proof that the awful weather in Wellington is Obama’s fault.

Talk about making a laughingstock of yourself, David.

The recession was a global phenomenon, not the fault of either New Zealand government. But the Government could choice how we reacted to the recession, and how we react now in its aftermath. While Labor in Australia chose a strong response focused on creating green jobs, National chose to do nothing and unemployment has risen remorselessly ever since.

69 comments on “Farrar tries to cover for do nothing govt, and fails”

  1. Peter Bilson 1

    MG – USA Q208 GDP was near 2%. So USA did not enter recession until Q4 2008. Recession is 2 successive negative quarters. Hence, NZ entered recession before the USA. I recall the Fiscal Fool Cullen (Goff’s boss) saying sub prime would not affect NZ. Shows what a fuckwit he was. Anyway, NZ low unemployment was due to worthless Govt jobs being formed that did not produce value, just beaucrats dishing out tax money to different interested groups. So the low un-employment was a crock of shit. Better to have these policy wonks on the dole it will cost NZ less!

    USA GDP data, source http://www.bea.gov/national/index.htm#gdp

    GDP percent change based on chained 2005 dollars
    2007q4 2.1
    2008q1 -0.7
    2008q2 1.5
    2008q3 -2.7
    2008q4 -5.4 enters recession
    2009q1 -6.4
    2009q2 -0.7
    2009q3 2.2

    So it may pay to get your facts right first MG before you slate off other posts you disagree with.

    • Marty G 1.1

      In the US, recessions are officially declared by the National Bureau of Economic Research. http://en.wikipedia.org/wiki/Recession They give December 2007 as the start.

      Yes, there was one intervening quarter of growth (caused by the tax rebate cheques, which just temporarily disguised the underlying recession) but, like The Roots say, ‘one monkey don’t stop the show’. That one quarter of growth does not break the recession according to any source I’ve seen and not according the official determiners of recession in the US.

      The problem is you’re taking a childish/legalistic view of what a recession is: ‘it’s two consecutive recessions, nothing else’. That’s not what experts use:

      “The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. For more information, see the latest announcement from the NBER’s Business Cycle Dating Committee, dated 12/01/08.” http://www.nber.org/cycles.html

      Still, I should give you some props for being the only rightie who has tried to engage with facts.

  2. Farrar is not the one creating the spin. You are.
    Simple facts. NZ went into recession. Australia did not.
    The NZ Government in late 2007-early 2008 did not take sufficient action.
    Phil Goff was associate Minister of Finance. He, Cullen and Clark were responsible for the inaction.

    • Marty G 2.1

      Come on sonny, I’m intrigued. What should the Government have done in the face of record high oil prices, the subprime crisis/credit crunch, and drought? Bearing in mind that they did increase minimum wage and cut taxes in the 2008 budget and cut corporate taxes the budget before.

      Come on. I want specifics.

      It’s easy to write dumb arse stuff like “The NZ Government in late 2007-early 2008 did not take sufficient action. Phil Goff was associate Minister of Finance. He, Cullen and Clark were responsible for the inaction.”

      But i want to hear what more action you wanted, bearing in mind that it wasn’t until August 2008 that the March Quarter GDP figures came out and it was only in August that the scale of the international recession started to become apparent.

      • TightyRighty 2.1.1

        at yet still no stimulus package from the outgoing government, despite it being within their powers to provide one. Maybe something to do with the cupboard being bare?

      • infused 2.1.2

        Buy a train set, duh..

    • NickS 2.2

      Australia did not.

      Lolwut?

      So which universe did this occur in? Because Australia definitely did slip into recession in 08 like the rest of the developed world, and indeed a quick google shows there are concerns that it will continue through 2010.

      Then again, you do have a vanity blog, so one cannot except all that much…

      • Jcw 2.2.1

        By the definition of two consecutive quarters of negative economic growth Australia did not slip into recession in 08.That article you site is a year old and irrelevant.

        • NickS 2.2.1.1

          …And this is why I shouldn’t post on when I have more than a weeks worth of sleep debt.

          But on the other hand, as Marty said Australia did come very close to a recession, with a strong drop in economic indicators for a quarter, which the argument here is that they avoid going fully into a recession via the Rudd government’s economic stimulus package. Rather than by the fact they experienced no indicators that a recession was on the cards if the government took no actions to try and deal with it.

          So when putting kiwiteen’s argument in perspective, and reading between the lines, kiwiteen is effectively claiming that those indicators that lead to AUS government etc predicting that a recession was incoming, and the resultant actions to deal with it, didn’t occur, or even that the stimulus package had no role in preventing a recession occuring.

          And also, on the newspaper article I linked to, it does actually show the concerns at the time for the Australian economy pre-stimulus that drove the government to act, which does makes it rather relevant…

  3. NZ S 3

    I remember John Key suggesting that Australia avoided recession due to the way they define a recession. According to Key, Australia would have gone into recession had they calculated it the same way as New Zealand. I know I should show my sources but I can’t remember where he said this. It may have been during his Christmas carol singing on ZM?

  4. Well, Sonny, I’m no economist and neither are you. What I do know is that Cullen, Goff and Clark as well as the rest of the Labour Government took NO action. They ripped us off through taxes and then cut taxes by a tiny amount when it came apparent that the would not win the election.
    Cullen failed. He did not foresee this economic downtown and did not invest OUR money wisely.

    • Marty G 4.1

      you don’t know what I do. But I can tell you this much. I know a lot more about economics than you do.

      They didn’t take no action. They put in several measures early on, even before it was apparent the reason would be major – they delayed the application of the regional fuel tax, for example, due to raising oil prices. There were the tax cuts I’ve mentioned too.

      What we’ve established, kiwiteen, is that you don’t know what Labour did, you don’t know what was happening in terms of international economics at the time, you don’t know what they should have done, you can’t show how any Labour action caused the recession (as Farrar claims), or how any reasonable action they could have taken with the information available at the time would have averted recession… and yet you still blindly assume that the recession was Labour’s fault

      Ah, to be young and foolish.

      • kiwiteen123 4.1.1

        I did not say that Labour caused the recession. I said that they did not stop it.

        • Marty G 4.1.1.1

          Farrar blamed Goff for the recession.

          And I told you that Labour reacted appropriately to the emerging situation. It wasn’t until August that we knew there had been a quarter of negative growth. It wasn’t until October that we knew we and other countries were in recession.

          It was in August/September that the subprime/credit crunch became a fullscale meltdown and people realised this was a global recession (despite the fact that the global recession had been going on for months by then, it takes time to get GDP data).

          You haven’t said anything that Labour should have done to stop the recession before August/September. And after time we were in an election campaign, the government was constitutionally in caretaker mode and could only take limited measures like the deposit guarantee scheme. They were going to put through an emergency budget in December 2008, focused as Clark said on ‘jobs, jobs, jobs’ but thet didn’t get the chance.

          So come on, what should they have done?

          • Herodotus 4.1.1.1.1

            Perhaps Labour could have acted on all their rhetoric contained within 8 or their 9 budgets by placing policies that would have improved our GDP to be within the top 1/2 of countries. Somehow after 8 statements this was lost and not included within the 9th budget (Or did Helen and Michael realise that it was unobtainable within the current framework). If this WAS so important where were the policies and action to follow to enable NZ to asscend the OCED rankings instead we slipped back 1-2 places, or was it simply another political meaningless statement with alot of hope and no prayer?

        • Clarke 4.1.1.2

          I did not say that Labour caused the recession. I said that they did not stop it.

          … and by the same standards, Bill English has not fixed the recession, so he’s clearly an incompetent Finance Minister.

  5. Draco T Bastard 5

    “Apart from the cycleway, the best National has come up with is an already discredited 2025 Taskforce report from Don Brash advocating solutions that failed in the 1990s.”

    Hey, Phil, they didn’t work in the 1980s either.

    I really do wish Labour would take ownership of the ballsup it made in the 1980s.

    • Tigger 5.1

      I wish National would take ownership of the economy now. Fourteen months in and still talking like they’ve just taken over – it was Labour’s fault, whine whine. National need to take charge or take off. And since we know Blinglish has NO ideas about what to do with the economy then I suggest the latter is an appropriate course of action.

      • Draco T Bastard 5.1.1

        National are trying to take ownership of the economy. That’s what their privatisation tactics are for.

        Now, what I assume you mean is that they’d take ownership of some action that will help the economy. They won’t as a depression is most likely to favour them and their mates.

  6. BLiP 6

    Well, according to Bill English:

    Having condemned his predecessor for many years for paying off debt too quickly, English said: “I want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook.”

    “In New Zealand we have room to respond. This is the rainy day that Government has been saving up for,” he told reporters at the Treasury briefing on the state of the economy and forecasts.

    So, it *must* have been do-nothing National Ltd® that caused the situation to become so bad – unless English is a liar? Which is it Farrar?

  7. Mark 7

    The real economy (private) went into recession in 2005 and the whole economy was only kept in the pluses by massive government spending (up to 8% of GDP).

    You cannot blame National for not changing any policy of Labour and borrowing more to fund capital projects.

    So what excatly would of Labour done if they won the last election?

    Borrow $1/2 billion dollars a week?

    Idiots!!!

    • andy 7.1

      Can you please cite or provide linky, please.

      The real economy only went into recession in 2009 post cycle way and job summit so JK has tanked the economy.. See its real easy to fling poo with no truth or evidence.

      You cannot blame National for not changing any policy of Labour and borrowing more to fund capital projects.

      Yes I can because they campaigned on just that premise. Change.

    • Marty G 7.2

      Mark. Tell me what the real economy is.

      You shouldn’t repeat spin if you don’t understand the terms. It makes you look stupid.

    • BLiP 7.3

      The real economy as opposed to the unreal economy? Fascinating.

      • Draco T Bastard 7.3.1

        Actually, the correct terminology is:

        Real Economy: Refers to the productive sector (Manufacturing, raw resources etc). It is that source of all wealth.
        Financial Economy: Refers to the banking sector (Financial services etc). The thing about it is that unreal is actually a fairly accurate description as it produces nothing but debt.

        • BLiP 7.3.1.1

          Ahhh – yes. That economic twilight zone where zombies in suits dance around cauldrons calling up demonic forces with fancy names like credit default swaps and used to gamble against a nation’s currency. Looks like we have managed to elect one of the chief zombies Prime Minister.

    • Draco T Bastard 7.4

      You’re the idiot Mark. In 4 lines you proved that you have NFI WTF you’re talking about.

      National DID change Labours policies. They cancelled labours tax cuts, put in their own and then cancelled any more while keeping the ones that only benefited the rich in. If they’d cancelled those as well then we wouldn’t have to be borrowing so much per week.

      Giving tax cuts to the rich just reduces the tax take – it doesn’t actually boost the economy in any way, shape, or form as reality has proven over the last three decades. In fact, it’s highly likely that it makes the economy worse off.

    • Interesting comparison Mark.

      Under Cullen NZ paid back huge amounts of debt and the state becme essentially debt free.

      Under National it has been borrowing $500m a week.

      These tories sure are economic marvels.

      I know this is simplistic but it matches the quality of your comments.

      Blip’s English quote says it all.

      Please address this.

      • Lanthanide 7.5.1

        “Under Cullen NZ paid back huge amounts of debt and the state becme essentially debt free”

        Um, no, we still have significant debt leftover from the previous government. Cullen paid some back, but by no means all of it.

        “Under National it has been borrowing $500m a week.”

        Actually the figure is 240M, and that includes rolling over existing debt. I believe the ‘new debt’ figure is about 150M.

        • mickysavage 7.5.1.1

          Um, no, we still have significant debt leftover from the previous government. Cullen paid some back, but by no means all of it.

          The argument always goes around in circles but when you take into account core crown financial assets then according to the Treasury at June 2008 the country was $19m in the black.

  8. PT 8

    yawn your a labour party hack M, we went into recession under labour before the international credit crisis

  9. sk 9

    We can argue the “wouldh’ve, couldh’ve, shouldh’ve’s” of the 2005-08 period until we are blue in the face . .. The point as to why democracy should be superior in an economic crisis is that you throw the bastards out and start again. The trouble right now is that Mr Key’s government appears to have no ideas at all. For Farrar to argue that it is Goff’s fault is pathetic. Has he not noticed that Mr Goff is in opposition, and that the NZ public has put him – very deliberately – in the policy sin bin?

    The point is that Mr Key appears to not have a thought in his head as to what to do on economic policy. That is the disgrace . . .

    • Draco T Bastard 9.1

      Of course JK doesn’t have a clue – he’s a financial speculator. All he knows is how to move money from A to B. That’s it. Unfortunately, he got very well rewarded for doing so.

  10. mike 10

    Marty, how does it feel getting post fucked on home ground?

    • Marty G 10.1

      The sad thing about that comment is it’s one of the smartest the right have managed to produce on this thread.

      That you are so sure of yourselves while constantly ignorant of the basic facts relating to the issue is astounding. But that’s what makes you rightwingers. If you were informed, curious, and questioning you wouldn’t be righties.

  11. So, Mark, kiwiteen 123 , DPF et al , what are we to make of from Rob Campbell’s ” Jobless Recovery” as posted on Werewolf, recently?
    He addresses Labour’s financial “mismanagement ” while going on to examine Nactional’s intention to use the recession to hammer NZ into a shape more suited to their world view ( one which places a cook, a nanny, chauffeur and gardener in every McMansion no doubt)

    To whit:

    “Speaking of which the figures for core spending by central government cannot justify English’s campaign of austerity, either. If one looks at page 128 of the Treasury Half Yearly update, the table for government core spending as a proportion of GDP was 32.4 % when National left office in 1999 and the ratio then fell when Labour took office, and stayed below previous National government levels for the next eight years, The ratio only surged in the year to June 2009 to 35.5 per cent at a point nearly sixteen months into a very deep recession. English can hardly use that track record as a rationale for cutbacks. Any campaign to do so is primarily an ideological crusade, and not one based on economic principle.”

    His point is, of course, that there is a deliberate hard cop-soft cop determination by Nactional to unwind the gains of lower/middle punters cemented in during the last three parliamentary terms. A jobless recovery is aok by them, in fact, very desirable.

    As for those who make fatuous comparisons of NZ with Australia in coping with recession, the effect on the Lucky Country of the Chinese stock piling of commodities has been well noted. So too has the creeping instability of many currencies & economies in the face of the expanding Chinese bubble. Perhaps there will be significant slippage in the Australian performance over the next year or so.A lot of commentators think so.Nactional will celebrate the closing of the wage gap when that happens, no doubt, and award themselves some more Brownlee points or whatever.

    Marty’s post I think misses the point by taking Farrer too seriously ( only Jim Mora should be allowed to do that): it seems daft to expect overnight outcomes from policy shifts whether in economic or education or crime statistics, but it is not daft to expect transparency and rational discussion about those policies. That degree of honesty and intelligence is precisely what this government is not giving us.

    Nact ministers pretend to offer ‘common sense’ ideas, using down-to-earth rhetoric and aided by superficial ‘five minute wonder’ media bites. The shallowness of their discourse is seriously alarming as is the obvious dimwittedness of a number of them. The style of debate from Nact supporters & trolls helps to sustain the electorate shallowness that supports this government’s poll levels even after a year of their anodyne gestures.
    It just seems silly and unconstructive to play yaaa yaaa ya did/didn’t games with them.

    • Marty G 11.1

      In my own defense, I responded to (and mocked) what Farrar said not because I think he deserves to be taken seriously but because others do take him seriously.

      If the kind of bullsh#t like he wrote in his post is allowed to go unanswered the impressionable and the empty-headed will internalise it as uncontested truth and, next thing you know, Colin Espiner’s repeating it in the Press.

      Farrar’s objective is to create a myth that the recession is Labour’s fault. I’m spiking that.

      It doesn’t always mean the kind of deep analysis you reference in your comment, but it’s a different game (hopefully complimentary) to the one Werewolf and Pundit are playing.

      captcha: reality

      • PT 11.1.1

        you arent spiking it m, you’re doing partisan rant and claptrap. you say the recession started under labour but labour isnt to blame, but recovery started under national yet national is to blame for the recession under labour

        • Rob Carr 11.1.1.1

          Recovery hasn’t happened yet. We have growth true but it is slower than population growth and all of the negative effects of recession e.g. unemployment, crime etc haven’t started going down yet.

        • Ari 11.1.1.2

          And Farrar was not engaging in partisan rants, right? lol. 🙂

          The “recovery” (we’re not actually in that stage yet, as the technical end of the recession just means bosses and investors are no longer losing money, not that the workforce has recovered) under National was significantly slowed down by their regressive tax rejig, and their ludicrous attempt to balance the budget during a recession. I thought I was done whacking people over the head with the example of Herbert Hoover, but you seem to need it.

          Labour had some good starting measures in place to mitigate the recession, and given how exposed both major parties have left our economy, it could have easily been much worse if not for their action.

    • spot 11.2

      “…it seems daft to expect overnight outcomes from policy shifts whether in economic or education or crime statistics…”

      Good point.

      One of the best things to come out of Rudd’s efforts is that “training and skills” package around Green jobs, that at least starts to address the groundwork required for a future in that direction.

      One could probably argue the odds on just how much of the $42b was, in practical effect (1 year into a 3 year spend), creating “Green Jobs” today, but the $100m thus far (and growing, maybe more that I haven’t heard of) on the skills front has got to be a smart move.

      As a side note – in time it’ll be good to see the analysis filter through on both Obama and Rudd packages. Rudd went in hard on the “individual payments” front to shore up the short-term consumer stimulation aspects, so will be interesting to see how the mid-long term investments come through (pay off) in subsequent years growth.

    • sk 11.3

      Galendra, do you have a link for the Rob Campbell piece?

  12. Santi 12

    Farrar roots for the Nats. He’s on the payroll and the equivalent to the cheerleaders of the Left that populate the Standard.

    Same thing, different colour.

  13. While it is certainly not Labour’s fault for the recession they did not take strong enough initial steps to deal with it in my mind. They took a few minor steps when they saw a credit crunch but it seems like for the good 3/4 of a year they remained in office after it started they did not really do a lot in way of a stimulus package.

    National then went and did as they do with most sensible things Labour tries to bring in and cut what Labour was planning to do even more with their recycled stimulus package of preallocated spending…

    I don’t think we will really see National do anything about this unemployment problem and will simply wait and assume the market will provide. Seems stupid of Farrar to lay blame to a previous government when what we need is change now to get those people back into jobs but that doesn’t mean that Labour is blameless.

    Seems quite pointless to compare us to the Australian economy at the moment anyway. We are a farming economy and they are a mining and logging one…we are going to respond very differently to financial crises and they were already doing better than us so they had further to fall. If we really want to catch up with them on something other than unemployment we don’t need “stimulus packages” we need constant support by the government. That is after all what it is there for is it not?

    • So what was it? Did Labour recklessly spend surpluses and employ too many public servants or did it not do enough to stimulate the economy?

      You guys just make it up!!

      • Gitmo 13.1.1

        Fool it’s all rather simple if you’re left the right are to blame and if you’re right the left can never be right .. right ?

        Or to put it another way the right are too blame for the economic downturn in the 90s if you’re left if you’re right the right curtailed the economic downturn of the 90s leaving the left a good economy ….. right?

        If you’re right the left squandered the economic growth of the early 2000s if you’re left they did a brilliant job and the right aren’t doing anything and are to blame for the current crawl out of recession…..right?

        Or perhaps all politicians are a pack of self serving fuckwits ..left or right ?

        • Herodotus 13.1.1.1

          You have summed the entire system very weel here for me !!
          And NZ suffers as a result of who ever is in power.

  14. Descendant Of Smith 14

    In general Labour when times were good paid off debt and put money away for the future cost of NZS. At the same time they increased wages for the lowest paid by lifting the minimum wage. These things all sound good to me.

    Under Labour wages increased, there were less unemployed. and we owed less money. It was quite notable to that many of the remaining long term unemployed lived in rural areas where the economic gains were not as good. In urban areas the numbers tended to churn.

    While tax cuts were an issue my recollection is that Cullen consistently followed Treasury advice as to whether tax cuts were affordable. He was always clear about this.

    (at least up to the last election when they got sucked into offering more than was affordable).

    It seems this steady approach gave much stability and certainty to the country and allowed private enterprise to grow and prosper.

    Certainly they, private enterprise, made plenty of profit during this time and lets face it if you couldn’t make a profit during this period you must have been a pretty crap businessman.

    What is often missing in this debate is how did private enterprise respond during this time.

    It was quite obvious that the property boom was speculative (baby boomers outbidding each other for rental properties) and was going to bust, it continues to be obvious that much of the spending economy is built on the back of baby boomers spending ( two incomes, no mortgage and no kids) and that this spending will reduce as these people move onto NZS and retire. It is quite obvious that the costs for caring for these people and the cost of their NZS will be large and we do not have sufficient cash reserves to pay for this.

    How many businesses put money away for when times were bad and how many just spent willy nilly, went on an expansionist policy, threw big parties, brought corporate boxes, took on more debt. Oh lots and now some are are struggling.

    While lots of businesses did pay off debt and put reserves away many did not.

    Businesses aren’t any different really than people – cause they are run by people. Some people paid off debt and are sitting pretty now, others spent and took on more debt and are struggling.

    Overall I thought Labour managed the economy pretty well.

    Of course my view is skewed by thinking that having low unemployment and people working in meaningful jobs as much more important than compnaies paying low wages and making bigger profits – but there you go.

  15. Herodotus 15

    Also govt increasing indirect and direct taxes from all of society hurts the economy. Perhaps the price gouging from power coy, poor reserve bank KPI (IAs they only have one !!) so as to increase dividends to the govt does not hurt or tax creep. Paying off govt debt and allowing total debt to rise dramatically also does not help.
    Cullen being an historian did enable NZ not to repeat many mistakes from the past, but he did not have the vision to capitalise on what the last 4-5 years of the labour govt had the potential to achieve. We also need a 1/2 glass full not just 1/2 empty Min of Fin.
    Also in mid 2004 or 5 we missed being way ahead of the pack by escaping a tech recession by 0.1% as that was the growth of a quarter that followed the previous -ve qtrs GDP decrease.

  16. tsmithfield 16

    Australia has been exporting commodities to an insatiable China. This has been keeping the Australian economy boyant.

    China is now looking at tightening the economy to avoid dangerous developing bubbles in their economy. So, I expect that Australia might experience a delayed reaction to the world recession once Chinese demand for commodities drops off dramatically.

    • Zaphod Beeblebrox 16.1

      There is alot more to the Australian economy than being a raw material exporter. Thats the major difference between us and them. About time Key came to terms with this.

      • tsmithfield 16.1.1

        True. I agree that Australia has put a lot more into stimulus to keep their economy going. Whether that will be the best in the long run time will tell. Eventually they will have to start withdrawing stimulus to limit inflation.
        They already have started raising interest rates. We haven’t got to that point yet, so we haven’t got the hit on our economy through higher interest rates yet.

        • Zaphod Beeblebrox 16.1.1.1

          My point would be that a strong domestic economy is as important as being a major exporter. Key/English need to have a think about how they want to achieve this. It doesn’t just happen.

          • Herodotus 16.1.1.1.1

            Under the Lab govt a major objective was to be within the top 1/2 of the OECD we went backwards. This is one indicator that Lab did not push the economy with anything tanaglable just riding the success that we achieved . There was no real policy how we were going to get to this destination. You could say that NZ achieves its success/failure irespective whatthe govt does !!!!!

            • Descendant Of Smith 16.1.1.1.1.1

              “There was no real policy how we were going to get to this destination.”

              Reduce government debt, make provision for older people, increase wages at the bottom, make provision for future NZS costs, provide assistance to families through WFF ( which in my view is a subsidy to employers who as a result didn’t have to put up with any where like the industrial unrest or wage pressures that they might have had to as a result) all seemed like clear policies to me aimed at increasing our performance in many of the areas measured.

              The reduction in child poverty through this time is reasonably well documented.

              While you might disagree on the policies I always felt Labour was quite clear on their overall strategy.

              I’m pretty confused about much of National’s.

              For instance they talk about closing the wage gap with Australia – how are they going to achieve this and on what basis. Actual wages which would be silly given the size of our economy and the higher cost of living in Australia or relatively with adjustment for the cost of living. differences. I don’t get any sense employers are looking to increase wages so how is this going to be done? Are they going to reduce corporate tax and make it compulsory for those tax cuts to be passed on to employees? Are they going to support companies to invest in value added products that provide a greater rate of return? Just what is their strategy?

              • Herodotus

                So as a platform for the 99 election and 9 years later we proceed to go in reverse. So Labour failed in this case, not to say Nats will succeed. regarding Govt debt all that happened with increased taxation was a transferral of debt from govt to private and then some extra added on. Refer to NZ debt increase over the last 20 years or so,.
                The Tasman sea gap will never be crossed unless there is emmigration. It is a great catch phase but like the Labour moving up the OCED ranking is as realistic as faireyland or the toothfairy

              • Pascal's bookie

                Herodotus.

                regarding Govt debt all that happened with increased taxation was a transferral of debt from govt to private and then some extra added on.

                What do you mean by this? Private sector debt is just that. Are you saying that the govt should have restricted the private sector’s ability to borrow?

                The fact is that people were borrowing as much as they could, or as much as they felt comfortable with. They were not, in any significant way, borrowing for the necessities of life. Rather it was to sell each other houses and buy consumer goods on hp.

                It would seem to me that this is unrelated to the government paying back debt. If the government had not paid back that debt, I see no reason to believe that the private sector would have thus borrowed less. If you have any reasons to suspect this I would be genuinely interested in hearing them

                In fact, I suspect that if instead of paying back debt, the government had cut personal taxes, then there would have been even more private sector debt as people would have felt comfortable with even larger mortgages. This would be on top of the extra government debt we would be carrying.

              • Herodotus

                PB
                NZ debt is about 1.4x GDP or $200b. Govt debt goes down yet tax creep accounted for over $10b & power price scouging $4b over lab term add in increases in petrol taxes and others. In my simple way I could have eliminted ALL govt debt.. how just ad another tax, this increase is compensated in some way by increases in other forms of debt, also local body debt Rodney is having to sell of land to cover the rise of their debt $200m, Man City changed its Fin debt policy 4 years ago within their 10 year plan to increase its debt. It is still debt that the country owes, and with local bodies still a semi govt/state sector debt.
                The govt allowed the reserve bank to change banks debt ratios and how their debt could be sourced, by changing banks ratios we could have min the amount of debt individuals could have incurred.

            • Descendant Of Smith 16.1.1.1.1.2

              I didn’t say they succeeded but I did think their strategy was clear and some things did improve.

              I also don’t believe any government should take responsibility for private debt. The fact that people and businesses chose to live beyond their means is their own fault.

              What did you expect the government to do – go back to Muldoon’s time and limit the amount of money banks could lend. Let’s face it many people got greedy and business people encouraged this. After all their were profits to be made.

              Of course they could impose property or death taxes which may reduce the speculative property incomes but the property market will self correct as the baby boomers retire and don’t need their three and four bedroom houses. If they keep em then it’ll correct when they all die – sometime over the next 30 years.

  17. Sam 17

    What is it about Tories and their passionate desire to re-write history?

    • BLiP 17.1

      They genuinely believe that the people they represent are too stupid to remember for themselves the actual history. Certainly works for their voters so, I guess, they think it will work for everyone.

      • Herodotus 17.1.1

        That is why History should still be a core subject in school, to teach a resembalance of what happened and more importantly why. From reading many blogs all we get is my side is pure and has never done anything wrong and the others are all bad. Especially with all the spin that is now applied to any subject matter. e.g Labour did not do all the evil things of the 84-90 period that man Roger Douglaus did!

        • Sam 17.1.1.1

          I agree. In fact I’d like to see the entire topic expanded into a kind of “Civic’ education in which children are taught an accurate history of New Zealand (none of this Maori ate the Moriori shit, although thankfully that’s far, far less prevalent these days), ranging from the birth of New Zealand to important contemporary developments (the reforms of the 80s and 90s in particular), as well as building an understanding of how the country operates. What parliament is and how it works, why and how we hold elections, and that sort of thing.

          As they say, knowledge is fatal to prejudice and so many people I know and meet these days have a flimsy, if not entirely absent, understanding of both our history and how the country works.

          Wa-hay, off topic here we go! 😛

  18. Sam 18

    I agree. In fact I’d like to see the entire topic expanded into a kind of “Civic” education in which children are taught an accurate history of New Zealand (none of this Maori ate the Moriori shit, although thankfully that’s far, far less prevalent these days), ranging from the birth of New Zealand to important contemporary developments (the reforms of the 80s and 90s in particular), as well as building an understanding of how the country operates. What parliament is and how it works, why and how we hold elections, and that sort of thing.

    As they say, knowledge is fatal to prejudice and so many people I know and meet these days have a flimsy, if not entirely absent, understanding of both our history and how the country works.

    Wa-hay, off topic here we go! 😛

  19. randal 19

    farouk and the woodlouse know all the reasons you have adduced about the comparison of our economy with australia.
    however they bet on the rest of us kneejerking it and while all this is going on then they can have a ball bashing people that cant fight back.
    like medicine there is a secondary benfit from having an illness and these times allow for the authoritarian aspects of owners and bosses to get free play.

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