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Ministerial review: the economy

Written By: - Date published: 10:37 am, December 27th, 2010 - 36 comments
Categories: Economy, national/act government - Tags: , ,

The idea of this little series of posts is to look at the major areas of government activity and have an objective look at how National is doing – both against their own promises and things that we hold important. Let’s start with the economy, the direct responsibility of Finance Minister Bill English and Economic Development Minister Gerry Brownlee.

Pre-election promises:

‘we don’t have a debt problem, we have a growth problem’

‘We will close the gap with Australia’

‘tax cuts will get us growing’

By the numbers:

GDP

GDP per capita, September 2008 quarter: $10,885
GDP per capita, September 2010 quarter: $10,612

Change in GDP per capita since September 2008, the quarter before National came to power: -2.5%
Change in GDP per capita since September 2008, in Australia: -0.4%

Employment

Number of employed people in September 2008: 2,193,000
Number of employed people in September 2010: 2,193,000

Jobless plus underemployed, Sept 2008: 261,100
Jobless plus underemployed, Sept 2010: 353,500

Unemployment rate: 6.4%
Unemployment rate, Australia: 5.2%

Wages

Weekly wage income per member of the labour-force, Sept 08: $554
Weekly wage income per member of the labour-force, Sept 08: $553

Australia v New Zealand average weekly wage gap, Sept 08: 24.5%
Australia v New Zealand average weekly wage gap, Sept 10: 26%

Economic status

Back into recession. New Zealand is the first country in the developed world to start a double-dip.

Ministers’ performance

As Economic Development Minister, Brownlee’s central responsibility is to create policy that sees the government support the development of industries that will create jobs and wealth. He’s failed. Narrowly-mindedly obsessed with mining and oil drilling, Brownlee has let everything else go to pot. There has been bugger all from Brownlee designed to save Kiwi jobs and create new ones during the Great Recession. Not only that, he’s failed to win the argument for more mining, while the exploratory oil wells keep coming up dry.

Brownlee’s complete failure in his role of Economic Development Minister has been somewhat overshadowed by his inadvertent role as disaster minister. Because he lives in Christchurch, because the film grants are administered by MED, and because he’s mining also comes under MED’s purview, he became the lead minister for the earthquake, the Hobbit fiasco, and the Pike River tragedy. Of course, his performance in handling those disasters has been as abysmal as his economic development performance. Christchurch is being allowed to waste away slowly. The Hobbit was a rip-off, and Brownlee knew it. The Pike River disaster itself was handled by the professionals; the role of ministers, apart from providing leadership, is to form policy in the aftermath – Brownlee has yet to provide a West Coast recovery package, his only policy ideas being the ludicrous notion of open-casting the mine.

English has a hell of a lot of experience with recessions. He was a Treasury official when the neoliberal policies Treasury campaigned for caused the long recession from 1988-1992. He was Finance Minister then Treasurer during the tail-end of the Asian Crisis and Finance Minister again for the last few months of the first round of the Great Recession. Now, he has earned his nickname Double Dipton twice over by being the first Finance Minister in the developed world to watch his country re-enter recession.

And ‘watch’ is the right word. English conveys the impression that he is an observer of events, instead of the most powerful economic figure in the land. He talks and talks about the need for New Zealand to improve its savings record but guts Kiwisaver and the Cullen Fund while borrowing billions to give tax cuts to the rich. He says we have to have an export-led recovery while allowing SOEs to undermine manufacturing here and, instead, import capital goods from abroad and giving tax cuts to the wealthy who are the most likely to spend that money on luxury imports or overseas trips. He says we need better value for money from our public assets but insists they operate on a purely commercial basis without regard for the wider economic impacts of their actions. He plays statistical games to pretend that wages aren’t falling, asking the New Zealand public to believe him rather than the reality they experience every time they open their pay packet or go to the supermarket.

Next year, he will be looking at big spending cuts to fill the hols in the government books that his tax cuts and do-nothing economic policy have created.

Towards the end of its tenure, the Fifth Labour Government was attacked as being ‘bereft of ideas’. To an extent, that was true. What’s jaw-dropping is that their critics are bereft of ideas after just two years. More mining, less tax, and tinkering with the RMA – that seems to be as far as National’s economic thinking got in nine years of opposition. It has been revealed to be a completely inadequate vision that couldn’t have delivered in the best of times, let alone in the peak oil world we’re now facing.

36 comments on “Ministerial review: the economy ”

  1. lprent 1

    /* anti-conspiracy theorist mode on */

    Before anyone starts going legal on me, this post and the others in this series are cooperative efforts by a number of the authors drawing on various posts. That is why “The Standard” has been used. It is an editorial reflecting a number of viewpoints.

    /* anti-conspiracy theorist mode off */

  2. NZGroover 2

    “an objective look at how National is doing” C’mon guys!? Seriously………The Standard having an objective look at National. That’s almost like the Nazi’s having an objective look at the Jews.

    • lprent 2.1

      Perhaps you’d care to state what is wrong in the post rather than making inane blanket statements. Most likely you cannot argue effectively against the post so you use this rather pathetic comparison instead.

      I very nearly threw this comment into spam. But then I thought it’d be better for people to compare a well argued post against a troll jerking off over a keyboard and immediately going into godwin style arguments because they’re too stupid to be able to argue anything else.

      • Craig GlenEden 2.1.1

        You should have gone with your gut feeling Iprent.

        ANTI-spam word “feedback”

      • NZGroover 2.1.2

        I appear to have hit a raw nerve, but I’m not trolling, I’m serious. As my evidence I submit all the posts on The Standard. I estimate 90%+ are biased towards the left, so to say you’re going to be objective about a right leaning government is mischievous at best. Please note my comments don’t get personal, I would appreciate the same courtesy.

        [lprent: My god – don’t tell me you didn’t realize this was a left-leaning site. I suggest that you read the about immediately.

        As for getting ‘personal’ – if you act like a fuckwit, then I will treat you like one. There is no better sign of self-involved wanker (often called ACToid’s) than jerking off than their first message on a post by invoking Godwins law. If you don’t understand why that is a sign of an idiot troll then I suggest you research it so you don’t make the same mistake again when you want to be ‘serious’.

        Anyway, bug out to ponder what you’ve learnt on blog protocols and don’t come back to the site for two weeks. This will allow the adults to discuss the topic without your juvenile ‘input’. ]

        • bbfloyd 2.1.2.1

          you’re right NZGroover, personalities shouldn’t be the issue. so i’ll give you my impersonal opinion of your original post… it was a pile of rubbish. quite literally a very weak attempt to compare the comments on this site to nazis.

          apart from demonstrating an alarming lack of depth in the thinking behind the comment, it shows a lack of realistic appraisal of what are the actual figures used in the original review. these are figures available to anyone who cares to look, by the way. not just numbers plucked out of the fevered minds of “rabid lefty agitators”.

          if you wish to take this personally, then good luck in your next adventure here in reality land.

        • Draco T Bastard 2.1.2.2

          Reality has a radical left bias so an objective view will, as a matter of fact, be left leaning.

        • Colonial Viper 2.1.2.3

          Interesting – NZgroover has not mentioned any specific passage he thinks is biased. Just a lot of fluster

    • Draco T Bastard 2.2

      Well, going by your comment, it’s far more likely that the authors at the Standard will have an objective view of National than you will.

    • Daveosaurus 2.3

      First post by a non-moderator and Godwin’s law has already been achieved. It looks like someone is desperate to shut down debate on this topic.

    • Eddie 2.4

      objective in the sense that its using statistics that are inarguable.

      The fact that you haven’t argued with the numbers just proves the point.

      • mcflock 2.4.1

        Well, if there is a rational argument against the unemployment or GDP figures, NZGroover could have provided it.

        So far all I’ve seen is arguments about bias, rather than disputation of fact.

    • Frank Macskasy 2.5

      Iprent makes a fair point; NZGroover attacks the messenger – but tellingly cannot address the points raised.

      Anti-spam word: cuts

  3. orange whip? 3

    it’s true that “more mining, less tax, and tinkering with the rma” doesn’t sound like much of a plan.

    but remember, for nine years the only vision they expressed was “less tax, tinkering with the rma, and kicking the maaaries” so not bad all things considered.

  4. M 4

    lprent

    Am I not getting something with the above figures for employed people in September 2008 and September 2010 because they are the same and I would have thought the September 2010 for jobless would be higher and not the same given that unemployment has increased or is this covered by the jobless and underemployed figures?

    Apologies in advance if the holidays are making me obtuse.

  5. nilats 5

    Maybe the decline in the NZ productive sector and continual growth in govt sector is a contributor to this. This happened around 2005 in the productive sector. We cannot grow an economy when political parties are worried about social factors over economic ones in the majority of cases.
    My customers in the industrial sector are quiet now, the only ones doing ok are the ones with overseas contracts like Skellerup, ANZ Eng, specialist electrical companies. Smaller companies that used to take the slack are struggling and on a cash sale basis as chance of default is always rising. The domestic economy is dying, been a trend over the past 4-6 years.
    This situation has been with both Nat/Lab in power and will not improve in the short term, no matter who is elected in 2011.

    • Colonial Viper 5.1

      and continual growth in govt sector

      Nope. This is a right wing meme and as far as i can see it is false. The NZ productive sector has declined however, even as our population has increased. Further if the private sector is unable or unwilling to create jobs or aggregate demand in the economy, then it is up to the public sector to do what needs to be done.

      We cannot grow an economy when political parties are worried about social factors over economic ones

      Who cares about growing an economy when only the few benefit from it, and everyone else gets minimum wage?

      The domestic economy is dying, been a trend over the past 4-6 years.

      This must have been the reason for National to ship $29M worth of train orders to china, instead of building them here, with NZ workers.What do your technical and engineering customers think about that.decision?*

      *PS I already know, Hillside and all their suppliers and business partners, they all think it is shit.

      • Jum 5.1.1

        JKeyll made a deal with China for election funding and the betrayal of our coach builders was the price; am I right?

    • Draco T Bastard 5.2

      The domestic economy is dying, been a trend over the past 4-6 years.

      No, it’s been a trend since 1984 when the first Act government brought in the neo-liberal reforms. Same thing has happened in the US and the UK where, to try and maintain an illusion of growth, they went whole hog financialisation. This, of course, has destroyed the economy of the US, the UK, Ireland and done some extreme damage to ours.

  6. Carol 6

    And yet both Stuff and Matt McCarten have praised Brownlee’s performance this year…?!! Is it that in this era of managerial politics, even McCarten praises tight management over outcomes? Has McCarten forgotten the plan to mine schedule 4 land, or looked lately at how things are going in Christchurch, or Pike River?

  7. Good post and one that deserves to be bookmarked and trumpeted continuously until next election day. I am looking forward to the rest.

    NZGroover you will go much further if you address the contents of the post rather than trying to divert. You give the appearance of being a troll

    Capcha figures …

  8. nilats 8

    Re Railways – if Cullen had not brought Toll then no one would have cared where Toll got their wagons from. Today\’s govt getting the blame for the total mis allocation of funds Cullen made. I know local suppliers are not happy, I know of one business that could supply quality Euro/USA parts but they would have lost out to Chinese made parts that other tendering firms were using in their calculations. The tender is based more on cost than value.

    \’Further if the private sector is unable or unwilling to create jobs or aggregate demand in the economy, then it is up to the public sector to do what needs to be done.\’ So the state is a wealth creator, LMAO.

    • mcflock 8.1

      Well, Hillside would have cared. And so would much of Dunedin.

      But in general people would have been amazed at any investment in rail infrastructure, rather than just continuing the corporate practise of allowing it to rust away because they were only interested in short term profits for their share price.

    • Colonial Viper 8.2

      So the state is a wealth creator, LMAO.

      It is indeed. I’ll put it another way.

      When the private sector is not willing to do necessary work, to create the necessary jobs, to pay the necessary pay, to take the necessary risks, then the Government should intervene and make it so. Keep people in work, add value to infrastructure and common wealth, boost aggregate demand so that private firms have orders on hand.

      Now if you would kindly address the points I raised – if you can.

      Or else be a good little RWNJ and realise that the Modern Left has a superior grasp of the economic cycle.

  9. Jim Nald 9

    Our Boxing Day social discussions centred on Key, English & Co being devious [unpublishable word].
    Some in our gathering were solid Nat voters … o … O

  10. Deadly_NZ 10

    Yep the Private sector is not willing to do anything except take and take, and the government couldn’t give a flying fark at all the people it has put into dire straits.

    So at the end of the day it really comes down to the fact of who has more voices in the democratic process we still enjoy (until the Nacts figure a way to take it away under some pretence or other).
    So we have to hope that alot of the people who voted for this smiley, wavey and vacuous team have finally come to their senses and vote said smiley, wavy, incompetants out of the treasury benches.. If not I fear for alot of ‘ordinary’ kiwi’s

  11. Frank Macskasy 11

    It doesn’t help when Trevor Mallard scores an “own goal” with this story he has released to the media…

    “Labour now Department of Mucking About
    TOM HUNT – The Dominion Post

    Public servants illicitly downloaded thousands of applications – including shoot-’em-up games – on to Labour Department work computers, placing its IT system in danger.

    The breaches, revealed in a email obtained by The Dominion Post, could bring down computer systems and cause damage costing “hundreds of thousands” of dollars to fix, Labour MP Trevor Mallard said.

    It also indicated staff were playing when they should be working. “You shouldn’t have time to play these games.” The email sent to Labour Department staff this month from deputy chief executive (business service group) Craig Owen said more than 2000 “unsupported, unlicensed and unauthorised” software applications had been loaded on to the department’s workstations. ”

    Source: http://www.stuff.co.nz/national/politics/4504184/Labour-now-Department-of-Mucking-About

    I don’t know what went through Mallard’s mind when he released this info to the media, but it’s not hard to see the implications of this situation.

    1. It reinforces stereotypes of “Gliding On”, lazy civil servants.

    2. It gives justification to National’s cutting of the civil service, with thousands losing their jobs.

    3. It gives credence to National’s self-created image as a “prudent manager” of our taxes.

    Nice one, Trevor.

    Please – stop trying to help us.

  12. randal 12

    national claims to be the party of business.
    well where is the new business then?

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    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Prime Minister’s update on the 3 September Auckland terrorist attack
    ***Check against delivery*** I want to begin with an update on the status of our victims from yesterday’s attack. We’re aware now that there were a total of seven people injured. There are five people in hospital, three are in a critical condition. The remaining victims have been treated and are ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Tonga’s language week goes virtual 
    This year’s Tonga Language week is going to be a virtual affair because of the nationwide lockdowns for Covid 19, said the Minister for Pacific Peoples Aupito William Sio. “We have been working closely with the Tongan community ahead of Uike Lea Faka-Tonga, and they have selected the theme Fakakoloa ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Resurgence Support Payment amended to include new businesses
    The Government’s Resurgence Support Payment (RSP) has been updated to better support newly established businesses. The RSP is a one-off payment that helps businesses with costs like rent or fixed costs during higher alert levels. When this COVID-19 response scheme was first established last year the criteria was included that ...
    BeehiveBy beehive.govt.nz
    2 weeks ago