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