National still seem to be getting a lot of cover for their economic mismanagement from the Global Financial Crisis way back in 2007-2008. But New Zealand’s failure to be “roaring out of recession”, as John Key promised, is no longer tied to the GFC. It’s Bill English and National’s economic policies that mean that the government deficit is pushing the limits with no reward for average kiwis.
We appear to be headed to a double-dip recession – we’ll find out on Thursday if it starts in the second half of this year, or spanning into 2011. Meanwhile Australia are roaring out of recession, and the promise, nay, the fundamental purpose of this government1, for our wages to catch up with Aussie is slipping ever faster and further away.
If Australia can do it, why can’t we? People look to Greece and Ireland and say “at least we’re not as bad as them” – but they were countries that had, respectively: overspent previously, and with massive corruption problems; or had had to bail out their massive banks after making themselves a global financial hub, much like John Key wants here. Their governments’ cupboards are well and truly bare.
Ours weren’t. Bill English admitted the great state of the books when he came into government. Cullen’s 9 prudent years of surplus and resistance to the right’s nagging for tax-cuts had left the country in a great position to weather the recession, with zero net crown debt.
$14 billion spent on National’s tax cuts later and the government’s cupboard is starting to get awfully bare, but we’re not recovering from recession…
Tax cuts for the rich do not stimulate the economy. They allow the rich to pay off their debts – as we all have far too much personal debt in New Zealand – but they do nothing for the recovery.
A Labour-led government would instead have had a large stimulus package, much like what worked for Australia. The alternative was, that instead of paying off the rich’s debt, you kick off government projects that need doing, and provide work for those who are struggling to find it. John Key’s much-maligned Cycleway isn’t wrong in principle, just scale: it provides merely a handful of jobs, where tens of thousands have been lost under this government.
And those people on benefits cost money. The right want to cut benefits, but the most effective way to do that is to provide people with jobs. The unemployed want to work, they want to provide for their families. Housing New Zealand has a shortage of houses, and we have a surplus of builders – get them building! Auckland’s public transport system needs major improvements – now’s the time! North Shore and other hospitals need expansion – expand them! There are many projects that need doing – not make-work schemes, but useful expansions of the economy that could be quickly started.
All those extra employed people wouldn’t be on benefits. They spend their pay packets at shops, providing more work for others, who in turn spend their additional money – creating jobs and all generating extra GST, business and personal tax… That’s how a government should spend $14 billion to get an economy roaring out of recession.
Instead the Key-Hide government have given us tax cuts for the rich and an economy that’s whimpering.
1 At least that’s what John Key told us.