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National’s hoax on unemployed workers

Written By: - Date published: 11:32 am, November 12th, 2007 - 41 comments
Categories: economy, workers' rights - Tags: ,

unemploy small

Last week Stats NZ announced unemployment had dropped to a record low of just 3.5%, after reaching double-digit figures under National in the 90s.

That reminded me of an old press release from Bill English just before the 1999 election where he called unemployment in the range of 3% “a hoax” and suggested 6% might be a more realistic target:

“Labour’s policies will increases taxes, give unions more power in the workplace, make it harder for employers to give young people a chance at a job, and impose extra costs on business. These policies will not help create one job.

“It is business which creates jobs, not the Government. The Government’s job is to create the right conditions for growth. We must support business with lower costs and flexible labour market policies, and do our bit by keeping Government spending down.

“The recent pre-election opening of the books showed that if we continue with National’s policies over the next three years we will be able to create another 115,000 jobs and bring unemployment under 6%. These are realistic targets.

“Labour’s claim that it can bring the unemployment rate down to 3% is also a hoax on all the people who think if they voted Labour they would get a job.

Sound familiar? National hasn’t changed its policies or its rhetoric one bit from the 1990s. There are no fresh ideas here, just a return to the economic policies of low wages and double-digit unemployment. The hoax was always National’s and it’s being played out on ordinary working families. The question is, are we gullible enough to let them do it again?

41 comments on “National’s hoax on unemployed workers ”

  1. Santa Claws 1

    Since you have 8 year old press releases hanging around Tane, perhaps you could look up and post a few extracts on Labour’s policy on Tax Cuts prior to this years conference.

    I see the fear-mongering and demonisation effort is moving into 3rd gear already.

  2. Tane 2

    Santa, nice try at interference, but that meme died here when your side’s dishonesty was exposed:

    Quoting out of context

    So how those unemployment stats looking? Which family on your street are you going to throw onto a benefit to pay for those inflationary tax cuts?

  3. dancer 3

    fascinating to see those trends – and i bet Bill is applauding from the sidelines these days (no actually i do mean that – he just won’t be telling anyone that it’s what he really thinks).

    i remember in the 90s the frequent headlines of job losses and redundancies – especially in smaller centres. having the security of a job (and a degree of freedom to move between jobs) is a luxury we shouldn’t take for granted.

  4. Billy 4

    Tane: Which family on your street are you going to throw onto a benefit to pay for those inflationary tax cuts?

    I am confused. I thought you guys were for tax cuts now.

  5. Tane 5

    Billy, subtlety is lost on you mate.

  6. Santa Claws 6

    Tane, what is the point of dredging up 8 year old press releases on such minor points. If you want to bang on about employment, then do it directly. Show me the press release from National saying that they want higher unemployment now, and you might have a point.

    Labour has campaigned for 8 years on not reducing taxes. Making a flip flop now is relevant. Show me the press release from National saying that they want higher unemployment now, and you might have a point.

    Anyway how about Labour’s real hoax on Workers:

    “The Government today introduced legislation to increase the top personal income tax rate to 39 percent for income over $60,000 from April 1, next year. “The increase will affect only about 5 percent of the workforce, those who can most afford to contribute a bit more to the country’s well-being,” Finance and Revenue Minister Michael Cullen said”

    What % is over the threshold now, Tane?

    I’m afraid I can’t understand your point on tax cuts – are you suggesting that the army of Labour functionaries employed in govt departments will be turfed out to pay for tax cuts? Unfortunately leeches of that sort are unlikely to end up on the unemployment benfit.

    Did you miss the statements from Evan Thornley (who your acolytes have promoted on this website, and who spoke at the Labour conference) on how stupid it is to pay for capital improvements out of taxation revenue?

  7. Tane 7

    Santa, I’ve gotta give it to you. When it comes to running interference you do a bang-up job. We’ve talked about tax elsewhere, and we’ll no doubt do so in future too. We can chat about it then. How are those unemployment stats looking? Do you think 6% is a more realistic target? Does it worry you that National are still promoting the same policies with the same faces that led to double digit unemployment?

  8. Santa Claws 8

    Tane, as usual you pick the stats that show the best picture – haven’t forgotten that Twain quote yest have you?

    Is the % unemployed the best measure? Sure it gives a nice headline when its moving the right way. However it can be dishonest, just like quoting the overall crime rate hides the dramatic increase in violent crime under Labour.

    Here’s some more from the stats commentary

    “The number of people in the labour force decreased by 8,000 (0.4 percent) to 2,229,000 in the September 2007 quarter, while the working-age population grew by 7,400 (0.2 percent). This resulted in a drop of 0.5 percentage points in the labour force participation rate to 68.3 percent. The female participation rate dropped 0.9 percentage points to 61.2 percent, while the male participation rate was unchanged at 75.7 percent. The number of people not in the labour force grew strongly by 18,000 (1.8 percent) in the September 2007 quarter, with the majority of growth in this category driven by females.”

    So, you are saying its a good thing that less people are working in NZ?

    Lets note quote 1999 policy from National as its 8 years ago – surely you realise that. Do try and at least quote 2005 policy dear boy.

  9. Tane 9

    Santa, percentage is one measure. I’m happy to look at others. Participation rates still show a far better picture than under National.

    But that’s irrelevant for the purposes of our conversation, because your mate Angry Bill seemed to think percentage was a good enough measure to do a press release on.

    The point with the press release is to show that English had exactly the same policies eight years ago and he was proven wrong. He now wants to inflict those same policies on NZ again. Have a read through again – you could be reading a press release from this morning for all his ideas have changed over time. Does this not concern you?

  10. Sam Dixon 10

    Santa Claws – when you try to spin publically avialable stats, its never going to work. The labour force participation rate dipped last quarter after strong growth the quarter before, its just normal statistical variance.

    You have to look at trends not datum points – and labour force participation is clearly up under Labour – and I know you know that because the figures were right there in the report you just quoted.

    National’s policies were bad for employment, Labour’s are not. In fact, Labour has been so successful at geting people into work that tax has grown and benefit expenditure has dropped sufficently for the Government to afford both major new spending in health, education, infrastructure etc, and across the board tax cuts, all while running a surplus and decreasinf our foreign debt.

  11. Billy 11

    I agree that trends are the most imprtoant thing. Your graph shows that unemployment was dropping under National.

    Which brilliant Labour policy was it which led to our strongest commodity prices for a generation?

  12. Santa Claws 12

    Sambo

    How about you look up the total jobs added under National, and the same figure under Labour?

    Tane – so you are saying that it isn’t business where those new jobs are, but government work? That seems to be your claim, since business obviuosly has nothing to with with improving the unemlpoyment rate??

  13. Matthew Pilott 13

    Billy, if you account for inflation commodity prices aren’t anything special. Or are you talking milkfat production (that’s the only commodity price that’s really shot up) – that was more Fonterra and a tight world market than Labour, but if you want to give them the credit be my guest.

    Oh and if you understand trends, or claim to, I won’t need to elucidate upon the trend of consistently lower unemployment under Labour, you’ll have already got it figured out for yourself.

  14. Tane 14

    Tane – so you are saying that it isn’t business where those new jobs are, but government work? That seems to be your claim, since business obviuosly has nothing to with with improving the unemlpoyment rate??

    Shit, desperation Santy. Clearly jobs reside at businesses. That’s not being argued. But whether jobs are created has a lot to do with a government’s policies. Labour has implemented policies that promote employment. National did not. It’s pretty simple mate.

  15. Billy 15

    “Labour has implemented policies that promote employment.”

    Such as driving all our skilled workers to Australia.

  16. Tane 16

    No Billy, I think you’ll find that’s the wage gap created by National’s Employment Contracts Act.

    Have a look over here:

    National: it’s not worth the pay cut

    It’s not Joanna Average, but the figures on this one are actually correct.

    And before you go arguing that we’re ‘overtaxed’, have a look at this one as well:

    Overtaxed?

  17. Santa Claws 17

    “Labour has implemented policies that promote employment. National did not. It’s pretty simple mate.”

    So, the drop from 11% to 6% was nothing to do with the National govt of the time, but the drop from 6% to 3.5% is all due to Labour’s policies?

    Pull the other one Tane.

  18. Tane 18

    Santa, the Nats went from 8.5 to just over 6% in their nine years in office. Along the way they let unemployment get to more than 11%, with all the social cost that brings. At the end of it all, 6% unemployment was the best they could imagine – a “realistic target”, Bill said. Getting unemployment down to the 3% range was “a hoax”.

    But it’s been done, and we’re as near to full employment as you can get in an economy where at least 2% will be transitioning between jobs at any one time.

    Of course there are challenges such as underemployment and low pay that are still to be dealt with, the fact remains that National has failed on unemployment, and Labour’s policies have delivered. I know it hurts bro, but learn to deal with it.

  19. Policy Parrot 19

    For Santa Claws, all his Christmases have come at once, with the Herald now tying the National Party banner to its flagmast.

    However, Santa, as you will remember, is simply a creation of the big corporates – Coca Cola – I believe? – and when examined as such, it is not hard to understand why he speaks as he does…

    I’d certainly have second thoughts putting one of my children on his lap…

  20. Santa Claws 20

    Tane – its good that you confirm that National was just as good as Labour in cutting unemployment – an overall drop of 2.5% in both cases.

    Congratulations on proving my point.

    In fact, you could say that National probably did the better job, turning around an increasing trend to a decreasing trend. That’s got be harder.

    Parrot, if you are waiting for Tane to post on the EFB, I think you’ll be waiting a long time.

  21. Matthew Pilott 21

    Claws – brilliant. You almost managed to make it sould good, being in charge as unemployment reached 11%. Only a brainwashed Tory could spin that!

    Having an overall drop of 2.5% is just as easy starting from 8.5% as it is from 6%, right…?

    It’s not like getting rid of the harder, longer-term cases of unemployment is tough, when National had more that a tenth of the workforce unemployed. Diminishing returns Claws? What a cock-up National are, when they’re meant to be driving employment through business!

    Nice try. You could also try some year 9 math and work out for yourself that average unemployment was about 7.5% under National, and 4% under Labour. Bit too much thought required though, aye champ?

    Congratulations on demonstrating just how worthless your ‘points’ are.

  22. Santa Claws 22

    Haha Matthew – off track again. Didn’t you notice that unemployemnt started rising under Labour, and it took National to get it under control. Credit is obviously due to the current Labour government for not making things worse, and continuing to support the trend downwards.

    Its so good to see that you passed year 9 math. Of course anyone with an IQ above 27 could have seen that the average was higher under National. Are you colourblind or did you just not look at Tane’s pretty picture?

    Here’s another way of looking at it.

    In the Dec 1992 quarter (the worst in the chart) the total unemployment was 175,600.

    In the Dec 1999 quarter it had dropped to 116,900, a decrease of 58,700.

    The latest quarter total is 77,200, but the lowest it has been under Labour is 75,000 back in Dec 04. This was a reduction of 41,900.

    So, who has cut unemployment the most?

  23. Tane,

    Given inflation has been running at twice the rate of the 1990s under this Labour Government, and that every credible economic commentator says that out-of-control government spending is a key factor in inflation, it’s telling that you suddenly become obsessed with inflation and tax cuts.

    Yes, unemployment has fallen under Labour. It helps to achieve this by hiring tens of thousands more civil servants. Hell, just last year the IRD hired twenty six people to work on “internal communications”.

    Meanwhile, the sickness and invalid’s beneficiary numbers have risen by 50% under Labour. Despite spending 100% more on our health system, half as many more people are chronically ill than before.

    You’re a hollow man, Tane.

  24. Sam Dixon 24

    Santy – under National unemployment rose to record highs then dropped to just high, then rose again and fell a bit. Labour came in and rapidly unemployment dropped to record lows and stayed there. All your number games around the edges can’t hide that fact.

    (by the way, inyour trawls through the Stats numbers did you notice what’s happened to underemployment since National got turfed out?)

    I had to ask someone what the ‘Sambo’ thing is a reference to – it turns out your a racist too, hmm, I which I could say I was surprised.

    Tane – an interesting number to look at might be long-term unemployed – I think MSD does numbers on how many have been on the UB for more than a year and 3 years – as you say there is a pracitical floor to unemployment becuase of churn in the economy – that churn unemployment is impossible to get rid of but should mostly only generate short term unemployment, long-term unemployment might be seen as unemployment above this inherent minimum ie. all unemployment that good government and good economic conditions canhope to eliminate (i’m pretty sure I remember Burton saying it had gone down 92% under Labour)

  25. Sam,

    Just what economic crises has this Labour Government had to deal with? Let’s see. Oh, yes, the Asian financial crisis. Oh, no, that was 1997, wasn’t it? Oh, the Canterbury droughts. Oh, hang on, that was in 1997 as well, wasn’t it? Dairy prices have taken a tumble–oh, hang on, they’ve been trading at international record highs.

    Labour has “managed” the economy in the warmest economic summer New Zealand has had since the second world war. Eight years of golden weather. A two-year-old could have achieved what Michael Cullen’s done.

  26. Sam Dixon 26

    9/11,

    oh and Sars, Internet bubble, the current credit crunch, the war on terrorism’s impacts on tourism and trade, record oil price run-up, the auckland black-out, food/travel miles…

    every government faces world economic crises and economic threats … you can’t keep making excuses for National’s pitiful record forever.

    The fact is unemployment stayed high and wage stayed low under National because those are National policies. National wants low labour costs, that means low wages, kept low by a large poll of desperate unemployed. Labour and the left in general have full employment as a central tenent of their economic policies.

    (captcha: Reporters believed … whatever comes out of independent poltiicalcommentator DPF’s mouth?)

  27. Matthew Pilott 27

    IP, of course there’s nothing the Government has done in New Zealand to encourage employment and a healthy economy. Nithing at all. No apprenticeships, no encouraging of exports. Nothign a two-year-old wouldn’t ahve thought of anyway, clearly…

    And Clawsie – try and pretend that there is only white, no blue and red – the colours are obviously screwing with your thought process. The first half is erratic, unstable and, if that stat is indicating whether you have a job, probably not that good. This is backed by the quote that 6% was National’s realistic target. Labour must have disagreed, because they’ve shown 3.5% is possible. That’s surely not too hard to accept?

  28. Tane 28

    Sam, it’s like Angry Bill said:

    “We must support business with lower costs and flexible labour market policies”

    That means lower wages and less employment protection… and with the sweetener of 6% unemployment, if you’re lucky. Tell me again why workers would want this guy in charge of the economy?

  29. burt 29

    Tane

    I see today that Dr. Cullen is saying that higer wages not lower taxes will slow down the drift to Aussie.

    OK, I’ll agree with that but there is always a BUT!

    What will happen when wages start rising an average of 10% a year?

    I’m sure most people would enjoy that level of annual increase, the senior MP’s have for the last 8 years.

    But what about inflation? What about the low ‘Rich Bastard’ threshold? If the average wage is $50K and the ‘Rich Bastard’ threshold has been kept low to avoid giving the big tax payers the benefit from tax cuts then just how big will the surplus be then?

  30. Tane 30

    Burt, wages aren’t going to grow at 10% a year in a hurry, I can tell you that. But the answer is to gradually bring wages up to a decent level in a manner that closes the gap with Australia while having a limited inflationary effect.

    The idea that we can never raise wages because there will be an automatic and equal rise in prices is an absurd (and intellectually unsustainable) defence that paints the current unequal distribution of wealth as somehow natural and eternal. I think you righties massively overstate the inflationary effects of wage rises, and you do so for political purposes.

  31. burt 31

    Tane

    I think wages are ridiculously low in NZ. You bluntly side step the reality that some sectors in NZ regularly get 10% increases when you say that 10% increases are not going to happen in a hurry. The problem is Tane that the groups getting the regular 10% increases are already high earners.

    The country’s leaders (both govt & business) denying their workers relativity against their own pay is surely something that grates with a unionist.

    You also sidestepped the issue of keeping tax thresholds low while talking about lifting wages. From the words Cullen used I’m starting to think he wants to keep the $60K threshold at $60K until the median wage is $60K. Gotta love his passion for his ideology.

    Amusing captcha “china pays”

  32. Tane 32

    Burt, yeah I’m talking about the great bulk of workers who get pay rises slightly above inflation if they’re lucky. You’ll remember the shitstorm that went down when the EPMU laid down its 5% benchmark, and the fights those workers had to go through to get that figure. That’s why I’m saying you’re not going to see 10% pay rises in a hurry, even if the money’s there.

    What’s needed is a strengthening of the ERA to allow for effective industry bargaining, which will most likely see a series of modest but decent pay rises that can start to close the gap over the period of a decade or so. It’s not an issue that’s going to be solved overnight.

    If the median wage approached anywhere near $60k then I imagine Cullen (or whoever his successor is) would have to adjust the tax brackets. But as it stands only about 12% are earning that much so it’s not a major issue.

  33. burt 33

    Tane.

    How do you get 12%. Is that the percentage of working age people paying the top tax rate?

    I can see the numbers as at 2006 from here: Heather Roy’s Diary

    The reality is that it was never kept: when the new higher tax rate was introduced the top five percent of taxpayers earned $66,000 and over, not $60,000. By the 2005/06 financial year, nearly 11 percent of taxpayers were being hit with the top tax rate when the threshold should have risen to $79,000 to keep his five percent promise. The figures for the year ended June 30 2007 aren’t available yet, but it’s a fair bet the numbers being overtaxed continue to rise, contributing even more to the burgeoning surpluses.

    While it’s easy to talk in percentages, this sometimes masks the real extent of the problem. In 2000, when the new tax rate kicked in, 194,000 people were paying the 39 percent tax rate. By 2006 the figure had ballooned to 352,000.

    So it was 11% in 2006.

    Strengthen the ERA, eight years not been long enough to do that? Lets get Labour out of here and get a real left wing party that’s not giving high earners and easier tax ride here in NZ compared to Aussie while punishing the low-middle earners – lets find that party and give it our support!

  34. Sam,

    Wow, what an impressive list!

    Except none of the items stack up. There was no impact on New Zealand tourism and trade by SARS, the global credit crunch, the internet bubble, or international terrorism.

    In 1997-1998, at the height of the Asian financial crisis, international visitor arrivals to New Zealand declined by 2.1% and 0.8% respectively, following six years of phenomenal growth, where increases in tourism ranged between 6.5% and 14.5%.

    Despite the so-called crises of SARS, international terrorism, 9/11, the internet bubble, and the global credit crunch, tourism arrivals have risen by between 3% and 11.5% year on year since the end of the Asian financial crisis.

    Commodity prices and good weather have pushed dairy into record-high production, and record high values. Not even you would be silly enough to claim that dairy, which accounts for 20% of our exports, is driven by government policy.

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