web analytics

NZ closes the gap with Aussie

Written By: - Date published: 9:30 am, January 15th, 2010 - 21 comments
Categories: national/act government, unemployment - Tags: ,

Well, I didn’t think it could done but it has been. National has been promising to close the gap with Australia, and damned if it hasn’t happened already. The Nats’ target was 2025, it didn’t even take a year. In fact, we’re now above Australia and accelerating away while they fall.

Unfortunately, it’s the wrong gap.

(sources OECD, ABS)
For the previous nine years, New Zealand had consistently lower unemployment than Australia. We overtook them in June last year, and we’re still rising even as Australian unemployment falls.

Unemployment was always going to rise during the recession, of course. But it was not, and is not, beyond the government’s power to limit the increase.

The Rudd Government in Australia implemented a $42 billion green jobs package In February last year and immediately the rise in unemployment eased, so much so that it has now dropped from a peak of just 5.8% down to 5.5% in December.

The Key Government, in rather stark contrast, came up with…. a $50 million cycleway … only $3 million of which is so far allocated… to a project that was being built anyway.

And, so, with this magnificent neglect from the top, unemployment has climbed remorselessly upward bringing higher benefit costs, higher crime, and higher deficits from lower tax revenue.

Hmmm, maybe we should be copying the Aussies after all.

On February 2nd, we’ll learn whether National has successfully slept, grinned, dithered, and holidayed its way through a doubling in unemployment in its first year.

21 comments on “NZ closes the gap with Aussie ”

  1. Clarke 1

    Marty, I think you’ve got the wrong end of the stick – this isn’t high unemployment, this is “labour market flexibility”, in which case it’s a desired outcome of National government policy rather than an invidious social ill that needs to be treated.

  2. Peter Bilson 2

    Looks like it reached parity under Labour in Q2 2008.
    Maybe we need mines to increase our employment level & o’seas funds.

    • lprent 2.1

      Mines don’t employ many people, most of whom have quite specialized skills (that we don’t have here). They do however employ a lot of capital.

      So if you want an industry that does little for the NZ economy, pick one that requires that you import a lot of expats and capital, dig a hole in the ground, and where the capital, profits, and workers leave at the end of the project. Of course the hole remains and usually costs a bundle to fix later.

      The only nett gain to NZ is in lawyers fees. It is a fools game being pushed by a fool.

      Tourism is almost the exact opposite. It gives large benefits to both employment and capital retention, including being sustainable – but Brownlee is unable to understand this. I can’t see any economic benefits from increased mining in NZ for NZ over the medium to long term. I can see considerable costs to NZ especially if it reduces our tourism.

      Looks like you are as thick as Brownlee is…

    • snoozer 2.2

      No Peter, follow the sources that Marty has provided, or look with your eyes:

      In Q2 2008, NZ unemployment was 3.9%, Aust unemployment was 4.2%.

      And the point isn’t to criticise the fact that unemployment rose, it’s the fact that unemployment has been allowed to continue to rise well above what happened in Australia.

    • Tigger 2.3

      Peter – yes, by all means let’s blame Labour for this…since they haven’t been in power for the past fourteen months. But no, it’s Helen’s fault clearly.

    • Macro 2.4

      Just a few little problems with mining Peter – one of which is that NZ actually doesn’t make Billions from it. It’s the companies who do the mining who make the money – if any is to be made – the govt get 10% in royalties. So no we wont increase our overseas funds with mining.
      Makes you wonder why we bother really.
      Oh yeah! Browlee’s mates tell him its a great idea!

  3. Zaphod Beeblebrox 3

    Wow this happened despite the success of the jobs’ summit. Obviously their cycleway is better than ours.

  4. gitmo 4

    What happened 2000-01 in Australia to cause the spike ?

    Moderation ?

  5. burt 5

    Well if the failed policies of the 90’s was top blame for all bad things in 1999-2008 then the failed policies of 1999-2008 are shown in their fully ugliness on this graph.

    The second point that is worth noting is; How can it be possible that Dr Cullen was right when he said Labour left the economy in good shape compared to the rest of the world when we have had a much harder hit than Aussie?

    • lprent 5.1

      burt – you’re just outright weird sometimes.

      Do you think that falling unemployment is a bad thing? Because from Q1 2000 to Q1 2008 that is what is displaying. You’d prefer to pay unemployment benefits rather than getting people into work and paying taxes instead?

    • burt 5.2

      I never though of falling unemployment as a failed policy of the 90’s – but I guess a fully employed workforce ain’t gonna vote for more welfare so it must have been bad by Labour standards.

      Actually lprent – you highlight a very valid point; the failed policies of the 90’s were just the bad things eh because Labour policy instantly trumped National policy on the good stuff and only the bad stuff was National’s fault. Just like today eh, the rising unemployment has nothing to do with Labour causing a recession in NZ before the rest of the world… it’s the National govt elected sometime after the turning point caused by Labour that made it real bad.

      • Macro 5.2.1

        “I never though of falling unemployment as a failed policy of the 90’s”
        burt there wasn’t any falling unemployment in the 90’s! Unemployment remained pretty static at around 6 to 8 percent for the decade, and we consistently over that period lost parity with Australia on pay. Don’t rewrite history to suit you ideology.
        And don’t give us the rubbish that it was Nats 90’s policy that flowed into the new century that lead to the drop in unemployment rates. That is just hogwash.

      • burt 5.2.2



        No socialist prerequisite for convincing people that socialism is good re-write of history required.

  6. Jared 6

    Marty, do you really think we can afford a stimulus package even a tenth of the size of Australia’s? And don’t spout a “we can’t afford not to”. Australia and NZ’s labour markets are far different, and its not simply an exponential increase or decrease factor in scale. We were hit hard by the recession, but to say it is the fault of National is simply unfair. We cannot afford a stimulus package the size of Australias or the US for that matter.

  7. Macro 7

    There is a difference between nothing and something.
    The NActMP govt have decided to do nothing. Oops sorry they decided to make their “stimulus package” a tax break for the rich – which as we all know went straight into the bank to pay of Mortgages or in Savings. Which of course is highly stimulatory.
    Now had Bill not been so generous to those who don’t need it, he might have been able to throw a few dollars in the direction of projects that were really stimulatory. – but his self interested mates made him chose otherwise.

    • burt 7.1

      Oops sorry they decided to make their “stimulus package’ a tax break for the rich

      So the fact we still have one of the lowest “wealth tax” thresholds of any OECD country is still beyond your grasp. Tell us again how we should increase wages in NZ and tell us again how with low wealth thresholds that is so beneficial to the workers rather than just the govt revenue for redistribution and buying elections with bribes.

      • Pascal's bookie 7.1.1


        If we had a tax free zone up to 15K, and a 25% rate for every dollar over that, we would have an even lower “wealth tax threshold”.

        It’s just sophistry burt. “Wealth tax threshold”. pffft.

  8. tsmithfield 8

    I wouldn’t get to confident in Australia just yet. They have been experiencing a boom due to China’s stockpiling of commodities. Well, all good things have to come to an end. China has just started reigning in its booming economy, so don’t expect that the gravy train will go on forever.


Links to post

Recent Comments

Recent Posts

  • Fast-tracked Northland water project will accelerate economic recovery
    The Government has welcomed the decision to approve a new water storage reservoir in Northland, the first of a number of infrastructure projects earmarked for a speedy consenting process that aims to accelerate New Zealand’s economic recovery from Covid-19.  The Matawii Water Storage Reservoir will provide drinking water for Kaikohe, ...
    BeehiveBy beehive.govt.nz
    12 hours ago
  • Tokelau Language Week reminds us to stay united and strong
    Staying strong in the face of challenges and being true to our heritage and languages are key to preserving our cultural identity and wellbeing, is the focus of the 2020 Tokelau Language Week. Minister for Pacific Peoples, Aupito William Sio, says this year’s theme, ‘Apoapo tau foe, i nā tāfea ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Kaipara Moana restoration takes next step
    A Memorandum of Understanding has been signed today at Waihāua Marae between the Crown, local iwi and councils to protect, restore and enhance the mauri of Kaipara Moana in Northland. Environment Minister David Parker signed the document on behalf of the Crown along with representatives from Ngā Maunga Whakahī, Ngāti ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • New Zealand and Uruguay unite on reducing livestock production emissions
    Agriculture Minister Damien O’Connor and Uruguayan Minister of Livestock, Agriculture and Fisheries Carlos María Uriarte have welcomed the launch of a three-year project that will underpin sustainable livestock production in Uruguay, Argentina, and Costa Rica.  The project called ‘Innovation for pasture management’ is led by Uruguay’s National Institute of Agricultural ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • 3100 jobs created through marae upgrades
    Hundreds of marae throughout the country will be upgraded through investments from the Provincial Growth Fund’s refocused post COVID-19 funding to create jobs and put money into the pockets of local tradespeople and businesses, Regional Economic Development Minister Shane Jones and Māori Development Minister Nanaia Mahuta have announced. “A total ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Health volunteers recognised in annual awards
    Health Minister Chris Hipkins has announced 9 teams and 14 individuals are the recipients of this year’s Minister of Health Volunteer Awards.  “The health volunteer awards celebrate and recognise the thousands of dedicated health sector volunteers who give many hours of their time to help other New Zealanders,” Mr Hipkins ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Community COVID-19 Fund supports Pacific recovery
    The Minister for Pacific Peoples, Aupito William Sio says a total of 264 groups and individuals have successfully applied for the Pacific Aotearoa Community COVID-19 Recovery Fund, that will support Pacific communities drive their own COVID-19 recovery strategies, initiatives, and actions. “I am keen to see this Fund support Pacific ...
    BeehiveBy beehive.govt.nz
    3 weeks ago