Polity: Economic plans compared

Written By: - Date published: 7:08 pm, May 12th, 2014 - 9 comments
Categories: Economy, labour, national, same old national, Steven Joyce, unemployment, wages - Tags: ,

polity_square_for_lynnRob Salmond points to the reality of the to different approaches to the economy. Labour looks at increasing jobs, wage growth, and having the government run surpluses. National looks at a 1% wage growth after inflation after years of falling real wages and no drop in real unemployment as being a sign of a healthy economy? Yeah right.

Today David Cunliffe announced Labour’s economic targets for its first term. They are important and ambitious. Labour is pledging to reduce government debt by running surpluses every year, and also to lower unemployment to 4% in its first term.

I don’t doubt Labour’s ability to run surpluses. The buoyant global economy leads to increasing demand for our exports, which increases tax revenue and decreases demand for transfers. Any decent finance Minister can run good surpluses in that environment. And David Parker will be a top-notch finance Minister.

The unemployment target is an ambitious one, and in my view one that only one a left-leaning coalition government can achieve. labour alone has at least six large-scale, economically sound policies that will create jobs. They are the upgrades to manufacturing generally, the forestry sector, monetary policy, specific programmes in housing (KiwiBuild) and electricity (NZPower), and a CGT moving investment into productive sectors. This is a plan that can create the tens of thousands of jobs our communities desperately need. National cannot and will not match it.

Meanwhile, Steven Joyce was on Q+A yesterday defending the results of National’s plan. Real GDP growth at the moment is around 2.7%, thanks in large part to the global post-GFC recovery and the Canterbury rebuild. But the very best number Joyce could conjure up for real wage growth was 1%.1

Even using Joyce’s own numbers for a moment, this shows that most of the growth in the economy is simply passing wage-earners by. It is going elsewhere. That is National’s legacy: strong growth for the fortunate few, lagging and insipid growth for everyone else, leading to a larger and larger gap between the rich and the rest.

The contrast with Labour’s multi-pronged jobs plan is stark.

  • 1.Joyce claims that wages are up 2.5%, while inflation is around 1.5%

9 comments on “Polity: Economic plans compared ”

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  1. Skinny 1
    12 May 2014 at 8:20 pm

    Joyce was absolutely hysterical trying to defend Nationals mismanagement of our economy. It was obvious to those of us watching Q & A that ‘Mr Can’t Fix It’ is nothing more than a snake oil salesman representing his rich mates, trying to con the rest of hard working Kiwi’s by sucking them into excepting a miserly 2% pay rise.

    What an insult after wounding us with flocking off our assets to his rich mates. I worry for the poor elderly and the young who suffer in silence this winter.

    Shame on the rich elite!

  2. adam 2
    12 May 2014 at 9:39 pm

    All these so call lovers of liberalism are really just bat crazy libertarians in disguise. I think it time we called Joyce and co what they are Loonatarians – because only the right wing can be so stupid and crazy at the same time.

    Sing along with the Adams family theme

    Its crazy, and its dangerous

    its childish, and its lazy

    It’s the Loonatarians

  3. Colonial Viper 3
    12 May 2014 at 10:48 pm

    Labour looks at increasing jobs, wage growth, and having the government run surpluses.

    Oh FFS, the only way the Government can “run a surplus” is if the Government forces the private sector – including households and small businesses – to run a deficit via high taxation or other methods.

    Labour is pledging to reduce government debt by running surpluses every year, and also to lower unemployment to 4% in its first term.

    Impossible. Absolutely fucking physically impossible – unless you force the private/household sector to run up massive massive debts.

    If Labour don’t break out of this straitjacket of mainstream economic thinking, they, and this nation, are fucked.

  4. Stuart Munro 4
    13 May 2014 at 11:22 am

    A Korean finance minister who delivered results as lousy as Bill English’s would jump off the Han river bridge.

  5. fambo 5
    13 May 2014 at 3:23 pm

    John Keys return serve to the Labour’s economic target was simply that with the Greens as coalition partners in government there would be no more mining or dairying in New Zealand, as if this was the key to New Zealand being well-off. That’s as complex as the government’s economic plan gets.

    • Tracey 5.1
      13 May 2014 at 4:07 pm

      on the same day the greens announce some economic policy paid for by increasing royalties from mining and drilling…. so key is lying to the public again… and the media repeat it unchallenged.