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Talking down the economy

Written By: - Date published: 11:19 am, May 2nd, 2008 - 57 comments
Categories: economy, election 2008, same old national - Tags: , , ,

National is a party weak on policy. It has had to drop nearly every one of its principled but unpopular policies to get itself in a position to win an election. This raises the question of why someone would vote for National, rather than keep the current lot. One of National’s answers is to claim that New Zealand needs National’s supposedly superior economy management because the economy is going down the toilet. To further this claim, National and its allies need to talk down the economy.

It’s a strategy that National and business have employed in each of the last three election years. Proclaim a coming recession, blame the government, say that only National can save us. Enough repeating of dire economic warnings and the media will pick it up, the public will start to believe the spin, and you might just get the downturn you’re hoping for.  When poor hapless old Bill English tried it in 2002, the economy grew at 5.1%. Don Brash and John Key tried it on again in 2005 but the economy was too resilient and maintained a 2.7% growth rate. Even their gleeful predictions of recession in 2006 only came to two quarters of 0.1% growth in the end.

This year, the economy is facing real difficulties and this has encouraged National to push the ‘recession’s coming, elect us’ line harder (because we led New Zealand during its last two recessions?). Doom and gloom predictions of doubling unemployment are being bandied about by National’s allies. But don’t be fooled, things are not as bad as they would have you believe. Yes, there has been 6% inflation in food, the housing market is static, and petrol is up. But New Zealand is going into this rough patch with record low unemployment, strong wage growth, a mammoth dairy payout, business tax cuts in place, and income tax cuts coming. In fact, the economy is in such good shape that growth accelerated throughout last year and totalled 3.1%. Unemployment is not going to grow substantially because low unemployment is self-reinforcing employers are afraid to let staff go during soft patches in case they can’t get them back when things pick up and lots of people in work means lots of domestic demand.

So, watch National try to talk down the economy as the election approaches, but don’t believe them. It’s just the same old National up to the same old failed trick.

And remember who really has the better record on growth.

(data)

57 comments on “Talking down the economy ”

  1. randal 1

    this election so far has been meedia driven to the max. now that the Nats cannot buy the votes one way they are using the other and if that doesn’t work they will find another way of trying to win power for their own agenda…and the meedia is infantilised to boot and are lending their assistance because a) they have been instructed to and b) they always go for the new and improved version of anything without asking any questions…rewind to infantilisation.

  2. What you say about National trying to talk down the Labour-led governments economic performance makes sense. Then again I guess if the shoes was on the other foot then Labour would be doing exactly the same thing. Clearly many economic indicators have improved during the Clark reign though my right bias demands I say “correlation does not prove causation” :-}

    Unfortunately the confidence numbers seem to confirm that individuals and business are not feeling particularly confident about the future and that can not be good for the lefts chances of re-election.

    Roy Morgan consumer confidence here:

    http://www.interest.co.nz/ratesblog/index.php/2008/01/02/chart-roy-morgan-consumer-confidence/

    National Bank business confidence here:
    http://www.interest.co.nz/ratesblog/index.php/2008/01/02/chart-national-bank-business-own-activity-outlook/

  3. Steve Pierson 3

    randel. why ‘meedia’?

  4. Steven 4

    Well there’s many reasons why I’d vote for National and not Labour if an election was held this afteroon. But I’ll give you one example as I have just returned from the supermarket from my weekly shopping. As a modreate income earner who is severely overtaxed relative to what I get for my taxes and is striving to save ahead under my own steam and without the yoke of the state, I don’t deviate from my fixed $80 p/w spend at the New World. As recently as 6-8 months ago that bought me enough food and supplies to last me a week. Now that same spend will last me about 5 days. As a humble citizen with no political ties, I see a GOVT that couldn’t give a stuff about this issue and the similar horrendous rises in living affecting ordinary kiwis who the Labour movement is supposed to be representing (that’s a great oxymoron that one). This GOVT is weary and is too corrupted by their own selfishness and worldview to continue in office. I’m only the average guy in the street but I tell you that another term in GOVT for Labour will be dettrimental to the future of NZ and its people. Especielly if the Greens are alongside them.

  5. Tane 5

    Steven, what are you suggesting the government should do about international food prices?

    I’m also interested in your claim that you’re ‘severely overtaxed’. I know that’s what National is telling you, but the OECD begs to differ.

  6. Steve Pierson 6

    Why are you catpitalising govt?

    Usually, people would capitalise WEARY CORRUPTED or whatever the National line of the month is at the time.

    Steven. If you have a family, you’ve got tax rebates from Labour (which National opposed) through Working for Families. If you own shares or your own business, you just got a reduction in the corporate tax rate (= bigger profits) which National also voted against. If you’re really on a moderate income, ie between $12 and $15 an hour, you can thank Labour for pushing up the minimum wage every year since it came to office, moving up that wages of not only people on the minimum wage but also people earning a little above that amount.

  7. “As a modreate income earner”

    How many times the median income do you earn?

  8. Phil 8

    Nice use of selective data, Steve – you shopuld get ajob working for the Nats with data like that!

    I note the Wage/Salary data is not in the excel workbook you’ve used as a source. I found your real source anyway (same site different location) and it shows you haven’t adjusted for inflation. In real terms, the rise in average hourly earnings is the same under both Govt’s

    Tane,
    Food price rises have been a recent phenomenom. Non-tradable inflation (influenced by things like govt charges and otehr domestic price pressures) has been consistenly running at about 4% for the last few years – much more than the traded component.

  9. Tane 9

    Thanks Phil, yeah I’m aware of the distinction. But I’m guessing Steven is talking specifically about rising food prices, which are driven by an international market. There’s not a lot the government can do to reduce prices in that area.

  10. Joker 10

    Tane and Steve

    The reality to most New zealanders is that they are feeling the squeeze in their pockets, (actually) watching family, friends and colleagues disappear overseas in greater numbers and feeling more at risk of being victimes of crime.

    By saying “here are some graphs that show you are just imagining it” or “tough luck there is nothing the Government can do about it” is not addressing the very real concerns of the electorate in a very clever way.

  11. I love the claim “that I getting taxed way more than I get out of the tax system”.

    This is archetypical thought train of a neo-liberal. In fact, a majority of taxpayers are required to contribute “more than they consume” simply because in part the progressive tax system covers a lot of bases.

    For example, if you are sick, you get cheap (relative to actual cost) doctors visits. Obviously if you are not sick – you don’t get “full value” of out your tax contribution – just like private health insurance. Sure you might claim, “but I don’t get sick – what about the birth of your children, your own birth, vaccinations – for the most part these are provided free of charge”.
    The state-provider models eliminates the stress from the threat of – “what does my provider cover?”, and refrains from placing higher burdens on the most vulnerable, as they are typically more likely to go without insurance in private-provider models because they simply can’t afford it. Not mention avoids big costs at a time for young families when they are at their most financially vulnerable.

    I have no problem with paying more than I will ever get out, simply because that is a necessary price for living in a politically and socially stable country.

  12. Joker, dont forget there is the filter of mass media between you and ‘most new zealanders’

  13. Steve Pierson 13

    Phil. National’s record on wages is pathetic compared to Labour’s – we’ve provided graph data on it in the past.

    fuller analysis here http://www.thestandard.org.nz/?p=527

    Joker. i can’t magically make the media do a better job of covering these issues, nor can I magically make the Government adopt policy. What I can do is explain underlying facts. You can choose to ignore them if it suits your prejudices.

  14. Joker 14

    Steve,

    You say “nor can I magically make the Government adopt policy” this implies that you actually believe there are problems that exist that Government policy needs to address.

    However the theme in the presentations of your “underlying facts” always seems to be “no issue here, nothing to see”.

    But you are right I do read this stuff with prejudice. Perhaps the same prejudice you exercise whilst writing them.

  15. randal 15

    hey Steven I hear on the grapevine that Key is going to offer a general wage order of 10%…and its very anal to stick to a predetermined $80 budget…get some variety in your life dude…shall I come round for a baloney slicing party???????

  16. Steve Pierson 16

    joker. no, the opposite prejudice.

    saying ‘I can’t magically make the Government adopt policy’ means just that and nothing more.

    You’re resorting to the old tory line: when the facts don’t suit you say ‘well, no-one cares about the facts’. Ol’ mike is a great one for that, it’s all about perception to him, whether there are actual problems and who really has the best solution doens’t matter – it’s just perception, perception, perception. Anything to get back into power.

  17. Joker 17

    “joker. no, the opposite prejudice”

    Yeah, thats what I was trying to say. Whilst coming here after a long lunch might make me more berligerent it does nothing to make me more comprehendable.

    Anyway the perception stuff only resonates with the electorate if there is some beef behind it.

  18. Steven 18

    I don’t accept your way of thinking. Perhaps you all live under rocks or are rich pricks and are sheltered from everyday living? I’m living under a regime that takes 30-35 percent of my hard earned income and as a single 30 yr old Eurpean male I don’t see a cent of benefit of any of it. I would literally prefer to take it and throw it away in the wind. At the same time my cost of living down here in the real world is rising accross the board everywhere I turn and once this climate change rort kicks in it’s only going to get worse. It’s all very well to quote facts and figures and graphs and data but its what is happening in reality that is the true indicator. I’ll just move to Australia next year if there is no change in the election, I’ve got family there.

  19. Steven – have you considered asking your employer for a pay-rise?

  20. James Kearney 20

    Steven- to be paying 30% tax you would have to be earning $100,000 a year. To pay 35% tax you’d have be earning $200,000.

    I’m not going to even bother with the rest of your comment. You’re just a whinger who has all his facts wrong.

  21. r0b 21

    I don’t see a cent of benefit of any of it.

    Just the education you received, the health system you use, the roads you drive on, the other infrastructure that you use, superannuation when you retire, defence, international trade and relations, that sort of thing.

    You don’t exist as an island, you are part of and nurtured by a cooperative society.

  22. Steven, if you think your ethinic orgins have anything to do with the ammount of tax you shoudl pay, we woudl all welcome you moving to australia. PFO.

  23. Steve Pierson 23

    This is interesting – one can complain bitterly about being over-taxed without actually knowing how much tax one is paying. Steven says he is paying 30-35%, if he doesn’t know how much it is how can he know whether he is ‘overtaxed’ or not? And how much would be not overtaxed?

    Of course, like James points out – you’re not paying 35% income tax until your income is $200,000
    check it out for yourself: First $38,000 at 19.5%, next $22,000 at 30%, any more at 39%.. add it all up, divide by total earnings to get your total percentage tax.

  24. Joker 24

    What about if you chuck GST into the mix?

  25. Tamaki Resident 25

    Steve “I’m living under a regime … I don’t see a cent of benefit of any of it.” – so you’re not living in NZ then?

  26. ‘Steve Pierson
    May 2, 2008 at 3:55 pm
    This is interesting – one can complain bitterly about being over-taxd without actualyl knowing how much tax one is paying. Steven says he is paying 30-35%, if he doenst knwo how much it is how can he know whether he is ‘overtaxed’ or not? And how much would be not overtaxed?

    Of course, like James points out – you’re not paying 35% income tax until your income is $200,000
    check it out for yourself: First $38,000 at 19.5%, next $22,000 at 30%, any more at 39%.. add it all up, divide by total earnings to get your total percentage tax.’

    This is something I have suspected for a long time, I think what he really means is the media has told him hes being taxed too much, and hes just pissed off that he cant buy a ferrari ect.

  27. Tamaki Resident 28

    sorry, Steven not Steve in my comment above.

  28. Steve Pierson 29

    I just ran the numbers: you have to earn over $235,000 a year to pay 35% tax.

    Joker. He’s not talking about GST and you would have to make assumptions about spending in individual cases. But Tane posted a link eariler a link to OECD table on the tax wedge,
    http://www.oecd.org/document/17/0,2340,en_2649_34897_38148433_1_1_1_1,00.html#Table_O_1

  29. roger nome 30

    oh god, where’s David Farrar on this thread? How can he watch every piece of anti-Labour pseudo-economic hysteria he has beaten up ove the last three years be so soundly trounced. It must be very painful for him to read.

  30. Pain is no worries woger nome.Nice pill was it?

  31. randal 32

    steve pierson…meedia? …whine not?

  32. Razorlight 33

    You people need to pull your heads out of the sand. Kiwi’s are hurting. Mortgage rates are high, food prices are high filling the car up is expensive and the one response we hear from the left is …it is still better than if National was in government.

    You may well honestly believe this but you have to realise things are grim out here in the real world.

    I am not blaming Labour for all the things that are wrong. Quite clearly they cannot control Internationa Prices. But blindly harping on that National is bad is falling upon deaf ears. We all know what Labour has done, what we want to know is what they are going to do in the future to get us out of this. Where is the next big bold policy. Something along the lines of of WFF that will help those young couples that are about to find they have negative equity in their homes. I don’t want to see blue v red graphs showing what happened 15 years ago. I want answers for tomorrow.

    National may not be showing any vision either but after nine years I am ready to throw the dice, take a gamble and give them my vote. Times up Labour, lets see if the other team can deliver.

  33. r0b 34

    We all know what Labour has done

    I know what I think are the many good things Labour has done RL – I’ve posted often on it. But I’d be interested in your take. What do you see as the achievements?

  34. Razorlight 35

    rOb. I believe Labour can claim some credit. On their watch unemployment has dropped considerably and I think it would be churlish to say they cannot claim that as an achievment.

    I am also fan of Kiwisaver. I think that will pay dividends in the future.

    WFF has arguably delivered what it set out to do. I think an easier way to provide tax relief to working families is to simply cut their taxes, but hey lets not have that argument.

    So I am not a completely blind. There have been successes.

    But it is also obvious the world economy has been strong for the past decade with cheap credit financing our lifestyles. Those days are now over and I want to know what is Labours plan to get through this economic storm . Simply going on about past succeses and past National governments will not win back the support they have lost in the past 2 years.

  35. r0b 36

    OK Razorlight, a perfectly reasonable perspective.

    You want to know Labour’s plan. I want to know National’s plan. My suggestion is, don’t vote blindly for “change”, vote for the best plan. And by implication don’t vote for anyone that can’t or won’t articulate a plan.

    will not win back the support they have lost in the past 2 years.

    Labour have lost very little support, and it’s important to remember that. What has happened is that opposition has consolidated around one big party (instead of spreading over lots of little parties).

  36. Occasional Observer 37

    Again Steve attempts to use statistics in the most misleading and intellectually corrupt manner, to present a bogus argument.

    Let’s look at the actual data Steve sourced from.

    In Q4 1990, when National came into office, inflation was running at 4.7%. By Q4 1999, when National left office, inflation was running at 1.1%. Inflation is now at 3.5% (well outside the target band), with no sign of reducing in the near future.

    In October 1990, when National came into office, floating mortgage rates were at 15.4%. In November 1999, when Labour came into office, they were at 6.6%. They are now at 10.9%.

    In Q4 1990, GDP was at 0%. That’s right. ZERO. That was when Australia was running at 4.8% GDP growth. In 1999, growth reached 4.3%. Presently, many commentators are predicting that New Zealand is heading towards a recession; others suggest we will merely go through a period of zero growth.

    Throughout the 1990s, household debt servicing costs constituted less than 10% of disposable income, at 8.1% in 1999. Presently, household debt servicing costs is 14.5%. I don’t imagine Steve Pierson has a mortgage, so he’s probably ignorant of the effect of that.

    In 1990, unemployment was continuing a rising trend, going back since the 1970s. That’s right. Until 1990, unemployment had not fallen in a generation. It peaked at 10% in 1991, and dropped to 6.2% in 1999. Labour has continued this trend. It stands alone as the only statistic that will be better when Labour is thrown out of office, than they inherited when they were elected to office.

    Nice try, Steve, but again your statistical illiteracy, and your willingness to present a dishonest argument, gets the better of you.

  37. r0b 38

    OO I don’t have time right now to look at each of your claims individually, but those I have looked at, the quarterly data is so noisy that I don’t think it makes much sense to quote it. That far back we should look at annual rates.

    Picking on quarters allows you to make claims that sound convincing: “Q4 1990, GDP was at 0%. That’s right. ZERO. That was when Australia was running at 4.8% GDP growth. In 1999, growth reached 4.3%.” – but turn out to be totally misleading in full context:
    http://www.rbnz.govt.nz/keygraphs/Fig2.html

    From that one example that I’ve had time to look at it appears to me that it is you, not Steve, that is trying to lie with statistics.

    It stands alone as the only statistic that will be better

    Ahh no. Since the last National government, apart from unemployment down, we have better average GDP growth, numbers on benefits down, crime down, minimum wage up, poverty / childhood poverty rates down, suicide rates down, wage gap with Australia no longer widening, recently increasing personal savings (KiwiSaver) and so on.

  38. randal 39

    some of you people need to realise that New Zealand is not an autarchy and that we live in the real world where we are at the mercy of forces that we cannot control. to suggest that somehow the government does certain things just an only just to annoy YOU is delusional if not paranoid.

  39. higherstandard 40

    True Randal we are not living in autarchy the last time we came even close in recent memory was under Robert Muldoon and from my perspective the present government is only a shade better.

  40. AncientGeek 41

    hs: I find it difficult to see how you can say that.

    For me the defining feature of the Muldoon national government was its fiscal irresponsibility. There is no comparison between a national government that seemed to take pleasure in putting the taxpayers into hock, and a labour one that is fiscally prudent.

  41. r0b 42

    A while back Occasional Observer wrote: Again Steve attempts to use statistics in the most misleading and intellectually corrupt manner, to present a bogus argument.

    As we shall see below this claim is rather ironic, because it is OO, not Steve, that is guilty of these “crimes”. OO’s preferred tool for lying with statistics is to pick points out of noisy quarterly data, and try to draw conclusions from those few points, without looking at the real trends and context. Picking on odd quarters allows OO to make claims that sound convincing, but aren’t.

    Inflation

    In Q4 1990, when National came into office, inflation was running at 4.7%. By Q4 1999, when National left office, inflation was running at 1.1%. Inflation is now at 3.5% (well outside the target band), with no sign of reducing in the near future.

    Let’s have a look at the real trend: http://www.rbnz.govt.nz/keygraphs/Fig1.html
    See how inflation plummets in the early 90’s? Hurrah! Was that the work of the National government? No. It was an effect of the explicit inflation targeting run by the Reserve Bank as mandated by the Reserve Bank of New Zealand Act – which was passed in 1989 by the Labour government of the time.
    http://en.wikipedia.org/wiki/Inflation_targeting
    http://en.wikipedia.org/wiki/Fourth_Labour_Government_of_New_Zealand
    http://www.rbnz.govt.nz/speeches/2361827.html
    So inflation fell at the start of the 1990s as a result of policies instituted by a Labour government, and with some fluctuation it has remained lowish ever since.

    Mortgages

    In October 1990, when National came into office, floating mortgage rates were at 15.4%. In November 1999, when Labour came into office, they were at 6.6%. They are now at 10.9%.

    Let’s have a look at the real trend: http://www.rbnz.govt.nz/keygraphs/Fig3.html
    Mortgage rates are increasing, it is a problem, but they have only recently begun to approach again the average that they were under National.

    GDP

    In Q4 1990, GDP was at 0%. That’s right. ZERO. That was when Australia was running at 4.8% GDP growth. In 1999, growth reached 4.3%. Presently, many commentators are predicting that New Zealand is heading towards a recession; others suggest we will merely go through a period of zero growth.

    Let’s have a look at the real trend: http://www.rbnz.govt.nz/keygraphs/Fig2.html
    In my opinion no strong case can be made either way here, unless you dishonestly pick just a couple of points in time and try and tell a story about them (which is what you did OO). But the fact (for what it’s worth, and ignoring the deficiencies of GDP as a measure) is that on average growth is slightly higher under Labour (as per Steve’s post).

    Household debt

    Throughout the 1990s, household debt servicing costs constituted less than 10% of disposable income, at 8.1% in 1999. Presently, household debt servicing costs is 14.5%.

    Once again you dishonestly present a couple of data points to make a case which ignores the real trends:
    http://www.rbnz.govt.nz/keygraphs/fig5.html
    Household debt has been increasing steadily since the 90’s. Yes this is a problem that Labour (like the previous National government) has not been successful in addressing. Household savings have also been declining over the same period. Yet paradoxically household net worth has risen from 171 Billion (1990) to 279 Billion (2000) to 526 Billion (2005) to who knows what now (data from Table 2 in the pdf document below). The relationship between these issues is not simple:
    http://www.rbnz.govt.nz/speeches/2823190.pdf

    However, our work also suggests that much of the decline in the savings rate in recent
    years may be connected with rising household net worth that has occurred due to
    sharp increases in prices for houses and farms. This paper has shown that there are a
    range of channels by which some households have been able to ‘unlock’ wealth on
    their balance sheets and spend it, which will have contributed to the wedge between
    income (as conventionally defined) and consumption. Many of these channels have
    involved an increase in indebtedness by parts of the household sector, which in turn
    has fuelled increased borrowing from overseas. In effect, there have been significant
    transfers of wealth across households and generations. Younger generations are now
    paying for the wealth transfer in the form of reduced housing affordability and higher
    debt levels, or by foregoing homeownership altogether.

    There, now if you want to criticise Labour, do it on the real issues, like the intergenerational transfer of debt (which I think is an outrage). Don’t play stupid games with meaningless snapshots of household debt.

    So then

    So then OO, when you say “Nice try, Steve, but again your statistical illiteracy, and your willingness to present a dishonest argument, gets the better of you” the only proper response is a rather sarcastic laugh. It is you OO who is guilty of these “crimes”.

  42. Occasional Observer 43

    Now, try and be a little bit honest, rob.

    I didn’t pick noisy statistical points in time. I picked the moment when National was elected to office. In many cases, such as GDP figures (which had been -0.2% in the two previous quarters), the numbers were worse than the point at which National was elected.

    I find it fascinating that you claim credit for inflation rates being a legacy of Labour’s reserve bank act (which I actually agree with, in a large part), but you refuse to claim that unemployment in the early 1990s, mortgage rates in the early 1990s, and zero growth in the early 1990s, were not a legacy of the fourth Labour government.

    I didn’t pick statistically noisy points in time–I chose the moment when National was elected, compared to the moment when Labour was elected. Equally, as much as you and Steve Pierson want to come up with spurious averages–discounting the legacy that each of the parties inherited–you are still trying to manipulate figures. National inherited a failing, crippled economy in 1990. The 1990s became a period of considerable prosperity, through strong economic management. The legacy in 1999 was falling unemployment, high growth, consistently low interest rates, strong fiscal management, low inflation, and low household debt servicing costs.

    Now, let’s fast-forward to present day New Zealand. The legacy Labour will leave National in 2008 is again low growth, high interest rates, poor fiscal management, high inflation, and high household debt servicing costs.

    NB: In your last comment, you referred to household debt, and explained that it had been rising for a generation. This is true. But household debt servicing costs haven’t been rising for a generation: they remained static at below 10% of household income throughout the 1990s. Now, household debt servicing costs are dramatically higher than they were in 1999.

  43. randal 44

    more blather to stun the punters with oo. how many more pages cn you waste with info bordering on the imcomprehensible. National must talk down the economy because they cant release any policy. Its in their nature to poor mouth everything anything that is not theirs anyway!

  44. r0b 45

    OO: I didn’t pick statistically noisy points in timeI chose the moment when National was elected, compared to the moment when Labour was elected. Equally, as much as you and Steve Pierson want to come up with spurious averagesdiscounting the legacy that each of the parties inheritedyou are still trying to manipulate figures.

    Are you seriously trying to argue that one off quarterly snapshots from noisy time series (OO) give a clearer picture of performance than 9 year averages (Steve) or the graphs showing trends over time (me)? An average over 9 years is “spurious”? Seriously OO? If you are seriously trying to make such claims then we need proceed no further, because you are a loony.

    Your point about inherited legacies and by implication the (unknown) time after election before the policies of a new government start to have any effect on the slow moving system that is the economy only serve to further reinforce the point that a single quartile measure taken at the moment of election is essentially arbitrary as a measure of long term performance.

    I find it fascinating that you claim credit for inflation rates being a legacy of Labour’s reserve bank act

    I do. One of the very few things their economic approach got right.

    but you refuse to claim that unemployment in the early 1990s, mortgage rates in the early 1990s, and zero growth in the early 1990s, were not a legacy of the fourth Labour government.

    Wrong. I am happy to agree that they were a legacy of the fourth Labour government, see next paragraph.

    National inherited a failing, crippled economy in 1990.

    To a certain extent yes it did. And why? Because the economic policies of the fourth Labour government were right wing policies – they were the policies of the individuals who went on to found ACT. The economy that National inherited in 1990 is a testimony to the failure of right wing economic theory (bizarrely under the flag of a Labour government that was a true Labour government in many other respects, but not economically).

    The 1990s became a period of considerable prosperity, through strong economic management.

    Ahh, bullshit. The 1990’s became a period of increased prosperity for a few at the top of the ladder, and a period of poverty and upheaval for the many at the bottom:
    http://en.wikipedia.org/wiki/Fourth_National_Government_of_New_Zealand

    Richardson’s first budget, delivered in 1991 and named by the media as ‘the mother of all budgets'[1], introduced major cuts in social welfare spending. Unemployment and other benefits were substantially cut, and ‘market rents’ were introduced for state houses, in some cases tripling the rents of low-income people.[1] In combination with the high employment resulting from some of the 1980s reforms, this caused poverty to increase, and foodbanks and soup kitchens appeared in New Zealand for the first time since the Great Depression of the 1930s.

    Soup kitchens for the first time since the great depression = “a period of considerable prosperity”! What planet are you on OO? I’m going to take a wild guess that you live your life at the top of the ladder, and don’t much care about the fate of those at the bottom.

    NB: In your last comment, you referred to household debt, and explained that it had been rising for a generation. This is true. But household debt servicing costs haven’t been rising for a generation: they remained static at below 10% of household income throughout the 1990s. Now, household debt servicing costs are dramatically higher than they were in 1999.

    Indeed they are, and a similar trend is evident in Australia (for data up to 2006), and I agree that this is undesirable. But it’s not like the Labour government is unaware of this fact or trying to hide it – see Cullen’s mentions of this along with other issues:
    http://www.beehive.govt.nz/speech/freedom+debt+freedom+prosper
    http://www.beehive.govt.nz/speech/economic+outlook+and+savings+challenge
    http://www.beehive.govt.nz/feature/new+zealand+well-placed+deal+global+slowdown
    As discussed in the speeches a major plank of Labour’s plan to deal with this issue is raising levels of household savings through KiwiSaver. Another major factor is of course wage levels, which historically Labour have raised and National have tried to lower (as a cost to business). So tell me OO, what are National’s plans to deal with this issue? Let me guess – is it a tax cut?

    Now, let’s fast-forward to present day New Zealand. The legacy Labour will leave National in 2008 is

    Heh. Pardon me if I insist on the small formality of an election first. If Labour loses, we can discuss the matter of legacies later.

  45. Dean 46

    Rob:

    “Soup kitchens for the first time since the great depression = “a period of considerable prosperity’!”

    I’ve got news for you and I’m afraid it’s all bad – there was never a time since WW2 when there weren’t soup kitchens.

    In your own words, what planet are you on again?

  46. Sa Paulo 47

    I don’t accept your way of thinking. Perhaps you all live under rocks or are rich pricks and are sheltered from everyday living? I’m living under a regime that takes 30-35 percent of my hard earned income and as a single 30 yr old Eurpean male I don’t see a cent of benefit of any of it. I would literally prefer to take it and throw it away in the wind. At the same time my cost of living down here in the real world is rising accross the board everywhere I turn and once this climate change rort kicks in it’s only going to get worse. It’s all very well to quote facts and figures and graphs and data but its what is happening in reality that is the true indicator. I’ll just move to Australia next year if there is no change in the election, I’ve got family there.

    right mate. you’re either a trolling idiot or you actually have your brain directly hooked into an IV drip solution called moronic right wing paranoia.

    I don’t see any benefit from my taxes you say- you should try living in a country with no roads, police force, courts, health service, customs, MAF etc etc…I suppose you have had no schooling either…or perhaps it was there you just didn’t pay any attention.

    climate change rort- credibility= 0

    having lived in Australia so many tories neglect to mention when they do this annual everyone is off to Australia crap is that there are 3 levels of government there that all want your due. Much more government than in New Zealand. And funnily enough, you would have two Labour governments fairly much everywhere you go I think.

    sheesh…I’m sorry if you are genuine. But having recently seen places where the priveleges a 30 yr old kiwi male has as a result of his tax dollars would be a wonderland, I have little sympathy for you. And you are right Aussie may be better, but it might not be. It has its pros and cons too.

  47. Ted 48

    Guys, looks like the BNZ didn’t get the memo re: we’ve never had it better. When they release their monthly confidence survey they do a summary of key industries, this month it was as follows:

    Advertising: “Mixed messages”

    Agriculture: “the effects [of the drought] will linger … sheep and beef poor”

    Car Sales: “Very weak especially for used cars”

    Commercial Real Estate: “Yields rising … Office market firm, retail weak. Second tier market easing the most.”

    Construction: “Worries about what might lie ahead.”

    Finance: “Weak”

    Forestry/Sawmilling: “Bad all around with high cost increases, weakish offshore demand, and slimming down ahead of an expected fall in domestic construction”

    Information Technology: “Steadily weakening in recent months”

    Retailing: “Obvious weakness but with rising costs and staff shortages”

    Tourism: “Signs of weakness against a more competitive US market”

    Transport: “costs rising strongly with driver shortages”

  48. randal 49

    are any of you hungry…no…just dont have the cash to waste on infantilised toys and machines to fill in the spaces left by the last lot of worn out crap that you purchased…go for a walk and smell the roses!

  49. Dave 50

    Steve, you forgot another column

    AVERAGE TAX INCREASE.
    Could you add that in please?

  50. Steve Pierson 51

    Dave. I’d somehow have to take into account the effect of Working for Families – and then the increase in the social wage which is paid for by tax.

    And it would be more sensible to look at the median than the average.

  51. Matthew Pilott 52

    Dave, do you want Steve to mention the tax increase the public voted for in ’99, or the drop in corporate taxes that National voted against in 2007?

    I’m not sure how either would add much to this post.

  52. Phil 53

    The drop in corporate taxes was part of a wider fiscal package which the Nat’s did not support. To pick on one item in a whole range of fiscal proposals is pedantic and anal, Matthew.

  53. Again, I advise everybody to watch
    Money Masters; http://crazyrichguy.wordpress.com/the-money-masters/
    and Money as debt; http://crazyrichguy.wordpress.com/what-is-money/

    Because it makes perfectly clear why voting for John Key and National is like inviting the fox into the hen house.

    John Key was one of only four advisors to Alan Greenspan’s new York federal reserve when they started the housing bubble from 1999 unitll march 2001 and global head for the Forex department of Merrill Lynch.
    Google Merrill lynch for scandals and you will begin to understand where I’m coming from.

    In reaction to a few earlier comments on a comment I made with regards to DU.
    For those of you who think that Depleted Uranium is a tolerable material to use in war I have collected some nice photo’s on my blog.
    For more on DU babies have a google and I advise those who have a weak stomach not to take to close a look at what the NATO and the US occupation force are doing to empty Iraq and Afghanistan and in the near future in Iran as well. 4.5 billion years of radio active contamination spread alover those countries. 4000 tonnes of radio active waste spread out in a fine layer of nano particled dust over Afghanistan and Iraq. A war crime of monstrous proportions and we are complicit. Ignorance is not accepted as an excuse. Remember the Germans: Wir haben es nich gewusst. It took them sixty years to live that one down.
    Oh by the way: our soldiers in Afghanistan will also be contaminated, radioactive dust does not select between the Taliban or innocent civilians or godd soldiers and bad soldiers. They will contaminated and they will contaminate wives, children their houses. They have actually found nano particles of “depleted uranium” on the Nasa space station. It gets in the atmosphere and travels everywhere. This is a crime of truly biblical proportions.
    Educate yourselves

  54. dave 55

    I’d somehow have to take into account the effect of Working for Families – and then the increase in the social wage which is paid for by tax.
    Fair enough , do it – and could you clarify what you mean by ” average unemployment” – is that average dole figures or average beneficiary figures – given that most on the sickness benefit and some invalids beneficiaries should be on the dole – and half the invalids beneficiaries should be on the sickness benefit.

    another table you could put in :
    “Average interest rate increase” to see how that matches with ” average wage increase” Go on.

  55. Steve Pierson 56

    dave. you’re asking for specifics that can’t be applied to the whole population.

    But if you’re so keen to see those figures – go and do it yourself.

    It’s amazing how arrogant you are when you don’t even know how the unemployment rate is measured. Clue – it’s not a function of beneficairy numbers (in fact, most unemployed aren’t on a benefit becuase they’re not unemployed long eneough).

    Try again when you’ve got some nous.

  56. Dave 57

    IM well aware how unemployment is measured, but given your dodgy stats and graphs, you could mean anything but in your definition.

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