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Why the Right is worried 1: Economy

Written By: - Date published: 11:00 am, October 18th, 2010 - 34 comments
Categories: brand key, Economy, john key, phil goff, unemployment - Tags: ,

Yesterday, former National media trainer Paul Holmes and former National Party President Michelle Boag attempted an extraordinary hatchet job on Phil Goff on Q+A. No analysis of the real policy divide that Goff and Labour with National carved out at the national conference, just attack – why? The economy, policy, Key’s fading brand, and the polls.

The economy – the economic data goes from bad to worse. We’re almost certainly in recession right now. Despite John Key’s assurances that we would be in the midst of a strong recovery right now, his leadership has seen the weakest period of growth following a recession on record. Each quarter has underperformed expectations and the last half of this year will probably see the economic shrink.

Despite English claiming that unemployment had definitely peaked just a couple of weeks ago, the number of people on the dole continues to climb. The median income shrank in the last year in nominal terms. Add in inflation and the median Kiwi household is over 5% worse off than when National came to power.

Key and Bill English have no clue. English spends all his time making silly statistical games to try to convince us that the opposite of the truth is happening (‘wages are going up!’ If you only count the wages of people in full-time employment, and ignore part-timers, and over-time, and all the people who have lost their jobs or are on reduced hours – and use an average, which is distorted by the fact that most people who have lost their jobs were low income).

National has tried to spin the turnabout in household savings as a good thing, and in normal times it would be. But what it shows now is that people are still extremely concerned about the future – they think their jobs are at risk, so they’re refusing to spend, which actually undermines the economy further. Every piece of bad economic news is actually encouraging households to behave in a way that worsens the situation. (it’s the classic contractionary spiral). The Keynesian response is for the government to increase its spending but that has barely worked this time, and the government is starting to withdraw its economic stimulus, even though its clear the private sector is in no position to stand on its own two feet.

The National leadership won’t publicly admit there’s a problem but anyone with half a brain knows that the economy is going to be the big issue over the next year, and it’s a loser for the government.

Next – Part 2: Key. Full series here.

34 comments on “Why the Right is worried 1: Economy”

  1. Buck Angel 1

    That was an enjoyable Labour party press release.

    • Bright Red 1.1

      what part of the post do you disagree with and why? if you can’t be specific, you look like a fool

  2. I dreamed a dream 2

    Bob Jones, Herald Oct 5, 2009 — “By 2010 the recession will be really biting, National will be suffering, perhaps unfairly, from the backlash of their traditionally tight-fisted policies, and voters will look to the left.”

    And — “Jones says Phil Goff is a clone of Key and if Labour keeps him as leader they’ll be back on the Treasury benches, but with one other proviso – Winston Peters makes it back. And Jones says he will because Peters’ timing is perfect.”

    (I don’t agree about the clone part though 🙂 )

    • bbfloyd 2.1

      IDAD… jones has always spoken in shallow soundbites.. he may be good at making money, but i wouldn’t bet on his political observations having any validity… most of what you quote him on is self evident. a blind man could have seen peters making a comeback next year. he’s still just an apologist for the tories… an irrelevant has been.

  3. randal 3

    its always the economy stupid.
    look at the DB ad and the figures and the whole thinng is tanking faster than the nats can repair the holes.
    just because they own the media in new zealand can they paper over the cracks so fast.
    time for the left to buy some media and get into them for their acquisitive greedy selfish habits

    • Colonial Viper 3.1

      Funny I haven’t seen the NATs repairing more than a few holes over the last 2 years, generally just knocking new ones in and hoping people wouldn’t notice.

  4. Green Tea 4

    “No analysis of the real policy divide that Goff and Labour with National carved out at the national conference, just attack – why? ”

    Because there is no divide between Labour and National. There’s just neo-liberalism with Key’s face, or neo-liberalism with Goff’s face.

  5. Fisiani 5

    Goff was torn a new one by Guyon Espiner when Goff failed to appreciate that banning foreign investment also applied to Aussies and that such a policy would breach CER regulations. What an own goal.
    Did you hear Guyon state on Q and A that Phil was in a government that sold land to the equivalent of 22 rugby pitches a day?

    • Bunji 5.1

      Did you hear Goff say this was a massive turnaround for Labour policy, because they were honest enough to look at the past and assess what worked and what didn’t?

      • bbfloyd 5.1.1

        fisi hasn’t got ears for anything approaching reality.. he’s just a sad half baked yesterdays man… that whole cadre of reactionary fossils is becoming more like caricatures of real people as the days pass…

    • Zaphod Beeblebrox 5.2

      Don’t worry CER is a dead duck anyway. No way will Aussie keep accepting NZers without working visas so that they can send the money back home to their families. Tony Abbott has stated he wants to cap migration (and Gillard would like to as well)- which he certainly can’t do with thousands of NZers headng accross the Tasman every week for the higher wages.

      Expect to hear more on this over the next decade.

    • Bright Red 5.3

      Fizzy, looks like Guyon is wrong. CER doesn’t cover investment current. This from MFAT:

      “Unlike most modern Free Trade Agreements, CER does not currently include provisions regulating foreign direct investment between the two countries. The Governments of Australia and New Zealand agreed to negotiate an Investment Protocol to CER, aimed at promoting further cross-Tasman investment. In their meeting of August 2009, Prime Ministers said that good progress was being made on negotiations of this Protocol, and announced the respective screening thresholds for foreign direct investment from each country into the other would be AUD$953 million for New Zealand investments in Australia and $NZD477 million for Australian investment in New Zealand. Negotiation of an Investment Protocol is continuing. ”
      http://mfat.govt.nz/Foreign-Relations/Australia/1-Trade-and-Economic-links/index.php

      • insider 5.3.1

        Whether GE was right or wrong on the point, Goff looked like he didn’t know CER or the effects of his own policy – he should have dealt with it better as a former Foreign Affairs minister.

        Even though I thought he did have some good questions for PG, I thought Espiner was pretty rude in the way he overtalked Goff. It’s only fair to give him space to talk. Good questions will expose lack of substance but only if the person has the chance to answer.

        Big unanswered question to me is, if foreign investment in monopolies etc is bad, what are they going to do about the investments already in place? Surely they are having just as evil effect as any new one?

        • Bright Red 5.3.1.1

          i would be confused too, if Guyon claimed something that was false was a barrier to my policy. The govt is in a slow process of putting in an investment part to CER (it’s already a year overdue), so Guyon claiming that CER does cover investment would be confusing.

          regarding current foreign monopolies, you can’t necessarily retrospectively ban them but the govt should look at buying them back.

          • insider 5.3.1.1.1

            Agreed to a point on being surprised, and it was live and that is always difficult, especially with the overtalking he had to deal with, but Goff has been living and breathing trade for almost 10 years and had an awareness regarding the impact on the Chinese FTA, so obviously been researching the issue. He then said he’d be renegotiating CER as a result…so inventing policy on the hop in response to a journalist’s apparantly ill informed claims. Yikes! Imagine the traffic between high commissions today

            KEy was slammed by the left for his non-response to Paul Henry. This seems right up there if not worse as at least Key could say the PH comments came right out of nowhere whereas Goff was being grilled on policy he was about to launch.

            • bbfloyd 5.3.1.1.1.1

              that really is drawing a long bow to compare simpering cowardice with your conceived indecisiveness.

    • Craig Glen Eden 5.4

      Espiner owned goal, his attack was way to strong and made him look incredibly biased. Which he is my opinion. Goff did well and admitted that labours selling of land was wrong.

      Espiner has never interviewed Key like that.

      People havent forgotten Key giving money to his rich mates and they wont forget either as christmas draws closer and theirs no money for presents for the kids.

      • Colonial Viper 5.4.1

        What? The kids can have cake, Craig. I mean, what ARE you doing with your $200 p.w. tax cut?

      • Bright Red 5.4.2

        Espiner was once overheard telling a group of National MPs that he was 100% behind their economic agenda – ie. more for the wealthy, like the Espiners.

    • lprent 5.5

      …that banning foreign investment also applied to Aussies and that such a policy would breach CER regulations

      Wrong… CER doesn’t include investment – it is pretty strictly a trade agreement. It would appear that both you and Espiner are into wish fufilment rather than reality.

  6. Adrian 6

    Espiner can’t interview Key like that because Key won’t turn up next time, the MSM knows Phil has to take what time he can get, but he should rip into dipsticks like Espiner and Gower, it would make good TV and a good image for Phil. As an aside, I’m afraid that I must have hurt Gowers feelings when I descibed him a few months ago as ” an unfortunate collision between a truck full of wing nuts and a Bugs Bunny sperm bank “. He appears to have had an eartuck and a bit of panelbeaters bog stuck between his teeth. OFFS. To paraphase.. I apologise for the fact that he has allowed himself to get upset by what I said.

  7. Zaphod Beeblebrox 7

    Is that why Key never goes on ‘Morning Report’? Kathryn Ryan hurt his feelings once.

    • bbfloyd 7.1

      yes.. the bitch asked him a serious question.

      • insider 7.1.1

        Kathryn Ryan doesn’t host Morning Retort – don’t think she ever did and certainly not while Key has been leader

        • Lanthanide 7.1.1.1

          She hosts 9 to noon, easy to confuse it especially as they usually open with a meaty/political topic from ~9:07 through to 9:20 or so, straight after morning report (and often makes me late for work while I sleep in to listen to it!).

        • lprent 7.1.1.2

          Who are they retorting to? Ummm probably Breakfast and the relative quality is the retort? 😈

  8. tc 8

    Key stays away from RNZ because:
    “Tis better to be thought a fool than to open one’s mouth and remove all doubt” and anyway the bulk of voters they try and con tune into the likes of Veitch/Henry/Sainsbury/Holmes and all the other ‘personalities’ to get their cues from…..scary but true IMO.

  9. ianmac 9

    It seems amazing to me that the PM of our country gets away with not fronting. You would think that he was a sort of figurehead president who like the Queen, only has to smile and wave to the adoring masses. Perhaps he is emulating the Queen Mother who went a long way on a smile and a wave.
    But our PM!!!

    • Pascal's bookie 9.1

      I know, and you’d think that political editors being paid in the six figures might start to get a bit pointed about being brushed off.

      • Zaphod Beeblebrox 9.1.1

        Does he go on B FM these days 95.0 Mhz. Helen used to go on Monday mornings and despite the student humor they used to ask better questions than any of teh serious journos.

      • Lazy Susan 9.1.2

        Just heard Julian Wilcox say rather pointedly on Native Affairs (MTS) that John Key has declined all requests to appear on the programme this year.

        I believe journos are beginning to get pissed off that Key won’t front. The upside of the no-show from Shonkey is that the opposition can fill the gap and get their message out largely unchallenged.

        However, the opposition should be all over the media to force Key out of hiding – frequent of the phrase “I notice the PM declined to show again – what is he frightened of?” by opposition MPs should turn the heat on.

        • Sean 9.1.2.1

          Just heard Julian Wilcox say rather pointedly on Native Affairs (MTS) that John Key has declined all requests to appear on the programme this year.

          No surprise there. John Key didn’t even front up on the 2009 budget on Morning Report. If it isn’t a photo opportunity, or if there is a chance that a real question may be asked, John Key isn’t interested.

          And no, it is not good enough.

          • Carol 9.1.2.1.1

            No surprise there. John Key didn’t even front up on the 2009 budget on Morning Report. If it isn’t a photo opportunity, or if there is a chance that a real question may be asked, John Key isn’t interested.

            And then Key had the hypocritical gaul to attack Goff in parliament today, saying that Guyon Espiner had given Goff a mauling on Qu & A last weekend??!!!!

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    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New resource for schools to increase awareness and understanding of climate change
    A new Ministry of Education resource available for schools in 2020 will increase awareness and understanding of climate change, Education Minister Chris Hipkins said today. “The resource, Climate Change – prepare today, live well tomorrow, will help students understand the effects of climate change at a local, national and global ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Getting more out of our most productive firms
    Finance Minister Grant Robertson has approved the terms of reference for an Inquiry into the economic contribution of New Zealand's frontier firms. Frontier firms are the most productive firms in the domestic economy within their own industry. “These firms are important as they diffuse new technologies and business practices into ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • NZDF sends more support to Australia
    The New Zealand Defence Force (NZDF) is sending an Environmental Health Team, a Primary Health Care Team and a Chaplain to Australia, boosting New Zealand support for the Australian Defence Force (ADF) as it battles bush fires in Victoria and New South Wales, Defence Minister Ron Mark announced today. The ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Zealand joins partners in calling for full investigation into air crash in Iran
    Acting Prime Minister and Minister of Foreign Affairs Rt Hon Winston Peters says that developments suggesting a surface-to-air missile is responsible for the downing of the Ukrainian International Airlines flight in Iran is disastrous news. “New Zealand offers its deepest sympathies to the families of the 176 victims. It is ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Staying connected to Australian agriculture
    Agriculture Minister, Damien O’Connor, says the Ministry for Primary Industries is continuing to stay connected to federal authorities in Australia as devastating fires affect the country.  “The Ministry is using an existing trans-Tasman forum for discussions on the agricultural impact of the fires and the future recovery phase,” says Damien ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Investment in schools – a commitment to communities
    Thousands of school-age children, their teachers and wider communities are benefiting from the Government’s multi-million dollar investment upgrading and renewing schools, Education Minister Chris Hipkins said today. “We want New Zealand to be the best place to be a child and that means learning in warm, comfortable and modern classrooms,” ...
    BeehiveBy beehive.govt.nz
    2 weeks ago