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Plain English: Rip Van Winkle Wakes Up

Plain English
22 September 2006

Rip Van Winkle Wakes Up

Last week Alan Bollard woke up from his long sleep through rising inflation. Financial Markets were surprised when Dr Bollard indicated that another increase in interest rates is possible. Bollard and Cullen have both believed they found a way to keep interest rates low while inflation and public spending ran rampant in a growing economy. They might be smart guys, but no-one is that smart. The country is about to pay the price for this illusion. Either we will have persistent 4% inflation, which is very bad for savers exporters and wage earners, or we have a dose of higher yet interest rates. Either way, Dr Cullen's dream of a rising economy in election year is fading.
It's the Economy Stupid

Clark's vicious attack on Don Brash is another attempt to obscure the fact that Labour overspent their electoral expenses limit and they used public money to do it. The attack shows the character of a leader and a government who believe that they can talk their way out of everything and that spin will beat reality every time. But reality matters. Rising interest rates and a sharper economic downturn will have more impact on Labour's prospects than the current controversy. Labour have taken their eye off the ball - every meeting and every day the Government is obsessing with Don Brash, it's not doing the job they were put there to do - manage the economy, provide health and education, maintain law and order.

Meanwhile Out In the Countryside

Along with Pansy Wong and Colin King MP, I spent two days in the King Country and South Waikato visiting 13 schools and a trades training centre. Many of our children are getting a good sound education and some of what we saw was inspiring. The care and attention older students get in smaller secondary schools more than makes up for the smaller range of options. In primary schools we saw excellent work in teaching the basics of reading, writing and maths. There are plenty of good ideas and strong leaders in education who could thrive with less rules and clear accountability. We know what works, but pushing it into every corner of every school is the challenge.
Hard Questions

Average pay in the public sector is $27.50 per hour and in the private sector it's $20.50, a gap of 34 per cent. Public sector pay is rising faster than private sector pay so the gap has grown by 30 per cent in the last two years. The government spend almost 50 per cent more on schools than in 1998, but recent government tests show no difference in achievement. Health spending has almost doubled but hospitals are doing less elective surgery. It's time to ask hard questions about value for taxpayers money and more thoughtful solutions than extra dollars for strategies, pilots, visions, and programmes. National won't have to slash and burn to do better for the citizens of New Zealand.

Bill English


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