Beginners' Guide To Talking Down Economy
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guide to talking down the New Zealand
are supposed to oppose the government and offer an
alternative to government. However that does not give
opposition parties licence to talk down the economy.
Tragically that reality has been lost on many
politicians, particularly those in Act and the few remaining
National MPs. Since the Clark-led Labour government
ascended to office in 1999, the opposition has taken it upon
themselves to try and talk down the economy.
treasonous really. Even if one never has a positive word to
say about the incumbent government, one must be careful not
to undermine confidence in the economy. Ultimately that
only puts at risk the livelihood of working families who
stand to gain from economic growth.
Those who talk
down the economy do so without conviction. They don’t
actually believe what they say or write. They don’t
actually want people to be unemployed and without a regular
wage or salary. The sole aim of the carping doom-merchants
is to make the government unpopular in the forlorn hope that
voters will vote for the opposition instead.
such criticism is inconsistent key economic indicators,
which paint a very different story to that which the
opposition attempts to spin. Take the example of Act MP
Muriel Newman’s latest foray into the economic debate (which
she patently knows nothing about).
Statistics New Zealand released the results of the latest
Household Labour Force Survey results, which show the
unemployment rate in this country falling to just 5.1
percent. That is the best result in 14 years.
Zealand’s unemployment rate is now below almost all our
major trading partners, including Australia and the United
States. At 5.1 percent New Zealand’s unemployment rate is
far below the OECD average of 6.9 percent.
consecutive quarters of employment growth, around 115,000
new jobs have been created. This has been a major
achievement considering the extraordinary adverse economic
conditions created by the terrorist attacks in the United
States on 11 September 2001, and the near collapse of Air
Fortunately the worst effects of those
two situations is behind us and the economy continues to
grow. With unemployment likely to fall below 5 percent by
the end of the year, New Zealand continues to perform
Good on every single entrepreneur,
industry leader, trade union official, and politician
(either in central or local government) who has worked to
create the conditions for economic growth in recent
But back to gawky Newman. Her critique of the
economy comes less than a week after the release of the best
set of employment figures in 14 years.
This is what she has to say about New Zealand’s economic
“… The reality is that many small
businesses are afraid to employ people in case they get it
wrong…” (Ed - 115,000 new jobs in just under two and a half
And how about this little gem, when discussing
paying young people a slightly higher wage:
increase the cost of on-the-job training for young workers.
As a result, employers may be less likely to hire young,
untrained staff…” (Ed - the government has greatly increased
the number of young people in work-based training).
course Newman isn’t the only opposition MP trying to talk
down New Zealand’s economic profile. Throughout the
election campaign Bill English tried in vain to destroy New
Zealand’s profile by making comparisons with other OECD
It is a mark of English’s lack of
credibility that he chose not to compare one of the most
fundamental measures of economic performance - employment.
Instead the game plan is to shift the debate to issues such
as the Resource Management Act (which the previous National
government passed into law in 1991).
can no longer drag out the old “left wing government
spending beyond its means” mantra because Labour in
government has actually reduced spending as a proportion of
GDP. The opposition cannot chastise the government for
failing to run a balanced Budget because the centrepiece of
this year’s Budget is a $2.3 billion surplus.
opposition is pushed further away from the centre, it is
left with precious few issues available to challenge the
government. The same scenario applies with regard to the
No longer can National and Act attack the
government on macroeconomic issues. If they do then they
lack credibility. While the opposition tries to talk about
compliance costs, global commodity prices, and the exchange
rate, the government can talk about the key indicators of
1. 115,000 new jobs
lowest rate of unemployment in 14 years
4. A $2.3 billion Budget
The opposition’s greatest fear is now a
reality. The centre left government is actually very
credible on economic issues. It is English’s nightmare. It
is also Richard Prebble’s nightmare.
The only option
they are prepared to try is to talk the economy down, but at
whose expense? Could they undermine the government’s
credibility on the issue of the economy? Possibly - but not
likely. Could they undermine business confidence in New
If Members of Parliament are true
patriots they won’t undermine New Zealand’s economic
profile. Constructive debate is healthy. But a blatant
attempt to talk down the economy is neither constructive nor
Jim Anderton must have enjoyed pointing out
that New Zealand’s low unemployment rate put this country
back into the top half of the OECD. When is the opposition
going to respond to that?
This year’s election served
as a timely reminder to those parties who seek to be
negative about New Zealand and its people. Voters do not
like carping politicians. National, which ran a negative
and septic campaign won less than 21 percent of the vote and
lost nearly one third of its caucus. Act also ran a
negative campaign and made no gains on its 1999 result. In
contrast, Labour ran quite a positive campaign and became
only the third governing party since the 1930s to increase
its share of the popular vote.
Newman knows very
little about economic policy. It appears that she doesn’t
know much about politics
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