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Gordon Campbell on the Prefu, and attempts to vilify France

Gordon Campbell on the Prefu, and on the RWC attempts to vilify the French

No surprise, really, that Treasury’s pre-election economic and fiscal update proved to be such a highly political document. The document gave ample reason for feeling extremely nervous about the economic outlook – global economic unease, downturns in demand among our key trading partners, major declines in commodity prices, delay in the Christchurch rebuild (and likely skills shortages and upwards wage pressure when that rebuild does eventuate) poor prospects for growth long term, a widening current account heading for 7 per cent of GDP … Name your poison, its here. Even the reasonably acceptable rate of underlying inflation is to be taken as a sign of weakness in the economy.

Oh, and that’s if everything turns out OK. There is a one in five chance, Treasury says, that an even worse scenario will eventuate. As mentioned though, this is a highly political document. Thus, Treasury also cites the stronger than expected growth in the short term and – despite all the storm clouds mentioned above – it paints a relatively rosy scenario where unemployment heads down below 5% in the forecast period, and wage growth stays pretty robust. If it is credible at all, this cheery picture of wage growth and job growth averages can only be on the back of the eventual rebuild in Christchurch, and will largely be limited to skills shortages in the construction industry.

Lets just say that on this occasion, Treasury is far more convincing as a bearer of likely bad news than it is in touting the scraps of possible good news. Keith Ng queried Finance Minister Bill English at the briefing about Treasury’s apparent nonchalance about those pesky credit rating downgrades we’ve had recently, which Treasury chooses to dismiss (at page 25 of the Prefu document) like so:

The credit rating downgrades…are not expected to have a material impact on debt financing costs (long term yields are expected to increase by around 15 basis points)

If that’s the case, Ng asked, why we were trying so hard just recently to re-assure the rating agencies? Good point. (English’s reply was to the effect that lots of countries are getting downgrades, so no big deal. But it would have been a bigger deal if it had happened a few years ago. Huh?) As yet though, there is no sign that the public feels unduly alarmed by the economic picture, or feels like blaming John Key and his team for the downward slope on which the economy will be perched, after the election.

Going into that election, the Key government has two main policy planks – the partial asset sales and the benefit reform process – for which it has yet to provide any kind of net costings. We await a spreadsheet where the gains/losses of the options of retaining the assets in question in state ownership are placed alongside those from the mixed ownership model that the government is promoting. So far, no transparent figures on the net position have emerged, for the public to evaluate. With the partial asset sales, we have been given only estimates of what revenue could conceivably be generated from a sell down. To repeat: there are no estimates of the long term comparative gains and losses from keeping them, as opposed to selling them

Similarly, there seems to be no modelling of the likely costs and savings from the much-heralded reform of the benefit system. Treasury does monitor and measure such things: eg the Prefu document pointed to the savings in benefit payments since the Budget from the lower than expected unemployment figures. On page 63 of the Prefu document, it also concludes that many of the Welfare Working Group recommendations “would result in large upfront costs if adopted”. It must be doing those calculations though, on the back of an envelope. Because when I asked English yesterday what the aspirational target – and/or the expected net gain – was for the benefit reform process in say, its first year of operation, he maintained that no such work had yet been done.

Essentially then, the government is heading into the election campaign asking the public for a blank cheque in two of its main policy areas. We should be asking for more.


RWC Fallout

One of the rationales for the massive expenditure on the Rugby World Cup – at a time when for instance, every hospital in the country is being run into the ground – is that the tournament is serving as a valuable showcase for New Zealand to the world. Well, if that is the case, could Keith Quinn and his anonymous sources in the All Black camp please shut the f***up with their campaign to vilify the French team?

The rest of the world admired the French efforts in the final. The efforts being made to the contrary are only underlining to the world – and to the other 50% of New Zealanders who are not obsessed with rugby – that the All Blacks and their fans can be just as ugly and graceless in victory, as they are in defeat.

About this alleged eye gouging by the French centre Aurelien Rougerie ….no one laid an official complaint that an eye gouging occurred. The player allegedly gouged – Richie McCaw – is not saying that he was deliberately eye gouged. In fact, in the Guardian, McCaw said this about French captain Thierry Dusautoir:

Dusautoir showed what he was made of last night. Every time I have played against him he has had one hell of a game. He has been around a long time and he inspires his team by the way he plays.

That surely, should be the end of it. If you’ve got the evidence, you front up. Instead, some anonymous elements within the All Blacks camp have taken the back door route – they’ve avoided fronting up, while using Keith Quinn as a conduit for allegations of foul play. The attempt to smear Dusautoir has been particularly contemptible, and looks like petulance at him being named man of the match, and IRB player of the year. Apparently Dusautoir’s sin was that he was “close” to the incident, and did nothing about it. Yep, three minutes before the end of a RWC final, Dusautoir has an over-riding obligation to be offering solicitous comfort to Richie McCaw. Good grief. If McCaw got an eye injury this was no less accidental – and did far less lasting damage – than McCaw’s knee to the face of French flyhalf Morgan Parra, far earlier in the game.

According to the French, their team members felt unable to leave their hotel on the night of the victory for fear of being attacked by celebrating All Black fans. (What would have happened to them if the French had won doesn’t bear thinking about.) Later, a photographer harassed the team at a private function and after being ejected tried to shoot photos through the restaurant window – and all the subsequent headlines were about the angry response to this cretin by one French player. Right.

We have lavished millions on this RWC – largely to the benefit of a fortunate few bar owners and hoteliers. No doubt, some business advantages will occur downstream in the wake of this tournament – but you can bet that RWC Minister Murray McCully won’t be ordering an opportunity cost analysis on whether this huge RWC spend-up really was the most effective way of promoting New Zealand as a business and tourism destination.

Footnote : The New Zealand Herald, which prominently featured the Quinn allegations also carried a highly selective story headlined “World Media Reacts : NZ Nailed It” that began with a largely positive report from the Guardian’s Robert Kitson. To get to Kitson, the Herald had to ignore the article in the same issue by the Guardian’s chief sports writer Richard Williams. For the record, here’s what Williams said:

All New Zealand did was win, which was presumably all they wanted to do in order to end their famous 24-year drought. They had hosted the tournament beautifully but when it came to the showdown they derived disproportionate benefit from home advantage, including a few free gifts from a referee who spent the first half infuriating even neutrals by giving virtually every decision to the men in black.

France's fans were unable to make themselves heard in a stadium draped in black but their team's display was full of spirit, generosity, creativity and adventure… and were hugely unfortunate not to become the first side from their nation to capture the Webb Ellis Cup.

The All Blacks were grim, pragmatic and joyless: a caricature of a stereotype. Nothing they did in the 80 minutes truly illuminated the game. Their try was a gimme, tinged with a hint of obstruction, and they never came close to scoring another…"I'm tremendously sad but tremendously proud, too," [coach Marc Lievremont] said during a dignified post-match press conference. He made no reference to the collision between Richie McCaw's knee and the temple of Morgan Parra in the 11th minute, which forced the early removal of France's own influential fly-half.

For the Guardian’s overview article on how New Zealand had successfully hosted the tournament, go here. It ends with this paragraph, which should also be kept in mind alongside the hosannas of praise for our hosting of the RWC, when assessing the tournament’s tourism legacy:

Abiding memory : A nation so immersed in their sport that it was possible to watch rugby 24 hours a day even if the down side was trying to dodge questions about England in every bar and restaurant visited. It was almost possible to forget the rip-off prices. Almost.


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