It's The Economy, Stupid
How National took Treasury's assessment of "better finances than expected" and projections of a soft landing in November 2023 to diving NZ's economy off a big cliff
Last year in August, I wrote Why More Economic & Social Pain Is Coming For Us All. The short of it was Nicola Willis’s budget approach was inevitably going to cut us off, and force many into economic and social pain. And worse, I kept thinking, “Do they not realise that pyramids rely on the people at the ‘bottom’ i.e. the masses? What are they doing?”
That was about a week before NZ Herald political editor Thomas Coughlan predicted a return of the “rockstar economy” under Luxon and Willis.
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The thing is the current “economic purgatory” we are experiencing is not un-predicted or unexpected.
Last year in November, 15 independent and highly credentialed economists wrote to Luxon and Willis, pleading with them to change course.
They said:
"Your government's cancellation of key infrastructure projects and sinking-lid cuts to the public service are powerful contributors to the current severe and prolonged recession…..
"If nothing is changed now, this [infrastructure] under-funding simply passes the burden of adjustments, and investment spending, to future generations.
"Failure to correct this course will lead to higher economic scarring, with the costs borne by those with the least ability to pay."
In response, Chris Bishop laughingly said Nicola Willis would rather listen to penguins than these experts.
He may have found that funny, but I doubt other Kiwis do.
New data for June by Centrix reveals more people are in hardship and struggling to pay bills - a 14% increase from a year ago.
It cites continuing weaknesses in some of our largest industries - construction, property and hospitality, and company liquidations on the rise.
But business liquidations were already at a 10 year high in January - that means it’s only gotten worse.
Construction shed around 12,000 jobs in a year after Chris Bishop effectively killed off state housing without scrutiny.1
~24,000 people face difficulties paying their mortgage and overdue home loan payments are at an 8 year high.
23,000 more people on jobseekers, another record high.
BNZ economists described the recent economic data as looking “nothing short of disastrous”, warning that the data showed our economy has hit a brick wall in Q2.
Kiwibank has cut its growth forecast for this year from 1.4% to 0.9% - making manifest the 15 economists’ warnings last year.
My point is none of this was ever unexpected, but it’s still disheartening to see it made manifest.
It’s also unfair on those who bear the brunt of this political ideology and functional incompetence.
Put this against the backdrop of a government that is borrowing - not for infrastructure, growth, education, science, investment, health, well being, our future, our tamariki, protection of nature and people etc - but for political tax cuts, unlimited & expensive 20% tax deductions for foreign and domestic business purchases, expensive health privatisation contracts etc …
And we see that this has been a speedrun to a burden we will have to bear at great cost - and which will be very expensive to unwind and catch up on. Possibly many generations…
It’s the intention that matters, and I am not sure this lot ever knew better - or cared for the average kiwi. Many are voting with their feet in record numbers, surpassing records from 13 years ago, another unspeakable and un-weighable burden that will cost us for a long time, and cut us off at the knees as the population ages and infrastructure burdens grow.
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Chilling comparisons to America
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35,000 jobs lost in a year while Craig Renney reports it’s taking much longer to find one again
48% of workers got a pay cut in real terms last year, meanwhile the cost of living index deteriorates
National Party advertising
Bishop also ignored pleas from the construction industry for over a year - because, well I think we all know by now he’s had it out for Kainga Ora for a while.
Well I blame the ignorant lemmings, the uniformed lemmings that voted for change not knowing how good they had it under Labour and believed the rhetoric of National their lies and misinformation.
Until we really get a large proportion of people engaged in politics we can expect the uniformed to still chase and support National absorbing the rhetoric of continued lies and misinformation.
Labour, Greens and Te Pati Maori have to change the messaging so they can engage and inform people. We get the great analysis from the Left which for those of us that are engaged and informed we absorb and understand - but for a large chunk of people they don’t take the time to listen and understand. But package the analysis in great sound bites that grabs people’s attention and resonates with them then the Left can grab attention from people and at this moment that’s what’s absolutely 💯 needed!
I’d like to sound outraged and say something like ‘unbelievable’ but when you look around the minority ‘western’ world the pattern is obvious and as you say Tui, they/we were warned. The problem is, even a change of government doesn’t ever fully reverse the damage done by the neo-lib ideology, it merely slows the decline. It also occurs to me that there are a lot of well meaning people who like to espouse what political parties should do…. Political ‘movements’ are where change occurs and this requires everyone to step up and play their part, especially in the areas of awareness raising and education. Traditional forms of protest and yelling from the sidelines will achieve nothing. Grace Blakeley (on Substack) writes well on this topic of how to effect change in the current context. So, once again, thank you for the good work Tui! 🙏 oh and to anyone criticising our current opposition parties, with all due respect, I challenge you to step up and get involved especially if you think the messaging is ineffective, exert some influence, have your say.