#Team Key is channeling #Team New Zealand in their TV ads.  Space age boats, elite performers surging out ahead in an 8-1 lead - what could possibly go wrong?

The government is campaigning on the economy because surveys show people think the economy is going OK, even if they haven’t felt the benefits yet.

To give them credit, New Zealand came through the last six years with less pain than most developed countries. What National don’t mention is that was largely because the previous Labour government left the Government with no net debt; Labour’s Working for Families helped families get through tough times; Interest free student loans meant working people could retrain; Labour’s KiwiSaver increased our savings.

National gets a little credit for not rolling those policies back (they cut KiwiSaver but didn’t kill it). But the government doesn’t get any credit for the Christchurch earthquake rebuild or for record terms of trade driven by high dairy prices - neither of which will continue to give us growth according to Treasury’s economic update this week. The rebuild is underway and commodity prices have fallen.

So this is as good as it gets under National.

I thought it was time to check in on our live economy-monitoring tool which I set up in January. If, like me you've been trying to answer the question all year 'Has National fixed the economy yet', this web site analyses the data in detail and gives you a simple answer.

According to its ad #Team Key think New Zealand is doing better than Australia, Japan, and most European countries. 

Depends what you mean by ‘better.’

Australia’s average weekly wage is $183.72  higher than in New Zealand. That gap may have fallen slightly from $190.61 six months ago, but is still much higher than $146.89 at the end of 2011 and $121.76 in 2008.

According to Treasury, wages in New Zealand will stagnate further while interest rates are set to increase. People are going to be even more out of pocket.)

Unemployment in New Zealand (5.6%) is still higher than Japan (3.5%). 

Not sure how that makes us ‘better off’.

Our current account deficit - the difference between what we earn as a country through exports minus what imports and services we have to buy - is about to get bigger. It will increase by $15 billion a year and our international liabilities will rise from 65 per cent of GDP to 77 per cent of GDP - worse than predicted. 

Spain - apparently worse off than us - has a current account surplus.

Just to recap what National really means when it claims to have fixed the economy; If the market wants raw logs or milk powder, then that's what we should sell. Doesn’t matter if that cements us in at the bottom half of the OECD as a log wage, low productivity economy. Just cross your fingers and commodity prices will go up again one day.

Doesn’t matter that we are becoming far too dependent on selling fewer simple, cheap products to one market (China, accounting for 23 per cent of our exports in the year to June). 

Doesn’t matter that exports will fall from 33 per cent of GDP when National came into office to 26 per cent of GDP, according to Treasury.

Bill English believes the government shouldn't bother with trying to promote added value exports. (Listen to his interview on Newstalk ZB – he argues at length against the whole idea of government helping to create value in the economy. I blogged about it here earlier in the year.)

This continues to be the biggest fault line between left and right; Whether to actively intervene in the economy to increase the value of raw products (Labour) or carry on as we are and wait for commodity prices to go up (National).

As Rod Oram wrote recently in the Sunday Star Times, ‘This is our starkest choice in economic policy in decades.’

 

 

Comments (12)

by Kat on August 21, 2014
Kat

The electorate should be aware by now that National's modus operandi is to maintain the status quo and tweak it for the benefit of a few. For example tax cuts for the top 10%, shares in public assets for the 3% that can afford them and open slather for the farming and transport sectors. Cycle ways appear to be Nationals one and only policy, and the Greens would quickly debate that.

This election its a choice of Nationals rowing boat with someone at the back calling the shots or Labours positive intervention with an honest skipper's hands firmly on the helm.

by DeepRed on August 21, 2014
DeepRed

And rowers have been known to take steroids.

by Lesley Ford on August 21, 2014
Lesley Ford

A rowing eight comprising white men and 1 token woman - that just about sums up National's world view.

by Andrew Osborn on August 22, 2014
Andrew Osborn

Josie: You've nicely cherry picked your data. Funny you didn't mention Spains 50%+ youth unemployment.

The fact is, we're doing far better than most in the OECD and our Aussie cousins are envious of our performance:

http://www.theaustralian.com.au/news/latest-news/hockey-envies-nzs-falli...

 

 

by Andrew Osborn on August 22, 2014
Andrew Osborn

Lesley: Good point. Pleased you brought it up.

Men, on average, are stronger rowers than woman.

It would be typical of a Labour/Green government to demand 50% female quota and thereby lose the race.

 

by Megan Pledger on August 22, 2014
Megan Pledger

@Andrew

Because in politics, physical strength is an asset. That's why so many athletes have to toss up going to the Olympics or taking their seat in parliament.

 

by Andrew Osborn on August 22, 2014
Andrew Osborn

Megan: The analogy was obviously lost on you: In order to win you pick the best, regardless of race, sex or other arbitrary classification.

I trust that every successful women would today be insulted by 1970's style quotas. Surely we're past that?

 

 

 

by Gilbert on August 23, 2014
Gilbert

Conflation is the oldest, most useful and most used tool in the bullshitters arsenal. New Zealanders are more susceptible to it than any other nationality -  probably because of our innate trust in people and authority. Team Keys exploitation of conflation with the athletic rowing crew advert, uses the classic blueprint and again illustrates how devious  they are. Imagine if they had featured  a crew consisting of hulks such as Collins, Brownlie, Tolley, Joyce, Nick Smith et al rowing the skiff?  Pick the best? You must be joking Andrew Osborn. They are clearly cheating & deserve the same contempt that they show to the NZ public..

by MJ on August 23, 2014
MJ

Andrew I think you missed a bit out of what you are saying. I'll add it for you: " the analogy was obviously lost on you, you silly woman"

by Lee Churchman on August 24, 2014
Lee Churchman

New Zealand, along with Canada and Australia managed to avoid most of the problems, in part due to stricter bank regultions IIRC.

The idea that conservative parties are better on the economy has to be the number one delusion in democratic societies. Mind you, it's not like most people have any real understanding of real world economics. A contributor on this blog was unaware of the distinction between orthodox and heterodox theories, for example. 

by Lee Churchman on August 24, 2014
Lee Churchman

Megan: The analogy was obviously lost on you: In order to win you pick the best, regardless of race, sex or other arbitrary classification.

Actually you don't. Any fool knows that having the best players is not the same as having the best team. 

by Lesley Ford on August 26, 2014
Lesley Ford

"Nowhere is trust more important than in politics and the public sphere. There, we have to act together. It’s easier to act together when most individuals are in similar situations—when most of us are, if not in the same boat, at least in boats within a range of like sizes. But growing inequality makes it clear that our fleet looks different—it’s a few mega-yachts surrounded by masses of people in dugout canoes, or clinging to flotsam—which helps explain our vastly differing views of what the government should do" Joseph Stiglitz

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