#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.’