Labour: the Economic Record 2000 – 2008
There has been considerable commentary made by Labour’s critics and political opponents that Labour was an incompetant economic manager, during their nine year term in office. The reality, though, is somewhat different. There are many things that Labour did well and some not-so-well.
But the records speaks for itself.
The following is data, in the form of easily understandable graphs, from Trading Economics, an American website. They collect data from the IMF, World Bank, Statistics NZ, the Reserve Bank of NZ, etc, (the usual motley crew of subversive, left wing organisations) to compile their finished presentations.
Each category will be presented via two graphs. Eg,
“New Zealand GDP Growth Rate”
Graph 1: 2000 – 2011
Graph 2: 1990 – 2011
National was in power from 1990 to the end of 1999.
Labour governed from the beginning of 2000 to the end of 2008.
National took office After November 2008.
New Zealand Unemployment Rate
Long-term unemployment (% of total unemployment) in New Zealand
Some politicians use long-term unemployed as an election weapon, to win electoral support. However, despite their mis-use of the facts and figures, long-term unemployment was dropping in the last ten years. Not that certain politicians would admit it, though.
Note how long-term unemployment rose in the late 1980s and spiked in the early to mid 1990s. Can we remember what happened to New Zealand in that time? The terms “Rogernomics” and “Ruthanasia” might jog our memories.
New Zealand Employment
New Zealand Government Debt To GDP
Despite claims that Labour “spent up large” during their nine year term, the truth is completely different. As the IMF data shows with crystal clarity, Labour paid down debt. It was not until National came to office that debt levels took of again.
It could be said, with considerable truth, that Finance Minister Michael Cullen ran the government accounts with a fiscal discipline that would make Scrooge sit up and take notice.
The IMF data shows fairly well why Labour had such massive debt kevels to pay down. It was an inheritance from the previous Bolger-led National Government of the 1990s. (Though National were addressing that debt, the reduction slowed from 1997 onward.)
New Zealand GDP
One of the many “charges” made by neo-liberals against the Labour Party is that centre-left governments are poor stewards of the economy and are anti-business. Yet, the World Bank data below shows quite dramatically how well New Zealand’s economy fared in the 2000s. Our growth was such that a common complaint from business was a lack of skilled, experienced staff.
The early 1990s were marked by “Ruthanasia” – a continuance of Roger Douglas’s extremist neo-liberal, free market policies. All socio-economic indicators worsened during Ruth Richardson’s tenure as Minister of Finance. The World Bank data below shows how New Zealand’s economy was practically crippled under the tender mercies of the New Right.
It was not till 2003, under Labour’s governance, that the economy began to grow.
As an aside, there were took tax cuts during the 1990s. Result: minimal benefit for the economy.
Labour increased taxes for top income earners in the early 2000s. Except for a short-term ‘dip’, the tax rise doesn’t seem to have impacted on the economy.
New Zealand GDP per capita
New Zealand Interest Rates
New Zealand Inflation Rates
New Zealand Current Account
This is the bit which shows how much we sell overseas (export), compared to what we buy (import). Exports can be wool, timber, fish, dairy products, company profits, etc. Imports can be fuel, consumer products, vehicles, raw materials, heavy machinary, etc. The shaded gray should be above the ‘O’ line, instead of below it.
New Zealand Government Budget
This graph is an interesting bit. When John Key and Bill English refer to the previous Labour government expanding State expenditure, this is what they are referring to. And they are correct – but only half correct. As per usual, they are telling you only half the truth – and leaving out the next, important bit.
Look at the next graph below, 1990 – 2000.
In the graph below, it is clear that the National government from the early to mid 1990s (commonly referred to as “Ruthanasia”) and in the late 1990s, consistantly cut back on expenditure. Some of you may recall horror stories of those times; ex psych patients living rough, in toilets, with no State-community support; market housing rentals; and hospital waiting lists far longer than anything we have today.
On 3 April 1998, Southland dairy farmer Colin Morrison (42) died on a waiting list, awaiting a triple heart bypass surgery. In death, Mr Morrison symbolised everything that was terribly wrong with the health system in the late 1990s. Public anger mounted as an unpopular government seemed unable to respond to concerns that our public services were being run down in the name of “efficiency”.
Little wonder that there was a 11.55% swing toward Labour in the 1999 General election – the electorate had had a gutsful of neoliberal policies resulting in growing inequality and social problems that seemingly went unheeded. Contrasts
That is the reason why Labour spent so much during it’s term: to make up for the lack of social spending in the 1990s, and to meet growing public clamour for social services to be better resourced.
Cash surplus/deficit (% of GDP) in New Zealand
Contrary to the fantasies of some history-revisionists, trying to paint the previous Labour Government as “bankrupting the country”, Cullen actually posted some fairly respectable surpluses.
New Zealand Sovereign Credit Ratings
The following data-sheet shows New Zealand’s credit downgrades from 1977, when Rob Muldoon was Prime Minister, to the present.
Note that three credit downgrades happened duting three National governments; 1991, 1998, and this year. And if you include the Rogernomics period – that makes FOUR neo-liberal governments that were downgraded.
Do credit ratings agencies seem “risk averse” to new right governments? Do they prefer centre-left governments?
First, look at 10 September 1998 (National government) – AA+ (negative outlook)
But when Labour came to power – 7 March 2001 – AA+ (stable outlook)
New Zealand Prison Population trend since 1980
A closer look at the period 1962 to 1996. Note the huge ‘spike’ in the prison population from 1986 onwards. Except for occassional dips, the prison population has continued to rise steadily since the mid-1980s.
It cannot be a coincidence that New Zealand’s entire socio-economic fabric was unravelled and “reformed” in a process commonly referred to as “Rogernomics”. The process of “economic reform” continued into the 1990s, referred to as “Ruthanasia”, up until 1996.
The prison population, though, continued to rise.
The ongoing effects of “Rogernomics/Ruthansia” are ongoing to the present day.
[This page still under construction - more data to follow. Keep checking back for more info.]
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