The National Party, common sense, and sausage sizzles
I’ve been involved in politics, in one form or another, for much of my life. I think I have a fairly good ‘handle’ regarding politicians; their ideologies; and their Parties.
I’ve seen Muldoon come and go; Bolger and Richardson; Shipley and English; and now Key and English, try their hand at managing our economy and spending our tax dollars.
Without exception, folks, every single National Government, from Robery Muldoon onwards, has been an apallingly bad fiscal manager.
National’s modus operandi,
- Cuts short term spending, worsening long-term social problems, which will become more expensive eventually, as social ills remain unaddressed,
- Cuts state sector employees and services, then realises that essential issues still remain,
- Cuts taxes when we can least afford it,
- Implements fiscal, political, and social policies that impact negatively on economic and social indicators,
- Borrows from overseas lenders when it was never necessary in the first place (or reduced borrowing, had tax cuts not been implemented)
- And generally makes bad choices that, long term, will cost the taxpayer more.
So – how on Earth has National ever built up a reputation of being a “sound fiscal manager” of our economy?!?!
Because every time National has been in office, it has left the country in an absolute economic shambles.
From Ruth Richardson’s “Mother of All Budgets”, to Jenny Shipley’s and Bill English’s “slash and burn” of the health sector, state housing, Police force, and other essential state services in the late 1990s – National has proven time and again it’s ineptness.
This Party is utterly clueless when it comes to simple matters of cause-and-effect.
One thing, though, has escaped me utterly.
How have they sucked in the public to effect a (undeserved) reputation of sound fiscal management?
Whilst National runs deficits, Labour, in the 2000s, ran surpluses. (A fact National attempts to hide by clumsily persisting in re-writing history.)
See previous blogpost: Labour: the Economic Record 2000 – 2008
Case in point; Dear Leader and his minions has made a great deal about slashing the state sector. National has made deep cuts into state sector services and sacked over 2,500 much-needed employees,
As 2,500 people were sacked from their jobs – all for a grand saving of $20 million, National belatedly realised that their slash-and-burn was little more than a false economy.
It soon became apparent that many of the sacked workers were much-needed experts in their field, and essential personnel to make the State function smoothly.
National took “appropriate action”,
Two thousand, five hundred of our fellow kiwis lost their jobs for “savings” of $20 million.
The Economic Development Ministry alone increased spending on consultants, contractors, etc, from $6.7 million in 2008-09 to $19.2 million in 2010-11. Other ministries most likely spent several million on their consultants, contractors, advisors, and Uncle Tom Cobbly.
So much for “savings” of $20 million.
One can only try to imagine what those 2,500 people who were sacked by National, must be feeling right now.
So the question remains; how has National managed to paint itself as a “responsible steward” of the country’s economy? Especially when a cursory study of their real performance reveals otherwise?
Tracey Watkins, writing in today’s (19 May) ‘Dominion Post‘, may have offered a clue,
” But while these sorts of measures might be an annoyance, they do not cause widespread pain.
And in a perverse way, Europe helps Bill English’s cause. It maintains a sense of crisis while the sight of workers marching in the streets only underscores the gentle and low-fuss nature of our own austerity drive.
This is why Labour has struggled so far to run a coherent argument against National’s management of the books – the danger has always been that protesting any cuts to date look not only shrill, but profligate. To voters, less is more at the moment. “
“ A sense of crisis “. It may well be that the Middle Classes have been panicked by overseas events. There may be an under-lying fear that – like households in tough times – the country needs to cut back on spending, to avert a Greece-like melt-down in our own economy.
There may be an underlying belief within the collective consciousness of New Zealanders that, in “tough times”, National is better at cutting than Labour. In “tough economic times”, cutting expenditure may appear to the public as more of a priority than, say, job creation.
Such feelings are not necessarily based on any reality or logical analysis of the country’s true economic situation; nor of the side-effects of cutting back on State expenditure. These may be deep-seated feelings based on how people may view the economy.
Generally speaking, people have very little experience with macro-economics; Keynesian-vs-Friedmanite economic systems; nor any real understand of how government economic policies work.
For most folk, their only experience is running the finances of their own households. Doing a household budget; paying bills; and balancing the chequebook is the extent to most peoples’ exposure to finances.
And yet, government finances is not like household finances at all. The former is more complex, with control over fiscal and taxation policy; revenue streams; and policies that can work to generate income for the state. The State has access to borrowings (if necessary) not open to ordinary households. By widening the tax-base, the State can increase its revenue – no easy task for ordinary households.
In short, the State has options not readily available to households.
But through a dumbed-down media which focuses mostly on superficial political issues; mindless entertainment; and on the Here-And-Now, the public have become low-information voters.
By not being aware of the true extent of the State’s abilities, the public are trapped in a narrow paradigm of the State being akin to “household budgets”.
So when National cuts expenditure, services, and jobs – it appears to the public to be a “common sense” plan to follow.
The public are not so aware that austerity measures can have negatives impacts on our economy and society, even in the short-term. Cutting back on government economic activity means a drop in all-round economic activity.
It is no coincidence that following Ruth Richardson’s “Mother of all Budgets“, that unemployment, company liquidations, economic growth, and other indicators worsened.
This is a Party that I would barely trust to run a sausage sizzle. They’d get rid of the volunteers; sell the barbeque; pay themselves a hefty fee; and claim success,
The ‘mother of all budgets’
In the above graph, note the two ‘spikes’ in unemployment. The first in the early 1990s, after cuts (through the “Mother of all Budgets”) created a rise in unemployment. The second rise occurred in the late 1990s, when the Shipley/English government again cut government services.
However, unemployment fell after the election of a Labour-led government in late 1999.
The implications of austerity policies should be crystal clear to everyone: reducing government expenditure and activity in the economy dampens overall economic activity. Everyone is affected – no one escapes the inevitable downturn.
Hence why the new French President, Francois Hollande, has rejected austerity policies for his country. President Hollande understands full well that cutting government expenditure will result in reduced state services; more unemployment; and a drop in economic activity and growth.
As long as the public are aware of these facts, then they can make decisions accordingly.
Ignorance of these facts will be painful, as anyone with memories of the 1990s will attest to.
In this case, ignorance is not most definitely not ‘bliss’. And no one will be exempt.
Dominion Post: Public service cuts get deeper
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