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2017 – Ongoing jobless tally

21 March 2017 2 comments

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Unemployment logo

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Continued from: 2016 – Ongoing jobless tally

By the numbers, for this year;

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Events

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January

February

March

April

Otago University: unknown

May

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Unemployment Statistics* at a Glance

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(*  See caveat below)

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Caution: Official Unemployment Statistics

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On 29 June 2016, Statistic NZ announced that it would be changing the manner in which it defined a jobseeker. This   so-called “revision”  would materially affect how unemployment stats were counted and reported;

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Change: Looking at job advertisements on the internet is correctly classified as not actively seeking work. This change brings the classification in line with international standards and will make international comparability possible.

Improvement: Fewer people will be classified as actively seeking work, therefore the counts of people unemployed will be more accurate.

The statement went on to explain;

Change in key labour market estimates:

  • Decreases in the number of people unemployed and the unemployment rate
  • Changes to the seasonally adjusted unemployment rate range from 0.1 to 0.6 percentage points. In the most recent published quarter (March 2016), the unemployment rate is revised down from 5.7 percent to 5.2 percent
  • Increases in the number of people not in the labour force
  • Decreases in the size of the labour force and the labour force participation rate

When Statistics NZ ‘re-jigged’ its criteria for measuring unemployment in June, unemployment dropped from 5.7% to 5.2% (subsequently revised again down to 5.1%).

All  unemployment data from Statistics NZ should therefore be treated with caution. Unemployment is  likely to be  much higher than Statistics NZ figures indicate.

 

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References

Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates

Statistics NZ: Labour Market Statistics – June 2016 quarter

Trading Economics: New Zealand Unemployment Rate  to January 2017

Previous related blogpost

Lies, Damned lies and Statistical Lies

National exploits fudged Statistics NZ unemployment figures

Lies, Damned lies and Statistical Lies – ** UPDATE **

2016 – Ongoing jobless tally and why unemployment statistics will no longer be used

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2016 – Ongoing jobless tally and why unemployment statistics will no longer be used

14 November 2016 9 comments

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Unemployment logo

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Continued from: 2015 – Ongoing jobless tally

So by the numbers, for this year;

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Events

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January

February

March

April

May

June

July

August

October

November

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Statistics

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This blogger previously reported how Statistics NZ recently implemented a so-called “revision” which would materially affect how unemployment stats were counted and reported;

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On 29 June 2016, Statistic NZ announced that it would be changing the manner in which it defined a jobseeker;

Change: Looking at job advertisements on the internet is correctly classified as not actively seeking work. This change brings the classification in line with international standards and will make international comparability possible.

Improvement: Fewer people will be classified as actively seeking work, therefore the counts of people unemployed will be more accurate.

The statement went on to explain;

Change in key labour market estimates:

  • Decreases in the number of people unemployed and the unemployment rate
  • Changes to the seasonally adjusted unemployment rate range from 0.1 to 0.6 percentage points. In the most recent published quarter (March 2016), the unemployment rate is revised down from 5.7 percent to 5.2 percent
  • Increases in the number of people not in the labour force
  • Decreases in the size of the labour force and the labour force participation rate

The result of this change? At the stroke of a pen, unemployment fell from 5.7% to 5.2%;

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And on-cue, National was quick to capitalise on Statistics NZ’s figure-fudging;

On 2/3 July, TV3’s The Nation, Dear Leader Key told Corin Dann;

“The unemployment rate in New Zealand is now falling pretty dramatically.”

On 8 August, Key was quoted on Interest.co.nz;

“On the other side, we need these people in an environment where unemployment is 5.2% and where growth is still very, very strong. You’ve just got to be careful when you play around with these things that you don’t hamstring certain industries that need these workers.”

On 12 August, in Parliament, English also gleefully congratulated himself on the “fall” in unemployment;

“The Reserve Bank is forecasting an increase of about 1 percent more growth in the economy over the next 3 years, compared with what it thought 3 months ago. It is forecasting that unemployment is going to continue falling from 5.2 percent this year to 4.5 percent by 2019 and that job numbers will increase by more than 2 percent on average over the next 2 years. A significant component of that, of course, will be the construction boom, where thousands of houses will be built over the next 2 or 3 years. These forecasts are in line with Treasury’s forecast for the labour market and show an economy that is delivering more jobs, lower unemployment, and real increases in incomes when in many developed countries that is not happening.”

The latest Statistics NZ (soon to be re-branded Ministry of Truth) unemployment figures showed another “fall”. The unemployment rate for the September 2016 Quarter is now purportedly 4.9%;

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Can that figure – 4.9% – be trusted?

When Statistics NZ “re-jigged” its criteria for measuring unemployment in June, unemployment dropped from 5.7% to 5.2% (subsequently revised again to 5.1%);

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Predictably, National were quick to once again exploit the September statistics, as their Twitter-feed showed on 2 November;

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And three days later;

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It’s all nonsense, of course – made worse by Statistics NZ’s other dodgy criteria used when considering their definition what constitutes being “employed”;

Employed: people in the working-age population who, during the reference week, did one of the following:

  • worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment
  • worked without pay for one hour or more in work which contributed directly to the operation of a farm, business, or professional practice owned or operated by a relative

Statistics NZ’s mis-representation of our “low unemployment” environment has gone largely unnoticed and unchallenged. No one in the mainstream media has picked up on the questionable data;

This meant the size of the labour force rose 33,000 and unemployment fell by just 3,000 to 128,000. The unemployment rate fell to 4.9% from a revised 5.0% in the June quarter. This was the lowest unemployment rate since the December quarter of 2008. Unemployment has fallen by 7,000 over the last year and is up 1,000 from two years ago.Interest.co.nz

Unemployment has fallen below 5 percent for the first time in nearly eight years thanks to the growing economy, but it is still not translating into booming wages. Official figures show the unemployment rate declined to 4.9 percent in the three months to September, or 128,000 people, the lowest rate since December 2008.Radio NZ

According to Statistics New Zealand, the unemployment rate fell to 4.9% in the September 2016 quarter. This is the lowest unemployment rate since the December 2008 quarter. There were 3,000 fewer people unemployed than in the June 2016 quarter and 10,000 fewer over the year.Maori TV

The unemployment rate has fallen to 4.9 percent for the September 2016 quarter, according to new figures from Statistics NZ. That’s the lowest it’s been since December 2008. – TV3 News

New Zealand’s unemployment rate fell below 5 percent for the first time since December 2008 as employers took on more staff than expected, although that didn’t spur wages to rise at a faster pace. The kiwi dollar rose on the figures. The unemployment rate fell to 4.9 percent in the three months ended Sept. 30 from a revised 5 percent rate in June, Statistics New Zealand said.Sharechat

New Zealand has recorded its best unemployment rate in almost eight years with third quarter figures falling to a better than expected 4.9 per cent. The jobless rate declined from a revised 5.0 per cent in the June quarter, according to Stats NZ, taking it to its lowest point since December 2008. – NZCity/NZ News

New Zealand’s unemployment rate fell below 5 per cent for the first time since December 2008 as employers took on more staff than expected, although that didn’t spur wages to rise at a faster pace. The kiwi dollar rose on the figures.

The unemployment rate fell to 4.9 per cent in the three months ended September 30 from a revised 5 per cent rate in June, Statistics New Zealand said.NZ Herald

New Zealand’s unemployment rate fell more than expected in the third quarter to drop to 4.9 per cent – the lowest rate since last 2008. The jobless rate declined from a revised 5.0 per cent in the June quarter, according to Stats NZ taking it to its lowest point since the December quarter nearly eight years ago. There were 3,000 fewer people unemployed than in the previous quarter and 10,000 fewer over the year. – TVNZ News

Of course there were “3,000 fewer people unemployed than in the previous quarter and 10,000 fewer over the year“! Ten thousand unemployed people vanished from the data, at the click of a mouse, as Statistics NZ worked their “magic”.

Statistics NZ could potentially make unemployment vanish entirely, overnight, by changing the unemployment criteria to people with only two hearts and scaly blue skin.

Only Hamish Rutherford, at Fairfax media, pointed out the questionable value of Statistics NZ’s data;

Unemployment has fallen to the lowest level in almost eight years, as the economy creates more than 10,000 new jobs a month. Official figures show the unemployment rate dropped to 4.9 per cent in the the September quarter, the first time it has fallen below 5 per cent since December 2008.

Earlier this year Statistics New Zealand revised the way it conducts the quarterly household labour force survey (HLFS), in a bid to bring the survey more in line with international standards. However the changes mean Statistics New Zealand cannot make confident comparisons with all of the figures from previous surveys.

But even in Rutherford’s article, the all-important point of dodgy stats was lost amongst the ‘rah-rah‘ of the mythical drop in unemployment.

The Otago Daily Times made an even less impressive, passing, reference to Statistics NZ’s fudged figures;

Unemployment in New Zealand is at its lowest level since 2008 but there will be lingering concerns about the lack of wage growth and the impact this will have on the inflation outlook.

Statistics New Zealand has changed some of its survey data to measure unemployment and employment and those changes are still bedding in.Otago Daily Times

Government Statistician, Liz MacPherson, has rejected any suggestion of political partisanship in the way unemployment data is now being presented.

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She was defensive in the face of criticism from Labour’s Grant Robertson and on  16 August, Ms MacPherson stated;

Like my predecessors I am fiercely protective of the statutory independence of the role of the Government Statistician and strongly refute any assertions made by Grant Robertson that there has been political interference in the production of official statistics.

This independence means that I maintain the right to make changes necessary to ensure the relevance and quality of our official statistics. Changes to the Household Labour Force Survey have been made to ensure that we produce the best possible measure of the current state of the labour market and to maintain consistency with international best practice.

Far from ignoring technological change during the past 30 years, such as the advent of the internet, we are incorporating these changes so as to be technology neutral.

Within the survey questions, to be regarded as actively looking for a job you must do more than simply look at job advertisements, whether it is online or in a newspaper.

It is not uncommon for revisions to be made to official statistics as a result of more accurate information becoming available or changes to international standards and frameworks.

In addition we are introducing new measures – for example underutilisation – enabling a deeper, richer understanding of New Zealand’s labour market.

When this does occur it is standard practice for Statistics NZ to communicate reasons for revisions and anticipated changes well in advance of their official release, as we did on 29 June 2016. […]

Statistics NZ has a legislative obligation to release objective official statistics. We will continue to do this at all times.

One of many ironies not lost on this blogger is that other government departments extoll the virtues of jobseeking on-line. As CareersNZ and WINZ state the blindingly-obvious, “most job vacancies are listed online”;

Careersnz;

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WINZ;

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Ms MacPherson’s assertion that Statistics NZ has changed it’s definitions of unemployment and jobseeking  “to maintain consistency with international best practice” is not an acceptable explanation.

If “international best practice” does not recognise on-line jobseeking as constituting a definition of unemployment – then that in itself is worrying and suggests that global unemployment may be much, much higher than current international statistics portray.

As a consequence of Ms MacPherson’s decision to exclude on-line jobseekers from official stats, this blogger concludes that official unemployment data is  severely flawed and unrepresentative of our real unemployment numbers.

In simple terms; the numbers are a sham.

Unemployment statistics will no longer be presented in on-going up-dates of the Jobless Tally.

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This Statement has not been endorsed by MiniTruth (formerly StatsNZ)

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Addendum1: Definition of Employment

Employed: people in the working-age population who, during the reference week, did one of the following:

  • worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment

  • worked without pay for one hour or more in work which contributed directly to the operation of a farm, business, or professional practice owned or operated by a relative

  • had a job but were not at work due to: own illness or injury, personal or family responsibilities, bad weather or mechanical breakdown, direct involvement in an industrial dispute, or leave or holiday.

Source

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References

Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates

Scoop media: On The Nation – Patrick Gower interviews John Key

Interest.co.nz: Key deflects calls for migration review; says migration needed with 5.2% unemployment

Scoop media: Parliament – Questions & Answers – 11 August 2016

Statistics NZ: Labour Market Statistics – September 2016 quarter

Statistics NZ: Labour Market Statistics – June 2016 quarter

Twitter: National (2 Nov)

Twitter: National (5 Nov)

Interest.co.nz: Jobs grew 35,000 or 1.4% in Sept quarter, but unemployment fell just 3,000 and jobless rate falls to 4.9%

Radio NZ: Unemployment drops to lowest level since 2008

Maori TV: Work force grows despite youth unemployment

TV3 News: Unemployment drops to lowest rate since 2008

Sharechat: NZ jobless rate falls below 5% for first time since 2008, wage inflation muted

NZCity/NZ News: Jobless rate falls to near eight-year low

NZ Herald: NZ jobless rate falls below 5 per cent for first time since 2008, wage inflation muted

TVNZ News: Unemployment rate falls to near eight-year low

Fairfax media: Unemployment drops to lowest level since 2008 on booming job creation

Otago Daily Times: Unemployment lowest in eight years

Radio NZ: Statistician denies political interference over job seeker figures

Statistics NZ: Government Statistician responds to Grant Robertson

Careersnz: Job hunting tips

Work and Income: Where to look

Additional

TVNZ: Q+A – Interview with John Key

Previous related blogpost

Lies, Damned lies and Statistical Lies

National exploits fudged Statistics NZ unemployment figures

Lies, Damned lies and Statistical Lies – ** UPDATE **

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This blogpost was first published on The Daily Blog on 9 November 2016.

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2015 – Ongoing jobless tally

7 November 2015 5 comments

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Unemployment logo

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Continued from: 2014 – Ongoing jobless tally

So by the numbers, for this year;

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Events

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January

February

March

April

May

June

July

August

September

October

November

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Statistics

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unemployment quarter ending September 2015 - new zealand

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Source

*NB: actual rate for Dec 2014/Jan 2015 Quarter should be 5.7%, not 5.8% as depicted in above column. See Stats NZ data here.
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June 2015 quarter – Employment & Unemployment

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statistic nz - june 2015 quarter - unemployment

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Commentary from Statistics New Zealand:

The unemployment rate increased to 5.9 percent in the June 2015 quarter (up from 5.8 percent), Statistics New Zealand said today. At the same time, there were 7,000 more people employed over the quarter (up 0.3 percent).

“Even though employment grew over the quarter, population growth was greater, which resulted in a lower overall employment rate for New Zealand,” labour market and household statistics manager Diane Ramsay said.

“Despite lower quarterly growth, this is still the 11th consecutive quarter of employment growth, making it the second-longest period of growth since the period between 1992 and 1996,” Ms Ramsay said.

Over the year to June 2015, employment growth was still fairly strong (at 3 percent) with 69,000 more people employed. The manufacturing industry showed the strongest annual employment growth.

“This is the first time since the December 2013 quarter that the construction industry has not been the largest contributor to annual growth in employment,” Ms Ramsay said.

The vast majority of growth was in Auckland (29,600 people), where the annual employment growth was driven by retail trade and accommodation, followed by construction. Bay of Plenty had the second-highest employment growth, with 11,000 more people being employed over the year.

Annual wage inflation, as measured by the labour cost index, was 1.6 percent, compared with annual consumer price inflation of 0.3 percent.

Source

September 2015 quarter – Employment & Unemployment

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statistic nz - september 2015 quarter - unemployment

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Labour market at a glance

  • Number employed fell for the first time in three years.
  • Unemployment rate increased to 6.0 percent.
  • Labour force participation rate falls further from record high in March 2015 quarter.
  • Annual wage inflation remained at 1.6 percent.

Source

Additional analysis;

  1. The Employment Rate fell 0.5%
  2. According to the HLFS, Total actual weekly hours worked increased over the last Quarter by  +0.4, and  Annually, by +1.5

Which means few people are working longer hours to sustain economic growth.

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Other Economic Info

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ANZ Economic Outlook

The New Zealand economy has clearly entered a more challenging period. Growth averaged just a 0.3% quarterly pace over the first six months of the year vis-à-vis a 0.9% quarterly pace over the second half of 2014.

Annual growth slowed to 2.4% in Q2 (the slowest since December 2013) and timelier indicators suggest a pace tracking perhaps a tad below 2% at present; not dire – nor a downturn – but certainly sluggish and consistent with deceleration.

In per-capita terms, activity is treading water and slowing labour demand (but still-strong labour supply growth) has seen the unemployment rate tick up to close to 6% Consumer and business confidence have fallen, and where the expansion was previously relatively broad-based, a more divergent regional performance is now evident.

Full Report here.

CTU Economic Bulletin 173 – Oct 2015

Despite economic growth in production per hour worked which peaked at 4.7 percent in dollar terms in the year to June 2014, wage rises have been subdued. Even the Reserve Bank is commenting on it. What are some of the reasons for wage rises being low?

We have a poorly performing economy. Most of the recent growth has been because more people have been brought into the labour force or people are working longer hours, rather than because people are producing more in each hour they work. Over the supposed “rock star” period of June 2013 to June 2015, the economy’s production per hour worked increased only 0.1 percent. Yet companies’ profit rates are rising quickly – so wages could.

Even the Minister of Finance concedes that current strong net immigration is holding down wages. It could be much better controlled so that, while taking humanitarian concerns into account, it focuses on skills that New Zealand residents genuinely do not have or couldn’t be trained to do, and in numbers that the country can absorb.

The Government has been open about suppressing pay increases for people employed in the state sector. Its tight funding of contractors such as in aged care also holds down wages. By doing this, the Government is reducing pressure on private sector employers for pay increases.

Full Report here.

Building Consents – Statistics NZ

Fonterra

  • 24 September: Fonterra Co-operative Group lifted its forecast total available for payout for the 2015/16 season to $5.00 − $5.10 kgMS due to an increase in the forecast Farmgate Milk Price of 75 cents
  • 14 October: Standard and Poor’s  downgraded Fonterra’s  credit rating from A to A-

Westpac Economic Overview – November 2015

Brewing El Niño conditions are likely to cause dry weather and knock the economy. And there will be further challenges from a global economic slowdown, the levelling off of the Canterbury rebuild, and the possibility of a housing market slowdown in Auckland.

Full Report here.

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Addendum1: Under-employment

The  under-employment stats;

People who are underemployed are those who work part-time, would prefer to work more hours, and are available to do so. In unadjusted terms, the number of underemployed grew by 12 percent over the year. While the number of part-time workers increased over the year, the ratio of people underemployed to employed part-time also rose – from 17.1 percent in June 2013 to 18.7 percent this quarter.

Official under-employment: up

Definitions

Jobless: people who are either officially unemployed, available but not seeking work, or actively seeking but not available for work. The ‘available but not seeking work’ category is made up of the ‘seeking through newspaper only’, ‘discouraged’, and ‘other’ categories.

Under-employment: employed people who work part time (ie usually work less than 30 hours in all jobs) and are willing and available to work more hours than they usually do.

Employed: people in the working-age population who, during the reference week, did one of the following:

  • worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment 

  • worked without pay for one hour or more in work which contributed directly to the operation of a farm, business, or professional practice owned or operated by a relative 

  • had a job but were not at work due to: own illness or injury, personal or family responsibilities, bad weather or mechanical breakdown, direct involvement in an industrial dispute, or leave or holiday.

Source

Addendum2: Other Sources

Statistics NZ:  Household Labour Force Survey

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[To  be periodically up-dated]

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“The Nation” reveals gobsmacking incompetence by Ministers English and Lotu-Iiga

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If there is a crystal-clear example why a functioning democracy must have  vibrant, critical current affairs programmes on free-to-air televesion, then  TV3’s ‘The Nation‘ on the morning of 2 May was top-of-the-pile. Without doubt, this land-mark episode was a powerful insight into the general competence (or lack, thereof) of two of the government’s senior ministers; Finance Minister Bill English and Corrections Minister, Peseta Sam Lotu-Iiga.

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Corrections Minister, Peseta Sam Lotu-Iiga -- TV3's 'The Nation' host & interviewer, Lisa Owen -- Finance Minister Bill English

(L-R) Corrections Minister, Peseta Sam Lotu-Iiga — TV3’s ‘The Nation’ host & interviewer, Lisa Owen — Finance Minister Bill English

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The highly talented host-interviewer, Lisa Owen, interviewed both, drilling deep down, and extracting information; admissions; and more critically – waving aside pathetic attempts to fudge legitimate answers. The resulting exchanges did not make for a ‘happy day’ for either government minister, revealing one totally out of his depth, and the other unwilling to admit that his stewardship of the country’s economy has been an abject failure.

1. Finance Minister Bill English

In  the opening months of World War 2, there was a period from September 1939 to May 1940, known as “the Phoney War“. Both the Allied Nations (led by Great Britain) and the expanding Third Reich were technically at war, but major military operations did not commence until Nazi Germany invaded Belgium, the Netherlands and Luxembourg on 10 May 1940.

In New Zealand, we might have referred to those first eight months as a “Clayton’s War” – the war you’re having when you’re not really having a war. (For those old enough to remember, “Clayton’s” refers to a non-alcoholic beverage marketed in New Zealand in the 1970s and 1980s. It was heavily promoted with the catch-phrase, “the drink you have when you’re not having a drink”. The marketing campaign was an advertisers dream-come-true, catching the public’s attention. The product, unfortunately for the manufacturers, was less successful. )

The same could be said of New Zealand’s so-called “rock star economy” and “recovery”.

By nearly all accounts, our recent growth has been predicated on three factors;

  1. The Auckland housing boom/bubble
  2. The Christchurch Earthquakes re-build
  3. Exports – particularly dairy – to China

The first is reliant purely on borrowing from off-shore to fund speculative activity. When that bubble finally bursts, we will be left with a multi-billion debt; thousands of bankruptcies; and an economy in tatters as capital flight takes place.

The second is a short-term growth-spurt which owes it’s origins to two natural disasters – literally disaster capitalism.

The third is built upon China’s unsustainable growth, and has recently fallen away, returning Australia as our number one trading partner, as the value of dairy commodities plummet.

The first two are unsustainable. The last is reliant on a major trading partner’s economic well-being. As with New Zealand’s lamb and butter exports to the UK prior to it joining the EEC in January 1973, we have placed our export “eggs” in one, very big, very fragile, basket.

Against this backdrop of The Phoney Economic Recovery,  the following financial facts should give us cause for concern;

  1. The on-going cost of the 2009 and 2010 tax-cuts, estimated to be around $3.8 billion per year, and up to $4.26 billion last year
  2. Plummeting dairy prices resulting in lower payout to farmers and taking $7 billion out of the economy
  3. Reduced tax-take by the government is around $4.5 billion

In view of unsustainable tax-cuts in 2009 and 2010; the economy taking a $7 billion “hit”; and lower than anticipated tax revenue by this government, it was hardly unexpected that Bill English’s promises of a surplus this year have collapsed.

Lisa Owen challenged the hapless Finance Minister in a sixteen minute long interview. In this excerpt, English is evasive when asked questions about the governments surplus;

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Full interview here

Throughout the interview, English was upbeat and insisted that a surplus was just around the corner;

“Well, okay, it would be nice if the number got there this year; it’ll just take a bit longer. What’s important here is the trajectory. So Government is closing its deficits; it’s getting to surplus. We’ll soon be in a position to start paying off debt. Our expenditure’s under control; the revenue’s a  bit harder. You’ve just seen in the last day or two, dairy prices are going down again; that has an impact. So we’re sufficiently confident in the direction that we’re not going to cut services or cut entitlements to try and chase a larger surplus number.”

Lisa Owen asked the Minister: “Okay. Well, before on The Nation, you said that the Government would not make any cuts to reach surplus. Is that still your plan?

English replied;  “That’s right. We’re not going to make any specific extra decisions now just because our tax revenue’s a percentage point – 1% down.”

Then, incredibly, English maintained that tax-cuts were still on National’s agenda;

Owen: “I just want to look at some of the big promises, like tax cuts. They were meant to come from that $500 million that you now don’t have. But is it fair to say that they’re not really likely now?

English: “As we indicated last year, we wouldn’t be able to contemplate that until 2017 for some of the reasons that you’ve outlined. So at the moment, the ability to deliver some kind of moderate tax cut hasn’t changed and we would have the next couple of budgets to work out how that would happen.”

Owen: “Hang on, Minister. It has changed, hasn’t it, Minister, because you’ve just identified the fact you’ve got less money, so it must have changed.

English: “Well, we’ve shifted the money from next year to the year after; that’s technically what’s actually happened. We’ll deal with that as time goes on, but the point I’m making is our finances are-“

Owen: “Is it likely that your tax cuts then will be delayed as well? Maybe 2018, not 2017?

English: “No, we’re not suggesting that. We said at the end of last year that they would be possible in 2017. We’ve made allowance for that.”

It beggars belief that we have a Finance Minister willing to entertain the notion of tax cuts at a time when dairy prices are dropping; tax revenue is falling; and public debt has ballooned to $59.9 billion  and rising by $27 million per day, every day.

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public debt - NZ Treasury

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Never mind tax cuts – when do we, as a nation, start to repay this debt mountain?!

The reality is that if National proceeds with promises of tax cuts in 2017 (which is an election year – bribe anyone?) New Zealand will have to  borrow from offshore to make up the shortfall in revenue. Our debt mountain will continue to grow.

English himself admitted that the deficit this year will be in the order of around half a billion dollars;

“…It is what it is, and that is for the 14/15 year, we budgeted $370 million surplus. It looks like it will be a $500 or $600 million deficit, and the surplus will be the next year. So we’re on track.”

Somewhere in National’s gross mis-management of the economy, they have gone from a $370 million surplus to a potential $600 million deficit – just shy of $1 billion lost.

How does a government make such a colossal mistake? “It is what it is” is hardly an explanation.

Throughout the interview, English kept repeating the mantra of a future surplus;

“The direction is pretty clear. Our surpluses will come and they will grow, and we’ll be able to pay off debt.”

“The target remains getting to surplus, and in the Budget, you’ll see the details of where the Government is up to with it. But I’m indicating that despite falling a bit short in 14/15, we’re on track for surplus.”

Though English insisted that there would be no cuts to spending, he did use coded language for possible reductions to welfare spending;

Owen: “Is it likely that your tax cuts then will be delayed as well? Maybe 2018, not 2017?”

English: “No, we’re not suggesting that. We said at the end of last year that they would be possible in 2017. We’ve made allowance for that.”

Owen: “Okay. So what about measures to curb poverty, then? Will they have to be delayed? Because the Prime Minister identified them as something of a priority. Is that going to be delayed?”

English: “Well, we’ve been working on these issues for a while, particularly focused on communities and families with persistent deprivation and caught in a cycle of dependence. And so you could expect to see us continue with that sort of programme through this Budget…

… Or sickness and invalids beneficiaries with more support for their health issues and more support for employment, could actually get out of dependency, off welfare and remain in work.

Because as we all know, invalids don’t actually have real disabilities or debilitating injuries or diseases – they are simply on a “cycle of dependence”.

When in trouble, blame someone else. In this case, invalids.

Owen then moved on to the issue of Auckland’s growing housing crisis and nailed English on this government’s spectacular inability to manage and address that city’s housing shortage. English simply blamed the Auckland Council;

“Well, the migration numbers have stayed high, bearing in mind about half of migrants appear to go to Auckland; the other half go to the rest of the country. But there’s pretty clear signals that Auckland City Council need to get on with the job. They are the ultimate decision-maker around the infrastructure and around the consenting for new houses. We’re giving them the toolkit to enable them to do it faster, but there’s clearly a lot more to be done, and we’ll keep looking for more tools to help the Auckland City Council to do the job they need to do.”

When still in trouble, keep blaming someone else. In this case, the Auckland Council.

Thus far, National’s grand strategy to cope with Auckland’s housing crisis is to shift ownership of 2,800 properties from Housing NZ to the Tamaki Redevelopment Company – as if shifting properties around on a giant ‘Monopoly’ board will somehow solve the problem?

Owen pointed out to English that in transferring 2,800 houses to the Tamaki Redevelopment Company, that he was breaking a previous committment;

Owen: “Now, hang on a minute. There you offloaded 2800 houses, and I thought you had a cap on getting rid of state houses of about 2000. So is that cap gone now?

English: “Well, no. What we’ve said is Housing New Zealand will own at least 60,000 houses, and that certainly hasn’t changed. Government remains the owner—”

Owen: “No, you said a cap, Minister. So has the cap gone now with this 2800 houses? The cap’s blown?

English: “No. Government will remain the owner of the Tamaki houses. We’ve simply put them in a different government company, which has been set up specifically to regenerate that community, because it’s a very particular skillset.”

English had all but surrendered to Owen’s persistent questioning by outright admitting his government’s failure to address Auckland’s mounting housing crisis;

“That’s right. We’re not meeting demand. I certainly agree with that. Whether it gets worse before it gets better, forecasters can argue over that. We’ve got plenty to do to meet the demand that’s been there for a while. And as I said, the Government’s supporting Auckland City, trying to get them a better toolkit and making our own contribution through redeveloping our own land in Auckland.”

For English, this interview was possibly the worst in his political career. He had to explain why his commitment to returning to surplus this year was now in tatters, and why his government’s housing plan for Auckland consisted of moving state housing from owner to owner, without adding significantly to the overall stock.

The only reason why National’s reputation for being a “sound prudent fiscal manager” survives intact is because New Zealanders are not paying attention.

But worse was to come when Corrections Minister, Peseta Sam Lotu-Iiga took the chair and was also interviewed by Lisa Owen. What followed was a debacle of Hekia Parata proportions.

2. Corrections Minister, Peseta Sam Lotu-Iiga

With on-going  privatisation of State services dressed up as so-called “Public-Private Partnerships” (PPPs), Lisa Owen put several questions to the Corrections Minister on the role of UK company, Serco, which has been contracted to run the new prison at Wiri.

His responses were jaw-droppingly incompetant. The man was totally out of his depth, as these excerpts show;

Owen: “So are they getting paid and how much?”

Lotu-Iiga: “Well, the contract is between Serco and PlaceMakers, and I’m not privy to those sums, but—”

 

Owen: “So you don’t know how much the business is going to make—”

Lotu-Iiga: “I don’t have the figures on me, but we could ask Serco what the contract’s for.”

 

Owen: “Out of the inmates building framing and having these contracts. So who makes the profit out of the contract?”

Lotu-Iiga: “ Well, we don’t know whether there’s profits being made, but what PlaceMakers—”

 

Owen: “Why don’t you know that, Minister? Because this is under your watch.”

Lotu-Iiga: “Well, I spoke to the managing director of PlaceMakers yesterday, and they said that they will pay a standard contract for fees to Serco. I don’t know what that amount is…”

 

Owen: “Right, so in terms of rehabilitation, but you don’t know who’s making a profit or if one’s being made?

Lotu-Iiga: ” Hang on. They’ve got a commercial transaction between Serco and PlaceMakers. I don’t know what that figure is, but we can work it out.”

 

Owen: “Even with that $30 million? Even with that $30 million profit that they’re making per annum?”

Lotu-Iiga: “I don’t think they’re making a $30 million profit.”

 

Owen: “You don’t think it’ll make $30 million, and what you’re saying is it’s still saving money even though this company is making a profit out of it? It’s still saving us money even though they’re taking that profit.”

Lotu-Iiga: “It’s… Well, it’s saving the taxpayer money. It is saving the taxpayer money.”

 

And then this astounding admission from the Minister that must have had every viewer that Saturday morning choking on his/her milo/tea/coffee, and the Prime Minister speed-dialling his Chief-of-Staff;

Owen: “Who employs those monitors? Who employs the monitor in the prison? “

Lotu-Iiga: “There will be— If I can just finish, there will be an ombudsman. They will be subject to complaints—”

Owen: “So the monitor in the prison, Minister, just to be clear, the monitor in the prison; who employs the monitor?
Lotu-Iiga: “My understand is that the monitors are based in the prisons, but they report to the Department of Corrections.”

Owen: “Who employs the monitor and pays their wages, Minister?

Lotu-Iiga: “Well, I don’t have those facts on me, but they do report—”

Owen: “Well, I do. The person who employs the monitor— the person who employs the monitor is the company, Serco. They employ the monitor, and pay their wages.”

Lotu-Iiga’s spectacular ignorance of his own portfolio has almost certainly destroyed his political career. He will also have disappointed his political strategist and mentor, controversial far right-winger,  Simon Lusk.

Lusk was employed by Lotu-Iiga during the 2008 election campaign for the Maungakiekie Electorate Campaign. In return, as well as being paid by Lotu-Iiga, in his Maiden Speech in Parliament the newly-elected MP openly acknowledged Lusk’s involvement in his election to Parliament. In this Youtube video, Lotu-Iiga mentions Lusk at 3:56. Note who is sitting behind Lotu-Iiga – Aaron Gilmore, another Lusk protégé.

Bad luck, Simon.

It is not often that I feel sympathy for a Minister of a National Government. When I do, it is the pity I feel for a doomed man whose career has come to a grinding, crushing halt.

At the next Cabinet re-shuffle, Lotu-Iiga will be joining Kate Wilkinson, Phil Heatley, and Aaron Gilmore in political oblivion.

Dead Minister Walking.

3. Political Panel

Mike Williams, Bernard Hickey & Jamie Whyte comment on interviews with Bill English and Peseta Sam Lotu-Iiga. Note ex-ACT leader, Jamie Whyte’s cringe-worthy apologistic comments on behalf of English, and why he thinks government debt does not matter.

4. The Programme

All in all, this was one of the most outstanding episodes of “The Nation” with excellent interviews; topical subject matter; and insightful analysis by (most) of the panellists. Lisa Owen joins Kim Hill as two of this country’s most formidable interviewers.

This is the sort of programming Mediaworks should be broadcasting at Prime Time. My “money” would be on people desperate for informative television – who are sick to their stomachs on a sickly diet of “reality tv” – to flock to such a viewer-friendly scheduling.

Good, quality, current affairs should never be tucked away as some sort of “guilty pleasure”.

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References

Wikipedia: The Phoney War

Wikipedia: Claytons

Rabobank: Country Report New Zealand

Farming Show: Australia becomes top trading partner once again

Radio NZ: Price drop another blow for dairy farmers

NZ Herald: Brian GaynorPlans for jump-start reveal differing styles

Scoop media:  Govt’s 2010 tax cuts costing $2 billion and counting

Fairfax media: Dairy prices fall at Fonterra GlobalDairyTrade auction

Beehive: Fact sheet – Personal tax cuts

Radio NZ: English concedes surplus target unlikely

Youtube: The Nation – Can National promise a surplus by 2016?

TV3: The Nation – Interview –  Finance Minister Bill English

Treasury: Debt

Fairfax media: Public debt climbs by $27m a day

Fairfax media: Government offloads 2800 state houses to Auckland development company

TV3: The Nation – Interview – Corrections Minister Sam Lotu-Iiga

Wikipedia: Serco

Simon Lusk: Clients

Fairfax media: The rapid rise of a well-educated man

Youtube: Peseta Sam Lotu-Iiga MP – Maiden Speech

Previous related blogposts

Tax cuts and jobs – how are they working out so far, my fellow New Zealanders?

Did National knowingly commit economic sabotage post-2008?

Budget 2014 – Why we will soon owe $70 billion under this government

The Mendacities of Mr Key #3: tax cuts

When the Rich Whinge about paying tax

Two Tax Strikes against Dunne?

“It’s one of those things we’d love to do if we had the cash”

National’s Ohariu candidate admits contact by Simon Lusk

Power Struggle in the National Party?!

Other blogs

Unframed: John Key has no credibility on debt and no Plan B

Acknowledgement

Tim Watkin, Producer of “The Nation“, for interview transcripts; link to Youtube excerpt featuring Bill English; and valuable insights.


 

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This blogpost was first published on The Daily Blog on 3 May 2015.

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Radio NZ Debate: Bill English vs David Parker

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20-september

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Check out this excellent debate between National’s Bill English and Labour’s David Parker. Well worth listening to;

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Election Issues debate - Economy - bill english - david parker - radio nz - housing - 2014 election - debate

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Alternative link: Listen to Bill English and David Parker debate the economy on Nine to Noon

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john key is scared of your vote

Above image acknowledgment: Francis Owen/Lurch Left Memes

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National, The Economy, and coming Speed Wobbles – March Update

23 March 2014 2 comments

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The Nationalmobile

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On 1 March, in a previous blogpost, I raised the following issues;

1. The Reserve Bank has indicated that  it will begin to increase the OCR (Official Cash Rate) this year. Most economists  are expecting the OCR to rise a quarter of a percentage point on March 13.

Confirmed. True to it’s word and as clearly signalled, on 13 March the Reserve Bank  raised the Official Cash Rate (OCR) from 2.5% to 2.75%.

2. An increase in the OCR will inevitably flow through to mortgage rates, increasing repayments.  As mortgaged home owners pay more in repayments, this will impact on discretionary spending; reducing consumer activity, and flow through to lower business turn-over.

Confirmed. The ANZ Bank  has already  announced it will increase its floating and flexible home loan rates .25 percentage points to 5.99% on 17 March. Expect other banks to follow suit. Other bank rate rises will be signalled here.

This will inevitably dampen consumer spending and reduce economic activity.

3. An increase in the OCR will inevitably also mean a higher dollar, as currency speculators rush to buy the Kiwi. Whilst this may be good for importers – it is not so good for exporters.

Confirmed, as the NZ Herald reported;

The New Zealand dollar jumped to a five-month high after the Reserve Bank raised the benchmark interest rate as expected and signalled further hikes are on the way.

The kiwi rose as high as 85.26 US cents, from 84.73 cents immediately before the Reserve Bank’s 9am statement. The local currency recently traded at 85.20 cents.”

And in another Herald story,

By raising rates, the Reserve Bank aims to tame both inflationary pressures and house price increases but also runs the risk of elevating an exchange rate it already considers too high, making exports less competitive.”

For a nation that bases it’s economy on exporting, a rising Kiwi Dollar will bring inevitable problems of higher debt and greater trade imbalance. It means we are not paying our way in the world and inevitably there will be a “Crunch Day” of tragi-Greek proportions.

On that day, the public will blame politicians.

Politicians will blame each other.

And the Left will shake it’s head in exasperation – it’s admonitions that this was all predictable as a natural consequence of unconstrained consumerism coupled with rampant capitalism –  lost in the shrill clamour of pointless blame-gaming.

As BERL economist, Ganesh Nana, said on The Nation on 15 March, we’ve been down this road before and not learned a single lesson  from these experiences.

4. As economic activity and consumer demand falls, expect businesses not to hire more staff and for fresh  redundancies to add to the unemployment rate. Unemployment will either stay steady later this year, or even increase.

On-going…

5. As interest rates rise, in tandem with the Reserve Bank’s policy on restricting low-home deposits, expect home ownership to fall even further. This will increase demand for rentals, which, in turn will push up rents. Higher rents will also dampen consumer spending.

Confirmed. The Reserve Bank  has reported that there has “been some moderation in the housing market. Restrictions on high loan-to-value ratio mortgage lending are starting to ease pressure, and rising interest rates will have a further moderating influence...”

Expect home ownership levels to fall even further as interest rates rise further; rents increase (thereby making it harder for low income families to save); and mortgagee sales to rise as well.

Interestingly, when in Opposition, National Party leader, John Key lambasted the Labour Government for a high OCR leading to high interest rates. In a desk-thumping speech, on 29 January 2008, he railed,

Why, after eight years of Labour, are we paying the second-highest interest rates in the developed world?

[…]

Why can’t our hardworking kids afford to buy their own house?…

[…]

Mortgage rates are rocketing upwards…

[…]

We know Kiwis are suffocating under the burden of rising mortgage payments and interest rates…”

It seems that Mr Key should now begin to be answering his own questions.

6. As the global economy picks up and demand for oil increases, expect petrol prices to increase. This will have a flow-through effect within our local economy; higher fuel prices will lead to higher prices for consumer goods and services. This, in turn, will force the Reserve Bank to ratchet up interest rates (the OCR) even further.

Whilst fuel prices remained steady during the worst of the GFC, they have begun edging upward again as the global economy improves and demand for energy grows.

Our high Kiwi Dollar will mitigate the worst of rising crude-oil prices – but only temporarily. Once other Central Banks begin to rise their OCRs, expect the value of the Kiwi Dollar to fall as speculators sell the Kiwi in preference to harder currencies.

This will be good for exporters.

But will be a negative impact on imports – such as oil. Prices will rise as the Kiwi Dollar falls. Count on it.

7. As businesses face ongoing pressures (described above), there will be continuing  pressure to dampen down wage increases (except for a minority of job skills, in the Christchurch area). For many businesses, the choice they offer their staff will be stark; pay rise or redundancies?

Data suggests that wages are not keeping pace with GDP Growth;

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Wages

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NZ average hourly wages 2012 - 2014

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GDP

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NZ GDP Growth Rate 2012 - 2014

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8. Expect one or more credit rating agencies (Fitch, Moodies, Standard and Poors) to put New Zealand on a negative credit watch.

On-going…

9. According to a recent (21 February) Roy Morgan poll, 42%  of respondents still considered the economy their main priority of concern. 21% considered social issues as their main concern.This should serve as a stark warning to National that people will “vote with their hip wallets or purses” and if a significant number of voters believe that they are not benefitting from any supposed economic recovery, they will be grumpy voters that walk into the ballot booth.

There is no reason to think otherwise on this issue. Voters who are spending more on mortgage or rent are less inclined to be happy consumers.Especially as mortgage rates are expected to rise even further, according to Bernard Hickey’s assessment of Governor Graeme Wheeler’s statement,

Wheeler said in early December he expected to raise the OCR by 2.25% by early 2016, which would lift variable mortgage rates to around 8% by then. The bank forecast interest rate rises of around 1% this year and a similar amount next year.”

Home owners paying 7% to 8% on their mortgage will not be happy-chappies and chapettes. They will be grumpy. The 2009 and 2010 tax cuts will be a dim memory and any attempt by Key to remind voters of those cuts will not be warmly received. Especially as any minute gain for workers was more than swallowed up by the rise in GST, ACC, government user-pays charges, and now their mortgages and rents.

If only a small percentage of grumpy voters change their voting away from National (or stay home) – that will mean a critical drop in support for a right-wing bloc. One or two percentage points is all that is required to change the government.

10. National has predicated its reputation as a “prudent fiscal manager”  on returning the government’s books to surplus by 2014/15. As Bill English stated  just late last year,

We remain on track to surplus in 2014/15, although it will still be a challenge to actually reach surplus in that financial year.”

[…]

On top of which is the $61 billion dollar Elephant in the room; the government debt racked up by National since taking office in 2008. As Brian Fallow wrote in the Herald in 2011,

The concern about government debt is not so much about its level, but the pace at which it is increasing. In June 2008 net government debt was $10 billion, or 5.6 per cent of GDP, and gross debt $31 billon, or 17.2 per cent of GDP.”

A lower tax-take, reported by Treasury on 11 March puts serious doubt on National’s ability to return to “remain on track to surplus in 2014/15″;

  • Total unconsolidated tax receipts for the seven months ended January 2014,  $143 million (0.4%) below the 2013 Half Year Economic and Fiscal Update (2013 HYEFU) forecast…
  • Total unconsolidated tax revenue for the seven months ended January 2014,  $459 million (1.1%) below the 2013 Half Year Economic and Fiscal Update (2013 HYEFU) forecast…
  • GST $250 million below forecast,
  • Net individuals’ taxes $191 million below forecast,
  • Customs and excise duties $156 million below forecast

The March Treasury report follows from a February report showing a similar “smaller than forecast tax take across the board“,

The Crown’s operating balance before gains and losses (obegal) was a deficit of $1.79 billion in the six months ended December 31, $380 million wider than forecast in its Dec. 17 half-year economic and fiscal update, and down from a shortfall of $3.19 billion a year earlier. Core tax revenue was $602 million below forecast at $29.18 billion.

[…]

The smaller tax take was across the board, with GST 2.3 per cent below forecast at $7.5 billion, source deductions for personal income tax 1.2 per cent below forecast at $11.71 billion, and total corporate tax 4.9 per cent below expectations at $3.56 billion.

As I wrote on 1 March, should National fail in that single-minded obsession, the public will not take kindly to any excuses from Key, English, et al. Not when tax payer’s money has been sprayed around with largesse by way of corporate welfarism. Throwing millions at Rio Tinto, Warner Bros, China Southern Airlines, Canterbury Finance, etc, will be hard to justify when National has to borrow further to balance the books.

Any economic “recovery” is fragile; dependent on overseas factors; and will bring new problems. Little wonder that Key brought the election date forward by two months. Mortgage rates by the end of the year will be nudging 7%.

Not much of a Christmas present for New Zealanders.

As such, Labour must begin to attack Key’s government in this area. This will be a grand opportunity for the Left to finally drive a stake through the “heart” of National’s undeserved reputation as  being a “responsible economic manager”.

National remains utterly vulnerable during this year’s election.

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References

Interest.co.nz:  Bernard Hickey looks at what the Reserve Bank’s OCR decision means for mortgage rates and house prices

Radio NZ: Reserve Bank warns of more interest rate rises

Interest.co.nz: Mortgages

NZ Herald: Dollar jumps on OCR hike + video

NZ Herald: New Zealand raises interest rate to 2.75 percent

Reserve Bank: Reserve Bank raises OCR to 2.75 percent

John Key: SPEECH: 2008: A Fresh Start for New Zealand

Interest.co.nz: Oil and Petrol

tradingeconomics.com: Wages

tradingeconomics.com: GDP

Roy Morgan: Economic Issues down but still easily the most important problems facing New Zealand (42%) and facing the World (36%) according to New Zealanders

NBR: Govt sees wider deficit in 2014 on ACC levy cut, lower SOE profits

Fairfax media: Public debt climbs by $27m a day

NZ Herald: Govt debt – it’s the trend that’s the worry

NZ Treasury: Tax Outturn Data

NZ Herald: Govt deficit bigger than expected as tax trickles in

Previous related blogposts

TV3 Polling and some crystal-ball gazing

National, The Economy, and coming Speed Wobbles

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https://fmacskasy.files.wordpress.com/2014/02/the-cost-of-living1.jpg

Above image acknowledgment: Francis Owen

This blogpost was first published on The Daily Blog on 16 March 2014.

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A Tale of Two Track Records: Labour vs National #1: New Zealand GDP

12 March 2014 4 comments

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party-logos - which

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As the election campaign for 2014 heats up, citizens can expect a deluge of dis-information, distortions, and  lies from the enemies of the progressive Left. Their constant repetition will be that Labour left the economy is a shocking state in 2008, with the most pernicious  outright lie that the Clark-Cullen government left New Zealand with a “decade of deficits”.

None of it is true. It is part of a meme-construction by the Right, with zealous followers who are willing and able to spread their mis-information on the internet.

Spreading lies is easy.

Discovering the truth is that much harder – you need to know where to look.

This series of reports will hopefully make things easier for those who want a clearer picture of events over the last two or three decades.

Those who cannot remember the past are condemned to repeat it.” – George Santayana

  • Introduction

Most graphed information is taken from Trading Economics, a US-based, on-line, economics-information website.

Trading Economics provides its users with accurate information for 196 countries including historical data for more than 300.000 economic indicators, exchange rates, stock market indexes, government bond yields and commodity prices. Our data is based on official sources, not third party data providers, and our facts are regularly checked for inconsistencies. TradingEconomics.com has received more than 100 million page views from more than 200 countries.

In turn, the site uses information from Statistics New Zealand, the World Bank, NZ Treasury, etc.

The reader can set dates for specific time-parameters  (indicated with red arrows) to search the site’s data-banks by years. It is extremely user-friendly and informative.

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field parameter searches

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Other sources for data will be clearly referenced.

National governance is marked with a blue line.

Labour governance is marked with a red line.

  • New Zealand GDP

“The gross domestic product (GDP) measures of national income and output for a given country’s economy. The gross domestic product (GDP) is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time.”

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New Zealand GDP

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In the 1990s, under National and Ruth Richardson’s (1990-1993) economic stewardship, GDP dropped from $43.9 to $40.3 billion and unemployment skyrocketed to 11.2%. For much of the 1990s, GDP see-sawed up and down, peaking at $67.9 billion in 1997 before falling away again.

Note: National implemented two tax cuts, in 1 July 1996 and 1 July 1998. Neither seemed to help grow GDP, and many public services were cut back in the late 1990s.

For Labour, except for a dip in 2001, GDP rose every year from 2002 to 2008. The rise in percentage terms is outlined below.

From 2009 to 2013, despite the GFC, GDP increased from $117.8 to $169.6 billion, though the rise in percentage terms, outlined below, was not so encouraging. GDP growth, per capita, was also lack-lustre, as demonstrated below.

  • New Zealand GDP per capita

“The GDP per capita is obtained by dividing the country’s gross domestic product, adjusted by inflation, by the total population.”

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New Zealand GDP per capita

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Except for two recessionary periods (early 1990s and 2007/08 Global Financial Crisis and recession), New Zealand’s GDP, per head of capita, has grown every year, until the GFC/recession, when it dropped from$28,168.1 per capita in 2008 to $27,383.8 in 2009.

Curiously,  the 2009 and 2010 tax cuts did not seem to contribute greatly to per capita GDP.

  • New Zealand Real GDP

Real Gross Domestic Product (real GDP) is a macroeconomic measure of the value of economic output adjusted for price changes (i.e., inflation or deflation). This adjustment transforms the money-value measure, nominal GDP, into an index for quantity of total output. GDP is the sum of consumer Spending, Investment made by industry, Excess of Exports over Imports and Government Spending. Due to inflation GDP increases and does not actually reflects the true growth in economy. That is why inflation rate must be subtracted from the GDP to get the real growth percentage called the real GDP.

The raw data for the Reserve Bank  graph (see below) is available in an XLS spreadsheet containing all key figures.

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reserve bank of nz real gross domestic product 1990_2013

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  • Main Stats
  1. Average GDP, 1990 to 1999:     2.4%
  2. Average GDP, 2000 to 2008:   3.5%
  3. Average GDP, 2009 to 2013*:  1.2%

* 2013 figure averaged over three Quarters only.

(Calculations based on RBNZ raw data spread sheet)

  • Impactors on GDP growth
  1. Recession, 1987/91
  2. Ruth Richardson’s “Mother of all Budgets” in 1991, which deepened the recession,
  3. Recession, 1997/98
  4. GFC/recession, from 2007/08 onward.
  • Conclusion
  1. Whilst GDP figures “bounce” around, Labour’s stewardship of the economy between 2000 and late 2008 has been more consistant in GDP growth and with less extremes shown in the 1990s and post-2008.
  2. GDP dipped into negative growth in the early 1990s and post-2008
  3. GDP remained in positive growth between 2000 to 2008
  4. Allegations that the economy did not perform well under Labour are clearly wrong, and the evidence does not sustain those claims.
This blogpost was first published on The Daily Blog on 5 March 2014.

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References

Trading Economics:  About Us

Trading Economics: New Zealand GDP

Trading Economics: New Zealand GDP per capita

Wikipedia: Real Gross Domestic Product (definition)

Reserve Bank of NZ: Real GDP

Reserve Bank of NZ: Real GDP Raw Data spreadsheet

NZ Treasury: New Zealand Economic Growth: An analysis of performance and policy

NZ Treasury: Recent Economic Performance and Outlook

Te Ara: The ‘mother of all budgets’

Ministry of Business, Innovation, & Employment/Dept of Labour:  How bad is the Current Recession? Labour Market Downturns since the 1960s

Colin James: Ruth amid the alien corn

Previous related blogposts

Labour: the Economic Record 2000 – 2008

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The trouble with capitalism is that you run out of money

There, fixed it.

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