Archive
The “free” market can’t even build a bloody hotel?!
.
.
Our crisis in construction reaches tipping point
According to recent reports in the media, New Zealand is no longer able to build and complete major projects;
.
.
Speaking to Radio NZ on 8 February, Building Recruitment managing director, Kevin Everett, lamented our chronic shortage of skilled building staff;
“There’s astronomical demand, there’s shortages everywhere from skilled to semi-skilled, to labours. We just can’t get reliable people.
The feedback we’re getting for 2018 from our clients is that they’re all expecting a big year this year and that’s putting pressures on everyone because they just can’t get the manpower.
I’ve heard of people going in and getting 40, 50 people in one hit. We’re looking at doing a campaign just now to go across to the UK, so we’re going to go to London, Manchester, and Glasgow and try and bring people in. We’re looking for at least 100 people in all different skill sets, in residential and commercial.”
The $200 million Park Hyatt hotel project was first announced on 4 July 2016 as a j.v. (joint venture) between Hawkins Group and China State Construction Engineering Corporation (CSCEC), the latter being one of the world’s largest construction companies;
In 2012, The Economist named CSCEC as the world’s biggest builder by revenue, then at US72.6 billion, ahead of China Railway Construction, China Railway Engineering and giant French builder Vinci which in 2003 had been the world’s biggest construction company.
Now, CSCEC has revenue of about US$100 billion.
The Economist article said Japanese builders had now disappeared from the world’s top 10 builders, overtaken by Chinese construction companies.
Fu Wah International Group itself is is a Chinese-owned multi-billion corporation. According to Forbes Fu Wah’s chairman, Chan Laiwa, ranked number 36 on the China Rich List and was worth an estimated US$5.9 billion. The hotel project is being built by a Chinese construction firm for it’s Chinese owners.
The Park Hyatt will be Fu Wah’s first project in New Zealand. The company has agreed to spend an additional $2.5 million on a public promenade, walkway and art display in the vicinity of the hotel.
In the Hawkins Construction 2016 press release Fu Wah New Zealand General Manager, Richard Aitken, said;
“Together with China Construction, they have the resources, experience and skills to deliver an outstanding outcome for Auckland.”
Panuku Development is a Auckland Council CCO responsible for the regeneration of eighteen hectares of Auckland Council-owned land in the Wynyard Quarter. This includes the Park Hyatt hotel construction site, which it apparently retains ownership of. Panuku Development’s then-Chief Executive, John Dalzell, echoed the sentiment;
“This appointment by Fu Wah International Group is a testament to the quality of work Hawkins has delivered on a number of Wynyard Quarter projects to date.”
In September 2015, as the Park Hyatt project gained resource consent, then-PM John Key was singing the “benefits” accruing to the region;
“ The new $200 million Park Hyatt in Auckland and the $35 million Sofitel in Wellington will create jobs during construction and when the hotels are up and running.”
Gambling with promises of jobs
The arrangement sounds remarkably similar to a deal in between the National government and SkyCity Casino. In 2012, SkyCity was granted approval for up to 500 new pokie machines in return for a $350 million international convention centre in downtown Auckland.
At the time, Key also touted the promise of 900-plus construction jobs from the the Skycity development. This optimistic promise was quickly revealed to be another of his shonkey “loose connections with the truth”;
.
.
By June 2016, the reality of the Skycity deal revealed at least a hundred jobs going to offshore to an American contractor in Thailand. National’s response? This was “how the free market operated“.
Increasing tourism and “more jobs” appear to be the two main reasons touted for the Park Hyatt project.
But even the prospect of more jobs has recently been questioned.
Earlier this month (8 February), concerns were voiced that two hundred extra workers from China would have to be brought in from China, to “help the 300 local staff already on site“. According to Building Recruitment managing director, Kevin Everett, New Zealand evidently lacks the prerequite skills to complete the Hyatt project;
“There’ll be a number of skills mainly around fine decorating including stone work, tiling, wallpapering, painting, veneer work – there’s quite a lot timber veneer within the hotel, so they’ll bring those skills to us.”
Which is remarkable, as New Zealand once built and completed vast construction projects such as the Clyde Dam with minimal foreign labour;
.
Clyde Dam is the largest concrete gravity dam in New Zealand consisting of one million cubic metres of concrete. It’s height is 100 metres, width at base is 70 metres, width at crest 10 metres and length at crest 490 metres.
.
Plans to bring in two hundred Chinese workers appears to be part of China’s long-term strategy to engage and strengthen their state-owned construction companies. As The Economist pointed out in October 2012;
China’s construction firms have become good at finishing big projects on time. But analysts doubt whether they are ready for rich countries. Julian Bu of Jefferies, an investment bank, says their main advantage – low labour costs – is little help in places where they cannot bring lots of Chinese workers over.
So much for claims that the project would create more jobs.
Fu Wah even issued a veiled warning that the Hyatt project could face disruptions and delays if Chinese workers were not allowed into the country immediatly.
At a time when unemployment is still at 122,000 (most likely that figure is an under-estimation as Stats NZ has a narrow definition of unemployment) and under-employment has increased;
.
.
– it is difficult to understand why New Zealand continues to import labour from overseas. Suggestions from some on the Right that these 122,000 constitute a group “unwilling” to work is not credible when taking into account that the under-employed group has risen sharply by a massive 7,000.
The economy – a legacy from nine years of National’s indifference to job-training and thirtyfive years of neo-liberal free market “hands off” ideology – appears paralysed and unable to engage with unemployed and under-employed for re-training. The new Coalition government Minister for Workplace Relations and Immigration, Iain Lees-Galloway, said as much on 8 February;
“We know that construction is a sector where the previous government failed to invest in the skills that New Zealanders need to participate in that sector, and there are significant shortages in the construction sector as we’re seeing a lot of infrastructure and a lot of construction being undertaken at the moment.”
It seems cheaper simply to import labour when needed, and return them to their home countries when that need has ended. That let’s businesses off the hook having to invest heavily in training local workers. It also increases labour exploitation by unscrupulous bosses.
The Property Council’s acting CEO, Matt Paterson, frankly admitted that foreign companies and labour could be used as a weapon to lowering prices (including wages), when he disclosed in July 2016;
“One of the issues holding back the development and construction market in New Zealand is high prices, so any additional competition we get is good. We do need to make sure competition is also bringing us quality and they’re not taking short cuts with materials or labour. Construction costs have been high in New Zealand for a long time. We need to develop a stronger, more competitive, capable construction sector. In the short term, there’s work that needs to be done and overseas firms can play a part in that. But we need to build stronger New Zealand industry.”
In the case of Fu Wah and the Hyatt hotel project, at least one construction company disclosed to Radio NZ that they had attempted to tender for the contract;
However an Auckland company, which did not want to be named for fear of losing out on future work, told RNZ they had voiced their interest at the start of the project in 2016.
A staff member said soon after Hawkins and China Construction were appointed as the main contractors, his company was contacted about what the programme of work would be and asked whether they would be able to do it.
“We went back and said ‘yes, everything’s fine, things are going to be a little bit tight here, things will be fine here’, but nothing major that would lead us to believe we’d been crossed off as a potential subcontractor.”
He said while it was emphasised that they should lock in subcontractors early because of a busy schedule to meet the deadline, it was never an issue of lack of skills.
“At that point in time we more or less had a year or two to lock in labour resource, to build up the labour teams that we have if necessary. But we heard nothing for a couple of years, in fact we never even heard back in the end on whether we could tender for the main package.”
When asked whether they had the staff to do the work now, he said they did.
There appear to be several aspects to this story – all inter-related;
Globalisation
The US’s economic model over the past 40 years has been predicated on a kind of globalisation that encourages low wages and outsourcing. The idea was that cheaper stuff would offset the loss of jobs and lower wages. But in an economy made up of 70 per cent consumer spending in which wages haven’t risen for most of the population since the 1990s, that maths stops working. “Globalisation can’t be just about outsourcing and low wages,” says [former General Electric CEO] [Jeff] Immelt (there’s an increasing body of research showing that low wages are a cause, rather than just a symptom, of the problems of globalisation).
In 2014, our own right-wing think-tank, the NZ Initiative (formerly Business Roundtable) said;
As technology improves, many of the unskilled jobs in advanced economies such as New Zealand will simply be replaced.
Even more pertinent, those unskilled jobs that can’t be replaced by technology are likely to be outsourced to those who can provide the cheapest labour, namely, developing countries.
Globalisation has already seen this effect occurring to a large extent.
Leaving labour to Market Supply & Demand
The free market sees unionised protection for workers as anathema to the concept of Supply and Demand for skilled, semi-skilled, and low-skilled workers.
During last year’s election, the supposedly “free market” party, ACT, promised to increase teacher’s salaries – but with strings attached;
David Seymour is proposing to boost funding for schools – but only if they agree to take teachers out of collective pay agreements.
He said teachers had lost ground against the average wage over the past 30 years.
And Mr Seymour said the reason was a 1970s style pay system.
“The unions insist on paying the best teacher and the worst teacher in New Zealand exactly the same and often protecting under-performing teachers.
“What we’re saying is that we’ll raise teacher pay on average by $20k, but we won’t have that model anymore.”
The ACT Party education policy encourages “…schools to opt out of union contracts”. (Which seems to forget that teachers unions are already voluntary. People have a choice and can already opt-out of membership. Though the ACT Party espouses “personal freedom”, the word “choice” is strangely missing from their Principles statement.)
So what’s gone wrong?!
So if New Zealand has a free-market economy that according to one group is the third most open in the global economy – what’s gone wrong? Why do we have 126,000 unemployed and a further 108,700 under-employed when we have a skills shortage in the construction trade? (Note: Stats NZ’s definition of what constitutes an unemployed person is narrow and actual numbers are most likely even higher than “official data” states.)
The Christchurch earthquakes of 4 September 2010 and 22 February 2011 damaged and destroyed large parts of the city. In late 2011, the National-led government at the time was keenly aware that the cost of rebuilding was estimated to cost around NZ$13.5 billion. By 2014, Treasury increased that estimate to a jaw-dropping NZ$15.4 billion.
The need for skilled labour should have been obvious to all.
Obvious to everyone except the government at the time: the Key-led National government.
National’s “response” – an exercise in incompetence
National’s response to on-going problems in the construction industry can best be summed up in a March 2012 comment made by then Earthquake Recovery Minister, Gerry Brownlee;
.
.
Leaving citizens to the “tender mercies” of the free market seems National’s de fault setting.
Which had its inevitable conclusions as the Christchurch re-build is yet to be completed; the entire country is suffering a housing crisis; affordability worsens; and homelessness increases. Even retiring “baby-boomers” have not escaped our deepening housing crisis;
“We risk discovering that New Zealand is going to have a population of homeless pensioners,” Salvation Army spokeswoman Sue Hay told Radio New Zealand.
Compounding housing unaffordability and homelessness was a critical shortfall in skill tradespeople.
At a time when over a hundred thousand New Zealanders were out of work and under-employment was rising, National was practically sitting on it’s hands.
Post 2008 Global Financial Crisis, enrollments for ITO trainees fell dramatically;
.
.
In 2013 – two years after the second Christchurch earthquake, Waikato Plumbing Services office administrator,Gayelene Woodcock, warned presciently of a looming critical shortage of skilled tradespeople;
“During the early 1990s the same thing happened. When there was a decline after the 1987 crash it didn’t actually affect the whole industry until the early 1990s.
The lack of apprentices taken on there showed through about four or five years later when there was an extreme shortage of tradesmen.”
Labour’s Grant Robertson could also see the rushing train bearing down on us;
“We have a shortage now in skilled tradesmen. It’s welcome that the Government worked out they need to do something but the impact of that skilled shortage is being seen at the moment. It’s being seen in Christchurch and it’s likely to be seen around the country.”
Report Card: F for Failed
We now have a shortage of tradespeople so critical that the viability of some building projects’ is threatened.
Whatever tepid measures National implemented failed to address the growing problem. After the 2011 Christchurch earthquake, National had clear warning of the problems confronting the construction industry.
It chose to tinker with half-hearted solutions, but these proved ineffectual seven year later as one media report after another highlighted the crisis.
One immediate solution has been to remove barriers such as tuition costs. The Productivity Commission’s report appeared to reluctantly confirm this barrier;
There is some evidence that differences in subsidy, fee and student support arrangements can influence the study decisions of students (and employers). For example, members of the ITO sector expressed concern about these influences on decisions on undertaking industry training while in full-time employment through an ITP, PTE or ITO…
[…]
The University of Waikato submitted that fees combined with geographic distance may still represent a substantial barrier to obtaining a university education. In particular, it notes:
While parents with professional incomes and substantial net assets may not be concerned about their
children acquiring large amounts of debt to fund tertiary study, the poorest families with minimal net
assets will quite rationally be averse to their children acquiring large amounts of debt. (University of
Waikato, sub.93, p.6)[…]
The evidence suggests that higher fees reduce demand, that students in non-university tertiary education and lower-income students are more price-sensitive, and that some minority groups may be more price-sensitive (Leslie & Brinkman, 1987; Heller,1997). Where the actual cost students will pay is not transparent,
because various grants or discounts apply that mean actual cost is lower than the advertised price, students from lower-income families are more likely to be discouraged. The availability of loans and allowances will offset this, although students from lower-income households may also be more debt-averse.
In plain english, low-income families were “debt averse” – a scenario which contradicts many right-wing reactionary prejudice which parrots the myth that poor families are in debt because they make “poor choices”. In this case, a student debt is a poor choice that such families will unsurprisingly seek to avoid.
The new Labour-led Coalition government – not fettered by the dead-weight of user-pays ideology to which National is chained to – has understand this simply reality and taken blindingly obvious steps to remove this barrier;
.
It took National nine years to allow the current mess we now have in the construction industry. A mess whereby over a hundred thousand New Zealanders are unemployed whilst the building industry is seeking to import cheap, skilled labour from offshore.
It has taken the Coalition just over three months to begin to tackle National’s toxic legacy of mis-management.
Postscript1
In March 2017, Fu Wah applied to build 330 apartments on the Auckland waterfront, adjacent to the Hyatt Park hotel.
At this stage it is unclear who will provide the labour for this project. Familiar claims have been made that the proposed NZ$500 million apartment project would “create more jobs”.
Past evidence suggests those claims should be regarded with caution.
Postscript2
Globalisation continues to wreak havoc with our local industries As Fletcher Building announced on 25 February has it has pulled out of the Ormiston Town Centre building project. This is the latest in building projects that Fletchers has either withdrawn from, or will not be tendering for, as local companies find it impossible to compete with low-priced offshore competitors.
Postscript3
Fletcher’s chairperson, Ralph Norris announced his resignation from the debt-ridden company on 14 February.
Norris was also chairperson of the Business Roundtable until September 2001. The Business Rountable (later re-branded as the so-called “NZ Initiative”) was a pro-free market lobby pressure group that was instrumental in the neo-liberal “reforms” of the late 1980s and 1990s. Part of those neo-liberal reforms was globalisation: allowing offshore companies to bid for contracts in New Zealand alongside local industries.
.
.
.
References
Radio NZ: 200 Chinese tradies to complete Akl hotel
Hawkins: Hawkins and China Construction JV signs up for Park Hyatt Auckland
NZ Herald: World’s biggest builder arrives in NZ for $375m in contracts
Forbes: Profile – Chan Laiwa & family
TVNZ News: $200M luxury hotel under way in Auckland’s waterfront
Panuku Development Auckland: Home Page
NZ Institute of International Affairs: Speech to the NZIIA – 3 May 2015
NZ Herald: Go-ahead for $200m Auckland waterfront hotel
Fairfax media: Key defends Sky City casino deal
TVNZ: Key defends convention centre job predictions as offshore contract raises fears
Radio NZ: SkyCity centre steel jobs go to Thailand
NZ Herald: Hyatt’s new $200m hotel ready for 2018
Wikipedia: Clyde Dam
The Economist: Great wall builders
Radio NZ: Minister requests more info on Chinese tradies
Statistics NZ: Unemployment falls to a nine-year low
Radio NZ: 300 apartments for Auckland waterfront
NZ Initiative: Degrees no longer a ‘golden ticket’
Radio NZ: ACT leader blames unions for teachers’ poor pay rates
ACT Part: Education
ACT Party: Principles
Heritage: Economic Freedom – Country Rankings
Statistics NZ: Unemployment rate down to 4.6 percent
Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates
Mediaworks: Unemployment – Bad news NZ, it’s much worse than you think
NZ Parliament: Economic effects of the Canterbury earthquakes
Treasury: 2014 Budget – Rebuilding Christchurch
Fairfax media: Christchurch rent crisis ‘best left to market’
Radio NZ: Housing report paints ‘sobering picture’ of crisis
Fairfax media: More NZ retirees will become homeless without action on housing – Salvation Army
Productivity Commission: Student characteristics and choices (pgs 41, 60, 73, 74)
TVNZ: Shortage of skilled tradespeople exacerbating Auckland’s housing problem
BCITO: Prime Minister encourages construction apprentices
Radio NZ: Fletcher out of running on another big-ticket build
Noted: Unfair overseas competition hurting NZ forestry, says industry leader
Fairfax media: ‘Incompetence’ behind Fletcher Building’s woes, admits chairman Sir Ralph Norris
NZ Herald: Ralph Norris retires
Additional
NZ Herald: Brian Gaynor – How to fix Fletcher Building
Fairfax media: Dearth of tradesmen foreseen
Other Blogs
The Standard: Fonterra and Fletcher Building
Previous related blogposts
Roy Morgan Poll: Unemployment and Under-employment up in New Zealand!
Lies, Damned lies and Statistical Lies
Lies, Damned lies and Statistical Lies – ** UPDATE **
MSM catches up on Unemployment stats rort
.
.
.
.
This blogpost was first published on The Daily Blog on 26 February 2018.
.
.
= fs =
2017 – Ongoing jobless tally
.
.
Continued from: 2016 – Ongoing jobless tally
By the numbers, for this year;
.
Events
.
January
- Gateway Housing Trust: 7 redundancies
- Pumpkin Patch: 560 redundancies
February
- Westland Milk: unknown
- Wellington City Council: 17 redundancies
- Solid Energy/Spring Creek Mine: unknown
- Cadbury Dunedin: 380 redundancies
- The Warehouse: 130 redundancies (est.)
- ABB: 59 redundancies
March
- Credit Union South: 8 redundancies
- Marcs and David Lawrence: 44 redundancies
- Suncorp: 100 redundancies (est.)
- Auckland Libraries: 74 redundancies
- TVNZ: unknown – t.b.a.
April
Otago University: unknown
May
- Silver Fern Farms: up to 370 redundancies
.
Unemployment Statistics* at a Glance
.
.
(* See caveat below)
.
Caution: Official Unemployment Statistics
.
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;
.
.
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.
.
.
.
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
.
.
.
The Mendacities of Mr English – Social Services under National’s tender mercies
.
.
Context
.
On 25 January, as Radio NZ returned to it’s normal broadcasting schedule (and putting away it’s dumbed-down “summer programming” until next December/January), John Campbell had his first interview with John Key’s replacement, Bill English.
Campbell raised several issues with English; the US withdrawal from the TPPA; the Pike River mine disaster; and the housing crisis. At this point, English made this staggering claim;
@ 5.58
“We’ve got a government actually with a good record on addressing, in fact, some of the toughest social issues. There may be disagreement over means by which we’re doing it, ah, but our direction is pretty clear. And you know over, certainly heading into election year we think that the approach the government’s developed around social investment, around increasing incomes is the right kind of mix – “
English’s bland assertion that “government actually with a good record on addressing, in fact, some of the toughest social issues” is at variance with actual, real, mounting socio-economic problems in this country.
.
Key indicator #1: Unemployment
.
The latest HLFS unemployment stats show an increase from 4.9% to 5.2% in the December 2016 Quarter. However, in all likelihood, the unemployment numbers are actually much, much, higher since Statistics NZ arbitrarily altered the way it calculated what constituted unemployment.
On 29 June 2016, Statistics 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% for the March 2016 Quarter (and subsequent Quarters).
If the “current unemployment figures” from Stats NZ are reported as “5.2%’, they may well be back to the original March 2016 figure of 5.7%, before the government statistician re-jigged definitions.
.
Key indicator #2: Housing
.
– Home Ownership
According to the 1984 NZ Yearbook, in 1981 the number of rental dwellings numbered 25.4% of housing. 71.2% were owner-occupied. Nearly three quarters of New Zealanders owned their homes.
Home ownership reached it’s maximum height in 1991, when it stood at 73.8%. Since then, it has steadily declined.
By 2013 (the most recent census survey), the numbers of rental dwellings had increased to 35.2% (up 33.1% in 2006). Home ownership had decreased to 49.9% (down from from 54.5% in 2006). If you include housing held in Family Trusts, the figure rises to 64.8% of households owning their home in 2013, down from 66.9% in 2006.
Whether you include housing held in Family Trusts (which may or may not be owner-occupied or rented out), home ownership has fallen steady since the early 1980s.
Renting has increased from 25.4% to 35.2%.
More and more New Zealanders are losing out on the dream of home ownership. Conversely, more and more of us are becoming tenants in our own country.
As Bernard Hickey from Interest.co.nz said in December last year;
Nearly two thirds of the 430,000 households formed since 1991 are tenants.
Think about that for a moment. It is a stunning revelation of how the young and the poor have been hit the hardest by the changes in New Zealand since the mid-1980s, and on an enormous scale.
It means two thirds of the kids born in those families grew up in rental accommodation, and more than 80% of those are private rentals (although the Housing NZ homes are often no better). That means they often grew up in mouldy, damp, cold and insecure housing. It’s true that some homes occupied by their owners are also below par, but it’s a much lower proportion and owners have the option to improve their homes through insulation and ventilation.
The NZ$696 billion increase in the value of New Zealand’s houses to NZ$821 billion between 1991 and 2015 means the 64% of owners in live-in houses have also had plenty of financial flexibility to improve those houses. Renters have had no access to that wealth creation and are not allowed to put a pin in the wall, let alone put in a ventilation system or some batts in the ceiling. The take-up for the Government’s home insulation and heating subsidies were vastly higher among home-owners than they were for landlords.
Those 284,000 renting households formed since 1991 have also often been forced to move schools and communities and all the roots that build families because New Zealand’s rental market is so transient.
[…]
It illustrates the scale of the fallout from that collapse in home ownership from 1991. Not only has it handicapped the education, health and productivity of a entire generation of New Zealanders, but it is set to magnify the likely growth in pension and healthcare costs of our ageing population. And that’s before the wealth and income inequality effects.
.
– Affordability
In 2016, the 13th Annual International Demographia International Housing Affordability survey rated New Zealand as one of the most unaffordable housing markets in the world;
The most affordable major housing markets in 2015 are in the United States, with a moderately unaffordable Median Multiple of 3.9, followed by Japan (4.1), the United Kingdom (4.5), Canada (4.7), Ireland (4.7) and Singapore (4.8). Overall, the major housing markets of Australia (6.6), New Zealand (10.0) and China (18.1) are severely unaffordable. (p2)
[…]
In New Zealand, as in Australia, housing had been rated as affordable until approximately a quarter century ago. (p24)
A 2014 report by the NZ Institute for Economic Research stated the “the average house price rose from the long-run benchmark of three times the average annual household income to six times“;
.
.
The NZIER report refers to several reasons for increasing housing prices; slow supply of land; demographic demand (from ‘Baby Boomers’); and investor demand caused by lack of a capital gains tax. Interestingly, the Report also refers to an “over-supply of finance”;
The loosening of financial standards and rising household debt relative to income has happened over a long period of time. The increase in indebtedness has coincided with rising house prices relative to incomes. This suggests that increased household indebtedness has at least partly contributed to the increasing price of homes. (p14)
Prior to Roger Douglas de-regulating the banking/finance sector, New Zealand banks could only lend depositor’s funds as mortgages.
As a result, mortgage money was “tight”, and scarcity helped keep house prices down. Vendor’s expectations were kept “in check” by scarcity of bank funds. Prior to the mid 1980s, Vendor’s Finance (by way of a Second Mortgage) were commonly-used financial tools to assist house-owners to sell and buyers to complete a purchase.
Once the banking sector was opened up, and monetary policy relaxed, cheap money flooded in from overseas for banks to on-lend to house-purchasers. As property investor, Ollie Newland vividly explained in the 1996 TV documentary, Revolution;
“I got a phone call from my bank manager to say some bigwigs were coming up from Wellington to have a chat with me. I thought it was just one public relations things they do. I had a very small office, it wasn’t much bigger than a toilet cubicle, and those five big fellows crowded in with their briefcases and books and they sat on the floor and the arms of the chairs – I only had one chair in the place – and stood against the walls. Their first words to me were, we’re here to lend you money. As much as you want. For somebody like me, and I’m sure it’s the same for everybody else, to suddenly be told by the bank manager that you could have as much money as you want, help yourself, that was a revelation. We thought we had died and gone to heaven.”
Unfortunately, the side affect of this was to increase vendor’s expectations to gain higher and higher prices for their properties. Combined with recent high immigration, and a lack of a comprehensive capital gains tax, and the results have been troubling for this country;
.
.
As well as increasingly unaffordable housing, we – as a nation – are sitting on a trillion-dollar fiscal bomb.
Think about that for a moment.
Little wonder that in September last year, the Reserve Bank issued the sternest warning yet that we were headed for impending economic mayhem;
A sharp correction in house prices represents a key risk to the financial system, and one that is increasing the longer the current boom in house prices persists. A severe downturn in house prices could have major implications for the banking system, with over 55 percent of bank loans secured against residential property. Moreover, elevated household debt levels and a growing exposure of the banking system to investor loans could reinforce a housing downturn and extend reductions in economic activity, as highly indebted households are forced to reduce consumption and sell property.
As with many other individuals, institutions, organisations, business leaders, left-wing commentators, media, political pundits, political parties, the NZIER was (and still is) calling for a comprehensive capital gains tax to be implemented.
Even then, this blogger suspects we may be too late. National (and it’s predecessor, to be fair) have left it far to late and the economic horse has well and truly bolted.
Even a Capital Gains Tax at 28% – New Zealand’s current corporate tax rate – may be insufficient to dampen speculative demand for properties.
Meanwhile, the dream of Kiwis owning their own homes continues to slip away.
Depressingly, New Zealanders themselves have permitted this to happen.
.
– State Housing
If the Middle Classes and their Millenial Offspring are finding it hard to buy their first home, think of the poorest families and individuals in our communities. For them, social housing consists of packing multiple families into a single house; living in an uninsulated, drafty, garage; or in cars.
Last year, the story of mass homelessness exploded onto our media and our “radar” as New Zealanders woke up to the reality of persistent poverty in our cities;
.
.
Although on occassion, the mainstream media found them themselves in embarrassingly ‘schizophrenic’ situations as they attempted to reconcile reporting on our growing housing crisis – whilst raising advertising revenue by promoting “reality” TV programmes that were far, far removed from many people’s own disturbing reality;
.
.
According to UNICEF;
295,000 New Zealand kids are living beneath the poverty line, which means they are living in households where income is less than 60% of the median household income after housing costs are taken into consideration.
One way to alleviate poverty is to provide state housing, at minimal rental, to families suffering deprivation. Not only does this make housing affordable, but also strengthens a sense of community and reduces transience.
Transience can have deletarious effects on families – especially on children – who then struggle with the stresses of losing friends; adjusting to new neighbourhoods, and new schools.
A government report states that transience for children can have extreme, negative impact on their learning;
Nearly 3,700 students were recognised as transient during the 2014 year. Māori students were more likely to be transient than students in other ethnic groups.
[…]
Students need stability in their schooling in order to experience continuity, belonging and support so that they stay interested and engaged in learning.
All schools face the constant challenge of ensuring that students feel they belong and are encouraged to participate at school. When students arrive at a school part-way through a term or school year, having been at another school with different routines, this challenge may become greater.
Students have better outcomes if they do not move school regularly. There is good evidence that student transience has a negative impact on student outcomes, both in New Zealand and overseas. Research suggests that students who move home or school frequently are more likely to underachieve in formal education when compared with students that have a more stable school life. A recent study found that school movement had an even stronger effect on educational success than residential movement.
There is also evidence that transience can have negative effects on student behaviour, and on short term social and health experience
Writing for The Dominion Post, in April 2014, Elinor Chisholm and Philippa Howden-Chapman pointed out the blindingly obvious;
Continuity of education and supportive relationships with teachers are critical for children’s educational performance.
“Churn” is not good for educational performance or enrolment in primary health care, where staff can ensure children are properly immunised and chronic health problems can be followed up.
It was for this reason that, in our submission on the Social Housing Reform Bill late last year, we strongly recommended that families with school- age children should be excluded from tenancy review.
Secure tenure and stability at one school would allow children the best chance of flourishing. In high- performing countries such as the Netherlands, children are explicitly discouraged from changing schools in the middle of the school year.
The bill had announced the extension of reviewable tenancies to all state tenants (new state tenants had been subject to tenancy review since mid- 2011). However, the housing minister, as well as the Ministry of Business, Innovation and Employment, had made clear that the disabled and the elderly were to be excluded from tenancy reviews.
In our submission, we acknowledged the Government for recognising the importance of secure tenure.
People who are compelled to move house involuntarily can experience stress, loss, grief and poorer mental health. Housing insecurity is also associated with poorer physical health.
National’s policy of ending a state “house for life”; increased tenancy reviews for state house tenants, coupled with the sale of state houses, is inimical to the stabilisation of vulnerable families; the well-being of children in those families; and to communities.
In 2008, Housing NZ owned 69,000 rental properties.
By 2016, that number had dropped significantly to 61,600 (plus a further 2,700 leased). National had disposed of some 7,400 properties.
Between 2014 and 2016, at least 600 state house tenants lost their homes after “reviews”.
This, despite our growing population.
This, despite John Key’s own family having been provided with the security of a state house, and Key enjoying a near-free University education.
This, despite John Key, ex-currency trader, and multi-millionaire, admitting in 2011 that New Zealand’s under-class was growing.
.
Key indicator #3: Incomes & Inequality
.
In June 2014, Oxfam reported on New Zealand’s growing dire child poverty crisis;
The richest ten per cent of New Zealanders are wealthier than the rest of the population combined as the gap between rich and poor continues to widen.
Oxfam New Zealand’s Executive Director Rachael Le Mesurier said the numbers are a staggering illustration that the wealth gap in New Zealand is stark and mirrors a global trend that needs to be addressed by governments in New Zealand, and around the world, in order to win the fight against poverty.
“Extreme wealth inequality is deeply worrying. Our nation is becoming more divided, with an elite who are seeing their bank balances go up, whilst hundreds of thousands of New Zealanders struggle to make ends meet,” said Le Mesurier.
Figures for the top one per cent are even more striking. According to the most recent data, taken from the 2013 Credit Suisse Global Wealth Databook, 44,000 Kiwis – who could comfortably fit into Eden Park with thousands of empty seats to spare – hold more wealth than three million New Zealanders. Put differently, this lists the share of wealth owned by the top one per cent of Kiwis as 25.1 per cent, meaning they control more than the bottom 70 per cent of the population.
Oxfam New Zealand’s Executive Director, Rachael Le Mesurier, was blunt in her condemnation;
“Extreme inequality is a sign of economic failure. New Zealand can and must do better. It’s time for our leaders to move past the rhetoric. By concentrating wealth and power in the hands of the few, inequality robs the poorest people of the support they need to improve their lives, and means that their voices go unheard. If the global community fails to curb widening inequality, we can expect more economic and social problems.”
A 2014 OECD report placed New Zealand as one of the worst for growing inequality;
.
.
Not only was inequality a social blight, but according to the report it impacted negatively on economic growth;
Rising inequality is estimated to have knocked more than 4 percentage points off growth in half of the countries over two decades. On the other hand, greater equality prior to the crisis helped increase GDP per capita in a few countries, notably Spain.
According to the OECD assessment, income inequality had impacted the most on New Zealand, with only Mexico a close second;
.
.
The OECD Report went further, making this “radical” observation;
The most direct policy tool to reduce inequality is redistribution through taxes and benefits. The analysis shows that redistribution per se does not lower economic growth.
The statement went on to “qualify” any suggestion of socialism with a caveat. But the declaration that “analysis shows that redistribution per se does not lower economic growth” remained, constituting a direct contradiction and challenge to current neo-liberal othodoxy.
In August 2015, former City Voice editor, and now NZ Herald social issues reporter, Simon Collins revealed the growing level of child poverty in this country;
The Ministry of Social Development’s annual household incomes report shows that the numbers below a European standard measure of absolute hardship, based on measures such as not having a warm home or two pairs of shoes, fell from 165,000 in 2013 to 145,000 (14 per cent of all children) last year, the lowest number since 2007.
Children in benefit-dependent families also dwindled from a recent peak of 235,000 (22 per cent) in 2011, and 202,000 (19 per cent) in 2013, to just 180,000 (17 per cent) last year – the lowest proportion of children living on benefits since the late 1980s.
But inequality worsened because average incomes for working families increased much faster at high and middle-income levels than for lower-paid workers.
The net result was that the number of children living in households earning below 60 per cent of the median income after housing costs jumped from a five-year low of 260,000 in 2013 to 305,000 last year, the highest since a peak of 315,000 at the worst point of the global financial crisis in 2010.
In percentage terms, 29 per cent of Kiwi children are now in relative poverty, up from 24 per cent in 2013 and only a fraction below the 2010 peak of 30 per cent.
In September 2016, Statistics NZ confirmed the widening of income inequality from 1988 to 2015, between households with high and low incomes;
- In 2015, the disposable income of a high-income household was over two-and-a-half times larger than that of a low-income household.
- Between 1988 and 2015, the income inequality ratio increased from 2.24 to 2.61.
.
.
The neo-liberal “revolution” took place from the mid-to-late 1980s. Hardly surprisingly, the rise in income inequality takes place at the same time.
Income inequality dipped from 2004 when Labour’s “Working for Families” was introduced.
However, income inequality worsened after 2009 and 2010, when National cut taxes for the rich; increased GST (which impacts most harshly on low-income families and individuals); and increased user-charges on essential services such as prescription fees, ACC levies, court fees, etc. Increasingly complicated WINZ requirements for annual re-applications for benefits and complex paperwork may also have worsened the plight of the country’s poorest.
Despite all the promises made by the Lange government; the Bolger government; and every government since, our neo-liberal “reforms” have not been kind to those on low and middle incomes.
.
Key indicator #4: Child poverty
.
According to Otago University’s Child Poverty Monitor in 2014;
Child poverty has not always been this bad – the child poverty rate in the New Zealand many of us grew up in 30 years ago was 14%, compared to current levels of 24%.
Thirty years prior to 2014 was the year 1984. David Lange’s Labour Party had been elected to power.
Roger Douglas was appointed Minister of Finance. The Member for Selwyn, Ruth Richardson, was also in Parliament, taking notes.
The term “trickle down” entered our consciousness and vocabulary. It promised that, with tax cuts; privatisation; winding back state services; and economic de-regulation, wealth would trickle down to those at the bottom of the socio-economic ladder.
How is that working out for us so far?
.
.
So much for the “aspirational dream” offered to us by “trickle down” economics.
.
Key indicator #5: The Real Beneficiaries
.
In June last year, Radio NZ reported the latest survey of household wealth by Statistics NZ. It found;
“…the country’s richest individuals – those in the top 10 percent – held 60 percent of all wealth by the end of July 2015. Between 2003 and 2010, those individuals had held 55 percent. The richest 10 percent of households held half of New Zealand’s wealth, while the poorest 40 percent held just 3 percent of total wealth.”
.
.
Following hard on the heels of the Stats NZ report, Oxfam NZ made a disturbing revelation;
.
.
Three years after her previous public warning, Oxfam New Zealand’s, Rachael Le Mesurier, was no less scathing. Her exasperation was clear;
“The gap between the extremely wealthy and the rest of us is greater than we thought, both in New Zealand and around the world. It is trapping huge numbers of people in poverty and fracturing our societies, as seen in New Zealand in the changing profile of home ownership.”
National minister, Steven Joyce responded. He was his usual mealy-mouthed self when interviewed on Radio NZ about the Oxfam report;
“There’s always inequality but again you have got to look at those reports carefully because in that report a young medical graduate who has just come out of university would be listed as somebody who is in the poorest 20 per cent because they have a student loan.They’ll pay that student loan off in about four years and they’ll be earning incomes of over $100,000 very quickly.
So although they’re in those figures today, they won’t be in those figures in five years’ time.”
Which appears to sum up the National government’s head-in-sand attitude on child poverty and income inequality.
Economist, Shamubeel Eaqub, though, had a different “take” on the issue and warned;
“Every time we see a new statistic on inequality, whether it’s in terms of income, opportunities or wealth, it shows very clearly that New Zealand is being ripped apart by our class system.”
When economists begin to issue dire social warnings, you know that matters have taken a turn for the worse.
So where does that leave our New Dear Leader Bill English with his insistence that “we’ve got a government actually with a good record on addressing, in fact, some of the toughest social issues”?
English’s assertion to John Campbell on Radio NZ, on 25 January, (outlined at the beginning of this story) makes sense only if it it is re-phrased;
“We’ve got a government actually with a good record on addressing, in fact, some of the toughest wealth-accumulation issues. There may be disagreement over means by which we’re doing it, ah, but our direction is pretty clear. And you know over, certainly heading into election year we think that the approach the government’s developed around private investment, around increasing incomes for the wealthiest ten percent is the right kind of mix – “
Not a very palatable message – but vastly more truthful as income inequality continues to wreak appalling consequences throughout our communities and economy.
Otherwise, English appears to reside not so much in the Land of the Long White Cloud, but in the Realm of Wishful Thinking.
.
.
.
References
Radio NZ: Checkpoint – Bill English on the challenges of his first month as PM
Scoop media: Unemployment rate rises to 5.2 percent as labour force grows
Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates
NZ 1984 Yearbook: 3A – General Summary – Census of population and dwellings 1981 (see “Tenure of Dwelling”)
Statistics NZ: Owner-Occupied Households
Statistics NZ: 2013 Census QuickStats about national highlights – Home Ownership
International Demographia: 13th Annual International Housing Affordability
NZ Institute for Economic Research: The home affordability challenge
Monetary Meg: What is vendor finance?
Radio NZ: NZ immigration returns to record level
NZ On Screen: Revolution
NZ Herald: New Zealand residential property hits $1 trillion mark
Reserve Bank: Regulatory Impact Assessment of revised LVR restriction proposals September 2016 – Adequacy Statement
The Guardian: New Zealand housing crisis forces hundreds to live in tents and garages
Fairfax media: One in 100 Kiwis homeless, new study shows numbers quickly rising
Al Jazeera: New Zealand’s homeless: Living in cars and garages
NZ Herald: Homelessness rising in New Zealand
Radio NZ: Homeless family faces $100k WINZ debt
TV3 News: The hidden homeless – Families forced to live in cars
TV1 News: Housing crisis hits Tauranga, forcing families into garages and cars
UNICEF: Let’s Talk about child poverty
Education Counts: Transient students
Dominion Post: Housing policy will destabilise life for children
NZ Herald: State housing shake-up – Lease up on idea of ‘house for life’
Radio NZ: Thousands of state houses up for sale
Housing NZ: Annual Report 2008/09
Housing NZ: Annual Report 2015/16
Fairfax media: Nearly 600 state house tenants removed after end of ‘house for life’ policy
NZ Herald: Key admits underclass still growing
Oxfam: Richest 10% of Kiwis control more wealth than remaining 90%
NZ Herald: 300,000+ Kiwi kids now in relative poverty
Statistics NZ: Income inequality
Law Society: Civil court fee changes commence
Fairfax media: Prescription price rise hits vulnerable
Salaries.co.nz: ACC levies to increase in April 2010
Radio NZ: Thousands losing benefits due to paperwork
Scoop media: Health Issues Highlighted in Child Poverty Monitor
NZ Herald: Hungry kids foraging in pig scraps ‘like the slums of Brazil’
Fairfax media: Damp state house played part in toddler’s death
NZ Herald: More living in cars as rents go through roof
NZ Doctor: Tackle poverty to fight rheumatic fever
Radio NZ: 10% richest Kiwis own 60% of NZ’s wealth
Fairfax media: Wealth inequality in NZ worse than Australia
Radio NZ: Steven Joyce responds to Oxfam wealth inequality report
Additional
Dominion Post: Kids dragged from school to school
Other Blogs
The Standard: John Key used to be ambitious about dealing with poverty in New Zealand
Previous related blogposts
Lies, Damned lies and Statistical Lies
Lies, Damned lies and Statistical Lies – ** UPDATE **
National exploits fudged Statistics NZ unemployment figures
2016 – Ongoing jobless tally and why unemployment statistics will no longer be used
CYF – The Hollowing Out of a State Agency
The Mendacities of Mr Key # 18: “No question – NZ is better off!”
Foot in mouth award – Bill English, for his recent “Flat Earth” comment in Parliament
The Mendacities of Mr English – Fibbing from Finance Minister confirmed
Rebuilding the Country we grew up in – Little’s Big Task ahead
.
.
.
.
This blogpost was first published on The Daily Blog on 7 February 2017.
.
.
= fs =
2016 – Ongoing jobless tally and why unemployment statistics will no longer be used
.
.
Continued from: 2015 – Ongoing jobless tally
So by the numbers, for this year;
.
Events
.
January
- Gameloft: 150 redundancies
- ROA Mine: 20 redundancies
- NZ Bus: 200 redundancies (t.b.c)
February
- Fairfax media: 70 redundancies
- Prime Range Meats: 130 redundancies
- Stonewood Homes: 85 redundancies
- Dick Smith Electronics: 430 redundancies
March
- Wellington Hospital: 40 redundancies
- Solid Energy: 41 redundancies
- Bathurst Mining: 25 redundancies
- NZ Post: 500 redundancies
April
- Ministry of Justice: 100 redundancies
- Fisher & Paykel: 186 redundancies
- Cavalier Carpets: 65 redundancies
- Countdown Waihi: 41 redundancies
May
- Fuji Xerox: 40 redundancies
- General Cable: 62 redundancies
June
- Bathurst Resources Ltd: 8 redundancies
- Westport Harbour: 8 redundancies
- Holcim Cement: 105 / 150 redundancies
July
- Napier City Council: 78 redundancies
- Countdown: unknown
August
- Westpac: 72 redundancies
- Ministry of Primary Industries: 49 redundancies
- Waikato SPCA: 12 redundancies (?)
- Otago University: 20 redundancies
October
- Pumpkin Patch: 57 redundancies
- Ministry of Justice/Maori Land Court: 26 redundancies (tbc)
- BNZ: 500 redundancies (tbc)
November
- General Cable: 170 redundancies
- Lincoln University: 51 redundancies
- EQC: 400 redundancies
.
Statistics
.
This blogger previously reported how Statistics NZ recently implemented a so-called “revision” which would materially affect how unemployment stats were counted and reported;
.
.
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%;
.
.
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%;
.
.
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%);
.
.
Predictably, National were quick to once again exploit the September statistics, as their Twitter-feed showed on 2 November;
.
.
And three days later;
.
.
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.
.
.
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”;
.
.
WINZ;
.
.
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.
.
.
This Statement has not been endorsed by MiniTruth (formerly StatsNZ)
.
.
.
.
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.
.
.
.
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 **
.
To be periodically up-dated.
.
.
.
.
This blogpost was first published on The Daily Blog on 9 November 2016.
.
= fs =
National exploits fudged Statistics NZ unemployment figures
.
.
On 3 July, this blogger reported how Statistics NZ had radically changed 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.”
Statistics NZ explained the ramifications of the “revised” definition of unemployment ;
-
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
A person job-searching using the internet was “not actively seeking work“. Predictably, at the stroke of a pen, unemployment “fell” over-night from 5.7% to 5.2%.
It was “manna from heaven” for the incumbent government which has been besieged on several fronts for worsening social and economic indicators.
Despite being little more than a dressed-up “accounting trick”, politicians could claim with a straight-face that “unemployment was falling”.
Which did not take long.
Statistics NZ announced it’s changes on 29 June 2016.
Four days later, our esteemed Dear Leader, John Key, gloated on TVNZ’s Q+A to Corin Dann;
“The unemployment rate in New Zealand is now falling pretty dramatically.”
Of course unemployment was falling “pretty dramatically”. Government statisticians were ‘cooking’ the numbers.
By August, both Key and Bill English were joyfully quoting the “new unemployment stats”.
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.”
So not only was Key quoting the”new, revised” unemployment stats – but his government was now actively predicating their immigration policy on the bogus data.
Three days later, 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.”
Whilst it is expected for politicians to mis-use questionable data for their own self-aggrandisement (and re-election chances), worse was to come.
On 10 August, Radio NZ‘s
“The unemployment rate stood at 5.2 percent for the three months ended in March.”
Bonnett did not
It is unfortunate that some journalists seem unaware of the new ‘regime’ which portrays unemployment lower than it actually is. The fact that Statistics NZ has ‘fudged’ their data which now skews unemployment should be common knowledge throughout the mainstream media.
Especially when government ministers are now “patting themselves on the back” for a “fall” in unemployment that never happened.
The new unemployment figures are not factual. They are a fiction.
Journalists need to know the difference.
.
.
.
Addendum1 – a letter to the public
.
from: Frank Macskasy <fmacskasy@gmail.com>
to: Listener <letters@listener.co.nz>
date: Sun, Aug 14, 2016
subject: Letter to the editor.
The editor
The Listener.
On 29 June, Statistics NZ announced that it would be “revising” the definition of unemployment. It stated that “looking at job advertisements on the internet is … not actively seeking work”.
The consequence, as Statistics NZ pointed out, would be a “decrease in the number of people unemployed and the unemployment rate”. Accordingly, SNZ revised down the March Quarter unemployment rate from 5.7% to 5.2%.
It did not take long for politicians to realise and exploit the benefits of this revision. On August 8, our esteemed Prime Minister cited the “fall” in unemployment;
“On the other side, we need these people in an environment where unemployment is 5.2% and where growth is still very, very strong…”
Three days later, Bill English also referenced the new figure;
“The Reserve Bank… is forecasting that unemployment is going to continue falling from 5.2 percent this year to 4.5 percent by 2019…”
Even Radio NZ’s Gill Bonnett quoted the “revised” figure in a story on 10 August;
“The unemployment rate stood at 5.2 percent for the three months ended in March.”
The irony is that whilst Statistics NZ plays with phantom numbers to suit itself, the unemployed do not find their circumstances improved one iota.
Changing the numbers does not change people’s real lives.
.
-Frank Macskasy[address & phone number supplied]
.
Addendum2 – Statistics NZ’s other Dodgy Definitions
According to Statistics NZ, you are deemed to be employed if you;
- 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
How many people are deemed to be “employed” by Statistics NZ, even though they may be working one hour per week, with or without pay?
Statistics NZ’s employment/unemployment figures are utterly unreliable.
At best, they show the minimum number of unemployed in this country and most likely do not reflect reality.
Addendum3
As this blogger reported back on 12 February 2014;
A Roy Morgan poll has un-employment in New Zealand steady at 8.5%, with a further 11.3% under-employed. Collectively, 19.8% of the workforce (519,000, up 69,000) were either unemployed or under-employed. For the December Quarter 2013, according to Roy Morgan:
.
.
By contrast, the last Household Labour Force Survey (September 2013 quarter) reported 6.2% unemployed, and the 2013 Census survey gave a figure of 7.1%.
Roy Morgan’s polling to determine New Zealand’s unemployment rate yielded a figure 2.3 percentage-points higher than Statistics NZ’s Household Labour Force Survey.
Roy Morgan’s polling for the previous December Quarter for 2012 yielded a similar story. Polling revealed a staggering 9.4% unemployed, with a further 11.6% under-employed. By contrast, Statistics NZ’s figures for the December 2012 Quarter was 6.9% – 2.5 percentage points lower than Roy Morgan’s.
Curiously, Statistics NZ reports – but does not appear to analyse or question – their own conflicting data;
- The number of people employed decreased by 23,000 (down 1.0 percent).
- The labour force participation rate fell 1.2 percentage points, to 67.2 percent.
- The number of people in the labour force decreased by 33,000.
So despite the unemployment rate for the December 2012 Quarter apparently falling “0.4 percentage points, to 6.9 percent” – the actual number of people in work did not increase – it also fell.
There appears to be a solid disconnect between Statistics NZ’s own figures.
Considering the dodgy definitions being used by Statistics NZ, Roy Morgan may prove to be closer to reality than we realise.
Clearly our real unemployment rate is being masked by unrealistic definitions.
.
.
.
References
Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates
TVNZ: Q+A – Interview with 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
Radio NZ: NZ visa numbers reach ‘staggering’ record high
Statistics NZ: Household Labour Force Survey
Statistics NZ: 2013 Census QuickStats about national highlights
Statistics NZ: Household Labour Force Survey – December 2012 quarter
Statistics NZ: Household Labour Force Survey – September 2013 quarter
Previous related blogposts
Roy Morgan Poll: Unemployment and Under-employment up in New Zealand!
Lies, Damned lies and Statistical Lies
Lies, Damned lies and Statistical Lies – ** UPDATE **
.
.
.
.
This blogpost was first published on The Daily Blog on 15 August 2016.
.
.
= fs =
The Mendacities of Mr Key # 18: “No question – NZ is better off!”
.
.
1. Credit where it’s due!
.
TV3’s The Nation on 2 July was probably the most incisive investigative journalism this blogger has seen for a long time. The only “fault” is that The Nation is ‘buried’ at the ghetto time-slot of early Saturday (and repeated early Sunday morning). Mediaworks is wasting a tremendous opportunity to use their current affairs journalistic team as a critical lynch-pin of their broadcasting line-up.
(Especially after the fiasco surrounding the cancellation of Campbell Live. But let’s not go there and rain on The Nation’s well-deserved parade.
In this episode;
- Patrick Gower interviewed John Key and elicited some eyebrow-raising responses from him
- An investigation by Phil Vine and Heather du Plessis-Allan into the Saudi sheep deal yielded disturbing revelations
.
2. Evidently, we’re “better off”?
.
Following on from Bill English’s tragi-comical assertion in Parliament on 29 June that “there is no evidence that inequality in New Zealand is increasing“, our esteemed Dear Leader repeated the mantra three days later in response to a question from Gower;
Patrick Gower: “Good morning, Prime Minister, and thank you very much for joining us. Now, I want to take you back to your first big speech as leader of the National Party – that speech about McGehan Close. You talked in that speech about streets in our country where helplessness has become ingrained and said we have to do better. Now, on McGehan Close, when you went there, people were living in homes. Now we are looking at people living in cars. Is that really better? Is that better?”
John Key: “I think there’s no question New Zealand’s better…”
As reported in a previous story (see: Foot in mouth award – Bill English, for his recent “Flat Earth” comment in Parliament) practically every metric used presents an unflattering picture of New Zealand in the early 21st century.
From the Children’s Commissioner;
Child poverty is now significantly worse than the 1980s. In 1985 the percentage of children in families experiencing income poverty was 15%, compared to 29% now
Put another way;
“305,000 New Zealand children now live in poverty – 45,000 more than a year ago”.
Statistics NZ’s reported;
“Between 1988 and 2014, income inequality between households with high incomes and those with low incomes widened“
And the OECD was also damning, stating;
“rising inequality is estimated to have knocked more than 10 percentage points off [economic] growth in Mexico and New Zealand.”
Perhaps the most credible indictment of Key’s misguided view that “there’s no question New Zealand’s better” is from Key himself, from 2011;
He said he had visited a number of budgeting services and food banks “and I think it’s fair to say they’ve seen an increase in people accessing their services. So that situation is there.”
The difficulty with Key’s statement that “there’s no question New Zealand’s better” is that no one believes it.
.
3. Unemployment is down?
.
When Gower pressed Key that things had not improved much since Key’s visit to Aroha Ireland in McGehan Close in 2007, Dear Leader responded;
“The unemployment rate in New Zealand is now falling pretty dramatically.”
Well of course “unemployment in New Zealand is now falling“. Unemployment has “dropped” from 5.7% to 5.2%.
But not because National’s policies have created twelve thousand new jobs.
But because Statistics NZ had conveniently revised its method of calculating the number of unemployed men and women by arbitrarily excluding those who were jobseeking using the internet;
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… Fewer people will be classified as actively seeking work, therefore the counts of people unemployed will be more accurate.
The utter cheek of Statistics NZ to claim that “therefore the counts of people unemployed will be more accurate” by excluding on-line job-hunting is matched only by Dear Leader Key who wasted no time in taking credit for “unemployment rate in New Zealand is now falling pretty dramatically“.
We are being lied to – and it is officially sanctioned.
.
4. Cosying up to Winston?
.
Gower then touched upon Key’s attitude toward NZ First leader Winston Peters, and asked;
Patrick Gower: “But what about deputy prime minister? Do you rule out Winston Peters being deputy prime minister in one of your governments?”
At this point, my mind immediately Quantum-Leaped back to 2008 and 2011 when Key categorically, absolutely, 100%, resolutely, ruled out any possibility of having Winston Peters in his government;
“Mr Peters will be unacceptable as a Minister in a government led by me unless he can provide a credible explanation [on the Owen Glenn donations scandal].” – John Key, 27 August 2008
“I don’t see a place for a Winston Peters-led New Zealand First in a government that I lead. Historically, he has always been sacked by prime ministers. It’s a very different style to mine and it’s rearward-looking. I’m about tomorrow. I’m not about yesterday. If Winston Peters holds the balance of power it will be a Phil Goff-led Labour government. ” – John Key, 2 February 2011
Seems fairly straight forward; Key was holding up his own “No” card, a-la Winston;
.
.
Except, in the next breath, Key over-ruled himself and his previous pronouncements;
John Key: “Well, I’m not going to rule those sorts of things out.”
Perhaps Key mis-heard Patrick Gower’s question. Perhaps Key had mistakenly thought that Gower had asked him; “But what about deputy prime minister? Do you rule out Moonbeam being deputy prime minister in one of your governments?”
So, being the fair-minded journo that Gower is, he repeated the question;
Patrick Gower: “Yeah, but do you rule out Winston Peters as John Key’s deputy prime minister?”
John Key: “No, because in the end, in 2017, we’re going to have an election, and when we have that election, what we’ll have to do is I’ll ultimately put together a government. I can’t determine that. The people of New Zealand determine that. What I have a responsibility to do is to put together a government — if I’m in the position to lead the largest party and to lead those negotiations — then to try and make that work. But I’m not going to say who’s a minister and who’s not or what role they have and what they don’t.”
So there you have it. John Key – a Man of his Word. And principled. And flexible. Flexible with his Principles.
Or else, the John Key of 2008 and 2011 is not the same man who calls himself “John Key” in 2016? An imposter?
The only reason that people like John Key can get away with back-peddling; mis-information; and bendy-truths is that the voting-public are more cynical than ever. (Hence the rise of anti-establishment figure, Donald Trump; the in-your-face “Brexit” vote, and the success of Independent candidates in the Australian elections.) Voters expect politicians to be dishonest, manipulative, and abandon all principles in pursuit of power.
In this respect, Key has not disappointed.
.
5. Matthew Hooton
.
Well known right-wing commentator, Matthew Hooton, has been scathing in his condemnation of Murray McCully’s “Saudi Sheep Deal”, and has conducted his own investigations into the scandal. His findings have been published on the National Business Review’s website.
Whilst Matthew and I hold wildly differing political views, and whilst his involvement in ‘Dirty Politics’ is questionable, his insightful analysis and commentary on McCully’s dealings with Hmood Al-Khalaf has to be respected.
Matthew was a valuable contributor in analysing the “Saudi Sheep Deal” on The Nation, proving a credible counter-foil to Michelle Boag’s slavish and occasionally near-hysterical defense of Murray McCully’s dubious actions.
.
6. Auditor-General
.
The panelists lamented the fact that the Auditor-General’s report into the Saudi Sheep Deal was “not imminent”. I do not share those feelings.
Next year will be Election Year, and the closer the report’s release is to Election Day, the better it will be for the Opposition. If the Auditor-General’s findings are as scathing as many believe it will be, McCully will be sacked from his Ministerial position. The inglorious demise of his career will add to public perception that National plays “loose” with laws if there is a “buck” to be made.
The release of the Auditor-General’s report next year would be a strategic coup for Labour, Greens, and NZ First.
.
7. Final Word
.
Final word from that outstanding episode of The Nation has to go to Victoria University political scientist, Dr Jon Johansson;
.
.
“ People are utterly fed up with their Establishment, their elites, never accepting accountability for anything.”
Nailed it, Doc.
.
.
.
References
TV3: The Nation
TV3: The Nation – Interview with John Key
Parliament Today: Questions & Answers – June 29
NZ Children: Child Poverty Monitor – Technical Report
Radio NZ: A third of NZ children live in poverty
Statistics NZ: Income inequality
OECD: Trends in Income Inequality and its impact on economic growth
NZ Herald: Key admits underclass still growing
NZ Herald: A day out with friends in high places
Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates
Scoop media: Peters unacceptable in a National-led Government
NZ Herald: PM rules out any NZ First deal
Fairfax media: John Key’s Cat Moonbeam
NBR: Flying sheep endanger McCully
TV3: Panel – Jon Johansson, Conor English & Mike Williams
John Key: Man of Many Principles
An open letter to Winston Peters
John Key: When propaganda photo-ops go wrong
National Housing propaganda – McGehan Close Revisited
I have seen one future, and it is bleak
State house sell-off in Tauranga unravelling?
The Mendacities of Mr English – Fibbing from Finance Minister confirmed
Why is Paula Bennett media-shy all of a sudden?
Park-up in Wellington – People speaking against the scourge of homelessness
Lies, Damned lies and Statistical Lies
Foot in mouth award – Bill English, for his recent “Flat Earth” comment in Parliament
Lies, Damned lies and Statistical Lies – ** UPDATE **
.
.
.
.
This blogpost was first published on The Daily Blog on 7 July 2016.
.
.
= fs =
Lies, Damned lies and Statistical Lies – ** UPDATE **
.
.
Intro
A few days ago, this blogger reported how Statistic NZ had implemented a revision which would materially affect how unemployment stats were counted;
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%.
Simply because if a person was job-searching using the internet they were “not actively seeking work“.
Which beggars belief as the majority of jobseekers will be using the internet. It is the 21st century – what else would they be using?
Update
Four days later, our esteemed Dear Leader, John Key, was interviewed on TV1’s Q+A by Corin Dann;
.
.
“The unemployment rate in New Zealand is now falling pretty dramatically.”
Well, it would, wouldn’t it?
Of course unemployment would fall “pretty dramatically” if government statisticians are cooking the numbers.
It did not take Key very long to use the “revised stats” to his advantage.
Expect more BS from National ministers congratulating themselves about how well their “job creation” policies are working.
.
.
.
.
References
TVNZ: Q+A – Interview with John Key
Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates
Scoop media: On The Nation – Patrick Gower interviews John Key
Previous related blogpost
Lies, Damned lies and Statistical Lies
.
.
.
.
This blogpost was first published on The Daily Blog on 6 July 2016.
.
.
= fs =
Letter to the editor – Key discovers how to reduce unemployment in NZ
.
.
from: Frank Macskasy <fmacskasy@gmail.com>
to: Sunday Star Times <letters@star-times.co.nz>
date: Sun, Jul 3, 2016
subject: Letters to the editor.
The editor
Sunday Star Times.
On 29 June 2016, Statistics NZ announced that it would be changing the definition of what constituted an unemployment person being called a jobseeker;
“Looking at job advertisements on the internet is correctly classified as not actively seeking work. “
So an unemployed person, using the internet to look for work, is no longer considered a jobseeker?
Stats NZ then promptly “reviewed” the current employment rate of 5.7%, revising it down to 5.2%.
Four days later, on TV3’s “The Nation”, our esteemed Prime Minister patted himself on the back for “falling unemployment” saying;
“The unemployment rate in New Zealand is now falling pretty dramatically. “
Well, of course it’s “fallen”! Statistics NZ has ‘cooked’ the numbers! By arbitrarily deciding that any unemployed person using the internet to look for work is no longer considered officially a “jobseeker” – unemployment has “miraculously” dropped!
Now we now how Key’s government plans to reduce unemployment, and it’s not by job-creation.
Lies, damned lies, and statics indeed!
George Orwell would be mightily impressed!
.
-Frank Macskasy
[address and phone number supplied]
.
.
.
References
Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates
Scoop media: On The Nation – Patrick Gower interviews John Key
Previous related blogpost
Lies, Damned lies and Statistical Lies
.
.
= fs =
Lies, Damned lies and Statistical Lies
.
.
In the last few years, my writing has involved a wide range of topics affecting the social/economic/political aspects of our nation. The one common factor in my writing has been the ability to research facts and figures and put them into some usable context, either for evidential, or high-lighting purposes.
Offering an opinion that the government is hollowing-out Child,Youth, and Family is one thing. Carrying out research; finding information through the ‘net; asking specific questions using the Official Information Act are the means by which hard facts can be mined; refined; and presented to the reader in a form that presents a credible case to the audience. Stories such as “State house sell-off in Tauranga unravelling?” and “Ongoing jobless tally” are put together using information, quotes, financial and statistical data.
Two stories late last year illustrated how National – with silence or active co-operation by compliant state-sector bosses – has been able to manipulate statistics to present a favourable public perception of it’s management of the country.
.
.
Though occassionally, the truth slips out, as Greg O’Connor revealed on TVNZ’s Q+A on 25 October, last year;
.
.
Fudging statistics, numbers, facts, and dollar-figures is not isolated when it comes to this government. Only a few days ago, English was sprung giving false financial information relating to Sue Moroney’s paid-parental leave bill;
.
.
The Radio NZ report went on to state;
Ms Moroney challenged him about the figures in Parliament.
“Does he stand by his statement to Radio New Zealand on 17 June 2016 that extending paid parental leave to 26 weeks would add when it’s fully in place about $280 million a year.”
Mr English admitted he was incorrect and should have used the figures written in the veto certificate he himself had tabled.
“The government currently spends about $280m a year on paid parental leave, Labour’s proposal once fully implemented would cost around $120m per year on top of that – or $100m per year net of tax. Net of tax the proposal would cost $280m over the next four years.”
Ms Moroney then asked how Mr English got it so wrong.
He replied that he did so because he confused the $280m over four years, with $280m a year.
This is our Finance Minister confusing $280 million per year with over a four-year period. No wonder we’re over $60 billion in debt.
National has been crowing for the last few years that “crime has been falling“;
.
.
Even the Police Commissioner got in on the ‘act’;
.
.
“A huge amount of hard work from our Police has gone into achieving these fantastic results,” said Tolley in 2013. “Fantastic” is right – as in fantasy-fantastic.
Because it did not take long before people started realising that the Police stats were dodgy, and most likely bogus.
This was confirmed by outgoing Police Association President, Greg O’Conner, on TVNZ’s Q+A, on 25 October, in a very candid interview with Michael Parkin.
On statistics, Parkin referred to National and Police trumpeting a 30% drop in crime. O’Conner responded wryly;
@3.10
“Well, it’s uh, lies, damned lies, and statistics. If you look at the crime stats, um, which is those recorded stats, you’ll say the government and police administration are right. If you look at the stats around calls for service, they’re the phone calls that police receive in communications centes, etc, and just an example, family violence, domestic disputes; up by 10% a year pretty much, and across the board, 20% increase. So it’s the calls for service, to the extent that the communications centres couldn’t manage last summer. There’s a fear, and we’re obviously we’re trying to make sure it doesn’t happen this year. So the two are going in completely different directions.”
Parkin pointedly asked if the statistics are being manipulated. O’Conner’s response was startling in it’s honesty;
@3.55
“Of course they are. Every government department – I mean, what happens is that, the stats themselves are fair, but I mean I see it as a debate [like] about health, y’know, medical – the waitings lists have going down, but people get kicked of waiting lists and so it’s, you achieve – Put it this way, with crime stats, what we’ve set out to do is the way to cut crime stats is to hit your bulk crime. So if you have any success there, of course, that’s going to be big numbers down. And what you ignore is your small numbers. You ignore, in fact, interestingly enough you ignore drugs. You ignore a lot of your serious stuff that you only find if you go looking. And in the past that’s got us into real trouble. Got us into trouble with the child abuse files, in particular, and you remember, that they were put aside. Because they weren’t politically known. They were business as usual. All of a sudden we were concentrating on the crime and crash reduction, um, and we ignored that stuff. And so you’ve got to be careful. And this is where the politicisation of policing is really dangerous. It’s not done by the Minister saying ‘you gotta do this and you gotta do that’, it’s done by funding.”
O’Conner’s scorn is confirmed by an event last year where one police district was caught out, red-handed, falsifying crime statistics. Seven hundred burglary offences “disappeared”;
.
.
Herald journalist, Eugene Bingham, reported;
“ It transpired others knew about the allegations around the same time, including the local MP and then-Minister of Justice, Judith Collins.”
.
.
A police report “raised questions over pressures to meet crime reduction targets”, but Police were quick to assure that the fudged stats were “isolated“;
.
.
“Isolated”? As far back as 2012, Police were issuing warnings for petty-crime, instead of prosecuting;
.
.
Then-Police Commissioner Peter Marshall said;
“ These are 19,000 people who would otherwise go to court, who would clutter up the system in terms of court time, let alone police officers preparing prosecution files and spending time in court.”
So the policy of issuing warnings “freed up police time” and “un-clogged the Court system”?
It also created a drop in crime statistics.
How convenient.
The above Herald story, “Warnings to petty crims ‘freeing up police time’ ” appeared in the Herald in January 2012. So by April 2013, Police Minister Anne Tolley was able to say with (almost) a straight face;
“ These statistics show that our Police are getting it right, and I want to congratulate the Commissioner and all Police staff for their efforts in preventing crime and making communities safer.”
It’s easy to reduce crime. Just “massage” the stats away.
“Massaging” statistics does not work for long, as current Police Commissioner Bush recently discovered;
.
.
(Listen also to Radio NZ Checkpoint interview (2′ 39″))
Both Police Minister Judith Collins and Commissioner Bush resorted to old-fashioned “spin” (aka “bullshitry”) to explain away this embarrassing development;
Police Commissioner Mike Bush told MPs at today’s Law and Order Select Committee the jump in crime had to be kept in perspective.
“Burglary rates are some of the lowest rates in over a decade, in recent times there has been an increase – now that concerns me,” the commissioner said.
Police Minister Judith Collins tried to put a positive spin on the jump in crime when speaking to reporters later.
“Well there may have been a slight bump in crime and I think the commissioner said that was most likely so, but I think what we’re seeing is if police go after drug offenders, that’s always going to be counting as offences,” she said.
On this basis, if Police did not arrest anyone; nor prosecuted anyone, there would be zero crime in New Zealand. According to statistics, anyway.
So much for one one National’s vaunted, lynch-pin policies;
.
.
National’s ministers have never liked statistics. They have a tendency to show up the failings of this inept government. Who can forget then-Welfare Minister, Paula Bennett in August 2012 giving an explanation (of sorts) why her government was not willing to undertake measuring the poverty line;
.
.
“ There is no official measure of poverty in New Zealand. The actual work to address poverty is perhaps what is most important. Children move in and out of poverty on a daily basis.”
Though how Bennett proposed to “address poverty” when she was fearful of even measuring it has never been fully explained.
But as we know, since Bennett’s decision, poverty has increased and stories of people living in garages, cars, and families crammed into over-crowded houses have come to light. Despite not being measured, poverty refuses to go away.
What an inconvenient, annoying nuisance.
On 29 June 2016, Statistics 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%.
Simply because if a person was job-searching using the internet they were “not actively seeking work“.
Which beggars belief as the majority of jobseekers will be using the internet. It is the 21st century – what else would they be using?
In fact, a government website – careersnz – states categorically;
.
.
Work and Income’s (WINZ) website states similarly;
.
.
On-line job advertising company, Seek, reported a sharp rise in job adverts on their websites.
For the government statistician to unilaterally declare that “looking at job advertisements on the internet is correctly classified as not actively seeking work” beggars belief. One might as well say that if a person admitted to hospital shows no outward signs of serious illness, then that person is obviously not sick.
When most jobs are advertised online – as stated by government agencies!!! – where else would one look for a job? By studying tea-leaves perhaps?
The result of Statistics NZ’s “improvements” by removing online job-hunting as job-seeking is obvious; the rate of unemployment dropped.
How surprising.
Stats NZ actually seemed pleased with the consequence;
Fewer people will be classified as actively seeking work, therefore the counts of people unemployed will be more accurate.
How can “the counts of people unemployed” be “more accurate” if large numbers of unemployed are culled from the count?!?! In what Universe is this an accurate count to include some unemployed, but not others, for the most specious reason?
This makes no sense in terms of accurate statistics. To any sober person, an unemployed jobseeker is one who is;
- Unemployment
- Job-seeking
There is no rationale for arbitrarily removing job seekers who use the internet to seek work. Especially as two government departments encourage on-line searching because “most jobs in NZ are advertised online“.
There can only be one rational explanation: the unemployment statistics are inconvenient. Therefore change the parameters of the statistics.
This change to Statistics NZ is of considerable benefit to the National government. Their policies have consistently failed to reduced unemployment in a meaningful way.
The perception is that “strings have been pulled”; “whispers made into certain ears”; and Ministers’ expectations made clear to certain senior civil servants.
If all this is true, this would have to be one of the most under-hand things that National has done these last eight years. This would have to be one of the worst.
Aside from the fact that it is another in a long list of lies, bendy-truths, omissions, etc, this one is a wilful attempt to hide the consequences of their failing policies.
It was bad enough when Stats NZ defined being “employed” as;
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
If working one hour, without pay, is the minimum measure of being “employed”, then what must our true rate of unemployment actually be?
As much as possible, I deal with facts in my writing. But when supposedly independent, non-partisan, ostensibly-accurate data-collection and presentation is no longer a true reflection of reality, then we have reached a point where I am dealing in assumptions, half-facts, and outright distortions.
This government has done what few other Western democracies have achieved; a state of Orwellianism that Stalinist Russia, Nazi Germany, and other dictatorships required unrelenting brute force to achieve.
When it comes to National, believe nothing; question everything. Misinformation is policy.
Welcome – to National’s “Brighter Future”.
.
.
.
Note: Some parts of this story are an excerpt from a previous blogpost, Weekend Revelations #3 – Greg O’Connor and criminal statistics.
.
.
.
References
TVNZ: Q+A – Police Association president steps down
Radio NZ: English admits maths error in bill veto defence
Beehive.govt.nz: Offences at 24-year low, crime down for third year running
NZ Herald: Crime rate falls to 29-year low
NZ Herald: Police made burglaries vanish
NZ Herald: Two-year search for ‘ghost crimes’ truth
NZ Herald: Police deny being caught out by false review claims
NZ Herald: Warnings to petty crims ‘freeing up police time’
Radio NZ: Police concerned at national crime spike
Radio NZ: Checkpoint – Police concerned at national crime spike (audio)
NZ Herald: Measuring poverty line not a priority – Bennett
Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates
Careersnz: Job hunting tips
Work and Income: Where to look
Fairfax media: Wellington jobs advertised on Seek up 11 per cent over past year
Statistics NZ: Household Labour Force Survey – Definitions
Other Blogposts
Polity: English canards
The Daily Blog: To make the unemployment stats drop, Government now claims anyone looking for jobs on the internet isn’t unemployed
The Standard: The great big list of John Key’s big fat lies (UPDATED)
The Standard: “Post-truth” politics (and false equivalences)
Previous related blogposts
John Key’s “pinch of salt” style of telling the truth
National – self-censoring embarrassing statements?
Weekend Revelations #3 – Greg O’Connor and criminal statistics
Media stories of the Week: Police Commissioner Mike Bush on dubious police practices
The Mendacities of Mr English – Fibbing from Finance Minister confirmed
The Mendacities of Mr Key # 16: The sale of Kiwibank eight years in the planning?
That was Then, This is Now #28 – John Key on transparency
.
.
.
.
This blogpost was first published on The Daily Blog on 3 July 2016.
.
.
= fs =
When National is under attack – Deflect, deflect, deflect!
.
.
As I have pointed out in previous blogposts, when threatened with bad headlines or a scandal of some description, National’s automatic defense is to generally to default to one of three* deflections;
- Blame previous the Labour government
- Release story on ‘welfare abuse’
- Blame Global Financial Crisis or similar overseas event
There are plenty of past instances of this kind of strategy.
In February 2013, the Auditor-General found that National gave Skycity special treatment when negotiating a convention centre in return for 500 additional pokie machines. In a damning report, Deputy Auditor-General Phillippa Smith said;
“Although decisions were made on the merits of the different proposals, we do not consider that the evaluation process was transparent or even handed.”
National’s response was immediate. The following day, Associate Social Development Minister Chester Borrows launched into an attack on so-called welfare fraud;
.
.
In May 2014, faced with mounting criticism over National’s incompetent mis-handling of legalised synthetic marijuana, our esteemed Dear Leader announced a new policy to introduce a new, restrictive, regulatory framework for psychoactive substances. Key had no shame in blaming Labour for the Opposition attempting to offer solutions to a botched drug-policy that National was wholly responsible for;
Mr Key said that, in hindsight, the Government should have taken an ultra conservative view last year and not given any legal high substances a waiver.
And he said the Labour Party forced his Government’s hand over announcing a new ban on synthetic drugs, which will take effect on 8 May.
The Government’s new ban was announced late on Sunday after the Labour Party said it would announce on Monday its own plan to immediately stop the sale of synthetic cannabis and other psychoactive substances.
Mr Key said his cabinet decided last Tuesday on a ban but wanted to keep quiet about it to cut down on stockpiling by consumers.
He said the Labour Party has not affected the Government’s policies on synthetic drugs but forced its hand in terms of the announcement.
Also in mid-2014, National was hit with multiple bad-news media stories;
Smith gives nod for open-cast coal mine on conservation land
NZ unprepared for a deep water oil spill, Greens say
Consumers hard hit by hefty electricity price rises
National’s fix over GCSB draws a storm of protest
Loans door shutting on first-home buyers
High petrol prices hit struggling families
Job ad stall hints at unemployment rise
SkyCity deal doesn’t add up: Treasury
Housing plan ‘a weak compromise’
.
.
Currently, our esteemed Dear Leader is facing political, media, and public heat over New Zealand being a party to the tax-haven industry. When challenged, Key first denied that New Zealand was a tax haven;
“Tax havens are where there is non-disclosure of information – New Zealand has full disclosure of information, and so all you’ve got is New Zealand’s taken a different view from a lot of different jurisdictions and that’s because the way we tax is we tax a settlor.
In other words, it’s all about making sure New Zealanders pay their fair share of tax, what we’ve got is quite a legitimate regime.”
As mounting evidence from several sources disproved Key’s weak assertions, he was forced to announce an enquiry into the country’s trust laws.
Then Labour Leader, Andrew Little, challenged Key to disclose his tax-returns – which Key refused point blank.
Again, on cue, National’s media strategists dropped a Deflection #2 ‘bomb’ into the public discourse, with this offensive vilification of ” basically young males” from Bill English;
.
.
English’s disparagement of young, unemployed New Zealand men was roundly condemned by fair-minded New Zealanders – but the demonisation tactic had worked. For a moment, the public and media had taken their eyes of the Tax Haven ball. Which would not be the first time;
.
.
However, in making that ill-advised comment, English may have accidentally opened a can of inconvenient but still-salient facts;
- Prior to the 2007/08 GFC, unemployment stood at around 3.4% – or 78,000 workers.
- As the GFC/Recession impacted on our economy, unemployment reached 7.3% by 2013 – throwing 154,000 people out of work.
- Seventysix thousand people lost their jobs as a result of dubious activities in the financial markets. Or did those 76,000 suddenly decide to voluntarily give up their jobs to go on the dole for $200 a week?
- Though the official unemployment rate is currently at 5.3% – there still remains 133,000 out of work.
- In 2009, National scrapped the Training Incentive Allowance which benefitted many solo-parents looking to re-train and move off welfare into paid employment
The history of entrenched high-unemployment can be seen to have taken root in the late-1980s, as right-wing economic “reforms” were implemented by Roger Douglas and his cronies. Note the rise of unemployment rate and numbers from late 1987 and early 1988, when neo-liberalism was introduced into the economy and workplace;
.
.
.
Reference: Trading Economics – Unemployed Persons – Unemployment Rate
.
So not only was English blaming 133,000 workers for being out of work as the global economy was slowly recovering from the Global Financial Crisis – but is evidently blaming workers for the steady rise of unemployment since the implementation of neo-liberal economics in this country.
Free trade agreements have also played a role in the destruction of jobs in New Zealand. As more and more manufacturing and service jobs were relocated to low-wage societies (China, Vietnam, Pakistan, Fiji, India, etc), the numbers thrown out of work increased in our own country.
Cheap clothes and shoes from low wage societies are not cheap. They were paid for with the jobs of our fellow New Zealanders.
Bill English’s repugnant diatribe at Federated Farmers – where his ignorant, red-neck views no doubt found sympathy with certain elements from the crudely-informed rural community – are in stark contrast with his stated comments on 28 May 2009. As the GFC storm was beginning to buffet our economy, English was full of sympathy as more and more people were ending up unemployed;
“We are particularly concerned that the economy creates new jobs. The burden of a recession falls most harshly on those who lose their jobs and on their communities. We owe them every effort to create the opportunity for a new job.”
Mr English apparently no longer believes “we owe them every effort to create the opportunity for a new job” and has shifted the “burden of recession” firmly back onto the shoulders of the unemployed.
Or perhaps it is high time that people started asking the acolytes of the Church of Neo-liberalism – at what point do they understand and accept that blaming the victims of their failed, inflexible, free-market doctrine will not make that ideology work?
How long do we have to wait, Mr English?
.
.
.
.
Postscript
* In Auckland’s on-going housing-crisis situation, a fourth Deflection can be applied as a useful tactic to take the heat of National’s inept policies;
4. Blame the RMA
Number 4 deflection can be used in conjunction with Number 1 deflection. Or even Deflection #2, for maximum reactionary responses from the ill-informed.
.
.
.
References
Fairfax media: SkyCity report slates Government ministers
Radio NZ: Govt cracks down on benefit fraudsters’ partners
Radio NZ: Legal highs to be regulated by July
Radio NZ: Thousands stopped from getting benefits not entitled to
Radio NZ: NZ’s ‘world-class’ tax system defended
Parliament: 3. Prime Minister—Statements
TV3 News: ‘No doubt’ NZ is a tax haven – expert
Fairfax media: Government u-turns on review of foreign trust regime but appointment under fire
Fairfax media: NZ PM John Key refuses to release tax records – what do we know of his assets?
Radio NZ: Farmers agree Kiwi farm labourers ‘hopeless’
Fairfax media: ‘Hopeless’ comment a sign of a tired Government
Employment.govt.nz: Employment and unemployment – March 2008 Quarter
Trading Economics: Unemployed persons
Statistics NZ: Household Labour Force Survey: September 2012 quarter
Statistics NZ: Labour Market Statistics: December 2015 quarter
NBR: Bennett cutting a benefit that helped her – Labour
Scoop media: Speech – Bill English – Budget 2009
Additional
Radio NZ: Deputy PM will not apologise for comments (alt. link) (audio)
Other bloggers
The Daily Blog: Hypocritical narrative blames the victim rather than the cause for economic ‘failings’
The Standard: Trickledown has failed
The Standard: Offers of help flood in to Bill English
Previous related blogposts
Benefit fraud? Is Chester Borrows being totally upfront with us?!
The Mendacities of Mr Key #2: Secret Sources
John Key – Practicing Deflection 101
National under attack – defaults to Deflection #1
National under attack – defaults to Deflection #2
.
.
.
.
This blogpost was first published on The Daily Blog on 17 April 2016.
.
.
= fs =
Unemployment, Christchurch, dairy prices – Bill English confirms blogger’s analysis
.
.
Leg #1: Treasury reported in 2012, on the Christchurch re-build;
The Canterbury rebuild is expected to be a significant driver of economic growth over the next five to ten years. The timing and speed of the rebuild is uncertain, in part due to ongoing aftershocks, but the New Zealand Treasury expects it to commence around mid-to-late 2012.
Leg #2: The Reserve Bank, in 2014, on our Dairy sector;
The New Zealand dairy industry is experiencing prosperous times, continuing the strong growth in export earnings of the past eight years. Animal numbers and prices have increased and on and off farm productivity growth has been impressive. And the future looks bright. There seem to be important structural reasons behind the rise in dairy prices that should continue into the medium term.
Leg #3: Steven Joyce, Associate Minister of Finance, this year, on the Auckland housing boom;
“Closer to home, the Reserve Bank … highlights several factors continuing to support growth domestically, including robust tourism, immigration, the large pipeline of construction activity in Auckland, and, importantly, the lower interest rates and the depreciation of the New Zealand dollar.”
There we have it – the three basic “legs” comprising National’s economic development policy. One is predicated on fluctuating international market-prices; another is an unsustainable property boom funded by billions borrowed from off-shore; and the other is the epitomy of ‘disaster’ capitalism.
In debating the fragility and unsustainability of these three sectors of our economy, I (and other bloggers from the Left) have pointed out time and again the transitory nature of the dairy sector boom; the Christchurch re-build boom; and the Auckland property market boom. Acolytes of the so-called free-market – ever dedicated to their quasi-religious right-wing notions – have dismissed our warnings.
On 4 November, the National government’s Finance Minister and sheep farmer, Bill English, made a statement in Parliament that has backed up our dire warnings – albeit somewhat late in the day;
“Of course, if unemployment was a direct choice of the Prime Minister of New Zealand, there would be none of it. You would just decide to have none. But, of course, it is not. It is a product of the world economy and its low growth rates, and of particular circumstances in New Zealand where the rebuild in Christchurch has flattened out and there has been a drop in national income of billions of dollars from the decrease in dairy prices, which was always going to affect the number of jobs in New Zealand, and now it is happening.”
Indeed; “and now it is happening”.
Two of National’s economic stimulators are either belly-up, or in the process of falling flat.
Only the Auckland housing boom remains. When that collapses, it will be much, much worse than the depressed Dairying sector. At that precise moment, international lenders will have noticed that we have been borrowing-up-large for one helluva massive property splurge-party – and they will be wanting their money back.
All $200 billion of it.
.
.
According to Squirrel mortgage broker, John Bolton;
“People are completely oblivious of what’s going on. If you overlay what’s going on around the rest of the world, all bets are off.”
New Zealanders are about to wake up with the biggest “hang-over” since they first got trolleyed at teenagers.
Is this where I say, “I told you so”?
Will it matter by then?
.
.
.
References
NZ Treasury: Recent Economic Performance and Outlook (2012)
Reserve Bank: The significance of dairy to the New Zealand economy
Parliament Today: Questions and Answers – Sept 10 2015
Parliament: Hansards – Questions for oral answer – 2. Unemployment—Rate
Fairfax media: Mortgage debt tops $200 billion
Additional
Metro: 10 ideas that could solve the Auckland property crisis
Previous related blogposts
Labour’s collapse in the polls – why?
“The Nation” reveals gobsmacking incompetence by Ministers English and Lotu-Iiga
The Mendacities of Mr Key # 12: No More Asset Sales (Kind of)
.
.
.
.
This blogpost was first published on The Daily Blog on 7 November 2011.
.
.
= fs =
2015 – Ongoing jobless tally
.
.
Continued from: 2014 – Ongoing jobless tally
So by the numbers, for this year;
.
Events
.
January
- Otago University: 20 redundancies
- Cavalier Carpets: 22 redundancies (plus management)
- Norman Ellison Carpets: 20 redundancies
February
- NZ Post: 400 redundancies
- SRX Global: 28 redundancies
- Mana Transport: unknown number of redundancies
- Fishing Camping Outdoors: unknown number of redundancies
March
- Harvestpro: 200 redundancies
- Smith and Davis: 120 redundancies
April
- Sanford: 232 redundancies
May
- Forman Building Systems: 22 redundancies
- Solid Energy: 113 redundancies & 15 sub-contractors
- Dunedin City Council: 15 redundancies
- Southern District Healthboard: 25 redundancies
- Corrections Dept: 260 redundancies
- Relationship Services: 183 redundancies
- Waihi Mine: 50 redundancies
- Fairfax media: 185 redundancies
June
- Foodstuffs: 128 redundancies
- Pagemasters: unknown number of redundancies
- Landcare: 11 redundancies
July
- New Plymouth City Council: 52 redundancies
- Fonterra: 523 redundancies
- Spark (Telecom): 24 redundancies
August
- DB Breweries: 24 redundancies
- NZ Post: 75 redunancies
- Unitech: 60 redundancies (proposed)
- West Coast District Health Board-Kynnersley Rest Home: 16 redundancies
September
- Fonterra: 227 redundancies
- AgResearch: 83 redundancies
- TVNZ: 30 (?) redundancies
October
- Bruce Woollen Mill: 19 redundancies
- Mediaworks/Radio Dunedin: 2 redundancies
- Solid Energy/Huntly Mine: 68 Redundancies
- Spark (Telecom): 22 redundancies
- NZ Steel: 100 redundancies
- Ericsson: 7 – 10 redundancies
November
- Unitech: 87 redundancies
- Downer: 30 redundancies
- Call Active: 60 redundancies
- Christchurch City Council: 46 redundancies
.
Statistics
.
.
*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.
.
June 2015 quarter – Employment & Unemployment
.
.
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.
September 2015 quarter – Employment & Unemployment
.
.
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.
Additional analysis;
- The Employment Rate fell 0.5%
- 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.
.
Other Economic Info
.
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
- May 2015: 2,171 new dwellings
- June 2015: 2,042 new dwellings
- July 2015: 2,824 new dwellings
- August 2015: 2,291 new dwellings
- September 2015: 2,242 new dwellings
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.
.
.
.
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.
Addendum2: Other Sources
Statistics NZ: Household Labour Force Survey
.
.
[To be periodically up-dated]
.
.
= fs =
Letter to the editor – Used car salesmen and pony-tail pullers
.
.
from: Frank Macskasy <fmacskasy@gmail.com>
to: Dominion Post <letters@dompost.co.nz>
date: Sun, May 17, 2015
subject: Letter to the editor.
The editorDominion Post
.
Unemployment is officially at 5.8% – 146,000 people
Ten years ago it was down to around 3.7% – 82,000 people
If National had started a house building programme in 2009, rather than Key’s underwhelming “cycleway” project (estimated 4,500 new jobs), then the effects of the GFC would’ve been minimised and the same re-building in Christchurch that has created high employment in that city, would have been spread over the entire country.
Key would be hailed as the Great Builder.
After all, high employment plus low unemployment equals higher tax take plus lower welfare spending and lower government debt.
Instead we having falling exports and pseudo economic “growth” based on an Auckland housing boom/bubble and a temporary rebuilding boom in Christchurch – neither of which are sustainable.Not exactly rocket science if one thinks it through.Not much wonder then, that Key is seen as a dishonest car salesman by some, and a hair-pulling bullyboy/joke, by others.
-Frank Macskasy
[Address and phone number supplied]
.
.
.
.
Above image acknowledgment: Francis Owen/Lurch Left Memes
.
.
= fs =
Letter to the editor – How much will a ‘free’ trade deal with Sth Korea cost us?
.
.
from: Frank Macskasy <fmacskasy@gmail.com>
to: NZ Herald <letters@herald.co.nz>
date: Mon, Mar 23, 2015
subject: Letter to the editor.
The editor
NZ Herald
.On 23 March, John Key and Tim Groser signed a “free” trade agreement with South Korea (before Key scooted back to New Zealand to prop up National’s lame-duck candidate in the Northland by-election).
Key tried his best to push for the benefits of the NZ-Korea FTA by claiming;
“At the moment, New Zealand exports into Korea attract $229 million a year in duties. Tariff reductions in the first year of the FTA alone will save an estimated $65 million.”
It may well “save” exporters $65 million in tariffs.
But how many jobs will it create?
Before New Zealand opened it’s borders to imports from low-wage economies, our unemployment was much lower. In 1981, the Five Yearly Census showed unemployment numbering at 60,258.
Thirtytwo years later, after trade liberalisation; abolition of tariffs; and other so-called “free” trade initiatives, the 2013 Census showed unemployment to number at 153,210 – two and a half times more than the early 1980s.
Perhaps it is just as well that we have cheap goods pouring in from China and elsewhere. We certainly have more unemployed to purchase them.
-Frank Macskasy
.
[Address and phone number supplied]
References
TV3 News: NZ signs Korea free trade agreement
1983 New Zealand Yearbook – Unemployment
2013 Census QuickStats about national highlights
.
.
= fs =
Have the media finally learned to ask the right questions?
.
.
When right-wing, normally pro-National, columnists like the NZ Herald’s John Armstrong question the veracity of this government’s assertions, then it is another indication that things are not going well for John Key’s six-year old administration.
Specifically, Armstrong’s questioning Steven Joyce’s claim on 12 March that thousands of new jobs have been created in Northland;
“When you add that to the 7,500 extra new jobs created in Northland in the last year, it is clear that the region is turning the corner and beginning to grow well.”
Armstrong replied two days later, lambasting the National Minister;
Deserving of special scrutiny is the repeated claim by Steven Joyce that 7500 new jobs were created in Northland last year. It certainly sounds impressive. The Economic Development Minister’s assertion is based on Statistics New Zealand’s household labour force survey. That indeed showed an increase of 7500 more people in employment in Northland at the end of last year as against the previous December.
The survey, however, stipulates that anyone who does paid work for as little as one hour a week is classed as being in employment. When people talk about “new” jobs, they usually mean full-time or part-time with a reasonable number of hours. We simply do not know what types of jobs were actually created.
Note Armstrong’s comment; “The survey, however, stipulates that anyone who does paid work for as little as one hour a week is classed as being in employment”.
He is indeed correct. Statistics NZ considers a person to be employed if they;
- 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
Note that a worker does not even have to be paid for Statistics NZ to consider you officially “employed”.
Which Armstrong duly noted;
The risk of making bald assertions without qualification is underlined by the survey’s other finding that despite the apparent strong lift in employment, the number of unemployed in Northland fell by only about 100 during the same 12 months.
It is refreshing that some in the media are finally starting to pick up the mendacities of this government. Key and his cronies are simply not be be trusted and every utterance they make should be fact-checked.
If an openly pro-National columnist understands that the governments claims are bogus, it should not be beyond the abilities of other journalists to undertake basic research as well. There is simply no excuse; the information is readily available through search engines.
Even Cameron Slater has picked up on National’s blatant propagandising and seems less than impressed.
As I blogged in early February;
If the last six years have shown us one thing, it is that the next scandal and revelations of dodgy ministerial practices and inept Prime Ministerial behaviour is not too far away.
The media are alerted. The public now have some awareness of dirty politics behind the scenes. And journalists are starting to exercise a form of collective memory.
It is said that the public no longer care about politics, and that Key has “de-politicised” it. But, like the continuing bad stories that finally destroyed Jenny Shipley’s government, continuing negatives stories can have a corrosive effect on this government.
The more times Key is caught out lying or being tricky with the truth or breaking promises – the more that the public will slowly but surely distrust his “brand”.
The loss of Northland will not only be damaging to the National government, it will be the clearest indication yet that the value of “Brand Key” has been irrevocably tarnished and diminished.
This will be Key’s final term in office.
Hat-tip: Maria Sherwood – John Key has Let Down New Zealand
.
References
National Party: Strong economic performance in Northland
NZ Herald: John Armstrong – Questionable tactics in race for Northland votes
Statistics NZ: […] Definitions
Whaleoil: Wheels come off Steve Joyce’s Northland campaign
Previous related blogposts
Un-employment; under-employment; and the plain unvarnished truth
Un-employment; under-employment; and the plain unvarnished truth*** UP DATE ***
Roy Morgan Poll: Unemployment and Under-employment up in New Zealand!
Witnessing the slow decay of a government past it’s Use-By date
When the teflon is stripped away
.
This blogpost was first published on The Daily Blog on 16 March 2015.
.
.
= fs =
2014 – Ongoing jobless tally
.
.
Continued from: 2013 – Ongoing jobless tally
So by the numbers, for this year,
January
- OceanaGold/Macraes Mine: 146 redundancies
- Fitzroy Yachts: 100 redundancies
- OceanaGold: 76 redundancies
- Tenix: 15 redundancies
February
- Goodman Fielder: 125 redundancies
- Pacific Steel Group: 70-90 redundancies
- Bathurst Resorces: 29 redundancies
- NZ Post: 44 redundancies
- NZ Post: 70 redundancies
March
- Cerebos Gregg: 125 redundancies
- Kiwibank: 100 (?) redundancies
- Lincoln University: 65 (?) redundancies
April
- Christchurch Yarns: 85 (?) redundancies
May
- Southern Cross Forest Products: 179 redundancies
- Fitzroy Engineering: 28 redundancies
June
- Hallmark cards: 106 redundancies
- Solid Energy/Stockton Mines: 187 redundances
- OceanaGold Corporation: 60 redundancies
- Postie Plus: 64 redundancies
- Southern Cross Forest Products: up to 60 redundancies
July
- Bullet Freight Systems: 197 redundancies
- NZ Post: 137 redundancies
- Postie Plus: 28 redundancies
- Buckley Systems: 36 redundancies
- Fonterra: 110 redundancies
August
- Kiwibank: 80 redundancies
- Infracon: 210 redundancies
- Croxley: 100 redundancies
- Mountain Designs: 70 redundancies
September
- ITL Engineering: 20 redundancies
October
- Nelson Marlborough Institute of Technology: 3 redundancies
- Sealord: 150 redundancies
- Donaghys: 30 redundancies
- Bridon Cookes: 18 redundancies
- Heinz Watties: 100 redundancies
- Tasman Insulation: 29 redundancies
- Wellpak: 40 redundancies
- Manukau Institute of Technology: 50 redundancies (full-time equivalents)
- IAG: 91 redundancies
- Helipro: 70 redundancies (?)
- Vincent Aviation: 30 redundancies (?)
November
- Vodaphone: 250 redundancies (plus unknown number of contractors)
- NZ Defence Force: 52 redundancies
- Eagle Air (Air New Zealand): 232 redundancies (?)
- Downer Tenix: 40 redundancies
- Entec: 12 redundancies
- Unitec: 50 redundancies
December
- Sealord: 81 redundancies
- Asco Carbon Dioxide: 20 redundancies
- Ministry of Maori Development: 5 redundancies/job losses
- Silver Fern Farms: 100 redundancies
- Kiwirail: 65 redundancies
.
*
.
See also
.
*
.
Current unemployment statistics
March 2014 Quarter
| March 2014 quarter | Quarterly change | Annual change | |
| (000) | (Percent) | ||
| Employed | 2,318 | +0.9 | +3.7 |
| Unemployed | 147 | 0.0 | -1.1 |
| Not in the labour force | 1,093 | -0.9 | -2.9 |
| Working-age population | 3,559 | +0.3 | +1.4 |
| (Percent) | (Percentage points) | ||
| Employment rate | 65.1 | +0.4 | +1.4 |
| Unemployment rate | 6.0 | 0.0 | -0.2 |
| Labour force participation rate | 69.3 | +0.4 | +1.4 |
All figures are seasonally adjusted. Source: Statistics New Zealand
* Employed: Includes people who worked one hour (or more) per week, whether paid or unpaid.
June 2014 quarter
.
| June 2014 quarter | Quarterly change | Annual change | |
| (000) | (Percent) | ||
| Employed | 2,328 | +0.4 | +3.7 |
| Unemployed | 137 | -6.3 | -10.9 |
| Not in the labour force | 1,114 | +1.7 | -0.9 |
| Working-age population | 3,579 | +0.6 | +1.6 |
| (Percent) | (Percentage points) | ||
| Employment rate | 65.0 | -0.1 | +1.3 |
| Unemployment rate | 5.6 | -0.3 | -0.8 |
| Labour force participation rate | 68.9 | -0.3 | +0.8 |
.
All figures are seasonally adjusted. Source: Statistics New Zealand
* Employed: Includes people who worked one hour (or more) per week, whether paid or unpaid.
.
Additional statistics
Officially unemployed stats;
In the June 2014 quarter compared with the March 2014 quarter:
- The number of people employed increased by 10,000 people.
- The employment rate fell 0.1 percentage points, to 65.0 percent.
- The number of people unemployed decreased by 9,000 people.
- The unemployment rate fell 0.3 percentage points to 5.6 percent.
- The labour force participation rate decreased 0.3 percentage points, to 68.9 percent.
Official unemployment: down
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
The Household Labour Force Survey for the September 2014 quarter will be released on 5 November 2014.
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.
.
.
[To be periodically up-dated]
.
.
= fs =
Deep thought vs Deep prejudice
.
.
This letter to the editor appeared in The Listener, on 27 September, and caught my attention;
.
.
Mr Dawson wrote in response to one of those typically unthinking comments which condemned the poor for their “unbridled, reckless breeding“. The previous letter writer, a Mr Smith, parrotted the usual prejudice,
For too long, family numbers have blown out of control, because the state, funded by people who took a responsible attitude towards family numbers, has been there to pick up the tab, and this has bred a culture of entitlement
The problem with people like Mr Smith is that no thinking is required when making such puerile statements. He just repeats what he’s heard from elsewhere.
It’s worthwhile recalling that before the Global Financial Crisis – caused by well-educated, white old men (and predominantly, they are usually always White Old Men) – unemployment in New Zealand in the September 2007 Quarter stood at 3.5% – or around 79,000 people.
By 2012, that had rocketed to 7.3% – or 173,000 of our fellow New Zealanders.
That’s 95,000 men and women who went from wage and salary earners – to the “lifestyle choice of luxury living on unemployment” .
Even with unemployment currently at 5.6%, there are still 137,000 people unemployed – 58,000 more than seven years ago. Factor in a growing problem of under-employment, and it becomes apparent very quickly why we have growing child poverty in this country. Especially when the definition of being ’employed’ is working only one hour a week (or more), whether paid or un-paid.
When public or media attention is focused on high unemployment and poverty and government policies – the causation of these problems is slated home to the GFC.
But taken in isolation, when the focus is on families suffering the effects of unemployment and poverty – the problem is slated home to “individual responsibility”.
The ignorance of people like Mr Smith is a kind of self-inflicted, Orwellian, double-think. No brain-power required.
By blaming individuals, and pointing to a so-called lack of ‘personal responsibility for indulging in irresponsible sexual activity’, Mr Smith is saved from the task of having to think through the issues. (Or else he’s just jealous he’s not ‘gettin’ some action‘, as our American cuzzies phrase it so eloquently in ghetto/under-class idiom?)
The next time Mr Smith or one of his clones parrots the same preconceived prejudice, they should be posed the question; what do we do with the children of workers who were in work, but now aren’t?
Do we;
Option A: Adopt the Eastern European gangster method and sell them into sexual slavery?
Option B: Adopt the Asian method, and chain them to sewing machines in sweat-shops, churning out Nikes and trendy t-shirts bearing witty social-justice slogans for Western consumers?
Option C: Or just go with the ISIS technique of mass extermination?
Once we sort out that little “issue” (because actually calling these things problems then demands solutions – an ‘issue’ only requires a cuppa tea and a chat), we can turn our attention to more pressing matters, according to our esteemed Dear Leader;
.
.
Damn. Which one?
Maybe we should ask Mr Smith. Perhaps it’s something he has thought deeply about?
.
References
The Listener: Letters to Editor 20 September 2014
Statistics NZ: Household Labour Force Survey: September 2007 quarter
MoBIE/Dept of Labour: Labour Market Reports – Employment and Unemployment – March 2008 Quarter
NZ Herald: Unemployment up to 7.3pc – a 13 year high
Reserve Bank NZ: Employment
Statistics NZ: Labour market statistics for the June 2014 quarter – Media Release
Statistics NZ: Household Labour Force Survey – Definitions
Statistics NZ: Introducing new measures of underemployment
Irregular Times: Celebrate Labor Day Without Outsourced Sweatshop T-Shirts – wear a sweatshop-free shirt instead
Fairfax media: Key moves for poll on change to flag
.
Above image acknowledgment: Francis Owen/Lurch Left Memes
This blogpost was first published on The Daily Blog on 27 September 2014
.
.
= fs =
Budget 2014 – Why we will soon owe $70 billion under this government…
.
Graphic courtesy of The Daily Blog
.
A few reasons why our debt skyrocketed from 2008 onwards…
1. The Global Financial Crisis, which reduced corporate turnover and export receipts, thereby lowering the company tax take;
2. Two tax cuts (2009 and 2010) reduced government revenue, thereby necessitating borrowing more from offshore to make up the difference. In essence, we borrowed from other peoples’ saving to put more money in our (mostly top incomer earners) pockets.
Using Parliament Library information, the Greens have estimated that this involved borrowing an extra couple of billion each year.
3. National could have kept Debt down by investing in job creation. Key’s cycleway project was promised to create 4,500 new jobs – it failed spectacularly.
Instead, job creation was largely left to “the market”, which itself was having to engage in mass redundancies for businesses to survive the economic downturn.
This meant more expenditure on unemployed which went from 3.4% in 2008 to 7.3% by 2012 (currently sitting at 6% for the last two Quarters).
Ironically, part of our current economic “boom” is predicated on the Christchurch re-build – evidence that had National engaged in a mass housing construction programme in 2009, after it held it’s mostly ineffectual “Jobs Summit”, we would have;
A. Maintained higher employment,
B. Paid out less in welfare,
C. Persuaded more New Zealanders to stay home and not go to Australia to find work,
D. Addressed the current housing crisis we now have.
As usual, National’s short-sightedness; irresponsible 2008 election year tax-cut bribes; and misguided reliance on market forces resulted in New Zealand borrowing more than we really needed to.
.
References
NZ Herald: Govt borrowing $380m a week
Scoop media: Govt’s 2010 tax cuts costing $2 billion and counting
NZ Parliament: Government Proposals—Cycleway and Nine-day Working Fortnight
NZ Herald: Cycleway jobs fall short
Statistics NZ: Employment and Unemployment – March 2008 Quarter
Statistics NZ: Household Labour Force Survey: September 2012 quarter
Fairfax NZ: Jobs summit ‘fails to deliver’
TVNZ News: OECD report shows housing crisis in NZ – Labour
TVNZ News: Christchurch rental crisis ‘best left to market’ – Govt
Additional
Fairfax media: Public debt climbs by $27m a day
Fairfax media: Budget 2014: The essential guide
Previous related blogposts
Can we do it? Bloody oath we can!
.
Above image acknowledgment: Francis Owen/Lurch Left Memes
.
.
= fs =
Radio NZ: Focus on Politics for 21 February 2014
.
– Focus on Politics –
.
– Friday 21 February 2014 –
.
– Brent Edwards –
.
A weekly analysis of significant political issues.
Friday after 6:30pm and Saturday at 5:10pm
Disagreement about how to reduce poverty and inequality is looming as one of the big debates of election year.
.
.
Click to listen: Focus on Politics for 21 February 2014 ( 16′ 38″ )
.
.
.
= fs =
Roy Morgan Poll: Unemployment and Under-employment up in New Zealand!
.
.
A new Roy Morgan poll has un-employment in New Zealand steady at 8.5%, with a further 11.3% under-employed. Collectively, 19.8% of the workforce (519,000, up 69,000) were either unemployed or under-employed. For the December Quarter 2013, according to Roy Morgan:
.
.
By contrast, the last Household Labour Force Survey (September 2013 quarter) reported 6.2% unemployed, and the 2013 Census survey gave a figure of 7.1%.
Gary Morgan, of Roy Morgan said,
“The latest Roy Morgan New Zealand December Quarter 2013 employment figures show New Zealand unemployment at 8.5% (unchanged from September Quarter 2013). However, New Zealand under-employment – those working part-time but looking for more work – has jumped to a record high 11.3% (up 2.7%). It should be noted that this is the fourth year in a row that under-employment has increased in the December Quarter. However, this year’s increase is substantially larger than in previous years and must represent a major concern for Prime Minister John Key seeking re-election.
“This means a total of 19.8% (up 2.7%) New Zealanders are either unemployed or under-employed – almost identical to the figure earlier last year in the March Quarter 2013 of 19.9%. Total New Zealand unemployment and under-employment is also significantly higher than when Prime Minister John Key won the 2011 Election (19.0%). Key clearly needs to reduce unemployment and under-employment during 2014 to have a strong chance of winning re-election to a third term in November.”
Bearing in mind that Statistics NZ defines being employed as anyone working one hour or more, per week, whether paid or unpaid, and it becomes apparent as to why unemployment/employment statistics in this country are skewed towards the low end. Statistics NZ is simply not presenting us with a real picture of unemployment.
This, of course, suits governments of either hue, whether National or Labour-led.
Roy Morgan further explained how their polling was conducted;
“The Roy Morgan New Zealand Unemployment estimate is obtained by surveying a New Zealand-wide cross section by telephone. An unemployed person is classified as part of the labour force if they are looking for work, no matter when.
The results are not seasonally adjusted and provide an accurate measure of monthly unemployment estimates in New Zealand. The Statistics New Zealand Unemployment estimates are obtained by mostly telephone interviews.
Households selected for the Statistics New Zealand Labour Survey are interviewed each quarter for up to two years (eight interviews), with one-eighth of the sample being replaced each quarter. The first interview is conducted face-to-face. Subsequent interviews are then conducted by telephone.
Statistics New Zealand classifies an unemployed person as part of the labour force only if, when surveyed, they had actively sought work in the past four weeks ending with the reference week and were available for work or had a new job to start within the next four weeks.
Statistics New Zealand Unemployment estimates are also seasonally adjusted. For these reasons the Statistics New Zealand Unemployment estimates are different from the Roy Morgan Unemployment estimate.
There is a similar divergence caused in Australia’s ABS Unemployment estimates and the Roy Morgan Australian Unemployment estimates. Roy Morgan Executive Chairman Gary Morgan’s concerns regarding the ABS Unemployment estimate are clearly outlined in his letter to the Australian Financial Review, which was not published.”
No doubt National/ACT supporters will find little joy in these figures and will casually dismiss them as unreliable or some other reason.
But one suspects they will sing a different tune when a Labour-led government is installed later this year, and Roy Morgan polling continues to show higher-than-official unemployment statistics.
At that point the Right will suddenly “discover” Roy Morgan.
Note: The Household Labour Force Survey for the December 2013 quarter was released on 5 February 2014.
.
*
.
References
NZ Parliament: Unemployment and employment statistics: the Household Labour Force Survey in context
Roy Morgan: New Zealand real unemployment steady at 8.5% and a further 11.3% (up 2.7%) of workforce are under-employed
Roy Morgan: Roy Morgan measures real unemployment in Australia not the “perception” of unemployment
Statistics NZ: 2013 Census QuickStats about national highlights
Statistics NZ: Household Labour Force Survey: September 2013 quarter
Statistics NZ: Definitions – About the Household Labour Force Survey
Radio NZ: Unemployment rate falls as more give up job hunt
.
*
.
Above image acknowledgment: Francis Owen
This blogpost was first published on The Daily Blog on 5 February 2014.
.
.
= fs =
Un-employment; under-employment; and the plain unvarnished truth… *** UP DATE ***
Continued from: Un-employment; under-employment; and the plain unvarnished truth
.
.
Additional to my original blogpost on The Daily Blog on 6 February.
In up-coming unemployment stats, I’ll be focusing on the Jobless and under-employed numbers, as well as the narrower “unemployed” stats from the Household Labour Force Survey (HLFS). It is evident from the numbers of under-employed and the extremely narrow defining on what constitutes an unemployed person, that we are not getting the full picture from the HLFS.
Coupled to that, the Census last year revealed unemployment to be at an astonishing 7.1% whilst Roy Morgan poll (5 December 2013) had the figure at 8.5%.
By comparison, the HLFS (at roughly the same time) had unemployment at 6.2%.
So unemployment stats ranged from 6.2% (HLFS) to 8.5% (Roy Morgan).
Coupled to that is the narrow definition of the HLFS used by Statistics NZ (see below), and we begin to see why the “official unemployment rate” appears more ‘benign’.
From the January 2014 Parliamentary report, Unemployment and employment statistics: the Household Labour Force Survey in context;
The Reserve Bank has expressed concern at its variance with other indicators. [2] A commentator in the Westpac Bulletin, puzzled by the continued weakness of the HLFS in 2012 compared to the Quarterly Employment Survey (QES) and other labour market indicators, described it as ‘confusion reigns’ and suggested that survey ‘volatility’ played a role. [3] The ANZ commentator is cautious: ‘The HLFS has been very volatile in recent years, and we and the Reserve Bank will treat the result with a degree of scepticism, preferring to take note of a wide range of labour market indicators.’ [4]
These broader labour market indicators include external ones such as business and consumer surveys and job advertisements. These are in addition to those derived from official statistics such as changes in the employment and labour force participation rates, full- and part-time work, and hours worked, together with fine-grained analysis of changes by region, industry and age.
Various reasons for the volatility of the unemployment rate and its variance with other labour market indicators have been discussed – the impact of the recession, the dynamic nature of the labour market, the survey nature of the HLFS, and differences in coverage of the statistics. It has been suggested that the HLFS is more volatile at a turning point – either going into or out of recession…
The latest Household Labour Force Survey (HLFS) stats;
Officially unemployed stats;
The unemployment rate decreased over the quarter, down 0.2 percentage points to 6.0 percent. This decrease reflected 2,000 fewer people being unemployed [147,000]. The fall in unemployment was from fewer men unemployed.
Official unemployment: down
The under-employment stats;
Over the year, the total number of under-employed people increased by 27,200 to 122,600. As a result, the under-employment rate increased 1.0 percentage points to 5.3 percent.
Official under-employment: up
The HLFS Jobless stats;
In the year to December 2013, the number of people in the jobless category fell 27,400 to 257,100. Alongside the 15,000 fall in the number of people unemployed, there was also a 10,200 fall in the number of people without a job who were available for work but not actively seeking.
Official Jobless: down
Observation #1: Under-employment is increasing, which brings into question how effective the “drop” in unemployment and Jobless actually is. As being “employed” is defined as working for one hour (or more) per week; with or without pay: the whole statistical reporting of true unemployment in New Zealand is now called into question. Especially with regards to the next point.
Observation #2: “A 10,200 fall in the number of people without a job who were available for work but not actively seeking” signifies that the drop in Unemployment/Jobless can also be attributed to people giving up, as this Radio NZ report stated in February last year (2013).
Observation #3: As stated in the “Definitions” below, a person who is job seeking only through newspapers is not considered in the “Unemployed” category, but under the wider “Jobless” definition. Considering that a number of households cannot afford the internet, and do not qualify for WINZ registration, this makes a sizeable “chunk” of unemployed effectively invisible.
Observation #4: The above Observation suits successive governments, which are desperate to report lower unemployed so as to gain support from voters.
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.
Up-coming unemployment stats will focus on Jobless and under-employed numbers, as well as the more restrictive “unemployed” stats from the HLFS. Hopefully this will create a more comprehensive ‘snapshot’ of what is happening in the jobs ‘market’.
Further Information
“4 out of 5 New Zealand homes had access to the Internet, up 5 percent since 2009.”
The corollary to that is that one in five households – a staggering 20%! – do not have internet access.
Which means that job seekers on little or no income (especially if they do not qualify for WINZ support) may rely solely on newspapers to look for jobs.
But as I’ve reported above, using a newspaper to be job-seeking does not quality you as “unemployed”.
20%.
That’s quite a number.
No wonder of official unemployment stats are dodgy as hell.
.
*
.
References
NZ Parliament: Unemployment and employment statistics: the Household Labour Force Survey in context
Roy Morgan: New Zealand real unemployment steady at 8.5% and a further 11.3% (up 2.7%) of workforce are under-employed
Roy Morgan: Roy Morgan measures real unemployment in Australia not the “perception” of unemployment
Statistics NZ: 2013 Census QuickStats about national highlights
Statistics NZ: Household Labour Force Survey: September 2013 quarter
Statistics NZ: Household Labour Force Survey: December 2013 quarter
Statistics NZ: Definitions – About the Household Labour Force Survey
Statistics NZ: Household Use of Information and Communication Technology: 2012
Radio NZ: Unemployment rate falls as more give up job hunt
Previous related blogpost
The REAL level of unemployment
Roy Morgan Poll: Unemployment and Under-employment up in New Zealand!
.
*
.
Above image acknowledgment: Francis Owen
This blogpost was first published on The Daily Blog on 9 February 2014.
.
.
= fs =
Un-employment; under-employment; and the plain unvarnished truth…
.
Continued from: Roy Morgan Poll: Unemployment and Under-employment up in New Zealand!
.
.
This is the plain, unvarnished truth that most New Zealanders don’t know; don’t understand, and quite frankly, many do not want to know or understand. For many – especially National/Act supporters living in their own fantasyland – this is the reality that would shatter their comfortable upper-middle-class world-view.
First, read Mike Treen’s excellent analysis on The Daily Blog, on 30 January;
.
.
(Note the pathetic and largely ineffectual attempts by right wing blogger; self-proclaimed “social welfare expert”; and ex-Act candidate, Lindsay Mitchell, and one or two other National Party supporters to undermine Mike’s analysis. They are unable to address or answer even the most simple points Mike and others have raised.)
Then, read Matt McCarten’s piece in the NZ Herald, a few days later;
.
.
And now, here’s the ‘kicker‘;
According to Statistics New Zealand, which carries out both the five yearly Census as well as the Household Labour Force Survey (HLFS), the definition of an employed person is so loose and wide-ranging as to make the term meaningless;
Definitions
About the Household Labour Force Survey
The Household Labour Force Survey (HLFS) provides a regular, timely, and comprehensive portrayal of New Zealand’s labour force. Each quarter, Statistics NZ produces a range of statistics relating to employment, unemployment, and people not in the labour force.
The survey started in October 1985 and the first results published were for the March 1986 quarter.
More definitions
The labour force category to which a person is assigned depends on their actual activity during a survey reference week.
This section includes definitions used in the HLFS release. These conform closely to the international standard definitions specified by the International Labour Organization.
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.
So, if you “worked for one hour” – even without pay! ” – you are automatically classed as employed by this country’s statisticians.
No wonder that the Roy Morgan poll consistently reports that New Zealand has a higher unemployment rate than is generally reported by Statistic NZ’s HLFS or Census.
Quite simply,
- It appears that our stats are horribly wrong and are under-stating the severity of unemployment in New Zealand by several degrees of magnitude,
- Lower unemployment figures suit the agendas of successive governments (National, as well as Labour-led),
- Community organisations are over-worked struggling to put band-aids on the growing problem of hidden unemployment,
- New Zealand as a whole suffers through loss of productivity; increasing costs due to poverty; and other socio-economic problems.
When a government agency purports to measure employment and unemployment, and defines being employed as “working for one hour or more”, either paid or unpaid, those are not statistics – they are a sick joke. In effect, we are fooling ourselves as a nation that we have “low unemployment”.
These are not facts – they are propaganda; half-truths; mis-information; lies-dressed-up-as-comforting-facts. The reality – unpalatable as it may be for many – is that our unemployment is much, much worse than we have been led to believe.
If New Zealanders want to keep up this pretense, they will eventually have to “pay the Piper”, as societal problems worsen. And then, the rioting begins.
Note: For future reference, any subsequent use of Statistics NZ data referring to unemployment, in any upcoming blogposts, will carry the caveat;
“Definition of Employed (by Statistics NZ) includes any person who is;
- anyone working for only one hour (or more)
- anyone not paid for their labour
Accordingly, Statistics NZ information may not present a fully accurate picture of this country’s unemployment/employment rates.”
*** Up-date ***
The HLFS results for the December 2013 Quarter reported a “drop” in unemployment from 6.2% to 6.0%.
Interestingly, as Radio NZ reported, “the fall in unemployment did not match the pick up in jobs, due to more people searching for work“.
This ties in with the fact that “employment” is defined as anyone working for one hour (or more).
If more people are looking for work, this suggests any number of factors,
- The HLFS survey is failing to pick up accurate numbers of unemployment,
- Statistics NZ’s definition for unemployed is too narrow,
- The number of under-employed is (as Roy Morgan reveals) so high as to mask real unemployment.
Also interesting to note that the drop in the HLFS survey results mirror the fall in Roy Morgans polling, further lending credibility to the latter.
.
*
.
References
NZ Parliament: Unemployment and employment statistics: the Household Labour Force Survey in context
Statistics NZ: Hours Worked in Employment
Scoop News: New Zealand Real Unemployment at 9.1%
Statistics NZ: Household Labour Force Survey: June 2012 quarter
The Daily Blog: EXCLUSIVE: Billions of dollars stolen from the unemployed
NZ Herald: Matt McCarten: Rose-tinted view cruel fairy tales
Roy Morgan: New Zealand real unemployment down 0.3% to 8.5% and a further 8.6% (down 1%) of workforce are under-employed
Statistics NZ: Household Labour Force Survey: September 2013 quarter
Scoop News: Inequality keeps rising, says UC social research expert
Statistics NZ: Labour market statistics for the December 2013 quarter
Radio NZ: Unemployment falls to 6 percent
Previous related blogposts
The REAL level of unemployment
Roy Morgan Poll: Unemployment and Under-employment up in New Zealand!
.
*
.
Above image acknowledgment: Francis Owen
This blogpost was first published on The Daily Blog on 6 February 2014.
.
.
= fs =
Latest Roy Morgan Poll – the Left has a Sh*tload of Work ahead of it!
.
.
The latest Roy Morgan poll is not good news for the Progressive Left, with National regaining much the the loss it suffered in the last few polls, and up 3.5 percentage points since January figures. Labour and the Greens have dropped 0.5 and 1.5 percentage points, respectively.
In the chart below, the most recent Roy Morgan poll (January 20 – February 2, 2014) is compared to a recent TV3-Reid Research poll and previous Roy Morgan poll (6 – 19 January 2014);
.
| Roy Morgan poll 6 – 19 January 2014 | TV3 – Reid Research Poll 2 February 2014 | Roy Morgan poll – 20 Jan – 2 Feb 2014 | |
| Right Bloc | |||
|
National |
43.5% |
44.05% |
47.00% |
|
Maori Party |
2.00% |
1.00% |
1.50%* |
|
Conservative Party |
2.50% |
2.10% |
1.50% |
|
ACT |
0.00% |
0.00% |
0.00% |
|
United Future/Peter Dunne |
0.50% |
0.00% |
0.00% |
| Left Bloc | |||
|
Labour |
33.50% |
33.50% |
33.00% |
|
Greens |
12.50% |
12.40% |
11.00% |
|
Mana |
0.50% |
0.30% |
1.00% |
| Wild Cards | |||
|
NZ First |
4.00% |
5.70% |
4.50% |
|
Internet Party |
– |
– |
0.50% |
.
For the First time, Kim Dotcom’s Internet Party is registering in a Poll. At 0.5%, it polls higher than both United Future and ACT. But unless it wins an electorate seat (unlikely), it will not gain representation in Parliament.
Tracking Roy Morgan’s polling;
.
.
In their formal press release, Gary Morgan said,
“The resurgence for National comes as Prime Minister John Key has raised the possibility of a referendum on changing the New Zealand Flag coinciding with this year’s election. Key made the point that Canada, which changed its national flag in 1965 to a maple leaf, had never regretted its decision to remove the Union Jack.
“However, despite this week’s improvement for National the latest Roy Morgan New Zealand December Quarter employment statistics show 19.8% (up 2.7% since the September Quarter) of New Zealanders are unemployed or under-employed. A total of 519,000 New Zealanders (up 69,000). For John Key and National to retain their current lead and stand a good chance of re-election at the end of the year, further reforms are needed to reduce labour market regulation and provide real opportunity for the more than half a million New Zealanders looking for work or looking for more work to find gainful employment.”
Which just goes to show; never under-estimate politicians and their tax-payer funded media strategists ability to manipulate the public.
On a discordant note, Gary Morgan’s reference to “further reforms are needed to reduce labour market regulation” is odd, considering that New Zealand’s labour laws are amongst the most de-regulated and liberal in the OECD. It would be hard to see what Morgan is referring to other than doing away with the minimum wage; all remaining health and safety laws; and banning Unions entirely? Bizarre.
Note: Taken between 20 January and 2 February 2014, the poll was conducted through calling 846 respondents, both on landline and mobile telephones. Currently, Roy Morgan is the only polling company that calls cellphones as well as landlines.
The previous Roy Morgan poll was conducted by calling 1,509 respondents, As such, the lower figure of respondents may be a factor in National’s “improving” fortunes? (Or else, people just liked talking about the flag…)
One thing is for certain; Labour, Green, and Mana supporters are going to have to work bloody hard to effect a change in government this year. It’s going to be a tough year!
.
*
.
References
NZ Parliament: Unemployment and employment statistics: the Household Labour Force Survey in context
TV3: 3 News-Reid Research poll shows Peters as kingmaker
Roy Morgan: National (47%) regains lead from Labour/ Greens (44%)
Previous related blogposts
Census, Surveys, and Cellphones (Part rua) (12 December 2013)
Roy Morgan Poll: Unemployment and Under-employment up in New Zealand!
TV3 Polling and some crystal-ball gazing
Latest Roy Morgan poll bad news for National
.
*
.
Above image acknowledgment: Francis Owen
This blogpost was first published on The Daily Blog on 7 February 2014.
* The original blogpost on The Daily Blog contained an erroneous entry for The Conservative Party under the “Roy Morgan poll – 20 Jan – 2 Feb 2014” category. The actual figure is 1.5% (as shown here), and not 2.5%. My stuff up. (Hat-tip: Weka)
.
.
= fs =
Radio NZ: Nine to Noon – Brian Easton – 7 February 2013
.
– Nine To Noon –
.
– Friday 7 February 2014 –
.
– Kathryn Ryan & Brian Easton –
.
Income inequality in New Zealand is set to become a central election issue, but is it really getting worse?
Brian Easton offers a solution how to address income inequality. Listen and find out what he suggests.
.
.
Click to listen: Brian Easton, Economist ( 13′ 37″ )
.
Acknowledgement: Radio NZ
(Hat tip: Murray Simmonds)
.
.
= fs =
Journalists encouraging irresponsible government policy?
.
.
Sorry, John, but precisely WHO is talking about tax cuts?
Because so far, all I’m hearing is a couple of journos putting the question to Dear Leader and his faithful little side-kick, Lassie Bill English. No one else is seriously contemplating cutting taxes – not when New Zealand’s sovereign debt is now $60 billion as at 9 November this year – and increasing by $27 million every day since Key’s hopelessly incompetent government came to power in 2008.
According to Hamish Rutherford, writing for Fairfax Media, this equates to $13,000 for every man, woman, and child in New Zealand – and expected to increase by another $10 billion by 2017.
We need to address this problem – not fuel it by increasing consumption of imported goods, thereby worsening our balance of payments.
For god sakes, stop encouraging National to engage in any further irresponsible slashing of revenue. National’s two previous tax cuts in 2009 and 2010 did nothing to help stem the growth in our sovereign debt. Not when revenue fell by up to $4 billion after those tax cuts.
We have other priorities.
For example, why is the Wellington City Mission short of $2 million to carry out it’s valuable work to assist the poorest in our society? It is obscene that the Mission will have to consider reducing some services, as Chief executive Michelle Branney recently suggested.
Why are New Zealand’s poorest families unable to afford basic medicines since this government-for-the-rich increased prescription charges in January 2013? When National cut taxes, it attempted to make up for the revenue shortfall by raising GST (despite promising in 2008 not to) and increasing government charges such as for prescriptions, Court fees, etc.
Why are New Zealanders needlessly suffering from rare diseases because PHARMAC cannot afford life-giving medication?
Why are poverty-related diseases making a come-back with such a vengeance?
Children’s Commissioner Dr Russell Wills…
… report is expected to reveal a 12 per cent rise from 2007 to 2011 in hospital admissions for poverty-related illnesses such as acute bronchiolitis, gastroenteritis, asthma, acute upper respiratory infections and skin infections.
“Most New Zealanders will find the numbers of children affected by disease shocking,” Wills told the Herald on Sunday, “but for those of us working clinically with families in poverty it is not surprising.”
Wills also works as a paediatrician in Hawke’s Bay. He said hospital wards were now full of poor, sick children every month of the year – not just in winter. There was no longer a “summer lull” in diseases.
English found himself so cash-strapped after their tax cut profligacy that, by 2012, he was even reaching into the meagre pay-packets of newspaper delivery boys and girls to grab extra tax revenue.
Instead of frittering away taxes, we need to be looking at the real problems confronting us;
- Address child poverty problems
When children go to school hungry because families cannot afford sufficient food after paying high rents, electricity bills, etc. then there is something seriously wrong with our country.
Especially when we are now seeing children eating out of rubbish bins because there is no food at home for them. I refuse to believe that most New Zealanders want this kind of society for their children.
This is not the New Zealand I grew up in.
The next Prime Minister must make this a #1 priority, and begin with taking on the role of Minister for Children and implementing a comprehensive Food In Schools programme (not the shonkey half-measures undertaken by National earlier this year).
Next on the agenda; returning welfare payments to pre-1991-slash levels (inflation indexed); reduce prescription prices for medicine; and implement a massive job creation programme.
- Pay down debt
From 2000 to 2008, Clark’s administration not only paid down debt, but also posted Budget surpluses,
.
Government Debt
.
Government Budgets
.
To be fair, Labour’s Finance Minister, Michael Cullen did not have the Global Financial Crisis to contend with. But by exercising fiscal prudence – instead of tax-cut lolly-scrambles demanded by the then-National opposition – he left the country in a fit state to weather the on-coming financial storm that was about to envelope the planet.
By the time National came to power in 2008, the global financial crisis was well and truly upon us, with the collapse of Lehman Bros on 15 September 2008. The GFC had started earlier, and signs were apparent to all but the most intransigent optimist that dark storm clouds were on the horizon.
As unemployment rose and economic activity slowed, National persevered stubbornly with it’s tax-cut programme – a move that would further indebt this country and put our government’s books back into the red again. At one stage, National was borrowing $380 million a week to make up for the shortfall.
This despite the fact that it was common knowledge that we were facing a dire crisis, as Tracy Watkin and Vernon Small reported on 23 April 2009,
The recession was expected to blow a $50b hole in the economy during the next three years, plunging the Government further into the red as costs climb and tax revenues fall.
“That’s $50 billion we will not recover as a nation, and $50 billion that cannot be taxed by the Government,” Mr English told a business audience in Auckland.
And yet, despite his own candid admission, English went ahead with tax cuts that we could ill afford, and had to make up with massive borrowings; cuts to government services; increased user-pays; mass sackings of state sector worker, and eventual partial asset sales. Even welfare was targetted for “reforms” (read; cost cutting) to claw back government spending.
Little wonder that by September 2011, credit rating agencies Fitch and Standard & Poors had downgraded us.
- Invest in upskilling the unemployed
Why are we importing tradespeople from overseas when we have 7.1% (153,210) unemployment in this country?
National’s response to the skills shortage was this ideological fob-off from Bill English, in June 2011,
“In the first place, it is the responsibility of the companies that expect to rebuild Christchurch to ensure that they have the skills.“
And to ensure that everyone understood that National was maintaining it’s long-held tradition of shirking responsibility, he added,
“Of course it will be tight, because they are competing with very, very large salaries, particularly those in Western Australia where something like $250 billion worth of capital projects are in the pipeline.”
That’s the problem with a government that places it’s faith in a free market solution to everything (except corporate welfare) – nothing happens.
Wouldn’t it have made more sense to offer free skills training to every unemployed person in New Zealand, along with subsidised accomodation in Christchurch for workers moving from other towns and cities to take up work offers?
There would have been a cost, to be certain. But that would have been off-set by (a) reduced welfare payments; (b) upskilled workers who would continue to use their new training for subsequent building projects; (c) more taxes paid by more employed workers; and (d) a flow-on effect to other businesses as income-earning workers spent their wages.
The $4 billion frittered away in tax cuts would have made a considerable dent in our unemployment and given a much needed boost to our economy. And by providing work to the unemployed, the government would have saved millions in welfare.
But by sitting on it’s hands and doing nothing, National has maintained the status quo; 160,000 unemployed wasting their time, and requiring more of our taxes to be paid for the dole.
Is this crazy or what?
Hopefully an incoming Labour-Green-Mana(-NZ First?) will have more sensible policies than what we’ve seen thus far from National. (Which won’t be hard to achieve.)
And other areas which desperately require State intervention,
- A fairer taxation system, including reducing (or even eliminating) GST; introducing a comprehensive Capital Gains Tax; looking at a Financial Transactions Tax (or “Robin Hood” tax, as Mana refers to it); making the first $20,000 tax free; and increasing tax for the top 1%.
- A sensible pricing system for electricity especially for low/fixed-income earners.
- Increase funding for early childhood education.
- More state housing, so our fellow New Zealanders have a decent roof over their heads.
- Invest in public transport, especially in Auckland, before the city grinds to a stop.
Those are the things we need to look at. Not cutting taxes for the well off (which is usually what the Nats end up doing).
These should be the priorities of a sensible government. Anything, everything, else is grossly irresponsible.
Otherwise, what the hell are we leaving our children?
.
.
.
Postscript
Armstrong’s article on tax cuts features a large image of a smiling David Cunliffe. Note; Cunliffe. Not English, nor John Key.
Is there a subtle sub-text being conveyed here that I’m missing? Perhaps I’m getting the wrong ‘message’ from Armstrong’s piece, especially when he finishes with this intriguing comment,
“Overall, English will not want to tie himself to future tax cuts without more solid evidence they can be sustained.”
My… that almost sounds like a veiled warning, doesn’t it?
This blogpost was first published on The Daily Blog on 30 December 2013.
.
*
.
References
Bill English: Dr Cullen maintains tradition of tax-cut denial
Wikipedia: Bankruptcy of Lehman Brothers
NZ Herald: Govt borrowing $380m a week
Fairfax media: $50b hole in economy
TV3 News: Double credit downgrade a double blow for NZ economy
Fairfax media: Key ‘no GST rise’ video emerges
NZ Herald: Food parcel families made poor choices, says Key
The Press: Irish rush for quake jobs
NBR: Chch rebuild companies will have to find skilled workers – English
TV1 News: Rise in prescription charges ‘not fair’ – Labour
NZ Herald: Tax cuts: High earners set to benefit most
NZ Herald: Budget 2012: ‘Paper boy tax’ on small earnings stuns Labour
Fairfax media: $4b in tax cuts coming
Dominion Post: Bennett expects welfare reform to save $1.6b
Fairfax media: Public debt climbs by $27m a day
Radio NZ: Pharmacies ‘carry cost’ of increases
NZ Herald: Child poverty ills rising
Fairfax media: Hungry kids scavenge pig slops
Fairfax media: Mum Not Prepared To Wait And Die
Radio NZ: PM defends record of helping poor families
Radio NZ: 5th year in deficit at City Mission
Radio NZ: Funding declined for housing project
NZ Herald: John Armstrong: Cutting tax tempting for National
The Atlantic: Tax Cuts Don’t Lead to Economic Growth, a New 65-Year Study Finds
Sources
Trading Economics: New Zealand Government Debt To GDP
Trading Economics: New Zealand Government Budget
Statistics NZ: Household Labour Force Survey: September 2013 quarter (6 Nov 2013)
Roy Morgan: New Zealand real unemployment down 0.3% to 8.5% and a further 8.6% (down 1%) of workforce are under-employed (5 Dec 2013)
Statistics NZ: 2006 Census
Statistics NZ: 2013 Census
.
.
= fs =
News Archives
Crony Watch
Keeping an eye on dodgy government appointees, crony-by-crony!
Frankly Speaking... 