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 <email@example.com>
to: Listener <firstname.lastname@example.org>
date: Sun, Aug 14, 2016
subject: Letter to the editor
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.
[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.
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:
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.
Scoop media: Parliament – Questions & Answers – 11 August 2016
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
This blogpost was first published on The Daily Blog on 15 August 2016.
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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.
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.
TV3: The Nation
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
NZ Herald: Key admits underclass still growing
NZ Herald: A day out with friends in high places
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
This blogpost was first published on The Daily Blog on 7 July 2016.
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