Back on track or off the rails?
“Why is the Kiwi economy such a disaster?”, ABC business editor Michael Janda asks, just over a fortnight after Luxon’s Q&A interview.
Anneleise Hall
Opinion
Last year was a tough one for embattled Prime Minister Christopher Luxon.
The former airline CEO, top negotiator, TikTok creator, and husband of Amanda tells us often how tough it is.
Well, he tells us ‘he’s’ wealthy and sorted… but also that he really knows it’s tough for minimum wage earners, even though he’s not sure how much the minimum wage is. He knows it’s tough for homebuyers and people in emergency housing, and it’s supposed to be tough for people they’ve sacked, those dole bludgers need to get a job.
‘We’re dealing with six years of economic vandalism from Labour,’ he forcefully told any reporter that asked a question the entire first year of his term.
The coalition would be focusing on ‘delivering tax cuts, growing the economy, and cutting government spending’, as he would say to them, because that’s the only thing he could be bothered memorising. I guess it’s tough answering questions when he rarely seems to know the answers.
When journalist Jack Tame asked Luxon, on Q+A in December 2024, why people don’t feel better off under this Government Luxon again claimed the previous government's "economic mismanagement” was responsible.
"All New Zealanders know it's been a pretty tough time. We've inherited a hell of a mess," he said glibly.
”We still acknowledge we've got tough times.
"The forecast around economic growth will be a consequence of the decisions we make around spending, inflation and interest rates,” Luxon declared.
The Reserve Bank started lowering interest rates in August as inflation followed its downward trend forecast under the last Government. Meanwhile consequences of spending decisions from Finance Minister Nicola Willis are clear.
“Why is the Kiwi economy such a disaster?”, ABC business editor Michael Janda asks, just over a fortnight after Luxon’s Q&A interview.
He goes on, “In short, a super-aggressive, inflation-fighting central bank collided with the October 2023 election of what has been described as New Zealand's most conservative government in decades, which came to office with a commitment to slash public spending,”
So Nicola Willis set upon the economy like a serial killer in a B-Grade splatter film, wildly slashing at everything; from vital ferries and port upgrades, public service, jobs and social programmes to public infrastructure and housing builds and even entire Ministries.
“New Zealand's economy shrank 1 per cent in the September quarter alone,” Janda continues.
“That would have already cemented a return to recession but, adding insult to injury, the statistics bureau revised down the previous quarter's contraction from 0.2 to a whopping 1.1 per cent. New Zealand's economy has shrunk 1.5 per cent over the past year.”
“These are depressionary levels of economic contraction.” Janda said.
New Zealand is bleeding out and Willis has promised more cuts and no new spending. So, rather than first aid, Willis has thrown down the knife and is moving towards the chainsaw. Carving us up for the market to pick over our entrails.
”Higher levels of debt, a higher deficit, and deeper cuts programmed in the future… the government's policies are hurting working people, and they're not working for Aotearoa," Council of Trade Unions economist Craig Renney said after Treasury released the Half Year Economic Fiscal Update or HYEFU in mid December.
"These books paint a picture of a government without a plan. The only solution the minister of finance is planning is to double down on an already failing strategy."
Meanwhile Luxon will tell us how Labour were economic vandals and Nicola’s doing a great job, getting us back on track.
And if the people don’t like it - tough.
References
https://www.1news.co.nz/2024/12/01/christopher-luxon-on-economy-surplus/
https://www.rnz.co.nz/news/political/536972/fiscal-update-shows-kiwis-paying-price-for-government-s-austerity-critics-say