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Home / New Zealand

Mike Hosking: How Labour tanked a rock star economy

By Mike Hosking
NZ Herald·
25 Sep, 2019 05:00 PM4 mins to read

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Labour’s excuses don’t wash with Mike Hosking. Photo / 123RF

Labour’s excuses don’t wash with Mike Hosking. Photo / 123RF

Opinion

COMMENT: The numbers don't lie — and our country is in trouble.

The Government is running a couple of questionable lines at the moment.

One, Deputy Prime Minister Winston Peters is busy telling us he predicted the economic slowdown when he announced he was going into business with Labour.

And two, the Government - mainly the Labour Party - is blaming the economic slowdown on "international headwinds."

Now what Peters said is technically true. He did predict it, but he predicted it because he knew the people he was looking to run the country would be doing pretty much what they have done and tank the place.

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Which makes Labour's claim about headwinds largely untrue.

The growth figures we saw last week were abysmal. What's really worrying is the next lot will be worse.

If you missed it the economy grew in the 2nd quarter by 0.5 per cent.

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That is for the months of April, May and June.

Which means the GDP for the next quarter - July, August and September - will be revealed just before the end of the year.

Ask yourself the very simple question that given what we now know about growth in the second quarter do you feel these past 3 months have been better? Of course you don't.

So then ask yourself, if the second quarter figure was 0.5 per cent then what do you think the 3rd quarter will be? 0.4 per cent? 0.3 per cent?

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Now if that's the case, the annualised rate of growth which is now down to 2.1 per cent will be dropping into the one's.

And it will be dropping into the one's in election year.

The trouble with that is that governments need economic credibility and this lot do not have it.

Along with the year of delivery which, believe me, will be nothing more than a sad joke by December, they will also have to defend their tanking of the economy.

They will say that it's the world's fault, which in a very, very small way it might well be.

They will also argue that compared to other countries we aren't doing too badly.

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First excuse first.

Look at our terms of trade. They are as good as they have ever been. What we sell to the world and how much we sell it for is fantastic. We are doing good business with the world, so despite the fact the world is slowing, we are still filling the tills.

Our trade deficit is excellent. It's shrinking and it's shrinking because of increases in exports - once again proof that business with the globe is fine.

The bit that's troubled is domestic. We are troubled locally because of KiwiBuild, lack of confidence, a tax and costs on farmers and the oil industry, taxes and a redistribution of billions into the non-productive parts of the economy such as welfare.

Second excuse: let's find a country to compare ourselves too. What a stupid game.

You say Australia? Fine, compared to them we look OK.

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I say China - compared to them we look hopeless. So who is the winner?

Compare New Zealand's growth with the global 3 per cent figure - we aren't even close.

All that tells you is that this government is looking to excuse its performance.

And that is my greatest frustration with how this country is being run right now.

It is not aspirational. It is looking to find someone useless and comparing yourself to them. That is not the way to win.

I don't run my radio programme that way. Successful people don't measure their lives or businesses against mediocrity.

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We became a rock star economy by standing out from the pack, by being impressive, by being a global leader.

Not by aspiring to be really good at making excuses.

Numbers don't lie, and when it comes to growth numbers, they are the foundation for everything.

Without growth, you have nothing. You enter a world of borrow and hope, your destiny is taken from you and owned by the banks.

There are a bunch of countries that operate that way and have the likes of the IMF breathing down their necks. Shall we compare ourselves to them?

Is that where our aspirations now lie?

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At least we are not as bad as Greece.

This is a better country than that, and it all starts with growth - and your attitude towards it.

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