The Prime Minister’s enthusiastic but largely scattergun pursuit of economic growth in 2025 looks to have failed, even though there’s four months of the year still to play out. Does anyone really reckon those four months will make a difference?
Christopher Luxon came out of the blocks hard. It would be a year of economic growth, he declared. But his declaration was designed for grabbing headlines only, rather than deeply planned and linked to policies. It needed more than just energy; it needed hard and detailed work wrapped around the idea. It needed changes to laws and economic settings, but National doesn’t appear to have thought that far.
Everything was once over lightly – and even that’s being generous. Jawboning and trying to talk growth up is not an economic policy.
So, here we find ourselves and just how is it looking? Not great – and again, that’s being generous. Newly released figures show unemployment has spiked to a five-year high of 5.2%. That’s 16,000 Kiwis who lost their jobs during the past year and are receiving Jobseeker Support or watching their savings – if they’re lucky enough to have any – dwindling. Half a million New Zealanders rely on food parcels every month; homelessness has spiked.
This is surely not what Luxon meant when he said this was the year of economic growth? Growth happens when you hire workers, but National appears to have taken us in the other direction. Its programme is failing, isn’t it?
Yet this week it doubled down. It fell to the Finance Minister Nicola Willis to explain the sagging economy, and she sunk Luxon’s growth goal within the first few minutes. It wasn’t deliberate or planned or done with any malice. I doubt she even realised what she’d said.
She simply said we are yet to close the chapter on the worst economic management in the history of this country when Labour was in office, but when that happens next year, watch out for the opportunities and jobs that might come your way. Next year, there’s the key.
So, park your ambitions for 2025 – the survive to 2025 catchcry is well and truly out – and wait until 2026. Apparently. Willis declared that good things are happening and grumbled about people taking a glass-half-empty view of unemployment figures when they were better than what was forecast. (Let’s ask the 16,000 recently unemployed how they feel about what’s in the glass.)
She said 240,000 jobs are expected to be created during the next four years, but that seems like more big talk from National. They’d be better to lower expectations and surprise us with the delivery, a useful lesson they could take from a Labour government.
As loose with the purse as Labour was, National’s limited impact in the economy is keeping the opposition alive in the polls, when it would normally, at this stage in the cycle, be dead and buried.
Next year is an election year and National needs some economic wins and fast. They can’t just keep blaming Labour and its mismanagement of the economy. According to Willis, that mismanagement cut so deep, it’s taking a long time to turn around. How convenient. Willis now repeats this line three times a day. It’s easier than accepting that your own approach isn’t working. If she’s really sincere about the glass being half full, she should have taken those figures on the chin rather than sheeting the rising jobless numbers back to Labour.
Voters will tire of this approach, and it’s not easy to get economic growth when 16,000 of your workers lost their jobs under your watch and signed on. To get growth, you need to see strong job creation. So far, that hasn’t happened under this government. Instead, we keep teetering in and out of recession, and unemployment rises slowly but steadily.
Auckland, with an unemployment rate of 6.1%, its highest level in five years, spells trouble for the government. It’s suffering more than other places, and its voters have been quick to punish a government it feels has not acted in the interests of the region. And say what you will about Auckland, it contributes nearly 40% to the country’s GDP.
Labour was heavily criticised for its long 2021 lockdown of Auckland, so you’d think this National-led government would be giving the region more attention. So, is there a plan to boost growth in Auckland? Not that I can see.
And let’s not forget about the rather large elephant in the room, US President Donald Trump and his tariffs. Indeed, National might have been more accurate if they blamed Trump for current economic issues, but that’s a no-no because no one wants to offend him; Labour is an easier target.
It seems Willis will only start to be responsible for anything when it becomes positive news. Falling interest rates are the work of the independent Reserve Bank, but listening to Willis and Luxon talk, it ranks as one of their greatest triumphs this term.
Maybe next year Luxon will get what he’s looking for, but it’s asking a lot of voters to stay engaged with the never-ending moveable promises of a better tomorrow. How many times can a government keep postponing the recovery and remain credible?
Nevertheless, Willis, and presumably Luxon, remain confident that next year the benefits of low interest rates will really kick in, employers will have more confidence to hire and we’ll be in a much better state than we are now.
They’ll talk up any wins, however small, because they desperately need something to show for their time in office. Voters want to see confidence return to the housing market, they want to see companies investing and hiring again, they want job security, they want to see salaries and wages go up and they want fewer shocks and a stable economy because Australia is always calling, right?
