Nicky No Job?
GDP falls and resignation calls.
Well, now, shake it up, you're to blame
Got me swayin' little honey
My heart's a ball of burnin' flame
Oh, yes, it is
Prancing like a cat on a hot tin shack
Lord, have mercy
Come on, little sister
Come on and shake it
Songwriters: William Henry Duffy / Ian Robert Astbury.
Unwelcome news.
Yesterday, Stats NZ data showed that our economy contracted in the June quarter, with a fall of 0.9%. This was three times greater than the 0.3% expected by the Reserve Bank and more than double the 0.4% generally anticipated.
Businesses are struggling across the board with “falls in 10 out of 16 industries”, and GDP has now fallen in three of the last five quarters.
Finance Minister Nicola Willis blamed “global uncertainty” even though she refuses to believe that Labour were affected by uncertainty during Covid.
Willis tried to blame Donald Trump, saying, “International turmoil and uncertainty relating to tariffs clearly had an impact on firms’ and households’ willingness to make investment decisions.”
Despite it seeming more likely that decisions were impacted by job losses, the fear of further job losses, and the cost of living, rather than Trump’s tariffs.
Willis then started talking up the situation and said, “The impact of tariffs has not been as disruptive as initially feared,” having just blamed the economic data on them.
Labour’s Barbara Edmonds said:
“Thousands of jobs are being lost, businesses are struggling to stay afloat, and record numbers of New Zealanders are leaving to find work overseas.
“The consequences for families and communities are huge - less money in people’s pockets, more pressure on household budgets, and fewer work opportunities close to home.
“New Zealand is now on the edge of a recession - and Christopher Luxon has no plan to turn things around. That is simply not good enough.”
A sentiment that was not only coming from the left.
GDP falls and resignation calls.
There are many reasons why people on the left would like to see the resignation of Nicola Willis.
From the ferry debacle to the underfunding of the public sector and the cancellation of fair pay claims, all delivered with a condescending sneer, and as much warmth as Ruth Richardson’s heart.
Increasingly, such calls have also come from the right, and a couple of weeks ago, I wrote about the Taxpayers’ Union attacking Willis in a series of advertisements.
Yesterday, we found that Ruth Richardson, Chair of the TPU, wasn’t the only neoliberal nightmare from decades back who wanted to see the government go harder.
Good grief, that’s the last thing we need. I wrote:
“Nicola should listen to Barbara, and Chippy, and Grant - but never Roger.
Douglas and the TPU mob want Willis gone because they want more austerity and more public sector cuts.”
Douglas and the UoA chair of macroeconomics, Robert MacCulloch, said Willis was “sending New Zealand bankrupt by failing to get to grips with our ballooning fiscal deficits and public debt.”
In a combined statement, they said, “Her own Treasury contradicts her claim that NZ is on a path to surplus. It is not. Treasury's long-term fiscal forecasts show out-of-control deficits due to pensions and health-care spending from an ageing population.”
They say we’re spending too much on pensions and healthcare, but strangely, these guys never mention that things like tax cuts for landlords were unaffordable.
Richard commented: “Douglas sold NZ and Labour out in the 80s. Now he wants Willis to do it again. What part of governing a country for the citizens of the country is this?”
Douglas and MacCulloch finished by saying, “Willis is not up to the job and is not levelling with the New Zealand public.” Both of which are true, but not in the way they meant.
So what do Douglas, Richardson, and the TPU seek to achieve with these calls?
Do they genuinely believe Willis will be replaced, and if so, by whom? Is this merely politicking ahead of the next election to blame the economy's state on National, and to position ACT as the only party capable of sorting things out?
My guess is that the libertarians don’t want the National Party getting any bright ideas about using stimulus to revive a struggling economy.
That would seem unlikely based on their behaviour to date, but National have everything riding on this and is no doubt aware that it will be hard for Luxon and Willis to get re-elected with the economy in this state.
Especially having promised that all the pain over the last two years was going to be worth it when the economy flourished and we got back on track.
Blaming someone else.
Over at ZB, they were looking for someone to blame.
People aren’t going to buy the “it’s all Labour’s fault” line anymore, and they don’t want to point fingers at the people in charge, so who’s it going to be?
Ahh, how convenient, let’s pin it on the Reserve Bank. What were they doing, only expecting a contraction a third the size of what occurred? Sort it out, guys, you’re making Nicola look bad.
Heather writes, “Now, I think it is a little unfair to blame anyone but the Reserve Bank right now because they really deserve it. The verdict is in on this now, isn't it?”
Well, I can think of someone who’s at least partly responsible, as in it’s her actual job.
“They have well and truly stuffed this up; they have no idea what is going on in this economy.”
Well, there you go, I had no idea that Nicola had started using pronouns.
“In July, which was only one month after Q2 ended, we'd just gone through this massive contraction - and the next month, they decided they didn't need to cut the cash rate anymore. They held the cash rate. That now should blow your mind.”
Maybe they’d been listening to Nicola and Christopher, who kept telling us we were on the verge of an economic rebound and that it was all going to be just fine?
Should they have assumed that the PM and Finance Minister were making stuff up in the hope that it came true?
The Reserve Bank's objective is to maintain low inflation, not necessarily to stimulate the economy during a downturn. I don’t know about you, Heather, but I haven’t noticed prices getting any lower.
As reported by 1News, earlier this week:
“Once again, higher prices for milk, cheese, and butter were the main drivers behind an increase in food prices, which rose 5% in the 12 months to August.”
The Reserve Bank has more to worry about than fixing the mess Nicola’s Trussonomics of applying austerity to a wavering economy has created.
Where’s the Prime Minister?
Do you remember that guy? He likes to keep his paws in his pockets so they’re warm when he greets people with a handshake or a pat on the back, even if the recipient seems reluctant.
Rather than front this information, the Prime Minister opted to spend the day with a more receptive audience, the Institute of Directors:
You might think that the leader would be alongside the Finance Minister for such an important announcement, especially if he has some secret plan to “reenergise the economy”, but he left her to it.
Willis told reporters that Luxon “had confidence in her to keep growing the economy”, which was interesting considering the economic data.
It’s never a good sign when a party leader says that a minister retains their confidence, and his absence suggested otherwise.
I don’t have anything positive to say about the economic prowess of Nicola Willis; she seems out of her depth and far from competent, but as bad as she has been, whatever Roger Douglas and the TPU have in mind would undoubtedly be a whole lot worse.
Have a good Friday, folks.
Ngā mihi,|
Nick.
To end today, here’s The Cult with Fire Woman.
When quoting Douglas, Richardson, and Heather Duplicity Allen it becomes clear as the nose on our faces that the RW gang still believe that their austerity wreaked by Douglas in the 80’was the best thing since sliced bread. Nicky no boats has been an unmitigated disaster from the outset. Wellington has been plunged into recession with all the job losses and associated decline in spending capital. My own region of Nelson/Tasman has seen our hospital rebuild cancelled and three major employers; The Eves Vally Sawmill, Sealords, and now Griffins either close or relocate out of the region. A wander down any high street and the effects on small businesses are clear for all to see. This government had no ideas when it was in opposition, save for criticising Grant Robertson, and has lacked any real idea how to manage the economy since being in power. The Tik Toc man comes across as a total fool (which of course he is!). I simply cannot imagine this crowd being afforded a second term……but…..watch this space
Blind Freddie could see that Nicky No Votes was always someone totally out of her depth. She has continually sneered and lectured us in tones that barely contain her condescending privilege. She never for a moment had a shred of ability, credibility, integrity, or humility.