Craig Renney says there has been "a slew of increasingly desperate articles from the right proclaiming the end of the Jacinda Ardern Government". Photo / Mark Mitchell
Craig Renney says there has been "a slew of increasingly desperate articles from the right proclaiming the end of the Jacinda Ardern Government". Photo / Mark Mitchell
Opinion
OPINION
Current polling suggests that the sheen from National's honeymoon period is coming off.
The rise in their support has stalled. New Zealanders now consistently state the most preferred Prime Minister is not Christopher Luxon.
Perhaps that explains the slew of increasingly desperate articles from the right proclaiming the endof the Jacinda Ardern Government. Wishful thinking has always been a feature of those who believe in the fantasy of trickle-down economics. Careful management of the facts is, unfortunately, more often absent.
Take for example the recent piece from Matthew Hooton (NZ Herald, September 2). He claims that real wages have fallen for two years now, and links this to a fall in Government polling support. A cursory glance at the Stats NZ website would show that for wages this is not true.
Average weekly earnings have risen $177.85 or 16.4 per cent over the past two years according to the Quarterly Employment Survey. Consumer Price Index inflation rose 10.9 per cent. That's 5.5 per cent real wage growth – or 2.75 per cent a year.
On the same basis National's three terms in office saw real weekly wage growth averaging a measly 1.7 per cent a year.
Better wage growth under Labour came despite the past two years delivering a global pandemic, war in Europe, oil prices rising 750 per cent, Brexit, and the shutdown of global supply chains.
The last two years of National delivered real wage growth of just 1.1 per cent a year - without those constraints.
According to both the Reserve Bank and Treasury, significant future real wage growth is forecast across the next few years. If Hooton is right about changes in wages leading to changes in Labour's polling, then Labour should romp home in 2023 and 2026.
Perhaps the most egregious element of current thinking on the right – and present in Hooton's article – is that Fair Pay Agreements (FPAs) are contributing to our current economic challenges.
For the benefit of those perhaps unfamiliar with FPAs the key thing here is that they don't currently exist. Quite how they are then having this macroeconomic effect while not yet existing is unclear.
What FPAs will do when they exist is create minimum standards for terms and conditions for employees.
Recent reports on the exploitation of seasonal workers in New Zealand demonstrate exactly why such agreements are needed.
Another element of the current economic critique of the right is that government support for the economy during Covid was too generous. That if we had simply been a little more parsimonious then inflation would be lower, and the economy would be stronger.
I may have missed it, but I can't find in Hooton's article anywhere a statement of the need to hand back the billions of dollars in tax cuts that were provided to businesses during Covid. It's only middle- and low-income earners receiving the $350 cost of living payment which is "throwing borrowed money on the inflation fire".
What articles such as these demonstrate is perhaps simpler. The right and their cheerleaders have nothing positive to offer for the economy and the vast majority of New Zealanders.
They make negative claims on the current state of the economy because all they have to put on the table are unfunded tax cuts, and a promise to return all of the problems the economy had before Covid. Here they are following the model set out by the equally failing UK Conservative Party, and in both countries, it's not working.
Craig Renney. Photo / Mark Mitchell
So instead of trying to tackle housing problems they simply want to make it more lucrative to become a landlord. Instead of supporting lifts in the minimum wage, they propose to give billions in tax cuts to the top 3 per cent of income earners.
Instead of supporting the poorest and most vulnerable, they call them "bottom-feeders" and threaten welfare sanctions for disabled people. The poverty of their analysis leads to the poverty of their solutions.
Perhaps instead of decrying what has been done, the right could try engaging with working people on the long-term challenges facing New Zealand. Challenges that FPAs will help tackle. They could try to provide some answers that wouldn't actively make the situation worse.
That however would require an acknowledgement of the real problems facing our country – all of which will require long-term investment and sensible policy. Both of which have been sadly lacking.
• Craig Renney is an economist and policy director with the New Zealand Council of Trade Unions.
