Editorial: National needs to put the economy first

Prime Minister John Key. Photo / Steven McNicholl

The Prime Minster says National will put work requirements for social welfare at the centre of its election campaign this year. What a pity. The National Party worries about work-shy beneficiaries every year. This election could be about more constructive subjects.

When John Key won the party's leadership he had high hopes of taking the economy to a higher level of wealth. By the time he won the last election the country was in a recession aggravated by the global financial crisis.

The past three years have been dominated by the need to assist the recovery as well as deal with a level of state spending that left him facing deficits for a decade.

Inevitably, the economic "step change", as he used to call it, has been on the backburner. But not entirely forgotten. Contracts have been awarded for a fibre-optic cable network to 75 per cent of the population and a rural broadband service.

Personal and company income taxes have been reduced by an increase in the GST rate. Efforts have been made to assess more of the country's mineral potential, though the Government has backed down on mining any part of the conservation estate and it faces Maori resistance to seabed oil drilling.

But the state of the economy remains favourable for the direction the Government wants to set. Commodity prices are high, domestic property is not attracting new investment. Households, farmers and business are reducing debt. Developing countries are enriching their diet. The stage could not be better set for investment in countries that produce food.

This should be the centrepiece of National's case for re-election. It can turn foreign investment interest to advantage, encouraging New Zealanders to invest in themselves as keenly as the Chinese and others may do. If it is re-elected it will offer citizens shares in state-owned electricity and gas production, and Air New Zealand.

It will go into the election with a considerable store of credibility and good will, which it could build on with positive and practical proposals to improve national productivity and give the voters a vision of progress.

Why, then, would it want to run a campaign that would suggest its primary mission in a second term will be to make sure beneficiaries are not bludging? It is not as though it is going to be as harsh as its Welfare Working Group, which recommended solo mothers who have a baby when already on the benefit should have to look for work once the baby is 14 weeks old.

The working group's report was made public hours before the February earthquake in Christchurch. The report has been overshadowed by that event and may deserve the closer attention National's election campaign could give it.

The welfare system is clearly permitting a certain amount of work evasion, as evidenced by the numbers that migrated to the sickness benefit once dole recipients had to accept reasonable offers of work.

But it is hard to see that much would be gained from the working group's basic proposal to replace all benefits with a single Jobseeker Support payment, paid at the rate of the dole, with supplements for sick and disabled beneficiaries and sole parents. It is not the beneficiaries who need to be tested so much as the doctors who are certifying them.

But whatever work tests National adopts for the election, the policy will merely enable Labour to highlight unemployment. The time to tackle the large numbers on the sickness benefit is when the economy is running close to capacity and labour shortages are appearing. The Government would do much better in November to put the economy first.