John Armstrong: Labour trains its guns on big target

How on Earth did that happen? If they haven't already conducted a post-mortem, National's strategists might well ask themselves how Labour managed to set the political agenda so easily this week on the crucial question of how to preserve jobs in the recession.

The Government insists it wasn't caught napping. If that is the case, it still gave a pretty good impression of being caught off-guard by Phil Goff's long-planned offensive.

The Government also insists it is relaxed about the Labour leader focusing on the jobs question. If so, why was there such a scramble to gather information showing it is still full steam ahead when it comes to finding initiatives to help people keep their job or find a new one if they need to?

Perhaps for the first time since becoming Labour's leader, Goff finally used all his skills as a politician of long experience on something of real substance, rather than getting sidetracked by the comparatively trivial.

Goff needed to get back on track after his less-than-glorious role in the messy Richard Worth affair. Still flush with Labour's triumph in Mt Albert, he stayed relentlessly on message this week as he sought to expose the widening gap between the rising tide of jobless and the seemingly diminishing returns in the way of credible job-saving initiatives in the aftermath of February's Job Summit.

His attack was carefully timed to take advantage of a vacuum in political news. Goff hoisted himself up the news bulletins and then sustained the attack in Parliament over the following days in what one Labour staffer described as the battle between the intangible and the tangible.

While National was talking about what might happen, Labour was talking about what was happening in the here and now. To that end, Goff repeatedly quoted the telling statistic that around 1000 New Zealanders are joining the dole queues each week.

National countered by saying initiatives such as Government-funded infrastructure projects coming on stream would create "thousands" of jobs. However, the Government's ability to rebut Goff is severely handicapped by the difficulty of measuring exactly how many jobs are being or will be saved or created by its actions.

The most it could do was cite the predictions of the Institute of Economic Research that the Government's "fiscal stimulus" might save 10,000 jobs - a figure which sounds less impressive when placed alongside the consensus forecasts produced by the same organisation that unemployment will grow by 60,000 over the next year.

National also sought to parry Goff's onslaught by mentioning other countries such as Britain and the United States where the unemployment rate is 7.2 per cent and 9.4 per cent respectively, compared with New Zealand's 5 per cent. Labour's response was to ask how highlighting what was happening elsewhere helped workers here.

Much the same point was made in a different way by Finance Minister Bill English, who told Parliament that most people's measure of a recession was not changes in gross domestic product. It was whether they still had a job.

Therein lies the potency of Goff's attack. It is all about personal security. He is not only wishing to be seen to be batting for those who have lost their jobs. His target includes a much bigger group - those who fear they too will be made redundant.

Goff is pitching to those living in low to middle-income city suburbs and provincial towns who deserted Labour at last year's election.

The same pitch underlies David Cunliffe's campaign against profit-gouging by foreign-owned trading banks and the Labour finance spokesman's push for an inquiry by Parliament's finance and expenditure committee.

An inquiry will probably achieve little in concrete results, but it helps get Labour back onside with its traditional constituency.

Hammering away on jobs and the banks also offers Labour a way of reopening debate about economic management as a whole. Polling, however, suggests the majority of voters are still ticking National's box when it comes to determining which party is best at running the economy.

Senior ministers do not believe National will be punished for rising unemployment because voters will see that is largely beyond its control and that there are no quick-fix solutions.

That is one reason why ministers think Goff's attempt to create a climate of fear will fall flat. The other reason is that Labour's attack is not backed up by solid policy which would suggest Labour would do things differently.

There is acknowledgment of a post-Budget hiatus. If that has created an impression that the sense of urgency apparent in the wake of the Jobs Summit has evaporated, that is misplaced.

Post-Budget, ministers have had lengthy sessions trashing out the principles which will guide policy development across a broad range of areas varying from business innovation to avoiding a return to welfare "dependency" as the result of a shrinking job market.

However, further employment initiatives are in the pipeline. They will be released progressively in line with the "rolling maul" strategy of announcing new policies one-by-one rather than using a "big bang" approach.

The rolling maul ensures the Government gets more publicity bang for its bucks. Even so, it does not have enough announcements pending to satisfy the media's appetite every week.

The staged releases are also designed to show policy development is ongoing with each step and is consistent with what has gone before. The downside is that it can look like National is taking a piecemeal approach to what is a very large problem with a human face.

National, however, believes it has a good story to tell in its handling of the recession. It averted a credit downgrade. It has quarantined income and other entitlements from being reduced. National thinks the Budget was widely acclaimed because its preservation of spending on public services demonstrated Key was a moderate conservative after all, rather than some right-wing reformer.

In that regard, the Budget is seen as a crucial component in National retaining the trust of the electorate in the run up to the last election.

At the same time, there is acceptance that for the next 12 to 18 months, rising unemployment will start to whittle away some of the strong public support the Government is getting - and that Goff will be doing his utmost to accelerate the trend by whatever means he can find.

However, having basically followed the economic recipes and recession-busting policies prescribed by the likes of the OECD and the G20 grouping of nations, the Government has to keep its fingers crossed that the worldwide downturn has bottomed out.

As English also told Parliament this week, the economic cycle moves more slowly than the news cycle.

The Government is confident enough that what it is doing will win it enough kudos in the wider electorate without it having to constantly feed the the news media just to keep its main Opposition rival shut out.