Bill English has been “trying it on” in his use of statistics, no doubt to try to get off the defensive around inequitable tax policy, his lack of a plan for growth and an embarrassingly strong performance by NZSF and ACC in the recent Crown Accounts.
Mr English alleged in a release last week that revisions to GDP data issued late last year showed the economy grew by “less than 1% a year”.
The Government Accounts had been released the day before. Labour had attacked the government for having suspended superannuation prefunding and cutting ACC, when the investment performance of both had risen strongly.
Based on the Statistics NZ revised data, the average GDP growth for those three years was actually 1.74%.
The more relevant GDP growth benchmark, averaged over Labour’s last term in office, was 3.2% GDP growth per annum.
That was significantly higher than during National’s previous term in office of around 2.6%.
It was higher, year on year, for the three year period Mr English quoted, than the UK (2.6%), US (2.5%) or OECD average (2.3%)
This strong and sustained economic expansion was achieved alongside:
- a massive reduction in Crown debt (net debt cut from 24.8% of GDP to zero);
- unemployment of 3.4%, the lowest in 21 years (less than half of today’s 7.3%)
This was achieved precisely because Labour did not follow Mr English’s advice in 2005 and 2006 to give early tax cuts. In short, not taking Bill English’s advice in 2005/06 meant NZ could afford a Budget in 2008 designed to support Kiwi jobs through the recession.
So if that was the real big picture, how did Mr English come up with his odd numbers?
- First, using highly variable quarterly GDP statistics, not the more aggregated and reliable annual numbers
- Second, choosing a short period impacted by the global recession to bring the average down.
- Finally, by taking advantage of retrospective statistical revision called chain linking whereby when recent data falls sharply (for example due to the recession) previous years are “smoothed” down to fit the trend.
The bottom line is National would give its right arm to have economic performance numbers today that matched the average under the last Labour government.
We have a Minister of Finance who has shown himself not above skewing data for political ends.
Lesson for Bill English: “when in a hole, stop digging”.
I knew that Bill English’s numbers sounded wrong. Thanks for going into it David.
We have a Minister of Finance who has shown himself not above skewing data for political ends.
This is incredibly worrying. If you had asked me twelve months ago whether Bill Engish would do such a thing, I would have said no. Guess I was wrong…
Yay Cullen
It seems to me to be something this govt is good at – skewing data – same thing with Aorangi primary – skew data to suit their agenda to close it down when it was based on lies. Just how can you trust ’smile and waves’ team when they show themselves to be shonky and unable to use data correctly. Appalling.
With; two ministers resigning, the Supercity debacle, the housing allowance debacle, GST rises, mining national parks, no stimulus, misguided infrastructure investment and tax cuts for the rich, to name a few when the gloss comes off Key it will be bad for the Nats…
I used to think this was a three term government but now am leaning towards two (and we are only half way through the first term..!)
How much of the $1b a month they are now borrowing is to pay for their tax cuts?
Jeremy M Harris: “when the gloss comes off Key it will be bad for the Nats…”
But is the gloss going to come off Key this term though? The majority of NZ seems to have fallen in love with Key. You know what they say about love? Love is Blind! No matter how much people hate GST increase, the supercity debacle, etc, etc, yet Key is as popular as ever. It’s like there’s a cult developing. It’s weird and I am really puzzled by this phenomenon. So, I think whatever lies the Nats spread, and no matter how they twist the stats, the gloss and teflon still sticks to Key. I hope I am wrong though.
“I am really puzzled by this phenomenon.”
You and me both! It defies logic – are kiwis asleep, brain dead or plain ignorant. You have to wonder?
Jennifer – 250 m per week is around $12b per yaer.
The cost of cutting taxes (TSY figs) is:
– alignment at 30%, $1.6b p.a.
– alignment at 27%, $3.1b p.a.
– alignment at 25%, $4.1b p.a.
– 33-33-27 (currently my suspicion of where they may settle, but it coud change), only $1.1b p.a.
The revenue from raising GST to 15% is $1.9b to $2.15b
The cost of compensation (say cutting bottom two rates to 10.5% and 19% with compensation for benficiaries) is $1.95 (TSY) to $2.1b (TWG estimate). Dropping beneficiary compensation would save the govt approx $0.4b p.a.
So GST-for-compo is a “tax switch” (i.e. a wash-up), which even English now accepts.
The net effect is a big absolute and relative tax cut for top earners – “the few not the many”.
And we are reminded that because of the deep fiscal hole this is utterly irresponsible!
There’s a name for it. Its called Motivated Social Cognition – whereby, once ideological convictions have taken root, appeals to logic are over ruled by emotion. Crosby/Textor are past masters at this dark PR art. For National Ltd™ voters to consider their decision a mistake, they will have to admit that they were duped which, in turn, makes them look like the numpties that they are. The longer it takes for the full cognition of their mistake to filter through, the more insidious are the effects of the cognitive dissonance they are currently suffering.
Alas for the rest of us, the continuance of the aberration requires more and more victims upon which scorn can be heaped and attention on real matters deflected. Consider, for example, Basher Bennett’s latest attack on beneficiares. Now, whether or not Mr Easton should be looking for a job is one thing, but whether or not a person in receipt of social welfare payments should be denied the right to participate in the democratic process is another.
What’s next – people with criminal convictions not allowed to vote?
Wow, Mr Easton does voluntary work, good for him. He’s obviously a scape goat being made the poster boy for the beneficiary bashing.
I think the mall thing is a great cause.
And making sickness beneficiaries look for work is bleeping cold.
@IDAD – LOL
– I like that, Key’s cult following.
@BLip – Shudder,
so true I think.
@I dreamed a dream: Yip it is strange and that is why I’m sticking with them getting two terms at the moment but who knows what the next 18 minths will bring, I mean if you told me a week ago a minister would resigning of $70 I would have laughed at you…
I think the phenomenon can be explained by the lack of attention most people pay to the issues most people will not know 1 in a 100 things this Government is doing that directly affects negatively but they’ll see 3 strikes and Key kissing a couple of babies and voila 60% approval rating…
BLiP
Bravo for putting a name and strategy to it. I have no doubt this has been behind National’s strategy, underpinning it since before 2005. It explains why, in the Glen/Winston debacle, it was ALL about Clark as far as Nats were concerned… they turned her into
the target and began sowing “she’s arrogant”. They repeated it so often people believed it and then people when asked what they thought of Clark would say “she’s arrogant”. Textbook stuff.
There is also a great book called “Policy Practice” , trying to recall author, it sheds alot of light in how politicians get acceptance for their policies, regardless of party affiliation.
People don’t like to admit they were duped so they need other reasons to change their mind… this is Labour and the Media job.
You are spot on, it’s clever except that we are talking about an entire country and its future.
Jeremy
People dont know what they don’t know. We depend so much on the media for our political information and they depend (due to shrinking workforce and expanding deadlines) more and more on Press Releases. None of that is conducive to wider populace understanding.
We all need to remember that people aren’t stupid but we are all susceptible to manipulation and politics is full of great manipulators, and national always has more money to spend than Labour on master manipulators…
Steven Joyce is a past master and it earned him direct entry to the Cabinet.
they’ve forgotten too about ripping everyone off with the ETS!
10% to 15% for power and fuel rises as well as GST at 2.5%.
go tell that to super and low income!
if we are honest, it was us that caused a lot of the issues that english is scurrying to cover up. we can’t hide from that. if we waffle on as typical opposition do, using tit for tat tactics, blaming the full moon, wasting time in question time with idiocy, childs play – we will never return.
our strategy sucks. our political team, at best, are pathetic old hat has beens. we’ve disadvantaged our economy. we need to move on. personally, i am ashamed. we need freshness, realism and honesty. we continue to crap on about global warming. there is no warming. we carry this deceit forward into national bus trips that mean nothing. it’s pitiful. we are wasting time if we actually do care.
national know this as do the public. sorry phil, good bye. helen continues to dog us. lets get real now.
if we truly care, time to look inside ourselves and rethink what it means to be for the people not bound by someones mucked up view of the world. pure as the driven snow on that.
if we are going on a bus tour then, it’s all stops. NO gst. No ets. Small government. No United Nations. We need to match are calls for fairness across the board with fair and simple one taxation. We need to reward people for ingenuity not stifle them with politicisation. We need to mark up welfare as an earned entitlment then set ourselves up to reduce. that way, we win.
Blip Great post. Matt, how about getting withthe programme?
^ LOL
people – this relates to schoolboy economics. raising GST does not create any extra income for the government. it slows down personal and spending behaviours. companies will not then be able to afford to produce goods, then income will not exist. jobs will fold. add on top of that the deception of the emissions scam rating at another 10% surchage on power and fuel for everyone. yes, english and key are tinkering with fudged numbers. any halfwit who checks these things can see that. the issue is, our numbers are out of kilter too.
go and do the sums properly. raising GST, introducing emissions tax on top of that will break nz.
so, if we truly give a rats then we need to be sending a stern and strong message:
cut income taxes – low middle
get rid of provisional tax – it stops business
reduce gst
get rid of the emissions scam
get rid of big goverment – save the need to take money that doesnt exist.
it’s very simple really.