By way of context, as a country we need to create and export value in order to pay for imports and good wages.  Sustainable economic growth is not at odds with social democracy, but a necessary component of making it work.  Growth is not an end in itself but a means to families and communities getting ahead.  For modern social democrats,  it should occur within a framework that ensures good social and enironmental outcomes.

The trouble is, despite repeated promises from the current government that economic growth is “just around the corner”, it just hasn’t happened.  

After Budget 2011, I posted a graph showing how the economy had actually performed under National compared to the growth forecasts since they came to office. With the latest downgrading of the growth outlook in the recent Budget Policy Statement, I’ve received a few requests for an updated version, so here it is:
 

Government GDP vs Reality

(sources: Treasury Fiscal and Economic Updates, and Stats NZ GDP series)
 
What do we see? Well, under National the economy has under-performed each set of growth projections since they came to office by a long way.    The sole exception is BEFU 11, which assumed an immediate GDP hit from the Canterbury earthquakes that didn’t eventuate. It raises the question, is the problem with Treasury’s forecasting models or with National’s economic management?
 
Take a closer look at the 2 oldest sets of projections.
 
DEFU 08 came out immediate after National become government, at the height of the global economic crisis. It predicted that the economy would now be over 6% larger than it is – that’s $12 billion a year.
 
BEFU 09 came out with Budget 2009 – this was Treasury’s ‘doomsday’ predictions written at the peak of the Great Recession (although, ironically, it was released after the recession officially ended). BEFU 09 saw a further two questers of recession that didn’t happen and a gradual return to slow growth.

In the jargon of finance, it’s called a “hockey stick”  – a graph that always starts by going down in each set of forecasts, but is always predicted to curve up in the future.  If  ”NZ inc” was a company with accounts like these, the board would be asking hard questions of the managers.  

In fact,  look where the economy should be now according to that ‘doomsday’ scenario. That’s right, ahead of where it actually is. The recession didn’t get as bad as Treasury thought in BEFU 09 but the recovery under National has been so anaemic that we are now below the level of GDP forecast at the gloomiest period of the Great Recession and falling further behind every day.
 
Here’s how over-optimistic each set of predictions has proven: 

Government Projections Over-optimistic by:

 There is a huge mismatch between what Treasury predicts and what National delivers.
 
So, what needs fixing: Treasury’s forecasting, which serves as the basis for government and opposition policy decisions, or National’s economic growth agenda and “120-point plan” ?
 
Both are the responsibility of Mssrs Key, English and Joyce.

More on why the Govt’s 120-point ‘laundry list’ is not a real plan, and what a real economic growth plan ought to look like, in future posts.

National's job claims vs reality

Even though the Household Labour Force Survey report reveals that John Key’s ‘brighter future’ promise has utterly failed to materialise in terms of jobs for a growing group of New Zealanders, it hasn’t stopped Mr Key claiming it won’t still come true. Yet we know he has no overall plan, no vision for how this will happen. Last year he made the incredible claim that Budget 2011 would create 170,000 jobs over the next 5 years. He continued to make this claim despite not being able to show anything in the Budget that would actually lead to job creation other than low interest rates and ECE funding. Simply managing the economy and ticking off boxes and hoping that market forces will deliver on the jobs is unbelievable. As expected the Govt is on track to once again fall short of its promise. The 2011 Budget documents predicted 36,000 jobs would be created in the year to March 2012. As at Dec 2011 just 10,000 jobs have been created, leaving the Govt to create a massive 26,000 jobs in the final quarter. If JohnKey keeps promising New Zealanders the world but not delivering, his credibility will be on the line, and we all know the story of the boy who cried wolf, don’t we?

Today was a day I have been approaching with mixed emotions. It was incredibly important that we marked the day, remembered those who lost their lives and their families, and acknowledged what has been an incredibly difficult year for us all. As a community we needed to confront all we had lost – people, homes, places, and security. Like many people though, I suspect, I saw today as a bit of a milestone – as David Shearer commented, like in any grieving process one year on you have marked all the significant days.

The last 24 hours have been pretty much wall-to-wall with events marking the day. Politicians from all Parties, the families of those lost, diplomats, and the community came together and remembered, commemorated, and acknowledged at incredibly moving ceremonies. There has been much good and sensitive media coverage of these.

Tonight my day finished with a much less formal event at a local school in Hornby. This was a community BBQ organised by the school (Branston Intermediate), a church (Hornby Presbyterian), and a local business (The Gough Group). The people of this suburb in the west had come out on a drizzly and overcast evening to be together and acknowledge what they had been through. Although the streets and houses in this suburb have got off lightly compared to their eastern neighbours, the people in these houses have certainly felt the stresses of the last 12 months. Many have lost their jobs, and of course like people all over the city they no longer trust the ground under them.

This event was much less sombre than the earlier events I went to. Several hundred people came out to remember but also to look forward to what comes next. There was music, a bouncy castle, egg and spoon and sack races, ice-creams and a BBQ cooked by 4 members of the Crusaders (Andy Ellis, Tom Taylor, Adam Whitelock and Patrick Osborne for the rugby fans out there).  This was a community coming together to be together. This was a community doing what we do on a smaller scale in back yards all over the country during summer – having a bbq and a yarn when something happens. A turnout of this scale is not something I could have not imagined before February 22nd last year.

For me there is great hope in Christchurch, albeit a hope that is embedded in frustrations and tensions (but that is for another day). It is this community togetherness with new combinations of co-operation (the school, the church and the business),  this empowered grassroots organisation, and this spirit that are the solid foundation that we will rebuild our broken city on.

Our job as politicians is to make sure these voices are heard and that this collective spirit is part of our new city.

Auckland needs to house another million people over the next 30 years requiring an extra 400,000 dwellings.  That is an impossible task without a long term strategy and total commitment from government, local government and both the private and community sectors. 

The Auckland Council has drawn up a draft Auckland Plan looking forward 30 years. It emphasises a commitment to a quality compact Auckland region. Feedback from Aucklanders has made it clear they want a bold visionary strategy.  They also want the impact of development on the heritage and character of the region to be considered.  And they want the ‘housing crisis’ addressed!

Auckland Council with all the good will in the world won’t achieve their plan on their own.  Around 13,000 new houses a year need to be built every year for the next 30 years.  That is a quantum leap from where we are now.  In 1992 around 4,800 houses were being built a year. The number peaked at 12,000 between 2001 and 2005.  In the latest figures the number has plunged to just over 2,000.

With this crisis already on us where is the National government’s long term plan?  To date the only response has been to duck for cover and push responsibility on to anyone and everyone.  Meanwhile Housing New Zealand has increasingly become nothing more than an uninterested landlord.

A different response is vital if we are to get out of the hole Auckland is fast sinking in to. It requires a multi-pronged strategy.  Doing what has been done in the last 20 years won’t work.  Quality affordable housing for rental, public and private, as well as homeownership for the modest income earner must be part of the equation.  But where is the leadership from John Key’s Ministers?

The Government holds many of the levers needed right now.  First, they need to get alongside the Council and other players to reach an agreed plan.  If they have no ideas of their own use the draft Auckland Plan as a starting point.  At least the Council recognises the crisis and have started consulting on it.

Identification of forward supply of land needs to occur now so zoning and the cost of holding the land can be worked through. Appropriate services including transport and amenities have to be planned for in advance.  Local government is underway with this process but Government has been more interested in closing down affordable housing opportunities. How about Hobsonville Mr Key?

Finance for housing is a major hurdle as well.  It’s time for some innovative thinking by Government as to how they could better use their borrowing power to kick start development.  I’m told the market cannot produce homes below $300,000 in Auckland.  If that is the case government has to consider the part it will play to get sufficient affordable houses built.

I met with a representative of a major bank recently who set out their ideas to improve access to housing finance particularly in Auckland.  They want to work with political parties to see what can be done to address the crisis.  Of course they are not benevolent organisations but at least they recognise something has to be done.  I suspect there will be little interest from the Government.

A recurring theme yesterday was the cost of building houses in New Zealand.  Costs are too high, according to those we met.  Why are they so high?  With so many natural home grown products available it should give New Zealand a cost advantage.  If we better understood what drives those costs, with our ability to innovate and reach unique solutions to problems, we might come up with new ways of working.  Perhaps it’s time for an inquiry into the cost of building houses in New Zealand.

We hear a lot about ‘economic transformation’ from John Key and Bill English.  It’s hard to believe they can’t see Auckland’s housing crisis will be a barrier to that transformation.

What we learned in the hours, days, weeks and months that have followed is the incredible strength, determination and spirit of the people of Canterbury. That is needed now more than ever. As is the support from the rest of New Zealand. At 12.51 today I think all New Zealanders should take a moment to remember the tragedy, and re-affirm our collective commitment to stand beside the people of Christchurch and Canterbury.

As Brendon Burns remarked in a post just one week on from the 22nd of February, “There are hard days ahead. Kia kaha to us all.”

Increase in unemployment under National

The Household Labour Force Survey Survey report of the December 2011 Quarter released last week revealed that our unemployment rate slipped slightly to 6.3% from 6.6%. While a rate of 6.3% in itself doesn’t necessarily mean we have reached crisis levels, the focus on the overall unemployment rate does conceal detail about our employment situation that if brought to the surface will shine light on what I believe is an immiment crisis looming in our economic horizon.

Since JohnKey’s National took office in November 2008, 53,000 New Zealanders have joined the unemployment ranks. That’s a 54% increase in the number of people unemployed to a total of 150,000. For these people, National’s promise of a ‘brighter future’ has utterly failed to materialise, especially if you have a mortgage and teenage children you are supporting through school.

While the impact of the recession cannot be ignored, the number of people unemployed has actually increased since the recession officially ended in mid-2009. The official unemployment figures only tell part of the story. Many more people are without work but are not counted as being unemployed. Many are described by the Salvation Army as being “discouraged unemployed”. They would like to work and would accept a job offer if given, but they would not be deemed as actively seeking work because for instance looking for work through a newspaper does not meet the threshold of “actively seeking work”. The number of Kiwis jobless has increased by almost 100,000 under National’s watch to now 261,300 people as of December 2011. In the meantime 59,964 people are receiving the Unemployment Benefit as at December 2011 a fall of 7% from 67,084 as of the December 2010.
So is this it? Is this the brighter future promised to all New Zealanders?

Hot Topics
Initial trading by the 6000 registered traders on New Zealand’s online predictions market, iPredict, suggests Julia Gillard has a 62% probability of surviving as Australian Prime Minister through to the end of March, with rival Kevin Rudd having just a 26% probability of having the job by then, and leading outsider Bill Shorten having a 6% chance of gaining the top job.
Ms Gillard’s longer term prospects are less positive, however, with the market suggesting a 55% probability of her departing as Labor Party leader by 1 July 2012, and a 77% chance of departing before the next Federal election.
Meanwhile, the International Monetary Fund is currently expected to report world growth for 2012 to be 3.2% in 2012, compared with 3.8% in 2011.
Gold is expected to be $1,704.70 USD per troy ounce on 1 March 2012. Apple’s NASDAQ share price is expected to equal or exceed $600 USD in the 2012 year. Images recorded by NASA’s Curiosity rover are expected to be released in 2012 while Lamborghini is expected to announced commercial production of a four door vehicle in 2012
Shanghai Pengxin Group’s offer on New Zealand’s Crafar Farms is now not expected to be settled until April. New Zealand economic forecasts have remained broadly steady this week with a slight increase in growth expectations for the December 2011 quarter. This week, the NZX is expected to rise above 3289.002 points by week’s end and the Exchange Rate is expected to exceed US$0.8332 on Friday.
David Shearer’s Labour Party remains favoured to win the 2014 New Zealand election.
New Zealand Economic Forecasts
New Zealand growth prospects have improved this week with growth now expected to be 0.6% for the December 2011 quarter, 0.5% for the March 2012 quarter and 0.4% for the June 2012 quarter.
Forecast unemployment has remained unchanged this week. Unemployment is forecast to be 6.4% for the March 2012 quarter and 6.3% for the June 2012 quarter.
Inflationary expectations for the September 2012 quarter have fallen 0.1% this week. Inflation is now forecast to be 1.6% for the March 2012 quarter, 1.6% for the June 2012 quarter and 2.0% for the September 2012 quarter.
The Official Cash Rate is not expected to be increased until December 2012 at the earliest.
Petrol prices are set to fall with the market now predicting there is an 80% probability that 91 unleaded petrol prices will drop to between 210 and 218 cents for the week ended 24 February 2012.
Fonterra’s final payout has moved for all tracked periods this week. There was a $0.06 decrease on last week for the 2011/12 financial year with the market now predicting $7.10 per kilogram of milk solids before retentions. The payout in 2012/13 has remained steady at $7.11, the 2013/14 payout has increased $0.04 to $7.42, and the 2014/15 payout has increased $0.07 to $7.46.
Current account deficit expectations are 4.18% of GDP to December 2011, and 4.09% to March 2012.
International Economic Forecasts
World growth is expected to be 3.18% for the 2012 year.
There is now a 37% chance at least one Euro member will depart the single currency in 2012.
The Reserve Bank of Australia is expected to reduce its cash rate from by 25 points to 4.00% at its meeting on 6 March 2012 meeting.
Gold is expected to trade at US$1,704.70 per troy ounce on 1 March 2012.
There is only a 40% probability the US Senate will formally approve a resolution of ratification of the Trans Pacific Partnership by July 2015.
International Politics
As discussed above, Julia Gillard is still expected to be Prime Minister to the end of March; however iPredict forecasts she now has a 55% probability of departing as PM before 1 July. There is also a 77% probability she will be gone by the next Federal election.
In the US, Barrack Obama has a 68% probability of being re-elected US President, defeating Mitt Romney who has a 74% chance of being the Republican nominee. Romney has an 81% chance of winning the Arizona Primary, while Rick Santorum has a 53% chance of winning the Michigan Primary.
In the UK, the Conservative / Liberal Democrat coalition is expected to survive 2012.
In France, however, there is a 74% probability Francois Hollande will win the presidential election over incumbent Nicolas Sarkozy.
In Syria, Bashar al-Assad is expected to continue serving as President by 1 June 2012.
There is a 30% probability Israel will launch an airstrike against Iran in 2012 and a 20% probability North Korea will detonate an atomic device.
Science and Climate Change
There is a 63% probability average global temperatures will be hotter in 2012 than in 2011 and a 12% probability 2012 will be the hottest year on record. There is only a 23% probability the OPERA experiment showing neutrinos exceeding light speed will be replicated in 2012. There is am 86% probability that there will be a formal announcement of the iPad 3 in March 2012.
New Zealand Politics
There is a 56% probability Labour will form a Government after the next General Election, with a 40% probability David Shearer will be Prime Minister by 1 January 2015.
Party vote forecasts are: National 42.1%, Labour 34.5%, Greens 9.5%, NZ First 5.1%, Conservative 2.7%, Act 1.7%, Maori Party 1.4%, Mana Party 1.3%, and UnitedFuture 0.6%.
The Maori Party is expected to win 3 electorate seats and the Mana Party 1 seat. UnitedFuture has a 63% probability of winning an electorate seat and Act a 52% probability. The Greens, New Zealand First and Conservative parties are not expected to win electorate seats.
Under these electorate and party vote results, the New Zealand Parliament would consist of: National 52 MPs, Labour 43 MPs, the Greens 12 MPs, New Zealand First 6 MPs, the Maori Party 3 MPs, Act and the Mana Party 2 MPs each, and UnitedFuture 1 MP. There would be 121 MPs, requiring 61 to govern.
David Shearer’s Labour Party could form a Government with the support of the Greens, New Zealand First, and either of the Maori, Mana, or UnitedFuture parties. Alternatively, John Key’s National Party could mathematically pull together a Government with the support of NZ First, Act and UnitedFuture.
Grant Robertson and Judith Collins are favoured should there be a vacancy in the leadership of either the Labour or National parties.

The film is based on an essay by Serge Halimi about media , published in 1997. The book was made ​​into a film in France in January 2012. It sets out the collusion between government media, political and economic, focussing on television and major French newspapers.

It could translate into pretty much any country around the world. I understand it also sets out a challenge to journalists to not be tame and to stand up for their craft.

Perhaps you’ll find it odd that a politician would care, let alone write about such things. As a former journalist I care strongly about the importance of good journalism, the ownership structures of our media, the lack of investment in public broadcasting and the growing concerns about political interference that is daily undermining the craft, putting more pressure on individual journalists and treating news as a commodity.

Isn’t it time we stood up for independence, more objective reporting and pride in the craft of journalism?More distance between media and governments (any government). The media was named as the fourth pillar of democracy for good reasons. Can we fight for it in this country too?

The promo clip below for Les Nouveaux Chien de Gard is in French. But you might get the gist.

Who are our new watchdogs?

Hat tip: BE

Labour MPs have been supportive of the Bill from the start. NZ First, the Greens and United Future have come out in favour of it now too. And of course most members of the public agree it makes sense.  The Tourism Industry Association has pointed out that it will give a boost to ailing domestic tourism figures.

The Dominion Post explained succinctly why it makes sense.  The Bill addresses an issue that only arises in those years when Waitangi and ANZAC fall on a weekend.  The days of celebration will still be 6 February and 25 April respectively but there will also be a Public Holiday on the Monday that follows.  We do this already for Christmas and other Public Holidays.  Using the Christmas example: it doesn’t make the Christmas celebration itself any different – but you know you can plan for a long weekend and some time off with the family.

In the first couple of weeks, I’ve also had my first media stand-up, my maiden speech, a funeral, a wedding, another Parliamentary speech, several radio interviews and my first appearance on TV show Back Benches.  Because the causes I’ve been fronting have been constructive, and media coverage has been positive, it has been a great experience.

But I’ve not been able to respond to every message of support.  I know other new MPs have had a similar experience. So I want to take this opportunity to say thank you to all those who’ve helped get me here, and those who’ve offered assistance or support. I appreciate it.

The first taste was Friday night, with a commanding win by New Zealand in the T20 game in Wellington. Before we get too carried away, T20 is not really the South Africans favoured format. They are ranked fifth compared to our second in the ICC rankings. But the Black Caps looked as good as they have all summer.

There are some impressive signs. Doug Bracewell and Tim Southee are charging into the bowling crease. Kane Williamson is looking accomplished. But towering above them all is Martin Guptill. He is in the richest vein of form you could find, averaging over 100 in international cricket for the summer. Watching him on Friday night, in a form of the game that challenges a cricket purist, almost every stroke that Guptill played was a genuine cricket shot, with impeccable timing and a good degree of power.

Guptill is agile and a ball of energy in the field as well. You would think he would be a major focus for the Indian Premier League T20 teams. Well he would be, if it weren’t for the fact that he has ruled himself out, prefering to play county cricket in England so he can focus on developing his skills for all forms of the game. Could I love this man any more?

Well actually, yes. If he can keep this form up for the remainder of the summer- especially in the Tests where New Zealand will be tested to the limit from the South African bowling line up that includes Dale Steyn not here for the T20s.

I have sometimes wondered about playing cricket late into March, but if that means getting opposition like the South Africans and then the summer of cricket can become the autumn of Guptill then I’m more than happy.