Joel Maxwell, described by The Post as an experienced senior journalist and Stuff’s kaiwhakamāori/translator, has written an article which reminds Prime Minister Christopher Luxon of something he said on the campaign trail in 2023.
Fair enough, too. Luxon should be reminded of a great deal he has said – and in a year or two he is likely to be reminded of things he is saying now.
For example, RNZ reports Luxon as saying he’s unfazed by projections of an $8.5 billion dollar hole in future funding.
The report drew attention to Budget documents which show cost pressures of $27.9 billion over the forecast period, with just $19.7 billion of reprioritisation options.
The figures leave an “unfunded pressures” gap of $8.5b.
Speaking at Mainfreight in Papamoa on Friday morning, Luxon said he wouldn’t characterise it as a hole in funding.
“What it highlights is ongoing work around continued savings that we will generate to redeploy back into the spending.
“It also underscores the importance of economic growth.”
The majority of the cost pressures are in health, education, Defence Force, transport and disability support services.
There are unfunded pressures in health social development, transport, and the Ministry of Business Innovation and Employment.
Luxon said he was “quite relaxed” about it.
“We’ll have ongoing savings going forward, as we’ve said from day one, and we’ll also continue to…really accelerate the growth in this country.”
Fasten your seat belts and hold on to your hats, folks.
In his article, Joel Maxell recalled Luxon saying a working economy means higher wages, it means a lower cost of living, and the ability to afford the quality public services that we all rely on.
He helped jog or memories by providing a link to Luxon’s braying in a 2023 National election ad:
“Let’s get our country back on track,” he said.
Maxwell then examined the Government’s track record, using data such as salary and wage rates including overtime increasing 2.4% in the year to June while inflation increased 2.7%.
Unemployment edged up for the June quarter, at 5.2%, employment edged down, at 66.8%.
And then:
Ahh, GDP, you l’il scamp – what about that measure of all our economic action?
Updated GDP numbers will drop on September 18, but the quarterly figures to March had GDP up by .8% (yay!), but down over the year by 1.1% (boo!).
But then:
To be fair, GDP doesn’t really tell us what it feels like to live in Aotearoa Inc.
Stuff gave us a hint about the reality last week, revealing that our average family earns less than many other countries but also pays more for groceries than they do.
Now I’m no financial wizard, but in economic jargon, I think that means that our economy technically ‘sucks’.
Forget about the rock economy, Maxwell says.
This is the just-be-happy-you’ve-got-a-job economy.
This is the shut-up-and-take-what-you’re-given economy.
This is the I-asked-AI-what-the-best-SUV-to-live-in-was economy.
He concluded:
Politically speaking, I think National, ACT and NZ First risk discovering that, primarily, it’s always been an it’s-the-economy-stupid-economy.
We could quibble with some things he said
After chiding John Key for supporting Donald Trump economic management reasons (Trump has made a tariffic job of showing that confidence was misplaced), Maxwell mused:
Speaking of leaders, my daughter asked me the other day what had happened to ACT’s David Seymour.
Is it just me, or does it seem like he’s melted out of the public gaze, recently, alongside the cost-of-living crisis?
If Maxwell had been listening, he would have heard Seymour answering questions in Parliament today as Acting Prime Minister. It’s hard to lie low when you have that job.
But our focus is on Maxwell’s dismissal of GDP.
If he ventured deeper into the data, he would find GDP tells us a great deal about how we are performing alongside other countries.
One variant is GDP per capita based on purchasing power parity (PPP).
Click to view
The report drew attention to Budget documents which show cost pressures of $27.9 billion over the forecast period, with just $19.7 billion of reprioritisation options.
The figures leave an “unfunded pressures” gap of $8.5b.
Speaking at Mainfreight in Papamoa on Friday morning, Luxon said he wouldn’t characterise it as a hole in funding.
“What it highlights is ongoing work around continued savings that we will generate to redeploy back into the spending.
“It also underscores the importance of economic growth.”
The majority of the cost pressures are in health, education, Defence Force, transport and disability support services.
There are unfunded pressures in health social development, transport, and the Ministry of Business Innovation and Employment.
Luxon said he was “quite relaxed” about it.
“We’ll have ongoing savings going forward, as we’ve said from day one, and we’ll also continue to…really accelerate the growth in this country.”
Fasten your seat belts and hold on to your hats, folks.
In his article, Joel Maxell recalled Luxon saying a working economy means higher wages, it means a lower cost of living, and the ability to afford the quality public services that we all rely on.
He helped jog or memories by providing a link to Luxon’s braying in a 2023 National election ad:
“Let’s get our country back on track,” he said.
Maxwell then examined the Government’s track record, using data such as salary and wage rates including overtime increasing 2.4% in the year to June while inflation increased 2.7%.
Unemployment edged up for the June quarter, at 5.2%, employment edged down, at 66.8%.
And then:
Ahh, GDP, you l’il scamp – what about that measure of all our economic action?
Updated GDP numbers will drop on September 18, but the quarterly figures to March had GDP up by .8% (yay!), but down over the year by 1.1% (boo!).
But then:
To be fair, GDP doesn’t really tell us what it feels like to live in Aotearoa Inc.
Stuff gave us a hint about the reality last week, revealing that our average family earns less than many other countries but also pays more for groceries than they do.
Now I’m no financial wizard, but in economic jargon, I think that means that our economy technically ‘sucks’.
Forget about the rock economy, Maxwell says.
This is the just-be-happy-you’ve-got-a-job economy.
This is the shut-up-and-take-what-you’re-given economy.
This is the I-asked-AI-what-the-best-SUV-to-live-in-was economy.
He concluded:
Politically speaking, I think National, ACT and NZ First risk discovering that, primarily, it’s always been an it’s-the-economy-stupid-economy.
We could quibble with some things he said
After chiding John Key for supporting Donald Trump economic management reasons (Trump has made a tariffic job of showing that confidence was misplaced), Maxwell mused:
Speaking of leaders, my daughter asked me the other day what had happened to ACT’s David Seymour.
Is it just me, or does it seem like he’s melted out of the public gaze, recently, alongside the cost-of-living crisis?
If Maxwell had been listening, he would have heard Seymour answering questions in Parliament today as Acting Prime Minister. It’s hard to lie low when you have that job.
But our focus is on Maxwell’s dismissal of GDP.
If he ventured deeper into the data, he would find GDP tells us a great deal about how we are performing alongside other countries.
One variant is GDP per capita based on purchasing power parity (PPP).
Click to view
The graph above comes from Globaleconomy.com
PPP GDP is gross domestic product converted to international dollars using purchasing power parity rates. An international dollar has the same purchasing power over GDP as the US dollar has in the United States.
GDP at purchaser’s prices is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products.
This is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.
The Gobaleconomy.com data are in constant 2021 international dollars.
The place to live in 2024 – according to the international rankings – was Singapore, which ranked number one in the world on this measure. New Zealand was 34th.
In 2010 Singapore had a PPP GDP of $95,456.
That was more than twice as much as New Zealand’s $41,271.
By 2024, Singapore’s figure had burgeoned to $13,2570.
New Zealand had risen (but not by much) to $48,163.
Yes, John Key was our PM for several of those years.
But in 2017 Jacinda Ardern became PM and for the next six years we had a Labour Party leader (Ardern and Chris Hipkins ) running the show.
Our PPP GDP numbers didn’t change too much on their watch.
Maybe that’s why Joel Maxwell didn’t delve too deeply into the potential for GDP statistics to tell us a great deal.
Bob Edlin is a veteran journalist and editor for the Point of Order blog HERE. - where this article was sourced.
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