Good News But Let's Not Go Nuts

There are signs our economy is entering a less fragile phase, and the drop in unemployment is great news.

We should all be grateful for that, regardless of whether our allegiances lie with National, Labour, or someone else.

There are still those who will blame everything that has happened in the last couple of years on National, as if the global financial meltdown was John Key's personal after-hours project. I suspect the same people are secretly disappointed with the news that there's some sign of recovery, because their visceral loathing for all things National sometimes affects their ability to think rationally.

Of course, just as National cannot be blamed for the fact we had a recession, I'm equally certain we shouldn't be giving John and co a pat on the back just yet. Firstly, because it's hard to point to a single thing National has done while in office to fix the economy's major structural issues. And the little things they've done, tinkering here and tinkering there, are unlikely to have had much impact.  They may in the future - for better or for worse - but it's too early to tell.

So what does this mean? Were things really as bad as we were told? Are they getting better, or is this just a blip? If things weren't as bad, did the people telling us know this?

When National took office we were sold the line that the economy was in dire straits, and that Government spending needed to be slashed. The state of the economy has been used to justify cuts in spending, the gutting of ACC, redundancies in the public sector, and welfare reform. All of these would have been on National's agenda, regardless of the state of the economy. The supposedly parlous state of the economy, however, gave the Government an opportunity to enact programmes that would otherwise have been regarded by the media and populace with hostility.

I'm not saying National sold us a lie, because I have no evidence to back this up. But the downturn has certainly been helpful to them in many respects.

If we are indeed climbing out of trouble (and if this isn't just a false dawn), will that cause National to revise some of those slash and burn policies, on the grounds they are no longer needed? I think it's more likely that Gerry Brownlee will start running triathlons.

And just because we may not be in the soup, that doesn't mean we should celebrate. Our economy may no longer be going backwards, but it will remain sluggish until major structural issues are addressed.

But, that aside, it's pleasing to read some positive economic news.