Lies, Damned Lies, and National

After a clumsy attempt by National to portray damning statistics as saying something quite different, and being caught doing so, Gerry Brownlee is now telling everyone that the plan to close the wage and income gap with Australia by 2025 was only only ever an aspirational one.

Can anyone else smell an enormous u-turn?

John Key says we can catch up with Australia, but we will need to grow 2% faster than Australia per year for the next fifteen years. How likely that is, given our current economic policies? There's no focus on increasing productivity. Instead the emphasis has been on policies that will either reduce productivity or make no difference, such as cutting Government spending, tax cuts, and employment law changes.

If there is any compelling evidence that tax cuts spur productivity I've yet to see it, and it would be interesting to hear why countries more highly taxed than ours continue to outpace us on productivity. Clearly, the effect of tax cuts on productivity is insignificant.

Cutting government spending means gutting public services, which means redundancies, which means unemployment. Rising unemployment will bring downward pressure to bear on wages, as more people compete for fewer jobs. And titling the balance of labour laws in favour of employers will also potentially push wages down over a gradual period.

Why, if you were trying to close the income gap with Australia, would you be taking steps to reduce wages?

But then this is a Government that thinks it can convince people black is white. Political commentators might think the brazen and deliberate misuse of statistics in Parliament is a jolly clever thing, but it's no laughing matter. It borders on outright dishonesty.

But let's get back to those growth projections. How is that 2% a year plan looking? Are we going to be ahead of Australia this year? I think you know the answer. Next year? Unlikely. What about 2012? 2015?

Can we reasonably expect to outpace Australia by 2% in any of the next 15 years? It is unlikely, unless Australia has a downturn. Because, without serious structural change, the only way we'll catch Australia is if the Australian economy goes south.

But now this is only an aspirational target, we don't need to bother with it. We all know about the importance of aspirational targets. My aspirations include winning lotto, driving a nice car (my Toyota Corolla is a reliable enough car but lacks that "wow" factor), and living in a house in the eastern suburbs of Auckland that will be so enormous it will block out the sun for most of Remuera's residents.

It seems that my aspirations are as achievable as John Key's.