Yesterday morning the National Party announced that they were proposing to re-write the education syllabus if they win the election. I’ve provided you with a link because it is now hard to find, such is the interest in the policy. Bold or stupid? I pick stupid because education is not a touchstone issue for anyone other than those with children. It isn’t even in the top five issues that voters are concerned about.
What is a top issue, is the economy and anything attached to it, like the rising cost of living. James Carville, Bill Clinton’s strategic advisor coined the phrase it’s “the economy, stupid” during Bill Clinton’s successful 1992 presidential campaign against incumbent George H. W. Bush. His phrase was directed at the campaign’s workers and intended as one of three messages for them to focus on.
Clinton’s campaign was channelling the concerns of voters during a hard recession at the time. It was a similar environment to that in which we now find ourselves.
Households are likely to have to spend an extra $150 a week over 2023 to keep up with rising costs, ASB economists say.
They have updated their forecast for the cost of living through 2023 and say while the impact will be uneven, households will face an increase in costs that is higher than the current rate of inflation – and income growth is unlikely to keep up.
They said while inflation was running at just over 7%, household costs rose 8.2% over 2022 because of a 45% increase in household interest payments.
The big increases in costs came from essentials such as food, fuel and shelter.
“Further volatility lies ahead, but we expect rises in living costs to continue to outstrip increases in consumer prices. Household budgets are expected to remain under significant household living cost pressures.”
About 60% of fixed home loans were due to reset over 2023, the ASB economists said, which would often mean higher rates.
“All up, the average mortgage interest rate facing borrowers will likely increase by roughly 150ps ending the year at just under 6%. That would see household debt servicing costs push back towards historical averages from a record low share of household income. The increase in weekly outlays averages out to an extra $50 per week per household.
“However, the impacts would be highly uneven. More highly indebted households would experience significantly higher increases running into the hundreds of dollars per week. Other households with high interest-bearing deposits and little debt will actually experience a positive impact on after-tax cashflows from higher interest rates. This group, however, is largely in the minority.”
Stuff
It’s the economy, stupid. By stupid, I mean Christopher Luxon, who thinks re-writing the education syllabus will be a touchstone issue for the election. Here’s a clue: it won’t. As I write this his big announcement is already off the front page of news websites. I hazard an educated guess that the last we hear of this policy will be yesterday. But it will motivate the education sector unions to campaign even harder against National. If that was the plan, then well done chaps. Give yourselves an uppercut.
While we are at it, the ASB Economist says that fuel costs will have big increases. So, time for a shameless plug for members and our big fuel savings that are available for you. Given that economists are predicting big increases, what is stopping you from making sure you are getting the best price possible?
Anyway, back to the issue at hand. The economy and the debilitating effects of inflation will be and are the biggest issues at play, not tinkering with education.
There is much profit in bashing the Government on the economy, long, hard and often. But somehow National prefers tinkering. I fully expect that they’ll emulate Bill English’s tragic election campaign of 2002 and have a million and fifty-two policy releases without actually focussing on the real issues that voters face.
Already Chris Hipkins has neutered most of National’s planned attacks by ditching or at least parking contentious issues. National had the rug pulled out from under them. They need to re-take the momentum, but they won’t do that tinkering on issues that really don’t matter.
The prospects of National being in the driving seat are getting slimmer by the day.
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