Damien Grant is a liquidator. He drives the ambulance to the bottom of the cliff. His latest piece is an interesting view on the economy from a liquidator’s perspective and his further comments provide food for thought for those who think that National is going down in a screaming heap at the next election – a screaming heap from which, apparently, they may never recover.
Always remember: a week is a long time in politics. September is light years away.
The beatification of our Prime Minister belies a darker truth; her Government is in trouble and faces the risk of annihilation come September. The challenge for the Opposition is to present a coherent economic plan to get this country back to work.
The scale of the economic collapse has been masked by the $10 billion Grant Robertson has gifted to – among others – big city lawyers, Australian-owned retail chains and, in the interests of disclosure, some of my businesses.
What is it they say about socialists? Eventually, they run out of other people’s money? We must be heading that way really fast by now.
This was a massive waste of cash as most of the employers who took it, including me, didn’t need the subsidy and were going to retain their staff anyway. Most firms that were going to fail before they got $7000 per employee are still going to fail.
I wish to remind people that the wage subsidy was paid to employers to allow their staff to do nothing. Employers do not normally pay staff to sit around for 5 weeks, so the government funded that.
I’d guess 5 per cent of firms who took this cash will survive because of it and the wall of redundancies and unemployment has merely been pushed down the road a month or two. In the US, where the labour laws are more flexible, unemployment is already at Great Depression levels; over 20 per cent. We can expect to match this well before the election.
I am hearing anecdotal stories about people losing their jobs in all sorts of industries, but I don’t have a clear overall picture as yet. I did read, however, that there were 61 suicides in this country last week. Whether that was due to losing a business, losing a job, or lack of access to mental health services because hospitals are empty awaiting the arrival of hordes of COVID-19 patients, I am not sure, but 61 suicides is a dreadful statistic.
With as many as half a million unemployed and many of the rest on reduced wages, unable to travel, coming out of a bitter economic winter and possibly ongoing outbreaks of Covid-19, making the case that this Government should be returned to office is going to be a tough sell.
I believe the government knows it is in trouble but, apart from spending like drunken sailors, it has no clue how to fix the economic tsunami coming our way. IRD funded loans (of $10,000 plus $1,800 per employee) are going to make little difference to most small businesses. What about the business that cannot pay the $35,000 GST bill due on Thursday? Things were going well for many businesses until we were all forced into lockdown. The government loan scheme is not going to go far.
In other words, the adulation that Jacinda is currently enjoying will not last much longer. Once the economic reality starts to bite – and by all accounts it has started to happen – then questions will be asked about whether or not it was all worth it. 20 dead, 1,400 cases and 20% unemployment. The government will be bankrupt, out of money and also of ideas.
Now for the big question. Which party is generally considered the better economic manager? We all know the answer to that.
I have no intention of rehashing the question of National party leadership. It has been done to death everywhere. Simon Bridges may still be there at the election, or he may not. Damien Grant thinks he will be, but either way, National needs to start telling us about their economic plan, and that just might win them the election.
What the electorate needs to know is how a Bridges-Goldsmith administration plans to revive the economic corpse they will inherit.
The stakes are higher than any election since 1984 because a second-term Ardern Government will have a mandate and an appetite for the largest expansion of the state since Robert Muldoon’s Think Big schemes and endless tinkering beggared the country.
The Budget comes out in two weeks. Bridges needs to do more than critique it. He needs to tell us what he’d do differently because if he fails we’ll end up with another three years of an Ardern premiership and worse, the prospect of a Luxon one after that.
A prime minister who is wonderful at giving hugs, but hides the truth about testing kits and flu vaccines is not strong and capable enough to get us through the next few years of turmoil. We need to focus on who will do the best job of economic recovery; not worrying about Simon Bridges’ diction.
This is not a repeat of 2002. There was no pandemic in 2002. There was no looming economic depression in 2002. Labour had a strong and competent leader in 2002. The circumstances were entirely different. What we have now is a crisis, about to be followed by an even bigger crisis. I put it to you that Jacinda is not up to the job. When you think about the rest of her government – Twyford, Nash, Clark, Shaw, Sage, Genter, Woods to name but a few… do you really think this bunch of fools can steer us out of an economic crisis as big as the Great Depression? Think Kiwibuild. Think mental health resourcing. Think taxation reform. They couldn’t do any of those things. And they won’t be able to bring us out of an economic meltdown either.
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