There was a certain irony in the fact that National, which lost its Finance spokesperson on Tuesday with the resignation of Simon Bridges, appeared at the weekly general debate with its most coordinated attack on the Government’s economic policies so far.
The focus was on inflation and the “cost of living crisis.”
However, National’s new finance spokesperson, Nicola Willis, did not speak in the debate.
Her appointment had a logic to it; she is close to National Leader Christopher Luxon and deputy leader. Ironically she is, like Finance Minister Grant Robertson (and Greens co-leader, Jame Shaw) from the ultimate middle class liberal urban electorate, Wellington Central.
Though National has a heap of data on its side, the whole economic debate is taking place against the global horror show that is the Ukraine war.
There is no better example of how profound this is than to look at the London Stock Exchange price for shares in Evraz, the steel company part-owned by the Helena Bay Oligarch, Aleksander Abramov.
The EU has sanctioned all Russian steel companies and banned their imports into the union.
Consequently, Evraz’s shares have fallen from a 12 month high of 707 British pence to yesterday’s price of just 80 pence. That will have seen the value of Abramov’s shares plummet from near around $3.85 billion to $442 million.
But the debate also came on the eve of the release of GDP figures for the last quarter last year.
Last week the ANZ Bank economists Finn Robinson and Miles Workman said they expected that to produce an annual growth rate for 2021 of 3.6 per cent.
That is substantially better than what was expected back at the start of Covid.
In the 2020 Budget Economic and Fiscal Update, Treasury forecast annual GDP growth for 2021 at minus one per cent.
They expected the real recovery to be this year with an 8.6 per cent GDP growth bounceback.
The ANZ, however, is expecting things to be grim this year.
“The outlook for economic activity is souring,” Robinson and Workman said.
“Living cost pressures are extreme right now. And there’s more inflationary pain to come, with global developments adding more petrol to the fire and the Omicron outbreak adding to labour scarcity.
“Inflation is now running laps around wage growth, meaning households are going backwards at an alarming rate.”
They said all this makes a technical recession over the first half of this year more likely.
No Opposition will miss out on having a crack at the Government with that sort of forecast doing the rounds.
The MP many thought would be National’s new Finance spokesperson, Chris Bishop, was content to blame the whole economic situation on Finance Minister Grant Robertson.
“The simple reality is, this Government is addicted to spending, and they can say all they like—it’s the fault of Ukraine, it’s the fault of international factors; why Vladimir Putin’s got anything to do with the rents that people in Lower Hutt pay, I don’t know, but I’m sure we’ll hear more from Poto Williams about that in due course,” he said.
Then followed a minor concession.
“It is, of course, true that there are international factors driving fuel prices, but inflation of 5.9 per cent is caused by Grant Robertson’s addiction to spending.”
He was followed by one of National’s six finance spokespeople since it lost power in 2017, Paul Goldsmith.
He kicked off on the right foot.
“This Labour Government has lost control of the economy and lost control of New Zealanders’ living standards because it hasn’t been able to discipline its spending,” he said.
But Goldsmith is a historian by trade, and the global crisis was too much for him to ignore, so he went off-script.
”We’ve seen the destabilisation of the post-war order in Europe, and that, of course, is concerning many New Zealanders and many people around the world. What does that mean for us as a country? What does it mean for peace and stability?” he asked.
Goldsmith is one of Simon Bridges’ closer friends within National’s caucus — which may explain why he has been returned to the front bench in yesterday’s minor reshuffle.
And he used part of his speech to pay tribute to the departing Bridges.
Another Bridges supporter is Pakuranga MP, Simeon Brown, a member of the so-called conservative “Taliban” group within the caucus. (He voted last night along with eight other National MPs against the Contraception, Sterilisation, and Abortion (Safe Areas) Amendment Bill )
Nevertheless, he stuck to the economic game plan.
“During a cost of living crisis in New Zealand, is it responsible for this Government to be proposing to spend up to $29.2 billion on a slow tram from the CBD in Auckland down to the airport, at a price of up to $16,000 per household in New Zealand,” he said.
“I know what people in my electorate are coming up and saying: We can’t afford to fill up the tank of gas to get to work this week. The rent’s gone up another 50 bucks; the price of food and groceries at the supermarket—it’s becoming more expensive.
“These are the issues which people in New Zealand are caring about.
“The Government should take the advice, stop the project, and actually focus on the cost of living crisis New Zealanders are facing.”
Megan Woods was Labour’s campaign chair for the last election campaign and part of Jacinda Ardern’s inner circle, so her pronouncements carry a degree of authority.
Her response to the National attack was simple; a reminder that National is proposing tax cuts and that somehow they will have to be paid for.
“What we’ve heard is another reheat of the familiar Bermuda Triangle from National, that somehow we’re going to spend all this money on tax cuts for the highest-earning New Zealanders, but they’re saying we won’t have to cut services,” she said.
“Services will have to be cut. We will see cuts to education. We will see cuts to health, and we will see cuts to housing. I’m already hearing the rhetoric from the National Party; they sound like they’re gearing up for a sell-off of State houses.
“I put cutting the Auckland regional fuel tax—I ask the rest of New Zealand how they feel about a party that was only offering relief for Auckland.
“There are many parts of the country that, indeed, were paying more for their fuel than Auckland.
“So this is a party that is not only out of touch, but it also doesn’t realise New Zealand exists beyond the Bombay Hills.”
Expect to hear more of that last line as the Tauranga by-election campaign gets underway.