Goff complains about unemployment

January 16th, 2010 at 4:16 pm by David Farrar

NZPA reports:

Closing the gap with Australia and stemming the trans-Tasman brain drain is one of the Government’s main long-term aims but Labour leader said the reverse was happening.

“Australian employment figures have soared for the fourth straight month and the jobless rate has fallen to 5.5 percent, a full percentage below New Zealand’s ,” he said.

“For the first time in more than a decade, Australian unemployment levels over the past six months are lower than New Zealand, with Treasury forecasts that New Zealand’s unemployment will continue to grow.”

Now it is true that unemployment is now higher in New Zealand than Australia, and this is not good. Unemployment is a lose-lose. Having able bodied people not working means we don’t achieve as high as we could, and it is bad fiscally as it means less tax paid, and higher welfare payments.

But unemployment tends to rise when economic growth falls away. Not straight away but normally with a lag of six to 12 months or so. So let us look at economic growth between NZ and Australia.

So why does Australia now have lower unemployment? Because New Zealand went into recession, and Australia did not. And no this was not a post credit crisis recession. New Zealand’s economy started shrinking in the first quarter of 2008, and kept shrinking until the second quarter of 2009.

Now people may be wondering who was responsible for the economy in the first quarter of 2008. Well a Phil Goff was an Associate Minister of Finance. So when Phil wonders why Australia now has lower unemployment than NZ, he doesn’t have to go far to ask how come.

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31 Responses to “Goff complains about unemployment”

  1. heisenbug (6 comments) says:

    From first seeing your headline I thought that Goff was complaining about being unemployed himself. If he weren’t such a useless sack then it wouldn’t be a problem ;-)

    Anyway, the type of employment is probably more important than the numbers – we want people in productive jobs. Jobs in the productive sector have been dropping steadily for the past decade; the only place jobs have grown is in the (non-productive) State sector. Not the kind of jobs NZ needs, as they’re all just a deadweight on the people who actually do useful, productive work earning real money.

    Cheers

    Richard

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  2. jaba (2,146 comments) says:

    I thought Phil was still re engaging with “middle” New Zealand. .. lets hope Little doesn’t roll him until he loser the next election. The right need him to stay as OPPOSITION .. I will repeat OPPOSITION leader.

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  3. Viking2 (11,540 comments) says:

    And don’t forget to add all the other beneficiaries classes that we have the Aussies don’t.
    But attacking Goff after 14 months with a National Govt. elected to make change is a bit rich. The policies have varied little, the rhetoric is much the same, the handouts have not changed any, the benefit bill hasn’t changed, Life just goes on as it was.
    We have had a bunch of reports and idea’s etc which have been shot down by the very people who asked for them.
    We have a bill for the World Cup to pay yet. Our local Govt. is still out of control on the spending side of the equation, our unions are causing more trouble than before, the teachers don’t want to carry out their responsibilities etc etc etc.
    Business confidence is still in the doldrums and interest rates are on the way up exacerbating our exchange rate problem.

    Man we have come a long way this last year.
    I just wonder when the Nats. and their camp followers are going to look out the window and see if the sun still shines.

    P.s. We still hav a smacking bill that 85% oppose, an ETS that should never have been passed and various other bad legislation.

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  4. Inky_the_Red (761 comments) says:

    Employment is more important to NZ than it is to Australia. Australia has two main advantages over NZ than means us Kiwis have to work more to improve standard of living.

    Firstly they have have large areas of valuable resources that are assessable without impacting on human populations or the environment. However this is minor compared the other advantage Australia have.

    The most important factor that Australia has is investment. Businesses (and their government) in Australia have invest in assets that produce wealth. Here our businesses rely on cheap labour to produce goods. So if Kiwis are unemployed then our standard of living (which includes GDP per capita) will fall.

    The really scary thing is that since NZ fell into recession both manufacturing and imports of capital goods has fallen. Making working even more important to us all.

    Investment in capital items means that workers become more productive. This country seems to ignore that.

    Our business leaders seem to think more of them getting compensation competitive with the rest of the world. However their performance seldom justifies their compensation.

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  5. PaulL (6,035 comments) says:

    Inky, Australia actually make quite good use of resources in natural reserves too. They don’t have a belief (like we do) that a reserve is only beautiful if it is in an undisturbed state.

    As for capital – that is very heavily driven by Australia’s compulsory superannuation scheme.

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  6. Grizz (609 comments) says:

    Phil Goff is trying to appeal to the sizeable chunk of the electorate who are too stupid to realise that he was part of the problem that created rising unemployment in the first place.

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  7. big bruv (14,114 comments) says:

    Remember how the wing nuts over at the EPMU funded site (the Standard) used to piss and moan about Key running down NZ when ever he pointed out the differences between here and Aussie?

    Well it seems that it is perfectly fine to run down NZ when you are the leader of the Labour party.

    http://www.thestandard.org.nz/farrar-tries-to-cover-for-do-nothing-govt-and-fails/

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  8. expat (4,050 comments) says:

    Mallard complains that McCully is fucking up World Cup and that waterfront development is doomed.

    LOL.

    Pot, Kettle, Black.

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  9. expat (4,050 comments) says:

    Wing Nuts BB?

    More like Nut Jobs.

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  10. bchapman (649 comments) says:

    GDP is irrelevant unless you can create meaningful employment for our kids. I would have thought the government at least show some concern about 25% youth unemployment. This despite the success of the Jobs Summit.

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  11. freedom101 (508 comments) says:

    If National just carries on with Labour’s huge spending and no tax cuts and borrowing to the hilt etc then they are as bad as each other. NZ will continue to decline relative to Australia. Might as well pack up and head to Aussie while I can still sell my house! If it becomes generally understood that National is not going to deliver anything meaningful then a trickle to Aussie will become a flood as Kiwis realise that the game is up.

    [DPF: I agree on the need for more reform. However there were $4 billion of tax cuts in Oct 2008 and Apr 2009]

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  12. OTGO (559 comments) says:

    I’ve lived in both countries and one of the differences between us is attitude. When the Aussies go to watch any of their sports teams they expect them to win. When NZers go to watch their sports team play they expect them to lose. This attitude has deep roots in the way we live our lives and is the reason behind our big brother attitude to Australia. If we can become more optimistic about our place in the world (and 9 years of socialist control never helped) we are well on the way to parity with our neighbour.

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  13. MT_Tinman (3,246 comments) says:

    NZ starts to actually use it’s extensive mineral reserves and Australia hits the sub-prime crisis a couple of Ocker bankers have told me is imminent and NZ will have to double it’s defense forces just to keep bloody Aussie immigrants out.

    That’ll fix the unemployment problem (for the small percentage who genuinely want to work) at once.

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  14. burt (8,293 comments) says:

    The growth recorded at the Dec ’07 quarter for NZ is completely out of step with the trend of the graph. What on earth happened that was a one-off in that Quarter?

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  15. Pita (374 comments) says:

    Ah…the benefits of political amnesia.

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  16. Ross Miller (1,705 comments) says:

    Who is Mr Goff?

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  17. wreck1080 (3,955 comments) says:

    Goffs got a bloody good point.

    John Key has pronounced a catch up with australia, but has done little useful to achieve that income.

    But while JK is failing abysmally, I’d say that Goff would have been even worse.

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  18. db.. (86 comments) says:

    Burt’s question.

    …”What on earth happened that was a one-off in that Quarter?”

    I can’t confirm the timing but my view is that the end of ’07 was the time when Cullen got very noticably sour so that even Winston Peters noticed and about that time Helen started to seriously add to her CV.
    Somebody may be able to get the timing of when Helen adopted the Global Warming objective and later on introduced the concept of “Carbon Neutrality”.

    At about that time the two most powerful people in NZ said fuck you, only you could not hear.

    Her cabinet blindly followed.

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  19. Manolo (14,018 comments) says:

    Goff’s mutterings are hardly of any relevance. The sooner Labour fades into oblivion, the better.

    You have to ask though, what is the current government, led by empty-suit Key, doing to close the gap with Australia? Increasing taxes, maintaining high spending, and a total passivity on welfare reform will not take New Zealand one inch closer to Australia’s economic performance. Quite the contrary.

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  20. CharlieBrown (1,024 comments) says:

    “Closing the gap with Australia and stemming the trans-Tasman brain drain is one of the Government’s main long-term aims”

    I thought that was aspirational now, as closing the gap was ruled out by Bill English after the report back from the 2025 taskforce gave national some realism as to what is required to achieve this aim, and in typical fasion, showed no spine and ruled out any changes. I figure that the best we can hope from the current twits that are leading is for the speed at which the gap is widening slows down.

    “For the first time in more than a decade, Australian unemployment levels over the past six months are lower than New Zealand”

    Well Goff is a twit too. He should know better than most that NZ may have had lower unemployment but had much higher underemployment (this help caused the huge downward spiral NZ’s productivity experienced under labour). The labour governments approach to cutting unemployment was simple… get three people to do a two person job and change the definition of unemployed by moving half the people that were unemployed into other benefits.

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  21. CharlieBrown (1,024 comments) says:

    Inky_the_Red – “Firstly they have have large areas of valuable resources that are assessable without impacting on human populations or the environment”

    Firstly, that is an absolute cop-out. We should all know that NZ is second only to Saudi Arabia per head of population in terms of resource wealth. It is more of a case that Aussie has large areas of valuable resources that they are PREPARED to use.

    “The most important factor that Australia has is investment. Businesses (and their government) in Australia have invest in assets that produce wealth. Here our businesses rely on cheap labour to produce goods.”

    Yes they have that factor, but the reason we don’t is because we have bad policies that discourage investment, and bad governmental leadership. Examples of this include super schemes, willingness to increase age of entitlement on pensions, willingness to invest in utilizing resources, better tax framework etc.

    We should be richer than australia, the reason we aren’t is because we have a history of electing bad leaders and over time a sizable population of NZ has developed an entitlement culture that thrives on tall poppy syndrome. Untill we take some brave steps and elect a government with backbone that will make the required policies, even if their is pain in the short-term, we will continue to see Australia get richer and richer and many of our best people leave.

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  22. Hagues (703 comments) says:

    [DPF: I agree on the need for more reform. However there were $4 billion of tax cuts in Oct 2008 and Apr 2009]

    lol, including Labours taxs cuts to make it sound like National are doing something. Yes National tinkered with our tax rates in 09 (then cancelled the next two rounds), but they have not done anything that is likely to made any kind of significant change.

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  23. Manolo (14,018 comments) says:

    “[DPF: I agree on the need for more reform. However there were $4 billion of tax cuts in Oct 2008 and Apr 2009]”

    How generous and magnanimous of the National government! Thank you for the kind reminder.

    I shall patiently wait for Key’s next bout of generousity.

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  24. GJM (64 comments) says:

    “[DPF: I agree on the need for more reform. However there were $4 billion of tax cuts in Oct 2008 and Apr 2009]”

    Sorry, that is rubbish. They have clawed those back and more since then, with a combination if fiscal drag, and stealth increases in other taxes such as petrol tax, ACC and of course the ETS tax grab.
    Since John Key got into office, they have cost our family more than $2000 in increased ACC levies alone, including the projected increases for motor vehicles coming on 1/7 this year and earners a month earlier.
    National is Labour Lite. Still as much fat, but different packaging.
    No wonder 30,000 kiwis flee th ecountry each year.

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  25. freedom101 (508 comments) says:

    The 2010 budget will be the true measure of this government. Either they are Night Watchmen for Labour or they are going to do something. If they don’t do anything meaningful then we can kiss by to even an aspiration to ever catch Australia.

    I have absolutely no faith in Bill English. He is a timid tinkerer. John Key is a nice guy – let’s see if there’s any substance behind it – roll on the 2010 budget.

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  26. Viking2 (11,540 comments) says:

    There are two things to do when surviving a recession.
    Increase incomes and reduce expenditure.
    Now the private sector have worked hard to do the first BUT the Govt. has failed miserably with the second.
    And of course the private sector have to carry the Govt sector as we all know well that the Govt. sector produces little income for NZ. AirNZ and some Soe’s excepted.
    So when is Numpty Bill and Trader Key going to get to work on their bit?

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  27. wreck1080 (3,955 comments) says:

    Very good article in todays Sunday Herald. Something I’ve thought to be true.

    The premise is that NZ companies under perform because our best managers and executives flee to better jurisdictions, leaving behind the rabble.

    sooo trueee!!

    If you can escape the ties of home family and friends, you’d be crazy to stay here. Unless you’re a dimwit of course, you do quite well here filling in the gaps.

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  28. jackp (668 comments) says:

    I was adding up the figures. 2 million people are working in New Zealand. 250,000 are not working and getting a sickness benefit, dpb, or unemployment, and more. Add that to what Vicking said, around another 250,000 getting paid directly (employment) or indirectly (subcontractors and leasors). About 25 percent of the population have their hand out for taxpayers to pay. That is a huge hole for the private sector to pay yet John Key and Bill English are not going to discourage this at the time. Also, John Key is a trader and he just made the carbon trading scheme more powerful. I don’t trust him.

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  29. Inky_the_Red (761 comments) says:

    wreck1080 “And of course the private sector have to carry the Govt sector as we all know well that the Govt. sector produces little income for NZ. AirNZ and some Soe’s excepted.”

    The public sector includes, the military, most hospitals, most schools, all universities, the police, urban fire fighters, national parks, libraries, local parks, the roading network, prisons, public car parks, museums, art galleries, public gardens, the legal systems and much more.

    These increase my standard of living I don’t use all of them but am happy they are all there.

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  30. Owen McShane (1,226 comments) says:

    Is Shane Jones the only MP in Parliament who understands the importance of Secure Property rights to enabling investment in productive activity?
    Those young Northland Maori who have occupied private land with the clear intention of ensuring it will never be sold to someone who wants to invest in it, and who can do so without the police arresting them for trespass, represent a major nail in the economic coffin that all New Zealanders will soon have to lie in.

    The police would arrest them if they invaded a property and stole a stereo or a cow. But the current owners’ losses from their activities will be hundreds of thousands of dollars. Why would anyone invest in Northland while this is endorsed by Government and senior academics.

    This of course follows on the heels of the occupation of a building by the Maori tenants who had lead to the building being sold to an Australian investor because they had defaulted on their lease. They claimed they were not occupying the building (which they agreed did belong to the Australian) but were occupying the land which they claimed was really theirs.
    The police agreed and said it could do nothing until a private action settled the matter in the Courts.

    Our rights in property are under assault from all directions.

    I should not be surprised that no New Zealander reviewer has reviewed Mike Moore’s excellent book on the benefits of globalisation, free trade and private property rights. A Chinese newspaper has.
    But they are committed to economic growth the development.
    We seem committed to stagnation.

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  31. Viking2 (11,540 comments) says:

    Nah, Jones was just making noise for noise sake.

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