Labour’s 4% unemployment target

May 13th, 2014 at 12:00 pm by David Farrar

The Herald reports:

Prime Minister John Key says it is all very well setting a new target of 4 per cent unemployment but policies were more important than targets, and ’s policies would increase unemployment.

“I can have a dream of becoming an All Black, too,” Mr Key said at his post-Cabinet press conference. “But the probability of Steve Hansen naming me in the squad coming up in the next few months is next to zero.”

The Budget-week banter followed a pledge by Labour leader David Cunliffe to cut the rate of unemployment from its present 6 per cent (147,000 people) to 4 per cent within a term.

I was going to make the same point. A target means little. Policies are what matter.

Mr Key also said National was on track to meet its target of 170,000 net new jobs between 2011-2015 – a target which attracted plenty of derision when it was announced in Bill English’s 2011 Budget.

“We are going to fulfil our target of creating 170,000 jobs we talked about some years ago,” Mr Key said.

The economy was going well but under Labour unemployment would be going up because with its Green partners, it was anti-growth, anti-development, anti-oil and gas exploration, and anti-farming.

Labour would also slow down the economy by increasing taxes.

The Greens think investing in companies that lose 96% of their value is how you create jobs!

Mr Cunliffe called a press conference at Parliament yesterday to announce the unemployment target and to reaffirm the party would run surpluses unless faced with a domestic disaster or another global downturn.

Again a target means nothing by itself. Policies mean everything. Labour has opposed almost every single measure of spending restraint in the last five years. If they had been in Government, spending would be billions higher and we’d still be facing many more years of deficits. So are they saying their opposition to spending restraint was wrong? Are they going to run a surplus by increasing taxes, rather than restraining spending?

“They will ask us to ignore the stagnant wages of most working families. 

This is, of course, incorrect. The latest annual household income survey (June 2013) shows average personal income from wages and salaries increased 5.4% and the median personal income increased 5.3%.

They will ask us to turn a blind eye to the soaring costs of living at the supermarket

Food prices in February 2014 are only 0.2% a year higher than a year ago. Fruit and vegetable prices are 5.6% lower than a year ago.

in our power bills

Power prices (as measured by CPI) increased an average 3.8% a year since 2008. In Labour’s last term they increased 7.6% a year.

in our mortgages

The cost of owning property (as measured by CPI) has increased an average 3.0% a year since 2008. In Labour’s last term they increased 5.2% a year.

and rents

The cost of renting property (as measured by CPI) has increased an average 1.9% a year since 2008. In Labour’s last term they increased 2.8% a year.

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34 Responses to “Labour’s 4% unemployment target”

  1. thor42 (971 comments) says:

    A very good fisking of Labour’s nonsense DPF!

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  2. Manolo (14,040 comments) says:

    The ascent to power of the communist Green Party will be the financial ruin of our country.

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  3. peterwn (3,303 comments) says:

    Labour actually wanted higher unemployment during the last 5 1/2 years. They (and ACT) would have dearly loved National to have a ‘slash and burn’ policy, as Australia and European countries are being forced into. Now they are all bitter and twisted this did not happen and are instead nit-picking John’s measures to keep NZ on an even keel during that time. In 2008, Helen Clark and her government did not have a clue what to do with a worsening global economic situation – but John Key did – with the least hurt to kiwis.

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  4. SW (241 comments) says:

    “Labour has opposed almost every single measure of spending restraint in the last five years. If they had been in Government, spending would be billions higher…”

    DPF you continually make this claim, but government spending has not decreased under National and has infact slightly increased (and I get that National didn’t continue increasing spending at the rate of the last Labour govt).

    If National hasn’t cut real spending, that means every spending cut proposed by them has been meet by an increase somewhere else. National have also cut government revenue to some degree (the ‘fiscal neutrality’ of the tax cuts has been debunked elsewhere – but I’m sure you disagree on that).

    In short, your claim has no basis. National hasn’t cut spending therefore the only thing you can take from Labour’s opposition is that they have different priorities to National. Regardless, I’m sure you know damn well that parties in opposition oppose things they wouldn’t in government (take National’s recored for example).

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  5. queenstfarmer (782 comments) says:

    The Greens have long had the answer to unemployment. It’s very simple: the magic of green jobs. From their “detailed and fully-costed” plan:

    … partner with clean tech entrepreneurs in the private sector and develop renewable energy solutions that we can patent and export abroad

    Brilliant! All the Govt has to do is partner with all of those “clean tech entrepreneurs”, who are currently sitting around the country doing nothing, give them loads of taxpayer cash (don’t worry that previous attempts have lost 96% of their value – that was obviously just bad luck), come up with brilliant “renewable energy solutions” that no-one else in the world is doing – surely the easy part – then get the patents and watch jobs roll in.

    This is the answer to every question about how will the Greens fund their spending.

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  6. WineOh (630 comments) says:

    Labour Plan for 4% Unemployment:

    1. Bloat the public sector up by hiring thousands of new bureaucratic civil servants
    2. Shift the benefit definitions and encourage individuals to shift to sickness benefits or other handouts
    3. Change the way unemployment is measured
    4. Invest in a few large infrastructure plans that creates a large number of very short term jobs.

    Yay job done!

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  7. chris (647 comments) says:

    @queenstfarmer Spot on. If these businesses were so damn profitable and job creating, why do they need the Government to intervene. Oh wait, it’s because they’re not profitable and lose billions…

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  8. ross001 (218 comments) says:

    Throughout the last term of the last Labour government unemployment was at or below 4%. Since National has taken over, unemployment has taken off. I’m surprised you forgot to mention that, David.

    “Unemployment Rate in New Zealand averaged 6.29 Percent from 1985 until 2014, reaching an all time high of 11.20 Percent in the third quarter of 1991 and a record low of 3.50 Percent in the fourth quarter of 2007.”

    http://www.tradingeconomics.com/new-zealand/unemployment-rate

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  9. Kimble (4,443 comments) says:

    Labour Plan for 4% Unemployment:

    1. Bloat the public sector up by hiring thousands of new bureaucratic civil servants
    2. Shift the benefit definitions and encourage individuals to shift to sickness benefits or other handouts
    3. Change the way unemployment is measured
    4. Invest in a few large infrastructure plans that creates a large number of very short term jobs.

    Yay job done!

    Good list WineOh, and the word Labour use for all that is “governing”.

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  10. Kimble (4,443 comments) says:

    ross001 is a fucking retard.

    There I said it for everyone else. So there is no need to continue to respond to his trolling.

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  11. thor42 (971 comments) says:

    Labour – “hey, trust us! Socialism has worked since……….. yeah, nah”.

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  12. chris (647 comments) says:

    I’m assuming all the ross-with-numbers are ross69. I think I saw a ross41 the other day too.

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  13. Steve (North Shore) (4,587 comments) says:

    Bloat the public sector will get unemployment figures down – and cost a shitload of private sector Tax.
    But it is only other peoples money

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  14. ross001 (218 comments) says:

    Kimble,

    Unemployment reached “a record low of 3.50% in the fourth quarter of 2007.”

    Who was in government in late 2007? I suggest you look in the mirror before you make a complete dick of yourself.

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  15. ross001 (218 comments) says:

    I think I saw a ross41 the other day too.

    Nah I can’t claim that one. :)

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  16. chris (647 comments) says:

    But then who stacks the public sector full of people who don’t actually do anything? I think there’s a good answer to why unemployment is supposedly lower under Labour. That and the manipulation of who’s on what benefit.

    When Labour were last in government, my wife went to visit the NZTA and there was an entire floor of unnecessary people doing the same job as the people two floors up.

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  17. stigie (1,311 comments) says:

    Very well said WineOh, ya hit it fair and square !~

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  18. ross001 (218 comments) says:

    “New Zealand’s unemployment rate rose faster during the recession than the rate in OECD countries on average (Figure 1). As of June 2010 the unemployment rate was 6.8%, lower than the OECD average of 8.4% but still substantially higher than the roughly 4% rate over 2004 to 2008.”

    http://nzinitiative.org.nz/site/nzbr/files/Unemployment1.pdf

    Who was in government between 2004 and 2008?

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  19. Kea (13,359 comments) says:

    Other socialist governments have simply made unemployment illegal. It is what made the USSR and Romania the success they were. :(

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  20. Tom Jackson (2,553 comments) says:

    Other socialist governments have simply made unemployment illegal.

    Such as the various National governments that presided over full employment in NZ. I’m old enough to remember when unemployment did not exist in this country.

    Labour is proposing to lower the unemployment rate, not to rid NZ of unemployment entirely. That’s quite a back off from a policy of full employment, which most social democrats support.

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  21. Tom Jackson (2,553 comments) says:

    But then who stacks the public sector full of people who don’t actually do anything?

    Who stacks the private sector full of such people?

    Every single fucking place I have ever worked is chronically overmanaged by keen, but clueless business school graduates.

    You want to get rid of useless people, oppose the cult of managerialism, which has infected both the private and public sectors.

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  22. rangitoto (248 comments) says:

    They could easily hire all unemployed as government workers on a living wage (no need for them to actually turn up of course). The government can then just print enough money to pay for it. Brilliant zero unemployment solution. I’m suggesting it to Wussel right now. Sir Cullen will be along to back me up any minute.

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  23. Tom Jackson (2,553 comments) says:

    They could easily hire all unemployed as government workers on a living wage (no need for them to actually turn up of course).

    We’ve had full employment before without having to take a wheelbarrow full of money to buy bread. A 4% unemployment rate outside of a recession would be high by historical standards.

    http://www.teara.govt.nz/en/graph/24362/unemployment-1896-2006

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  24. chris (647 comments) says:

    @Tom true, but the public sector is miles worse. And if the private sector want to stuff themselves full of middle management, it’s not the taxpayer paying for it.

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  25. Tom Jackson (2,553 comments) says:

    And if the private sector want to stuff themselves full of middle management, it’s not the taxpayer paying for it.

    No. It’s all consumers paying for it. Once a company gets so big the managers seem to decide that they get to splurge the shareholders’ money on hookers and blow.

    It’s my view that troughing should be expunged from every sphere of employment. You’re there to work, not to snort cocaine off some broad’s bum.

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  26. Nick R (508 comments) says:

    Let’s also recall that Labour ran surpluses between 1999 and 2008, while National demanded big tax cuts. I think we’d have been in a far worse position now if National had got their way then.

    The point being – opposition isn’t a great time for either party and both of them make plenty of silly announcements.

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  27. Tom Jackson (2,553 comments) says:

    Blaming any NZ government for the 2008 crash is pointless.

    We’re just lucky that like Australia and Canada we had fairly decent bank regulations.

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  28. rangitoto (248 comments) says:

    “No. It’s all consumers paying for it.”

    Then there’s nothing stopping you setting up a competitor and blow these bloated companies out of the water

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  29. doggone7 (819 comments) says:

    Labour said their target is 4% unemployment so it’s nonsense, impossible, etc., etc.

    John Key said their target was to create 170,000 new jobs so an absolute truth, beyond dispute has been uttered. Except that when the target is not reached he and Bill English will say, “It was just a target and…” followed by all the logical reasons in the world why it wasn’t achieved.

    Mr Key won’t have to get a new job after the election because he’ll still be Prime Minister. The statement though rings out like the spiel from the now loathed finance company gurus who turned out to be goodies.

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  30. igm (1,413 comments) says:

    ross01: Your pathetic left-wing burblings are really starting to piss me off. You are a typical blind left-wing unemployed leeching loser. National inherited a debt-ridden economy in free fall decline . . . you talk more shit than “Tojo” the Liar Cunliffe.

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  31. Kimble (4,443 comments) says:

    Labour is proposing to lower the unemployment rate, not to rid NZ of unemployment entirely. That’s quite a back off from a policy of full employment, which most social democrats support.

    Labour is proposing absolutely nothing of the sort.

    A goal isnt a plan.

    ~3% is probably the natural unemployment rate. So saying that that is your TARGET is pretty much the same as saying you are targetting full employment.

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  32. dime (10,100 comments) says:

    “Every single fucking place I have ever worked is chronically overmanaged by keen, but clueless business school graduates.”

    Not Dime Inc. We run a tight ship!

    Course, we dont employ people for made up, worthless jobs like HR.

    HR Manager Dime is quite lovely :D never been sued once!

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  33. Tom Jackson (2,553 comments) says:

    Labour is proposing absolutely nothing of the sort.

    Well, any rational person would suppose that the policy is being held back for the campaign, where Labour deem it would do them most good.

    I guess it would be easier to parrot John Key’s stupid talking point because he didn’t have a decent answer.

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  34. Kimble (4,443 comments) says:

    Answer to what?

    Oh shit! Labour thinks that low unemployment is… GOOD!?!

    And I guess any rational person would also suppose that those policies will be well thought out and will inevitably be successful.

    Because any rational person knows that it is the job of voters to suppose the policies of political parties and assume their success.

    Though I really doubt that the same rational person would be willing to extend the same courtesy to National if they came out with the goal/slogan/policy of reducing unemployment to 2%.

    Oh no no no. LABOUR came up with the idea of reducing unemployment. LABOUR were the ones to recognise employment as a good things. LABOUR was the one that came up with the fool-proof plan to make it happen:

    Step 1: Announce you will reduce unemployment to 4%
    Step 2: Fuck you, that’s how.

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