Espiner on Happy Ruth

Colin Espiner blogs on how is always seeing the bright side:

Everyone loves an optimist, so Labour’s Ruth Dyson must be amongst the most-loved MPs.

Her press statements on rising are always full of good cheer, and Dyson somehow seems blithely unaware of the gloomy economic conditions.

Back in May she caused something of a stir by putting out a press release headed “Labour Force Survey Reflects Stability In The Face Of Economic Challenges”. You’d have thought the unemployment rate had defied the economic downturn and things remained sunny. In fact, the survey reported the biggest jump in jobless in nearly 20 years.

Likewise, today’s next quarterly report on the unemployment rate, which finds an additional 7000 people have lost their jobs in the past three months and the unemployment rate now up another 0.2% to 3.9%, is welcomed by Dyson in a release entitled “New Zealand Economy in Good Hands”.

Ruth should have been a Minister when we had the Erebus crash. She may have done a press release highlighting the decline in carbon emissions due to no return trip!

I think Dyson’s skills are being wasted as Minister of Social Development – she could do wonders in the Treasury or the Reserve Bank. Under this minister, Treasury’s report this week warning of recession could have been headed up: “More good news likely on economy” and the bank’s gloomy predictions of 5%-plus unemployment could have been rewritten as “It’s all good here, too”.

Colin does go a bit fuzzy later on with though:

Labour will be extremely grateful to whoever bugged the National Party conference for taking bad economic news off the front page. It’s even possible that today’s whitewash from Dyson’s Christchurch colleague on petrol prices will equally disappear with nary a trace, given the media’s perchant for a decent whodunit.

It’s hard to swallow the minister’s recommendation that nothing needs to be done about regulating an industry making $11 billion profits a quarter because it is “fundamentally competitive” and that, essentially, the idea that petrol prices are fast to rise and slow to fall is simply a myth perpetrated by the media.

A more cynical journalist than myself might suggest that the government has several interests in not forcing down the price of petrol; for one thing, the GST take is much higher when prices are high, and for another, the high petrol prices are forcing some vehicles from the road, which is helping with emissions targets.

I think Colin is being a bit hard on Dalziel here. First of all the NZ oil companies do not make $11 billion profit a quarter. The NZ Govt has no power to regulate the global oil companies, which I presume that $11 billion refers to. It is a red herring figure. And a profit figure is meaningless anyway unless one knows what the turnover or capital was. An $11 billion profit on a $1 billion equity company is a universe different to an $11 billion profit on a $100 billion equity company.

Secondly it is a “myth perpetrated by the media” that higher petrol prices leads to much higher GST. Because the money spent on petrol is not spent on other goods and services, reducing GST collected there. Hence overall GST does not rise greatly, if at all, with higher petrol prices.

Colin is right though that the higher petrol prices may help with reducing carbon emissions.

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