ON AIR: Mike Hosking Breakfast

6AM - 9AM

Mike Hosking: The Govt's conning us and hoping we're too dumb to notice

Mike Hosking,
Publish Date
Tuesday, 3 September 2019, 4:18PM
Grant Robertson is blaming international headwinds for his own problems. (Photo / NZ Herald)

Beware the con.

The con is the government telling you that the reason the economy is slowing, tanking, falling, whatever word you want to use, is because of international headwinds.

Next time you hear Grant Robertson talk about our economy, count how many times he uses the term international head winds. He’s using that because it’s an easy out, it’s politics. He’s blaming someone else for our problems.

Word of warning: it isn’t true.

The growth number, the GDP for the second quarter (that’s April to June) is out later this month, and it won’t be good. All the signs are there if you want to see and acknowledge them.

Confidence is in the toilet, has been for two years. It started as an anti-Labour thing. Business doesn’t like Labour, but the key to the numbers was always, although the big figure number was done, the number around individual businesses was always solid.

In other words, they said they were down in the dumps, but as far as their own prospects were concerned, things were still ok. But all that’s changed, everything is now going backwards. The latest report, last week on confidence used the phrase ‘there is nothing good here to see or say ‘.

So international head winds: is the world slowing? Yes. Is their issue, our issue? No, not really. Log prices, yes, the rest, no.

Why? Terms of trade. Terms of trade are the numbers around what we get for selling our stuff to world.

The numbers are up, and according to the latest report, out yesterday, they will be for the next few years. We are sitting pretty, we make good stuff and we sell it to the world at good prices and the world’s woes aren’t affecting that

Also the fall in the dollar is helping. Our prices are more appealing. Lamb just yesterday is typical Record levels, never sold it for more.

So the fundamentals are fine. We are a country that grows stuff and sells it to the world, and that part of the equation is just fine thank you. Even tourism – yes, international arrivals are down, but they have been more than made up for, in the increase in domestic travel, we are making up the difference.

So what bits are in trouble? Answer: the bits the government have wrecked. Between the taxes, the regulations, the labour laws and the threats of change still to come, they’ve managed to spook everyone into their shells.

That’s why the second quarter number is going to be bad. That’s why the growth rate is going to go dangerously close to two per cent when it should be over three. That’s why the economists are telling us were an 80 per cent economy. And the excuse the government lines up is international headwinds.

The trouble has landed on our doorstep. When you hear that phrase, remember this: terms of trade. Us and the world? We’re fine. The stuff the government is leveraging, that’s your trouble.

International headwinds, it’s a hoax, they’re playing you and hoping your dumb enough to fall for it.

ON AIR: Mike Hosking Breakfast

6AM - 9AM