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Mike's Minute: Could the virus have big political implications?

Author
Newstalk ZB,
Publish Date
Thu, 5 Mar 2020, 10:53AM

Mike's Minute: Could the virus have big political implications?

Author
Newstalk ZB,
Publish Date
Thu, 5 Mar 2020, 10:53AM

Although it's only March, and although the election isn't until September, what we know according to the government, who are onto plan two of their three point plan for the virus, is that it will effect the economy for the rest of the year.

I've already called a growth rate of one-point-something for this year, for last year. We were slowing, the government was blaming head winds, and they're now blaming the virus.

Difference is the headwinds were for their political benefit. Yes, there were headwinds, but we had done a lot of damage locally that wasn’t helping. The virus is no one's fault, apart from possibly the Chinese, and we are at the mercy of it like everyone else.

So a growth rate of one-point-something wasn’t flash, and the economy was to have played a major role in the campaign.

By the time we vote, we will have Q1 numbers for this year. That’s January, February and March, they will come out around June, and I doubt they’ll be above zero.

By election day we should have Q2, April, May, and June. If the virus has been an issue all of Q1 and into Q2 we will definitely be below zero and that, potentially, technically, is a recession.

The "rockstar" economy to a recession. Oh, how turbulent these times are.

So the big question is, does the economy still play in the campaign? And if so, how? Does a government get blamed for the economy being in bad shape if it isn't directly their fault? Does a government get blamed for not helping enough in hard times? And if so, do we want more help? Or has the help been badly handled? Does an opposition have a platform to argue they would have done it differently? And if so, how?

Whatever help comes, if in fact it gets ramped up, it's extremely limited. There is only so much a government can do. Simon Bridges is arguing this week middle income earners deserve a tax break. We might all deserve a tax break if this gets ugly.

Grant Robertson told us the other day he will spend his way out of this. Under normal circumstances that sort of debt and cheque writing would be taken to task by conservatives, but we might not be in normal times or anywhere close to it.

Could the taps being turned on be a boon for a government? Do the old theories apply? Conservative governments are favoured in dark days because people back conservatives around the economy.Or do we fall in love with this govt who are filling our pockets with money and saving the day?

If the virus is still in play, all bets are off. Rules don’t apply, history is no guide, and lord knows how this all plays out.

The great hope, of course, is the virus is but a distant memory, and we can judge all contenders on a level playing field, not in a time of crisis and economic upheaval.      

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