Mike's Minute: GDP saves Government from very, very bad week

Author
Newstalk ZB Staff,
Section
Video,
Publish Date
Friday, 21 September 2018, 9:24a.m.

Given it's normally bad news Friday these days, and lord knows what the government has in store for us this afternoon by way of a pre-weekend dump in the vain hope we forget it by Monday, let us at least look at whether they ended, to this point, winning or losing the week.  

Yesterday's sacking is a disaster. Two ministers, both women both from the same party in a three party coalition in the first year can not be written off as anything other than an amateurish mess. Both ministers were clearly inept, unfit, not ready, and ultimately exposed.  

There others that are equally useless. It's just they haven't crossed a line yet, and sheer ineptitude in government isn't normally a sacking offence. 

So that all by itself takes some coming back from.  

The week started, of course, with the "hey there is nothing to see here” speech on Sunday. It was a farce, it announced nothing, it was a puff piece, and everyone saw through it.

Add to that the Prime Minister had mysteriously vanished through her "diary mix up.” Once again another aspect of management no one believed. So she failed to take advantage of the speech that under normal circumstances she would have on things like TV.

When she did reappear she told us to our disbelief that she'd had a sneak peek of the GDP numbers. And that singular mistake wrote the rest of the day off.  

To this point, it was a very, very bad week.

Wednesday we had the refugee announcement. It wasn’t a great day for the government,  but it was a good win for Labour.

Labour had promised 1500, Peters publicly challenged it in the Pacific thus leading to the Sunday speech and the show of kumbaya. So given the Peters' ascendency in the grouping Labour needed a good, tangible win, and the refugee quota with Peters in tow, on stage was it.  

And then came yesterday, and Whaitiri aside, what they got was the gold of the week.

GDP, 1 percent. It's a big, robust, indisputably good number. It was twice the forecast of the Reserve Bank, twice the previous quarters number,and even outpaced the most bullish of banks' forecasts.

And it gives the government plenty of ammunition to argue that the confidence surveys are fiction.  

They need, of course, the September quarter to be at least the same, and the December quarter as well. Which would give them an annual figure of 3.5 percent, which is what we should be doing.  

So there is still a lot to play for, and it's highly debatable whether we will get there, but for now 1 percent is a win, and a big one, and they’ll take it. 

So in summary do they get out of the week alive?

Yes, just. Real economic success, that 1 percent is what really counts. Much of the rest is optics.

And at this stage of the political cycle, optics are for headlines, economic growth is for credibility, and ultimately votes.   

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