Mike's Minute: No Prime Minister, the economy is not back to level 1

Author
Mike Hosking,
Publish Date
Wed, 16 Sep 2020, 9:34AM

Mike's Minute: No Prime Minister, the economy is not back to level 1

Author
Mike Hosking,
Publish Date
Wed, 16 Sep 2020, 9:34AM

You can feel the incredulity meter ramping up.

Good on all those who spoke out yesterday calling out the Prime Minister over her claim on Monday that the economy was back to level 1.

Quite apart from the fact it isn't, the claim was based on a small skerrick of card data that spanned a ludicrously short period of time. It indicated nothing other than we had been locked down and when we weren't as locked down, some might have gone out for a dinner.

It's the bounce-back we've seen before, the bounce-back seen all over the world. The shop takes in nothing one week, and the next week under a new level it takes in $10, half of which wasn’t spent the week before.

So, from $0 to $10 looks more impressive than it actually is.

The Prime Minister's fundamental lack of economic understanding, if she's not careful, is going to get her in real trouble. Economies win and lose elections, and no one is more invested in their personal economy than those living it.

So, out came the business people of this country with the dismay and anger that was richly deserved over a claim that, by the time she turned up on this show yesterday, when challenged she couldn't back up.

The economy is not back to level 1, and highly likely it won't be for several reasons. The wage subsidy is running out, government support is tailing off, and given we now bounce in and out of various forms of invented levels, confidence is trashed. As a result, we won't be spending like we used to, even those that can.

And we have those who can't spend, because they lost work. That number continues to grow daily. Not by the record breaking amounts of the early level 4 days, but it grows every day nevertheless.

Today's PREFU, the fiscal update, will tell us just what a mess they’ve made of this economy. And then tomorrow the GDP figure will confirm it.

But the most dangerous thing you can do in politics, especially around an election, is pretend things are what they aren't. You can do it with future promises, who knew they were never building 100,000 houses.

But when you tell people whose lives have been upended that the bounce-back is on and spending is great, and you're standing behind your counter wondering where the people are, and how level 2.5 is no way to pay the bills, no amount of fairytales changes your reality.

Once again, the pulpit of truth was the podium of BS.