Two pieces of bad economic news out today: firstly, the NZIER is predicting that the recession will be much deeper than forecast. Secondly, Treasury officials are now expecting unemployment to exceed their worst-case projections, meaning another 60,000 of us will be out of work. Such news raises the obvious question: shouldn't the government be doing something about it?
Just to make this clear, I do not expect the government of a small country at the bottom of the world to be able to solve the international financial crisis. But I do expect them to have a decent plan to moderate the impacts of that crisis on its citizens, to keep people in jobs and stop us from suffering too much. Unfortunately, their plans so far - a 10% pay cut for workers, "a cycleway the length of New Zealand", and some accounting tricks to make it look like they're building new roads when all they're doing is not maintaining the old ones - leaves a lot to be desired. Faced with the biggest economic crisis for 75 years, all they can come up with is spin and class warfare. I'd say they were cycling while the economy burned - but now apparently they're not even doing that.
The fundamental problem is one of ideology: National believes in the market. It does not believe in government. They do not believe that government can offer solutions even when the market has failed. Instead, they believe that the market should be left to sort itself out, which is only a matter of time. The fact that the market "sorting itself out" means mass unemployment and enormous suffering for the vast majority of New Zealanders means nothing to them, except insofar as it threatens their grip on power.
New Zealanders expect better from their government. We deserve better. The upcoming budget is the government's opportunity to meet that expectation. But if all they do is continue the same "do nothing" policy while looting the state and enriching the friends, then I think people are going to get very angry, very quickly. That's what happens when expectations aren't met.