Monday, October 13, 2008

Choices: the economy

Elections are about choices. Most obviously, we choose between politicians. But by doing so, we are also choosing between policies - policies which can make a real difference to our lives. In this series of posts, I am looking at what our choices are on employment relations, health, education, the environment, and other areas of key policy difference.

What are our choices on the economy? With the world in the middle of a financial crisis credibly being touted as a potential Great Depression, this is an important question. And while the New Zealand government has very little influence on the crisis itself, it has a great deal of influence over how badly it will affect us, and how much pain there will be domestically. So what are our two main parties' plans?

National laid out its "Economic Management Plan" last week, and it looked awfully familiar. In the face of a global crisis, National is presenting the same tired old policies it has always offered: tax cuts for the rich, gutting the RMA, and attacking the public service - the same policies they offered in 2005 and 2002. National clearly believes they have a universal solution which applies regardless of economic circumstance; others could accuse them of having an inflexible dogma, or policy goals more centred on wealth concentration than economic management.

Labour presented its policy at their campaign launch yesterday, starting with an immediate offer to guarantee retail bank deposits. This exposes the government to an enormous contingent liability, but NZ banks are in better shape than most (because we still regulate them), and the move was basically forced on us by the Australians. In practice, they do not expect they will ever have to pay out; it is a confidence-building measure only. Beyond that, Labour is planning to do the exact opposite of National, and bring forward infrastructure spending to stimulate the economy. They would also boost industry training, and offer retraining allowances to those made redundant or older workers who want to upgrade their skills. The overall aim is to keep the economy going, keep people in work, and help any victims of the recession. The overall message is "we will take care of you".

As with employment relations, there is a clear choice between the parties in this area, between policies designed to help the few and policies designed to help the many. Which do you prefer?