Wednesday, November 19, 2008

National's challenge

Jobless to near 6pc, says Key

A mid-December update of economic and fiscal forecasts is likely to show the unemployment rate heading up to just under 6 per cent, Prime Minister-elect John Key indicated yesterday.

He said figures in the half-year economic and fiscal update would likely be worse than those outgoing Finance Minister Michael Cullen had released last week.

To put that in context, that's a 50% increase on the levels we've enjoyed over the past nine years, so it's something the government should be concerned about. But from the Herald's brief piece, there's no expression of concern from John Key.

This isn't really surprising. Last time they were in government, National saw 6% unemployment as the floor, the minimum needed to keep wages down and profits high, and their pet Reserve Bank Governor Brashed the economy whenever it looked like people were feeling too economically secure. In opposition, Bill English denounced Labour's efforts to reduce it below that floor as a delusion. Reality has proved him wrong, and the electorate will now be judging National on whether they can keep people in jobs and prevent the misery of mass unemployment. But judging by the low priority accorded to the relevant portfolios in National's Cabinet, they're not very concerned about it at all.