Friday, February 13, 2009

What stimulus?

The past few weeks have seen the government announcing measures to stimulate the economy as part of its "rolling maul" of initiatives. It's talked big about how they plan to spend $9 billion, and how this is the third-highest per-capita in the OECD.

Unfortunately, they're lying. Pundit has been digging into their numbers, and uncovered the truth: National's "stimulus package" is a $9 billion bait-and-switch. Almost all of the spending was already announced by the previous government. "It is old, pre-global recession spending dressed up as a response to the current crisis".

The short version is this: Last December the government confirmed that its new spending combined with Labour's already committed spending would total $9b over the next three years. Every spending announcement since – the business tax reform, the new bridges and schools – hasn't been about new money, it's merely been telling us how that $9b would be spent. While the economy tanks and the rest of the world commits hundreds of billions in new spending, New Zealand hasn't changed its fiscal plans one iota.


It's like Obama announcing all the policies in his new stimulus package, but funding most of them out of George Bush's bailout last year.

In retrospect, this should have been obvious from before the election. Their election campaign "economic management plan" was simply the same old policies they had already announced, tarted up as a response to the fiscal crisis. Of course they'd pull the same trick when they gained power. The problem is that they are now responsible for dealing with a real crisis with real consequences - and rather than actually doing something about it, they are engaging in empty spin while in reality doing nothing.

New Zealanders expect better than that. We expect action - and we expect honesty. And if National's dishonest fake "stimulus" results in bad consequences for ordinary New Zealanders, National will have those consequences repaid in full at the ballot box.