The PM’s gaffe: Why it matters

While she writes fluff pieces about 125 years of women’s suffrage and does interviews and photo shoots around the subject, Jacinda Ardern needs to take the time to develop even a small understanding of the economy, what reports are produced and when, and above all, what GDP is.

This is because what happened on Tuesday when she was talking to Mike Hosking was, to say the least, deeply embarrassing. She clearly had no idea what he was meaning when he asked about the GDP figures, and the conversation went on without her having even a small clue about what they were talking about.

The reason it matters is demonstrated admirably by the fact that the dollar rose almost a cent against the US dollar, on the back of a ‘hint’ from the prime minster that the June GDP figures were going to be good news.

Illogical though it can be, (David Lange once referred to the markets as ‘reef fish’), markets rely on sentiment, and a ‘hint’ from the prime minister that things are better than expected in the economy has a positive effect on that sentiment, and the markets react accordingly.

Once the markets realised that a Newstalk ZB journalist was much more up with the play on economic matters than the prime minister, the dollar dropped back, ending the day lower than on the previous day.

This matters. It matters to exporters, securing a deal on Tuesday for selling their goods overseas. It matters to importers, setting an exchange rate for goods being brought into the country. It matters to fund managers looking after investments, particularly in foreign companies. Some people lost money on Tuesday because of the prime minister’s embarrassing gaffe. (Some may have made money too, but that was literally dumb luck.)? Statements from the prime minister make a difference, and she needs to understand?that.

It will do nothing for sentiment when the markets process the fact that the prime minister does not know the difference between the Crown accounts and GDP statistics. She didn’t even know enough to point out that there is no way she could have had a ‘hint’ about June quarter GDP, because that information is given to absolutely no one prior to the official release time.

The markets don’t care about the Crown accounts. They are the government’s books. But markets care a lot about growth indicators such as GDP.

I don’t believe that it is as simple as her not knowing the difference between Crown accounts and GDP. Listening to her conversation with Hosking, I will go as far as to say that she doesn’t have a clue about either.

It is fair to say that these matters should be left to the finance minister, but the prime minister is expected to know the basics of how the economy is run, and to be able to answer questions about it, even if only at a high level. It is economic sabotage for the prime minister to give an opinion on something that can have such a severe impact not only on the economy but also on business confidence, which is an area where this government has struggled so far.

Some (but not all) of the female MPs ( including unelected list MPs) in a recreation of an iconic photo of male elected MPs taken in 1905 in the Reading room of the Parliamentary library.

So while she is fluffing around over the next few days with issues like the celebration of women’s suffrage, it is important to note that the country is being run by a silly little girl with absolutely no knowledge of economic matters who demonstrates her complete ignorance on a regular basis, and then obfuscates immediately afterwards to cover up her incompetence. Writing fluff pieces about women’s suffrage really is all she is good for.

I think we can assume that business confidence will not be improving any time soon, thanks to this show of abject stupidity.