Alarm Bells are Sounding

By Owen Jennings 

Alarm bells are sounding.  Not loudly, yet, but persistently and with growing clangour.

In another apt analogy, the storm clouds are gathering and the first peals of thunder can be heard.  Our economy is heading toward danger and those in charge are oblivious to the problem but, even worse, do not have a clue on how to handle the deteriorating situation.  There was more negativity Tuesday night on the state of the economy as the business community showed its despair at the Coalition’s direction or lack thereof.

The massive issue facing the Coalition is that it is faction-ridden.  The factions are irreconcilable.  In the middle is Grant Robertson, desperately trying to steady the ship knowing he has to try and deliver stability and surpluses.  On one hand, he has crazed greenies to deal with, hell-bent on achieving environmental goals whatever the cost – even watching the economy collapse if need be.

On another side he has a group of big spenders, focused on buying popularity and wandering around like drunken sailors squandering hard-earned, taxpayer’s money but, ignorant of its effect on the nation’s accounts, or simply too intoxicated with the adulation from the province’s wannabees to notice.

Another group led by the PM. The articulate and plausible, who have an inflated sense of their own international worth, determined to be crowned as savers of the planet and setters of new global trends with wellbeing budgets and rescuing of the homeless. 

Yet another faction sees money as the answer for all Maori problems.  These won’t be content until they have created a dual and fractionated society by throwing endless dollars at each and every existing social problem despite how useless handouts are at rectifying such issues as history has repeatedly shown.

You can visualise the cartoon… Ringmaster Robertson trying to orchestrate wild factions of clowns, inexperienced, naive, arrogant and consumed, each with their narrow agenda ripping down and collapsing the Big Top.

The common denominator for each faction is runaway spending in the hands of maladroit novices.

Even those voters who backed them hoping for the bright new face of “kind government” are sick of waiting for a “transformation”.  It was always just words, virtue signalling and dangerous ideology.

The alarm bells include a rapidly diminishing surplus.  Spending rises by the day.  The calculations of surpluses were too generous.  Economists are doing the numbers and they are groaning.  Stephen Joyce’s knowing smile grows wider by the week.

Business confidence is falling.  It is not just sudden “captain’s calls” lacking integrity, research and economic rationale. There are nervous twitches in the world’s major economies; trade talks are foundering, there is uncertainty around Brexit, around the USA/China wars, around falling per capita incomes and much more. All this is confirmed by the rising price of gold.

Nervousness in the market is contagious.  Investment decisions get cancelled or postponed.  Two or three big co-ops in dairy and meat have failed to deliver and the Chinese have swooped in, eager to create plough-to-plate options on their own terms.

No major roadworks are planned.  The Coalition cancelled the most beneficial of these.  Hanging wire ropes down the centre of the road doesn’t create many jobs and leaves the underlying problem unsolved.  Currently, roadworks are being spun out as long as possible to keep the machinery running.  Unemployment looks set to rise in that sector.

Housing is a mess – a mess directly attributable to Coalition incompetence.  Developers cringe at the thought of even more incompetence being propelled into the cauldron.  The irony is that much of what was a housing crisis is now correcting itself.  The Coalition is like a fireman riding a bike to a fire.  Voilà, it’s all over before they get there.

But the blackest cloud is energy price rises and the havoc that the Emissions Bill will create in an already vulnerable market.  The obsession with climate change, despite New Zealand being the lone, chaste participant, shows we have a leadership more committed to showing off than to reality, willing to cripple our economy so we can beat our chest in the international arena.

Meanwhile, evidence for catastrophic outcomes is non-existent.  It is taking us into shark-infested waters that will crash employment, disembowel farming and send energy prices through the roof.

Energy prices impact all other prices.  It will take decades to repair.  Deliberately pillaging the economy, knowingly setting out a planned rape of what have been well performed, national accounts and doing so alone, internationally, when we are so small and exposed, is political treachery.

Were there some tangible reward for such harm, there might be an excuse, but doing it all for saving an indiscernible 0.2 of one degree C is utter madness.  

The current skirmishing around the banks, including the Reserve Bank lashing out, is much more than a debate over reserves set aside for a rainy day.  That’s a blind, a side-play.  It is dawning on those in shiny suits in Queen Street that the utterly absurd outcomes proposed under the Emissions Bill and related environmental rules, are going to decimate their bank’s balance sheets.  Inflation from escalating energy costs will crash through the economy like a raging tornado, inflating the price of all goods and services, thereby awakening the sleeping inflation giant and sending interest rates skyrocketing.  You can smell the fear.

The constant harping and exaggeration about dirty dairying, about overstocking and methane emissions, has been all about conditioning us for a removal of up to half our farms and replacing them with trees. The effects in rural New Zealand will be calamitous for our farming families.  Trees produce no income for 25 years, leaving the rural community bereft of jobs and activity.  When they are harvested they can cause an environmental disaster like the one we saw on the East Coast a few months ago.  Falling log prices in the last few days may alter the numbers around the edges but several farms are changing hands every day – all are being prepared for tree planting. 

The lack of understanding, of any semblance of careful planning, evaluation and strategic inputs is alarming.  Is the inner Cabinet plain stupid or is it hopelessly naive; like expecting a froth and bubble history academic to tackle New Zealand’s major housing problem? The Health Minister is a possum caught in the lights and oversees a sector desperate for leadership and a firm knowledgeable hand.

Education is run by the unions using Hipkins as their glove puppet.  Green ministers slash and burn progress with no robust analysis, no warning, no rationale.  Only Shane Jones knows what he is doing – the first politician to tax and spend his way to wealth and re-election happiness. 

By October or November, the storm will wreak damage.  Decisions made by ‘feel’ not fact will become glaringly obvious as failures.  Missed targets will continue.  Commission and committee reports will start to fester as incompetent Ministers try to figure out their execution.  The year of delivery will be no more than a fake pregnancy.  It will be an unhappy Christmas.

Winning the RWC might stave off the day of reckoning. Losing it will bring the final curtain down.