Gordon Campbell on the Prefu, and on the RWC attempts to vilify the French
No surprise, really, that Treasury’s pre-election economic and fiscal update proved to be such a highly political document. The document gave ample reason for feeling extremely nervous about the
economic outlook – global economic unease, downturns in demand among our key trading partners, major declines in
commodity prices, delay in the Christchurch rebuild (and likely skills shortages and upwards wage pressure when that
rebuild does eventuate) poor prospects for growth long term, a widening current account heading for 7 per cent of GDP …
Name your poison, its here. Even the reasonably acceptable rate of underlying inflation is to be taken as a sign of
weakness in the economy.
Oh, and that’s if everything turns out OK. There is a one in five chance, Treasury says, that an even worse scenario
will eventuate. As mentioned though, this is a highly political document. Thus, Treasury also cites the stronger than
expected growth in the short term and – despite all the storm clouds mentioned above – it paints a relatively rosy
scenario where unemployment heads down below 5% in the forecast period, and wage growth stays pretty robust. If it is
credible at all, this cheery picture of wage growth and job growth averages can only be on the back of the eventual
rebuild in Christchurch, and will largely be limited to skills shortages in the construction industry.
Lets just say that on this occasion, Treasury is far more convincing as a bearer of likely bad news than it is in
touting the scraps of possible good news. Keith Ng queried Finance Minister Bill English at the briefing about
Treasury’s apparent nonchalance about those pesky credit rating downgrades we’ve had recently, which Treasury chooses to
dismiss (at page 25 of the Prefu document) like so:
The credit rating downgrades…are not expected to have a material impact on debt financing costs (long term yields are
expected to increase by around 15 basis points)
If that’s the case, Ng asked, why we were trying so hard just recently to re-assure the rating agencies? Good point. (English’s reply was to the effect that lots of countries are getting downgrades, so no big deal. But it would have
been a bigger deal if it had happened a few years ago. Huh?) As yet though, there is no sign that the public feels
unduly alarmed by the economic picture, or feels like blaming John Key and his team for the downward slope on which the
economy will be perched, after the election.
Going into that election, the Key government has two main policy planks – the partial asset sales and the benefit reform
process – for which it has yet to provide any kind of net costings. We await a spreadsheet where the gains/losses of the
options of retaining the assets in question in state ownership are placed alongside those from the mixed ownership model
that the government is promoting. So far, no transparent figures on the net position have emerged, for the public to
evaluate. With the partial asset sales, we have been given only estimates of what revenue could conceivably be generated
from a sell down. To repeat: there are no estimates of the long term comparative gains and losses from keeping them, as
opposed to selling them
Similarly, there seems to be no modelling of the likely costs and savings from the much-heralded reform of the benefit
system. Treasury does monitor and measure such things: eg the Prefu document pointed to the savings in benefit payments
since the Budget from the lower than expected unemployment figures. On page 63 of the Prefu document, it also concludes
that many of the Welfare Working Group recommendations “would result in large upfront costs if adopted”. It must be
doing those calculations though, on the back of an envelope. Because when I asked English yesterday what the
aspirational target – and/or the expected net gain – was for the benefit reform process in say, its first year of
operation, he maintained that no such work had yet been done.
Essentially then, the government is heading into the election campaign asking the public for a blank cheque in two of
its main policy areas. We should be asking for more.
***
RWC Fallout
One of the rationales for the massive expenditure on the Rugby World Cup – at a time when for instance, every hospital in the country is being run into the ground – is that the tournament is
serving as a valuable showcase for New Zealand to the world. Well, if that is the case, could Keith Quinn and his
anonymous sources in the All Black camp please shut the f***up with their campaign to vilify the French team?
The rest of the world admired the French efforts in the final. The efforts being made to the contrary are only
underlining to the world – and to the other 50% of New Zealanders who are not obsessed with rugby – that the All Blacks and their fans can be just as ugly and graceless in victory, as they are in
defeat.
About this alleged eye gouging by the French centre Aurelien Rougerie ….no one laid an official complaint that an eye
gouging occurred. The player allegedly gouged – Richie McCaw – is not saying that he was deliberately eye gouged. In
fact, in the Guardian, McCaw said this about French captain Thierry Dusautoir:
Dusautoir showed what he was made of last night. Every time I have played against him he has had one hell of a game. He
has been around a long time and he inspires his team by the way he plays.
That surely, should be the end of it. If you’ve got the evidence, you front up. Instead, some anonymous elements within
the All Blacks camp have taken the back door route – they’ve avoided fronting up, while using Keith Quinn as a conduit
for allegations of foul play. The attempt to smear Dusautoir has been particularly contemptible, and looks like
petulance at him being named man of the match, and IRB player of the year. Apparently Dusautoir’s sin was that he was
“close” to the incident, and did nothing about it. Yep, three minutes before the end of a RWC final, Dusautoir has an
over-riding obligation to be offering solicitous comfort to Richie McCaw. Good grief. If McCaw got an eye injury this
was no less accidental – and did far less lasting damage – than McCaw’s knee to the face of French flyhalf Morgan Parra,
far earlier in the game.
According to the French, their team members felt unable to leave their hotel on the night of the victory for fear of
being attacked by celebrating All Black fans. (What would have happened to them if the French had won doesn’t bear
thinking about.) Later, a photographer harassed the team at a private function and after being ejected tried to shoot
photos through the restaurant window – and all the subsequent headlines were about the angry response to this cretin by
one French player. Right.
We have lavished millions on this RWC – largely to the benefit of a fortunate few bar owners and hoteliers. No doubt,
some business advantages will occur downstream in the wake of this tournament – but you can bet that RWC Minister Murray
McCully won’t be ordering an opportunity cost analysis on whether this huge RWC spend-up really was the most effective
way of promoting New Zealand as a business and tourism destination.
Footnote : The New Zealand Herald, which prominently featured the Quinn allegations also carried a highly selective story headlined “World Media Reacts : NZ Nailed It” that began with a largely positive report from the Guardian’s Robert Kitson. To get to Kitson, the Herald had to ignore the article in the same issue by the Guardian’s chief sports writer Richard Williams. For the record, here’s what Williams said:
All New Zealand did was win, which was presumably all they wanted to do in order to end their famous 24-year drought.
They had hosted the tournament beautifully but when it came to the showdown they derived disproportionate benefit from
home advantage, including a few free gifts from a referee who spent the first half infuriating even neutrals by giving
virtually every decision to the men in black.
France's fans were unable to make themselves heard in a stadium draped in black but their team's display was full of
spirit, generosity, creativity and adventure… and were hugely unfortunate not to become the first side from their nation
to capture the Webb Ellis Cup.
The All Blacks were grim, pragmatic and joyless: a caricature of a stereotype. Nothing they did in the 80 minutes truly
illuminated the game. Their try was a gimme, tinged with a hint of obstruction, and they never came close to scoring
another…"I'm tremendously sad but tremendously proud, too," [coach Marc Lievremont] said during a dignified post-match
press conference. He made no reference to the collision between Richie McCaw's knee and the temple of Morgan Parra in
the 11th minute, which forced the early removal of France's own influential fly-half.
For the Guardian’s overview article on how New Zealand had successfully hosted the tournament, go here. It ends with this paragraph, which should also be kept in mind alongside the hosannas of praise for our hosting of the
RWC, when assessing the tournament’s tourism legacy:
Abiding memory : A nation so immersed in their sport that it was possible to watch rugby 24 hours a day even if the down
side was trying to dodge questions about England in every bar and restaurant visited. It was almost possible to forget
the rip-off prices. Almost.
********