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Economist Brian Easton says the more informed an economist is, the more they keep their head down during elections

Economy / opinion
Economist Brian Easton says the more informed an economist is, the more they keep their head down during elections

This is a re-post of an article originally published on It is here with permission.

Elections are not a time to talk about economics in a serious way. Sure, politicians talk about the economy and what they will do to it, with promises soon forgotten when they take power. Elections are timely reminders of how shallow and poor quality our public discussion on the economy is. (You won’t be able to infer how I voted from this column. Economic issues were not a major determinant.)

The front page advertisement of my paper on the morning before election day proclaimed:

‘Vote Labour for help with the cost of living:

     - Free dental care for under 30-year-olds;

     - No GST on fruit and veges;

     - Free prescriptions;

     - $25 extra a week for 180,000 families;

     - 20 hours free ECE for 2-year-olds.’

My instant reaction was ‘Is that what the Labour Government is about? Where is the narrative?’

Providing such narratives is not an area of my expertise. Typically they are less pointy-headed than what I write and are developed by trying them out on audiences and modifying them in response to reactions. (Trump is a very transparent example of this behaviour.)

Had I been foolish enough to have been a Labour politician elected to office in 2017, I’d have started off with a narrative that the Key-English Government had suffered from inertia and failed to address a multitude of issues and ‘we are going to deal with the backlog’. One example would be the mess that housing had got into – it would take years to sort it out. (National is hinting that it will use the narrative but apply the backlog thesis to Labour. Oh well!)

Of course other events – the Mosque Massacres and the War on Covid – took over. In any case, a new narrative was needed following reelection in 2020. One which fitted in with actual events was something like ‘We’ve won the War on Covid; we are dealing with the recovery.’ (OK, it’s too pointy-headed.)

After the guns stop firing, there is an enormous readjustment necessary to get back to a peace-time economy. What happened after the Great War is not well documented and data deficient but it was turbulent. (Recall the sentiment in Man Alone: ‘I couldn't tell you about the war,’ Johnson said. ‘It wasn't a lot different from anything else. I could tell you worse things about the peace.’) In the case of the Second World War, Jack Baker points out that while it lasted five years, the recovery took another ten.

The War on Covid is in an uneasy armistice with guerilla warfare as the virus mutates and we respond with improved vaccines. Even so, we should celebrate our successes. Vigorous public health measures, including lockdowns until vaccines became available, restrained deaths to below 3000. There would have been another 20,000-odd deaths if our response had been as ineffective as the US’s. (One wonders how those who didn’t die, and their friends and relations, voted.)

To win that war we used a lot of economic resources, as is the way of warfare. That is the major reason for net public debt rising from around $5b in June 2019 to around $71b today. And as occurred during the Second World War, not only did government debt rise dramatically, but other economic activity got diverted. We had power cuts in the 1950s because we did not build enough power stations during WWII.

Today the pall of the War on Covid hangs over the world and New Zealand economies, in addition to the Russian invasion of Ukraine which is impacting on the world and hence on the local economy too. That pall hung over the 2023 election.

Is there a narrative to be constructed from this? As I said, this is outside my competence. But I do know that when faced with the 2008 Global Financial Crisis the government threw everything at it, public debt rose sharply, and National’s Key-English Government was re-elected in 2011 and 2014. People believed their narrative (although Labour did little to offer an alternative one).

The critical point is that the state of the New Zealand economy is shaped by what happened in its past and what is happening overseas. But, well illustrated in the election campaign, the public rhetoric assumes that the economy is isolated in time and space – a bit like a 101 economics textbook, I suppose. I infer that the commentariat find it very hard to follow what is happening overseas, while their knowledge of New Zealand economic history is thin, at best.

I am not saying that the more sophisticated in the local economics profession think this way and sometimes Minister of Finance Robertson showed he was aware of the international and historical impacts. But the public commentary was, shall we say, out of this world.

To go back to that front page advert. It could have been rejigged into this narrative. Something like ‘the economy is struggling under pressures over which the government has little control; but it is doing its best to shield the most vulnerable’. That is not to say that the promises were the most efficient way to protect them (some were more about targeting particular voters).

National’s story was similar. They were promising tax relief, funding it by cutting public services. Perhaps the tax relief was poorly targeted and indulgent. One fears the new government will repeat the Key-English mistake of cuts which cripple the public sector.

Even so, the choice for electors was not too bad (assuming you expected the promises to be delivered) although not very transparent.

Observe that neither party was targeting the group which was hardest hit – those facing substantial interest rate hikes. (I have a column to write about current international thinking on interest rates; prospects look grim for mortgage holders.) I take it that neither party could think of how to provide relief. It is a reminder that on many matters the government is impotent despite the political rhetoric. It makes promises to improve the situation but if it is realistic it knows it cant; if it is stupid it believes itself and is dismally disappointed. At best, politics hides behind promising policies which are largely ineffective. 

*Brian Easton, an independent scholar, is an economist, social statistician, public policy analyst and historian. He was the Listener economic columnist from 1978 to 2014. This is a re-post of an article originally published on It is here with permission.

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Like the chicken and the egg, which came first? The lobbyist or the politician?


Observe that neither party was targeting the group which was hardest hit – those facing substantial interest rate hikes.

No party can help ones hit hardest by interest rate hikes. As the interest rate hikes is designed to hit ones holding debt to control inflation. 



First home buyers


An insightful article, although there is so much debt now the banks are largely in charge anyway, for now.


“One fears the new government will repeat the Key-English mistake of cuts which cripple the public sector.”

It’s not a “mistake”. Starving the public sector is a feature, not a bug of both the Key government and the incoming one. 


With only slight humor, I am hoping the new government will act swiftly to "cripple the public sector" although at a personal level I have no wish to throw any 'grey cardy-wearer civil servant out onto the street willy nilly.

In my view the last two Labour governments tried hard to recreate the first two labour governments of the 1930's. Their mantra was to say to all NZers,.."don't you worry your little heads, government will look after you,...from cradle to grave".

And in true form they used every crisis to ratchet up the philosophy of the 'team of 5 million, looked after by a caring, indulgent big brother government'.

Socialism may have nice intentions but the result is predictable, the "needs" multiply faster than the taxes which can be screwed out of the rich.

The average citizen becomes less self reliant with less resilience to unpleasant events,...and the government grows ever bigger in the attempt to micro-manage the economy and every aspect of personal life.

We don't do our kids any favors by being indulgent of their every whim, and the same surely applies to the nation. Government is a blunt instrument to be used sparingly least it just smothers the ordinary citizen trying to make his/her way in the world.


Given the rich pay less tax as a percentage of their total income (which should include capital gains) - I feel we really haven't begun to explore how much more tax can be screwed out of them.

And bang goes your argument in the support of those poor rich people. My heart bleeds for them.



It is mischievous to repeat the nonsense of the late unlamented Minister Parker's comparing the rate of tax currently  paid by our richest sector compared to what they might pay if Parker's capital gains tax was in law at the moment.

I have no reason to support "poor rich people", just that a debate needs to be grounded in fact, not emotion.

For a more balanced view I suggest you google Sir Ian Taylors recent open letter to Cloe Swarbrick.


When you had a PM who couldn't even define what "GDP" was, you know where the financial literacy of a country sits. 


Can you define what GDP is? And better, can you define how it is derived?

I can. And not only how NZ's is derived. I can do the same for the UK, many EC countries, the USA and of course Australia.

I could explain the differences and why they exist. (And whether they should exist!)

I can also explain why it is a reasonable measure, given the intent to measure something. And I can explain why it is stupid measure.

Further, I can also point you at various studies that show the vast majority of people simply have no idea what it means. Nor how it is derived. Nor how it should be used. And how it shouldn't be used.

I would also claim to be no expert on GDP.

Sorry, what was your point again? (Look up the Dunning-Kruger effect.)


PM doesn't need to be an economist but some notional understanding of a key metric on a country's performance would be useful.

Hell, I am a racist bigot (according to Te Kooti) and afflicted with DK as you so state but I'm still able to describe it in a sentence, and without googling got within $20B. 

Guess you are an apologist for the last Government. A country led by turkeys...



Elections are timely reminders of how shallow and poor quality our public discussion on the economy is.

So very, very true. Elections leave me both depressed and angry.

So what to do?

Making basic macro-economics and some NZ economic history (steering well clear of  pub economics!) compulsory at high schools would be a good start.

And I'd go a bit further ... If you don't get a pass in the course, you don't get to vote. Plato was right (read The Republic) ;-)