Key: 'We're on the right track'

John Key
John Key
Prime Minister John Key has defended the Government's economic plan, saying new data showing a 13-year high in unemployment in New Zealand, is at odds with other data.

Mr Key said the data from the Statistics New Zealand household labour force survey out today was at odds with the quarterly employment survey.

According to the household labour force survey the unemployment rate rose to half a percentage point to 7.3 per cent in the September quarter, the highest level since June 1999.

Economists surveyed by Reuters were picking a 0.1 percentage point fall to 6.7 per cent.

Full-time employment shrunk 0.8 per cent to 1.7 million, while part-timers rose 1.4 per cent to 519,000.

"We're pretty surprised by the data. It's at odds with quite a lot of other data that we see," Mr Key said.

Today's figures come after the quarterly employment survey showed total filled jobs rose 0.3 per cent to a seasonally adjusted 1.715 million, bolstered by a pick-up in part-time workers and a decline in full-time equivalents to 1.35 million.

Mr Key also said data showing an unemployment rise in Auckland was at odds with "anecdotal evidence".

He said the Government were committed to their economic plan and there would be no change of tack after the survey was released.

"We're on the right track, in our view - we are reforming the economy as, is absolutely necessary.

"Things will bounce around, you will have international conditions to contend with - but from New Zealand's point of view we've grown 1.6 per cent in the first quarter, we've grown 57,000 jobs in the last 12-18 months.

"It is at odds with what most of the economists thought would happen; it's slightly unusual when we see what's happening in terms of those on the unemployment benefit - but that's the way statistical things happen.

"These are challenging international conditions -we see that with Germany likely to be growing by only about 0.8 per cent and the rest of the world slowing down.

Mr Key said he would wait for future data to assess if there was really a problem.

- By Kate Shuttleworth of APNZ and Paul McBeth of BusinessDesk

Policies for a different world

I agree that statistics aren't everything. However, the only evidence that "we are on the right track" appears to be that the economy is being restructured to plan. What Key tends to forget is that his ability to restructure the economy is not in question - it is the effectiveness of the restructuring policies that I (and probably others) worry about.
There are a lot of assumptions in there about the flow on (dribble down) effect on jobs etc, most of which do not appear to be emerging from the economic ether as Key imagined they would.
Sure, we can blame it on the economy elsewhere in the world, but many would argue that the type of freemarket based policies Key is implementing require growth to be occurring elsewhere if they are to work.
In the meantime, before that happens, what is he doing to prevent the economy collapsing and half the population moving to Australia?

 

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