The Right claims OCR cut proof their criminal management of economy is ‘working’ – what is the truth?

By
Martyn Bradbury
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29
892

The Political Right are attempting to pretend that the recent OCR cut is apparently because they are doing such a good job with the economy.

I call utter bullshit on that!

The decision was total capitulation by Orr to political pressure to put some money back in the pockets of mortgage holders AND because the economy is in free fall!

Why the OCR cut is not necessarily something to celebrate

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An official cash rate cut might be cause for celebration for under-pressure borrowers – but there is a reminder that it has been prompted by “extraordinary weakness” in the economy that may still be yet to fully hit.

Council of Trade Unions chief economist Craig Renney said he felt like he was “taking crazy pills” after the OCR announcement on Wednesday.

He said people celebrating the cut were not acknowledging the dire economic conditions that prompted the Reserve Bank to pull it forward by a full year.

The bank now expects unemployment to peak at 5.4%, representing an extra 10,000 out-of-work compared to its May forecast.

It expects the country to have been in recession through the middle two quarters of this year, and for gross domestic product to remain smaller for a year.

Renney said that was something that had not been recorded since the global financial crisis.

He said for inflation to meet the Reserve Bank’s forecast – it expects the annual rate to fall from 3.3% in the June quarter to 2.3% in the September quarter – consumption would have to be “absolutely smashed”.

“Long story short, it’s a hot mess … it feels a bit like celebrating you’ve saved a toe on one leg but you’ve lost the other leg.”

He said it was not evident where any future growth would come from, either.

“The only thing would be the dollar could fall so fast it could encourage export-led consumption but that’s a function of whether other countries are growing at the same time and the evidence from China and others is that that’s not happening.”

…that’s right, the economy is in terrible danger of meltdown with unemployment set to spike (I believe it will cross over 6%, well beyond the 5.4 predicted – if Key got 6% after pouring billions into the economy, this Government who are cutting will get far more), and because the NZ economy is nothing more than selling each other houses and basic bitch milk powder to China, we ain’t got jack shit to fall back on.

This Government are throwing 50 000 off welfare, throwing State Tenants onto the street, manufacturing a spending crisis in Public Health and slashing public services, all while borrowing $14billion for tax cuts we can’t afford while sparking a race war with Māori.

The Right will claim this is Economic providence, but for the vast majority who have gained a $12 a week tax cut, the cost of living crisis alongside rising unemployment and rising rentals are still crippling many.

Hilariously the current inflation bands are predicted to come down AS LONG AS there is no catastrophic weather event or geopolitical shocks for the rest of this year.

Good luck with that.

The public good vandalism this hard right, racist, climate denying, disabled abusing, beneficiary bashing Government have embarked upon isn’t an economic plan, it’s an act of right wing faith held together by hope and snot!

 

29 COMMENTS

  1. The truth is politicians lie & you’ve been living in a Neo-liberal wonderland for the last 40 years.

      • Quick, put your rose tinted glasses back on, everything will be OK if you do. National love & care for you. Labour love & care for you. There, it’s all better, go back to sleep & dream of infinite growth. Sleep tight. There is no Left or Right, just the constant glow of the everlasting free market. Sweet dreams & may your portfolio grow exponentially.

  2. The reality is they have cut the rate because the economy is tanking way faster than they thought it would .Willis spent two years bagging Orr and now is pleading with him to fix her monumental fuck ups .She is NZs version of Liz TRUSS .Well performing economies dont have supper low interest rates .All that will happen is house prices will go through the roof again which is what has fucked NZ for the last 30 years as we have lived a lie that the economy is booming because house prices are through the roof ,when the rest of the economy is dragging its knuckles through the mud .

  3. The reality is they have cut the rate because the economy is tanking way faster than they thought it would .Willis spent two years bagging Orr and now is pleading with him to fix her monumental fuck ups .She is NZs version of Liz TRUSS .Well performing economies dont have supper low interest rates .All that will happen is house prices will go through the roof again which is what has fucked NZ for the last 30 years as we have lived a lie that the economy is booming because house prices are through the roof ,when the rest of the economy is dragging its knuckles through the mud .

    • Yes….Youv’e nailed every point Gordon…What a mess!!

      National masters of the economy????…

      Only a fool would think that!

      Willis and Luxon are the classic clusterfuck combination…

      In fact, as the Oxford dictionary adapts, and adds new words, and ‘clusterfuck’ enters mainstream speak, they will need to look no further for a definition than…..’Willis and Luxon Syndrome’ circa N.Z.2024.

    • If you want to know where our economy’s heading then drive into the countryside and check out any few paddocks.
      No stock, right. We’re an agrarian economy and we have no performing agriculture other than cowsploitation and even that rort’s upending.
      We’re in deep shit and that shit’s getting deeper as we fumble about in the darkness, especially now, since the dirty, dodgy, greedy loser natzo’s and their privateer multi-billionaire and multi-millionaire ball-cupper money-fantasist mates have turned off the lights on our MSM.
      We’re heading into a dark fucking age man. The natzo’s and their self inflating mmp minion parties are drowning us in a trough like unwanted kittens while they, of course, head to Italy, Spain or France for a wee break from the rigours of stealing all our money after ruining our economy not to mention our infrastructure and our societies.
      N.B. The Banks. The four now foreign owned banks are rorting $180.00 a second net 24/7/365 from a stumbling economy in distress and the natzo’s know there are 600,000 people living in poverty with 200,000 kids going hungry and we stand idly by and watch them do that to us.
      What the fuck is wrong with us? Could it be the ” Wonderful competent management of the economy by the Coalition Government.”

  5. ‘Wonderful competent management of the economy by the Coalition Government.’
    Unique interpretation of the facts Bob.

  6. The economy has not been brought down by National it was rooted when they took over.Now the healing has started by cutting out some of the dead wood and allowing the green shoots to grow. Done well the economy will grow without causing inflation.

    • Trevor that’s simply not true. They are taking infrastructure backwards, energy initiatives backwards, race relations backwards, and they f’ing borrowed money to do it. You are like one of those delusional trump supporters that believed his horseshit about jobs and debt. He didn’t bring the jobs back and increased the national debt to fund a tax cut for the rich. Ring any bells?

  7. The economy has not been brought down by National it was rooted when they took over.Now the healing has started by cutting out some of the dead wood and allowing the green shoots to grow. Done well the economy will grow without causing inflation.

    • Simply not true Trevor.
      Govt debt to GDP was 39% at the end of 2023, compared to an average of 24% from 1972 to 2023, with the all time high being 55% in 1992. The govt of the day HAD to save the economy during the global Covid shutdown; the fact this figure was so low is actually surprising under those circumstances. There was certainly never any “debt crisis”.
      Unemployment was at 4% in the last quarter of 2023. It’s now shot up to 4.6% and expected to go higher as the slash & burn of Atlas Dave and the clueless Luxon continues.
      Despite the global slowdown (which according to the right wing nutjobs on here was all Labour’s fault), our economy was actually tracking pretty well.

      Now, after the bludgeoning it’s received from the Coalition – not so well.

      The current govt. have vigorously re-embraced far right neoliberal economics to set the scene for enforced privatisations. And the chief beneficiaries of those privatisations? – why, their donors of course.
      Gosh. What. A. Surprise.

      Trevor – the election campaign is long over. Stop spouting stupid unfounded one liners – you’re fooling no one. The “green shoots” are fungi growing on the carcass of our rapidly dying public wellbeing.
      The gNaCT donor-vultures however……..well, they’re hovering.

    • and the green shoots trev are?? borrowing shit loads on international money markets to fund tax cuts for landlords is that the kinda thing you’re thinking of?

  8. “the economy is in terrible danger of meltdown with unemployment set to spike (I believe it will cross over 6%, well beyond the 5.4 predicted”

    That’s a call for a bigger, faster OCR cut, right?

    “the NZ economy is nothing more than selling each other houses and basic bitch milk powder to China, we ain’t got jack shit to fall back on”

    Does any political party have a plan to fix this long-term? Or the kick-the-can plan, just continue increasing the population and have the value of agricultural exports per capita fall further and the majority of the population get poorer.

  10. I suspect (and I could be wrong), the Orr knows the US Fed will cut next month, and he doesn’t want to see the NZD soar (which will be very detrimental to exports). The NZ Central Bank is a follower, not a leader, and Orr simply pre-empted what he knew Powell was going to do next month to keep our currency stable relative the USD. We’ll see if I’m right in a few weeks.

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