CTU economist and policy director Bill Rosenberg says the government has used a series of crises – such as the worst global financial crisis and recession for decades, crashing local finance companies, leaky homes, devastating earthquakes in Canterbury, the Pike River tragedy, and now another international financial crisis – to spin a story of ‘there is no alternative’ to cuts. The government has held, then cut, spending when a more generous programme was affordable and could have held down unemployment and prevented stagnation.
Dr Rosenberg says delays in rebuilding Christchurch and further turmoil overseas are now looking likely.
“The government will try to spin the same story: these are beyond its control; the best it can do is keep the government’s books in order, and trust that “the market” will pull us through. But as always, it does have choices as to how it responds.”
Dr Rosenberg argues the government’s programme to a progressive earthquake levy, targeted to be higher for those with higher incomes, could have funded the rebuild of Christchurch. He also says it is not doing enough to support education and training needs following the crises:
“[The government] has announced a welcome $42 million education and training programme but is failing to build the excitement that would attract people to this unique opportunity to get new skills when jobs will be plentiful – in a great project. Too much of the work will go to skilled workers from overseas rather than developing our own skills.”