Ralston on economy

Bill Ralston writes:

For the next couple of years, expect to see higher unemployment, longer queues for food banks and more mortgagee sales – in short all the usual side-effects of a depressed economy. For Gen X and Gen Y, who have never experienced those conditions, there will be real anger, politically. Even if Labour survives the election it will experience a savage backlash among younger voters.

Cullen’s budget is still to come and he may move swiftly to ease the burden people face, but there has been little evidence of joined-up thinking in Labour’s approach in recent months.

Yes, there is the prospect at some point of some modest tax cuts aimed, according to Cullen, at low income earners. Yes, Helen Clark did decide to delay the implementation of some of the punitive taxes on petrol for a couple more years.

But the majority of mortgage-belt New Zealanders, who languish largely ignored in the hard-pressed middle-income bracket, have little hope of relief. The Government’s ill-conceived emissions trading scheme is set to soak billions of dollars out of households and small businesses and large corporations and agriculture will get a free ride for many years.

This has been a brilliant fair-weather Government, cruising through calm economic times. Conditions have changed yet it seems incapable of changing course. Batten down the hatches, guys, it can only get worse.

Bill forgot to mention that billions of extra taxes the Government will collect through the ETS. It may be the biggest tax hike of all times!