October 7, 2008 3:00pm by David Farrar

Dom Post on Economy

Growth this financial year is expected to be just 0.1 per cent, and unemployment is expected to climb to 5.1 per cent next year. For the first time since 1994, the budget’s operating balance will be in deficit. Prime Minister Helen Clark appears to welcome an election based on the economy. That is unsurprising. She can point to nine good years and to a reluctance to spend more than was flowing in. She would no doubt rather talk about that than the anti-smacking legislation, the chilling effects of her Electoral Finance Act, or why she defended the indefensible actions of NZ First leader Winston Peters.

All good questions.

However, she should not assume the voters will agree that she and Finance Minister Michael Cullen are the best stewards of the economy. Instead, they face questions over whether they have spent the proceeds of the years of plenty wisely.

Government spending has grown strongly during Labour’s years in government, sustained by the ever-growing tax take delivered by good economic growth. However, there are legitimate doubts that the taxpayer has received enough in return when it comes to better health services, better education, and improved infrastructure.

A number of studies have shown that actual improvements in outcomes for what has been a huge amount of money have been marginal.

The spending has been large, but the quality of some of it has been questionable. A relatively minor example offered by National is a 112 per cent increase to 505 in the past six years in the number of public relations, communications, media staff and contractors employed by government departments.

Yep a doubling of the number of comms staff in six years.