The main criticism of National’s welfare policy – in which they plan to reorganise the welfare system and spend half a billion dollars to move ~50,000 solo Mother’s and sickness beneficiaries into paid work – is that there aren’t any jobs for those people to go to, and National has no plans to create them.
But National doesn’t see this as a problem. Treasury has predicted robust economic growth over 4 years creating 170,000 new jobs. There will be – somehow, magically – loads of new jobs for welfare recipients to transition to. Why would the government waste money creating jobs when the market will supply an abundance?
Enter the Greek government’s referendum stunt. The probability of an unmanaged Greek default on >50% of debt now looks high. This will precipitate a banking crisis which will cause a second global recession. In this not-unlikely outcome New Zealand won’t get ‘robust economic growth’. At best we’ll remain stagnant. The problem is that we’re in an election campaign and both major parties are promising policies that rely on Treasury’s insanely optimistic forecasts.
This isn’t so bad in Labour’s case – they can still implement a CGT, compulsory savings and raise the super-age, although they won’t be able to afford payments to the Cullen fund, the $5k tax threshold or the GST waiver.
But look at what happens to National’s flagship policies. If they try to sell the assets during a global recession they won’t be able to realise the prices they want which means they won’t address the deficit. And spending $500 million dollars to transition solo mums and sick people into jobs that won’t exist would be an act of utter madness.
So it’d be nice to know what National’s ‘Plan B’ is, since the chances of them being able to follow through on either of their key election promises are pretty minimal. I don’t expect Key to answer questions on this – our Prime Minister doesn’t do reality – but Bill English and Steven Joyce should be called to account on this issue.