I see that in the New Zealand Herald on Wednesday 13th April there was an article from Richard Prebble about the delusions of the protestors outside parliament and also the delusions of those inside parliament.
His article uses examples of Associate Finance Minister David Parker and Minister for Workplace Relations Michael Wood, to emphasise his point around the debunking of delusions.
He stated that David Parker denied any government responsibility for inflation (Parker said that inflation comes from overseas) and that Michael Wood had told parliament that “our employment relations system has embedded low pay and conditions in a race to the bottom” (the adult minimum wage has risen from %16.50 in 2018 up to $21.20 today and given that only a delusional politician would say that was racing to the bottom).
Both of these claims are easily (debunked) proved to be false using the government’s own data.
A study of the Consumer Price Index shows that most inflation in New Zealand is from domestic causes. Actions such as printing $55billion and government deficit spending have pushed up prices far more than the influence of either fuel price increases or supply chain congestion as a result of the Covid Pandemic or the war in Ukraine.
Should both of these ministers truly believe what they have claimed then it is no wonder that we are in a seriously difficult economic position, and where the reality is that with that belief they are not showing any capability to handle the current economic crisis we are facing?
Conversely if they do not truly believe their statements are true then they must have made them; as Richard Prebble says; to make a political gesture, to lead the country to believe that they are actually in control and know what they are doing.
In either scenario they have only shown the extent of their delusional thinking; that maybe the voters can be led to believe that inflation has nothing to do with government policy and that a majority of voters will vote for union sector-wide wage fixing.
The reality is that no matter where inflation comes from whether it is from overseas or domestic that will not have any impact on achieving a reduction in the average Kiwi’s grocery bills, and the delusion that union bargaining will result in “higher quality Goods and Services”, will ever make New Zealand a more prosperous country.
When politicians believe their own delusions and refuse to acknowledge that government spending is inflationary and they are surrounded by bureaucrats who agree with their every thought and statement, it becomes almost impossible for them to then recognise reality even when it is right in front of them.
Minister Wood told parliament that union wage bargaining “will incentivize… The quality of goods and services offered; investment in skills and training; R&D Innovation… That will drive productivity and prosperity for our country.”
History shows that despite union wage bargaining, sector wide awards and industrial actions to achieve them, none of the benefits he claims will occur, ever actually happened. In actual fact under awards productivity fell.
When free bargaining was introduced New Zealand’s productivity compared to the rest of the OECD improved. What Woods fails to take into account is that productivity is what drives wages. Employer cannot pay higher wages if they are not making any money and if productivity doesn’t rise then they will very soon start to have difficulty in paying the wages at all and in all likelihood it won’t take long for them to go out of business and the wages stop altogether.
If sector wide wage bargaining and increasing wages is going to result in higher productivity then why don’t we just make the minimum wage $60/Hr and we will see a huge jump in productivity.
Yeah Right!! That will happen; just after the pink pig fly’s in to deliver the agreement.
The two examples used above are just that (examples), not a full list of all of this government’s delusional policy thoughts. But what they do show is that there is a serious problem with the competency of this government to make decisions which will have an effect on all of us.
Delusional thinking in a private capacity only has an effect on them but when they are our elected leaders and through their delusional thinking they do not or cannot see reality then the effects have the ability to hurt the whole population.
The current government needs to first of all recognise and then remember at all times, that any and every decision they make has the potential to affect the rate of inflation either for the good or the bad and also affect the ability for the population to achieve a level of income that will provide a sustainable standard of living.