Lucky Liz? Wait a few years to find out

Britain’s new PM, Liz Truss, might have caught a break last night.

The International Monetary Fund, after a longish period of complaisance in regard to fiscal stimulus, abruptly decided that the Truss economic plan was a good point to draw a line, in part because giving people their money back was seen as untargeted and might increase inequality.  

But in being so unusually prompt and decisive, it has missed a chance to wait and see which way the wind blows.

Robertson is confident about the benefits of spending – but what’s the story about the downside from borrowing?

So is the government succeeding in steering the country through the Covid-19 crisis and what it calls a “one-in-100-year shock”. And just what is it costing?

These are questions which will be uppermost in the minds of voters when they cast their ballots in next month’s general election.

Finance Minister Grant Robertson in Parliament this week assured the nation it is weathering the immediate impacts of Covid-19 “better than expected” — even though the full impact is yet to be felt.

He reckons the employment data this week shows the government’s plan to protect jobs and cushion the blow for businesses and households has protected the labour market from the worst effects of Covid-19.

According to Statistics NZ, the unemployment rate here ranks at seventh in the OECD, better than the OECD average of 8.4% and well ahead of Australia (7%) and the US and Canada (both at 13%).

Furthermore, the employment rate of 76.8% is currently fifth in the OECD, well above the average of 68.6%.