Are you feeling the effects of the official recession?

Peter Williams 17/09/2020

This is an op-ed written by Magic Talk Mornings host Peter Williams

OPINION: It’s a big couple of days for economic numbers. Yesterday the PREFU - the pre-election fiscal update which told us that things are not going to be very good economically in this country for another 15 years - at least. Then today, in fact at 10.45 this morning, comes a real figure, as opposed to yesterday which was all about projections and forecasts. Today we have the actual number of how much our Gross Domestic Product contracted or shrunk in the three months to the end of June. These were three months which covered level 4 and level 3 when the country basically hibernated, businesses shut and unemployment soared. The number, according to the economists and the Reserve Bank itself,  is likely to be around 16 percent, and I think that's the biggest in our history. It’s certainly the biggest in all our lifetimes. Put that with the 1.6 percent shrinkage in the size of our economy to the end of March and you have 2 consecutive quarters of shrinkage, and that is technically a recession. But are you feeling it?

Because today there will be a lot of serious analysis of this number and about what the future holds and about how long it will take us to pay back debt and how many people are unemployed and about what is the best way to overcome this recession and grow the economy again. And it will be the lead story on the news and there will be lots of interviews about it - and both the Finance Minister and the National Party finance man Paul Goldsmith will be on this show this morning. But we must always remember that the economy is about people. It’s about how people live and work and how and what they sell to the rest of us .. whether or not the product they’re selling is a solid tangible widget like a fridge or a car or a service like cutting your grass or preparing your tax return. So what I’d like to find out this morning, in the midst of all this dire economic news and terrible projections about the future, I’d like to find out two things. One, how are you coping in your life, in your family, in your home with the economic news of the last six months?  Do you still have a job? Do you still have a business? Are you and your family doing as well or worse than you were in March when all this started? Have you changed your spending habits because of a lower income? Have you had to start a new job or career as a consequence of the virus and the associated shutdown? And question two - what do you think are the prospects for the future both for you and the country? And what do you think politicians could do to get us back on track to economic growth? Do you look around the world and think this country is doing OK or do you see brighter prospects in other places, especially in Australia?

Do the headline numbers worry you? Do you see projections like7.8 percent unemployment in 2022, that’s a quarter of a million people on the dole in 2 years time, and do you think, yeah that’s not good, why don’t we start some projects to give people a job? Do you think about the projection that the government, which used to pride itself on having a budget surplus, will be running a deficit till 2035, that’s another 15 years, and do you think that’s not good? We need to be getting into profit sooner than that. Or do you sit back take and stock of a regular income either through a government job or government funded superannuation and you’re living in a house with little or no debt on it and you’re watching the value of that go up and up, especially again in Auckland, and do you think well I’ve been down this road before, about 30 years ago, and it was OK then, so it will be OK now?

So for an overriding theme, I guess I’m asking is this dire economic news having an actual impact on you? And do you see a way out of it? What do you think the government - no matter whether it’s Labour or National - what do you think they should do to get us moving? Do they do the actual spending and investment or do they put in place a framework which allows others to pay for it and employ people to do it?

This is an op-ed written by Magic Talk Mornings host Peter Williams