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  • rmacculloch

Labour's Spin Machine reaches new heights - to the point it risks being labelled "fake news"

In a world where we've mostly all become fed up with "communications teams" spinning and "shaping the narrative", our government is taking this "art" to new heights.

Take the latest concerns about our high inflation rate & "cost-of-living crisis". What has been Labour's strategy? To brand it an overseas phenomena, beyond the control of local forces. Brand it as being President Putin's fault. Brand it as a Ukrainian problem. Blame Coronavirus. Blame it on everything apart from anything to do with NZ's domestic policies. The New Straits Times in Singapore summarizes the spin machine at work when it reports that "PM Ardern said the sharp rise in the cost of living had been widely anticipated, blaming "oil prices and international tensions".

So what are the facts? Our inflation rate can be broken up into two parts - one due to rising prices of "tradeables", like oil imports, and the other due to "non-tradeables", which are domestically produced & consumed goods and services. As at December 2021, non-tradable inflation was high, at around 5.3%, whereas tradeable inflation was running at 6.9%. The weight of non-tradeables in the inflation basket (=60%) is higher than tradeables (=40%). Consequently NZ's overall inflation rate can be calculated as the weighted average of these two components, or 5.9% (=60%*5.3% + 40%*6.9% = 3.2% + 2.7%).

In other words, of our headline inflation rate, LESS THAN HALF is due to inflation in tradeables. However, if you listen to government spin you'd think the whole of our inflation problem was imported.

Yes, President Putin is way less to blame than our domestic policies. Like what? Like our supermarket duopoly. Like weak competition in our building industry, where some huge companies wield immense market power. Like increases in council rates & rents. Like our Reserve Bank's bungled $60 billion money printing program which occurred AT THE SAME TIME as the Finance Minister was boasting how low was unemployment. Like our country's closed border policies which led to labour shortages, upping wages. Like high government spending, financed by borrowing, which PM Ardern "absolutely refutes".

The point is not to carry on about our high inflation but to ask the question, "Why can't Labour tell a story as it is for once? Why is everything subject to such a massive spin job?" Little wonder people are trusting politicians less & less.



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