Back in 2022, Reserve Bank Governor Adrian Orr was appearing before a Parliamentary Select Committee trying to explain how and why the bank was too slow in moving the OCR and therefore increasing interest rates. He was asked by Parliamentary Select Committee member Chloe Swarbrick whether the Reserve Bank was deliberately engineering a recession to rein back inflation.



“I think that is correct. I mean, we are deliberately trying to slow aggregate spending in the economy. The quicker inflation expectations come down, the less work we need to do and the less likely it is that we have a prolonged period of low or negative growth.”



We talked about that at the time, that when you engineer a recession that's a nice, neat little phrase, and it needed to be done. Interest rates needed to go up to get the spending down. He said that while there might be a recession and a decline in the economy, the central bank was forecasting it could be job rich, and said the country was relatively well positioned internationally. 

That was 2022. 

Today in 2024, this is what a recession looks like. Big job losses across the private and public sector. Big ticket retailers struggling. Mum and Dad homeowners with mortgages making tough decisions about their spending. 

When bankers and politicians took percentage points in interest hikes, they took numbers. They debate theoretical concepts about the economy, and which levers they might need to pull to make the economy move in one direction or another. It sounds like a game, but ultimately, they're playing with people. 

When you're talking about numbers, you're talking about people, and the job losses across the economy are going to be painful and unsettling right now. Last week, it was the media, this week it's public service workers, and they have been in the gun and were an election talking point.  

The ACT party wanted to see public sector job cuts and they wanted to see a lot of them, 15,000 to bring the public service back to 2017 levels. David Seymour said last year, over the last six years we've seen a 30% increase in the size of the public. He said we have equally seen a 30% increase in public spending after inflation in population growth. Yet there is widespread dissatisfaction with the quality of public services, and I think there is a fair point there. 

When you look at my favourite from Waka Kotahi, the poor manager that sent the e-mail saying we have no idea why we're here or what our purpose is or what we're doing. He proposed that his own unit be disestablished because there was no clear direction from the government about what they should be doing or how they should be doing it. He couldn't see the point of his job. No. 

When you've got the Ministry of Education. Who are outsourcing the curriculum? What do they do? I can understand outsourcing. Perhaps the building of new schools. You know you can't expect the teachers to put the tool belt on and get to work hammering and sawing. But when it surely that is a core function of what the ministry should be doing, directing the writing of the curriculum. 

You know, I think for a lot of us, we've looked from the outside into the public service and thought. What are you doing? Why are you doing it? To what point? And what markers are there to say that you are doing it well? 

There has been a constant theme when it comes to changes of government that National trims down the public sector and then they hire out to consultants. And then when Labour comes and they bring back the public service jobs and don't hire as much when it comes to consultants, but this last administration did both. They hired more people within the public service on full time jobs and also spent a packet on consultants. I know how unsettling it is when you don't know if you're going to have a job tomorrow. You know, working in the media, you feel like you've got a target on your butt, and probably public service workers feel much the same.  

David Seymour also said last year that it thinks the fired public sector staffers could easily be absorbed into the rest of the workforce, and I've had anecdotal evidence that that is so already. A couple of weeks ago, I initially got a text from a principal saying the writings on the wall for the Ministry of Education. He's had a number of people —teachers— who went to the ministry, who can see which way you know the wind is blowing and have come back saying ‘can we get our jobs back?’ 

If that means that we can get people back to the front line, out of the ministry jobs and back doing what they're good at I'm all for it. There are jobs that need to be done by competent, qualified Kiwis. A lot of them were lured into jobs in the Ministry. That looks good, it's easy, don't have to worry about conjunctivitis or getting nits by being around the little children I'm writing theories about, policies about. But if it means we get our teachers back into the classrooms, great. If we get people doing things, that's great. 

A lot of the way the modern workforce is constructed is just creating jobs to have them. How many people involved in private sector corporates and in the public service spend all day booking out a meeting room to talk at one another about workers. About people who are actually getting up and going to work to pay their wages. What do they do? 

I totally get we need to have policymakers; we need to have people who can help ministers to make decisions about where a particular portfolio needs to be spending or where they're heading. Did we need our 30% increase in the size of the public service, many of whom had no idea what they were doing or what they were there for? I don't think so.

Back in 2022, Reserve Bank Governor Adrian Orr was appearing before a Parliamentary Select Committee trying to explain how and why the bank was too slow in moving the OCR and therefore increasing interest rates. He was asked by Parliamentary Select Committee member Chloe Swarbrick whether the Reserve Bank was deliberately engineering a recession to rein back inflation. 
 
“I think that is correct. I mean, we are deliberately trying to slow aggregate spending in the economy. The quicker inflation expectations come down, the less work we need to do and the less likely it is that we have a prolonged period of low or negative growth.” 
 
We talked about that at the time, that when you engineer a recession that's a nice, neat little phrase, and it needed to be done. Interest rates needed to go up to get the spending down. He said that while there might be a recession and a decline in the economy, the central bank was forecasting it could be job rich, and said the country was relatively well positioned internationally.  
That was 2022.  
Today in 2024, this is what a recession looks like. Big job losses across the private and public sector. Big ticket retailers struggling. Mum and Dad homeowners with mortgages making tough decisions about their spending.  
When bankers and politicians took percentage points in interest hikes, they took numbers. They debate theoretical concepts about the economy, and which levers they might need to pull to make the economy move in one direction or another. It sounds like a game, but ultimately, they're playing with people.  
When you're talking about numbers, you're talking about people, and the job losses across the economy are going to be painful and unsettling right now. Last week, it was the media, this week it's public service workers, and they have been in the gun and were an election talking point.   
The ACT party wanted to see public sector job cuts and they wanted to see a lot of them, 15,000 to bring the public service back to 2017 levels. David Seymour said last year, over the last six years we've seen a 30% increase in the size of the public. He said we have equally seen a 30% increase in public spending after inflation in population growth. Yet there is widespread dissatisfaction with the quality of public services, and I think there is a fair point there.  
When you look at my favourite from Waka Kotahi, the poor manager that sent the e-mail saying we have no idea why we're here or what our purpose is or what we're doing. He proposed that his own unit be disestablished because there was no clear direction from the government about what they should be doing or how they should be doing it. He couldn't see the point of his job. No.  
When you've got the Ministry of Education. Who are outsourcing the curriculum? What do they do? I can understand outsourcing. Perhaps the building of new schools. You know you can't expect the teachers to put the tool belt on and get to work hammering and sawing. But when it surely that is a core function of what the ministry should be doing, directing the writing of the curriculum.  
You know, I think for a lot of us, we've looked from the outside into the public service and thought. What are you doing? Why are you doing it? To what point? And what markers are there to say that you are doing it well?  
There has been a constant theme when it comes to changes of government that National trims down the public sector and then they hire out to consultants. And then when Labour comes and they bring back the public service jobs and don't hire as much when it comes to consultants, but this last administration did both. They hired more people within the public service on full time jobs and also spent a packet on consultants. I know how unsettling it is when you don't know if you're going to have a job tomorrow. You know, working in the media, you feel like you've got a target on your butt, and probably public service workers feel much the same.   
David Seymour also said last year that it thinks the fired public sector staffers could easily be absorbed into the rest of the workforce, and I've had anecdotal evidence that that is so already. A couple of weeks ago, I initially got a text from a principal saying the writings on the wall for the Ministry of Education. He's had a number of people —teachers— who went to the ministry, who can see which way you know the wind is blowing and have come back saying ‘can we get our jobs back?’  
If that means that we can get people back to the front line, out of the ministry jobs and back doing what they're good at I'm all for it. There are jobs that need to be done by competent, qualified Kiwis. A lot of them were lured into jobs in the Ministry. That looks good, it's easy, don't have to worry about conjunctivitis or getting nits by being around the little children I'm writing theories about, policies about. But if it means we get our teachers back into the classrooms, great. If we get people doing things, that's great.  
A lot of the way the modern workforce is constructed is just creating jobs to have them. How many people involved in private sector corporates and in the public service spend all day booking out a meeting room to talk at one another about workers. About people who are actually getting up and going to work to pay their wages. What do they do?  
I totally get we need to have policymakers; we need to have people who can help ministers to make decisions about where a particular portfolio needs to be spending or where they're heading. Did we need our 30% increase in the size of the public service, many of whom had no idea what they were doing or what they were there for? I don't think so.

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