On the 28 August 2023, the headline at RNZ rang out that Business profits contributed significantly to recent rising costs, study finds. That study sought to answer when inflation becomes "Greedflation" and it examined the time before the pandemic when profits were a dominant factor, the time during the pandemic when labour ( wages ) was dominant but inflation very low, and the time after the pandemic when inflation soared and there were a mix of factors - mostly around the cost of food, transport, and housing.
In that third stage, profits that were excessive remained a significant factor and it must be said that many corporates made record profits - and did get ahead...and it was mostly those people who were represented by Christopher Luxon's party and those hand picked to be in the room yesterday when he delivered his "corporate style" state of the Nation speech.
After memorised greetings in a range of languages designed to provide a perception of diversity that was unmatched by the composition of the National Party and those in the room - Luxon declared that :
"our job is to restore the spirit and the promise of New Zealand, that if you work hard - come what may - you can get ahead" - Luxon.
Luxon's words sounded good to those bathing in greedflation like Sir John, cos they were definitely getting ahead - a very long way ahead.
According to data from KPMG, banks in New Zealand made more than $7 billion in after-tax profits last year. No matter how you crunch the numbers, they’re eye-watering.
"It’s over $1 million an hour. This sector is extremely profitable - more profitable than the electricity sector, the supermarkets, and the construction companies, put together. If you took $10 billion with the profits divided by the number of New Zealanders, that's an average of $2,000 each." - said Simplicity.
As you know Labour had done a great deal to soften the blows by interventions in the "free market" - like the Super Market competition actions to limit prices for food, the discounts on petrol, addressing gib shortages in construction, bringing in migrants to fill Labour shortages in Hospitality and Tourism and Fruit Picking...while inflation drove up interest rates and hit home owners in the pocket - and Bankers were rolling in it.
Greedflation was not only rampant by the Banks but some retailers and service businesses adding surcharges well above the costs - an example was a patient of an Auckland dental practice who said she received a $5 surcharge for a contactless payment of an $80 dental bill.
That's a whopping 6.25 percent surcharge.
Dentists just can't get ahead, it seems.
Blame was sheeted home on the Reserve Bank for asking us to cool our jets before Christmas..and it took a long time for inflation to come back down, and this involved some flat GDP growth and people adjusting their consumption of certain luxuries.
However now that memories have faded, Luxon wagged his finger of blame at Labour for spending too much on these interventions, and those during the pandemic ( wages subsidies, business support payments ) ...which he did not speak about specifically in his rhetoric, instead using the opaque language of "Government Spending is up 84%" since 2017."
As you know Government spending had actually been coming down during 2023 as we adapted to the changing conditions but Luxon's purpose was to conceal the way the "social democratic" interventions of Labour had helped us - and instead turn that around ( a turnaround job ) as a justification for his neoliberal policies of austerity, crushing the welfare state, crushing the public service, deregulation, higher incarceration, and privatisation. ( Atlas Network )
These policies are never popular with the lower middle classes so they need to be sugar coated with a narrative that justifies them. One News reported that ...
"Throughout his speech, he adopted new language in describing policy initiatives being pursued by his ministers that "won't be popular with everyone". They included more sanctions for beneficiaries, a controversial new fast-track consenting process, and getting "government spending back under control".
The irony is Government Spending has been on a downward trajectory for two years - but Luxon took advantage of the fact media do not educate the population about these trends and even if they did - most of them would be busy playing video games and watching Netflix.
Luxon was sugar coating the way his Government will drive 7000 more children back into poverty by reverting to indexing benefits to inflation, how his government will reduce the incomes of the disabled, how his government will destroy the natural world by seemingly allowing Minister Shane Jones to consent projects for mates all by himself, and all the while choosing to spend billions on unaffordable tax cuts ( for Landlords ) and driving up rates with water done well.
"We were not elected to fiddle and tinker and tweak while the big problems go unsolved." - said Luxon but the truth is he was elected by an angry minority vote - resentful and reacting to the after effects of the pandemic...which Luxon consistently masked in his rhetoric.
Waiting times for healthcare, school absences, crime rates ...all of these matters were exacerbated by the pandemic in countries all around the world - but Luxon's deceit was to remove these factors from his "outcomes based" rhetoric in order to replace that with a false accusation - that Labour's profligate spending and incompetence was to blame.
This was irritating for those who understand the reality and the self applause was taken from Trump's playbook...as the staged performance was entirely choreographed.
The terms, "I've got to be straight with you" and "I have to be honest" were tell tale signs we were all being manipulated - because this Prime Minister was telling a tall story and it was refreshing to hear Chippy and Marama criticise Luxon for this afterwards.
The claims about a $200 Billion hole in Transport funding were soon exposed as nonsense and resting on dodgy work by Simeon Brown...and Chippy slammed Luxon for speaking utter rubbish.
Luxon was making the nation more fragile - and for some, things are fragile - but not for bankers, dentists, yacht owners, landlords, and the most wealthy 311 families who pay less tax - nor for most of the National Party supporter base.
These had been volatile times and we were emerging anyway despite the government with the culture wars and austerity programmes who were making things worse.
Instead of going through the entire speech ( like I did in the subtitles yesterday ) - I'll end this article on One News Coverage last night.
Maiki Sherman thought Luxon was strong which annoyed me, because I think Luxon was weak, insincere, deceitful and an actor reciting lines designed to sugar coat and justify the policies of the neoliberal right.
However Sherman did tell a story about two different audiences.
One was the general public gathered at the Big Gay out - in which Luxon encountered people who were unhappy with the way he was pandering to NZ First ( who were pandering to bigots ) and people riled by his handling of NZ Foreign policy over the plausible risk of genocide in Gaza. Luxon and Mandy hurried to get the hell out of there and back to the chapel where the Upper Room prays the gay away.
The other audience was a room stacked with the rich, the National Party faithful, the neoliberals and conservatives, mostly pakeha, most a bit older....where what I would call vacant old gold clutched their pearls and thought Luxon spoke very well.
One white "Remmers Old Gold" lady spluttered to camera that she hoped Luxon might reconsider the Treaty Principles Bill - you know - after he understands it better - and yes I rolled back my eyes like slot machines - and digested the emotion like eating glass - which I rationalised was what Sherman had been aiming at.
In summary - TVNZ One News did not have time to expose Luxon's lies and deceit leaving that hanging - but it did point out that he avoided talking about Winston and Seymour.
This was justified by Sherman as - they had had - a fair share of the oxygen anyway - but it may have been more insightful to say that Luxon was "eating his crow early" stacking his first 100 days with the most insidious policies of his junior coalition partners ( running rings around him ) and using Policy Exchange and Atlas Network tactics - where you go into urgency so fast with so much that the Opposition cannot respond adequately.
By 2025 much of what we discuss today will be forgotten, but right now - it's crystal clear that Luxon used cue cards at Waitangi to recycle an old speech - from 2022 and 2023, he modified his rhetoric after Waitangi, and now he was justifying more harm that was unnecessary and not supported by a base of evidence.
Luxon spoke about tough choices but like Chlöe said these are the same choices we have seen made by Neoliberal Governments for decades - no matter what the excuses and justifications.
"Now that won’t be popular with everyone – but it is necessary. More spending, more borrowing, and more taxes isn’t a pathway to prosperity, it’s a recipe for more of what we’ve seen from the last few years." - said Luxon.
And he wonders why not many people like him.
Luxon's State of the Nation Speech
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