#BHN False: "Labour had a massive spend up during COVID"

About this Video

• Video Title: #BHN False: "Labour had a massive spend up during COVID"
• Channel: Big Hairy Network
• Speakers: Craig, Pat, Chewy
• Duration: 00:15:19

Introduction

This video from the Big Hairy Network challenges the assertion that New Zealand's Labour government's spending during the COVID-19 pandemic caused the country's economic woes. The video uses data and charts to argue that New Zealand's inflation was comparable to other developed nations and that the government's spending was not the primary driver.

Key Takeaways

• New Zealand's COVID-19 stimulus spending was high relative to other countries because it classified all pandemic-related spending as stimulus, not because the actual amount was unusually high. The IMF's comparison is misleading due to differences in how countries categorized their spending.
• New Zealand's inflation rate during and after the pandemic was relatively average compared to other developed countries, refuting the claim that the government's spending was the main cause of inflation. The country's reliance on imported goods significantly impacted its inflation rate.
• New Zealand's geographic isolation provided advantages during the pandemic (lower infection rates) but also made it more vulnerable to global inflation. Because it imports many goods, external price increases directly affect its economy.
• The government's spending, ironically, may have helped keep inflation lower than it might have been by preventing extreme spikes in consumer demand.
• The video concludes by discussing a Treasury document that suggests a restrictive fiscal policy approach, which the speaker cautions against based on past economic policies.