Mike's Minute: There's a cold economic winter coming

Between Chris Luxon and ANZ, the National Party in a single week have reshaped the political debate and increased their chances of winning next year by a lot, if not exponentially. Luxon was back into it yesterday, talking up tax cuts and slack government spending, he is onto a winner. ANZ came to his aid with their forecast of inflation at 7.5 percent, the Reserve Bank upping interest rates at 50 points a pop for the next 2 outings, ending with a cash rate at 3.5 percent, which means your mortgage most likely has a six in it. It helps cement the argument that things economically are a mile off course. And we have the consumer sentiment numbers that show we are miserable, the latest statistics tanked. Can we help a war? No. Can we help the price of oil? No. But a lot of the price increases, the crisis in the cost of living, is homegrown. It’s the non-tradable inflation figure the Government can't hide from. It's the second-highest in the world behind America. That is what Luxon can run with and win with. Covid never got them anywhere because we are divided and over it. It was a debate around the margins. Borders, mandates, timelines, and so on. Tax is real, it's tangible, and everyone is a participant in the debate.  Everyone earns money, spends money, and is an expert when they don’t have enough. They also know that on the average wage, you are not rich or anywhere close to it, and yet a chunk of your income is taxed at the highest level. Add GST and over half your income heads to the Government. No one argues that’s good policy or economics. One of the theories for the Government's re-election was that by next year Covid should be mainly behind us. They can get on with trying to convince us Three Waters, He Puapua, trains, and compulsory job insurance is a good idea, and good government. What they didn’t see coming, even though they’ve engineered a good chunk of it, is a recession. Is a cost-of-living crisis, possibly stagflation, the worst of all outcomes? Nothing undoes a government more quickly than people struggling to pay the bills, cutting back on groceries, and worrying about filling up the car. History will show you that tough economic times are the Government's fault, whether they literally are or not. This time they literally are. Not all of it, but a big enough chunk for fingers to be pointed. Read ANZ's economic update. It’s a cold winter coming, the hangover from the debt-fuelled party is going to be long and painful, and someone is going to pay for it.See omnystudio.com/listener for privacy information.