THE 'TWO SPEED RECOVERY' IS A LIE

The so-called 'two speed' economic recovery is a convenient fiction, designed to hide the fact that the coalition Government's economic policies have deliberately widened the road for the few, at the expense of the many. 

BY POINTING TO a so-called 'the two speed recovery' the coalition Government and its cheerleaders think they have found a politically convenient explanation for New Zealand's growing inequality. Although the corporate media have uncritically embraced the explanation, no surprises there, you just know something smells when even Prime Minister Christopher Luxon likes to refer to this two-highway economy. He told the media last week:

'There's no doubt about it, we've got a two-speed recovery going on. You're seeing rural New Zealand, South Island primary industry sectors doing incredibly well, but certainly in Auckland and Wellington, much, much tougher.'

But referring to a two-speed economy merely serves to deflect attention from the fact that the Government's economic policies have been targeted at those already in the fast lane - asset owners, landlords, corporate shareholders, property investors, well-paid breakfast show hosts at Newstalk ZB. While the big end of town has benefited from the Government's economic policies, we're expected to wait for the benefits of these policies to supposedly 'trickle down' to the rest of us. But wages for most workers have barely kept pace with inflation, and in many sectors have fallen in real terms. The so-called recovery has actually seen a transfer of wealth upward.  'Trickle-down economics' has never worked, and it won't work now — despite what Christopher Luxon might claim.

The Government's economic mantra, repeated ad nauseam by Finance Minister Nicola Willis, has been 'fiscal responsibility'. But this is just code for its anti-working class austerity agenda. Austerity measures have been rolled out that have cut public services, frozen or slowed public sector wages, and delayed infrastructure investments (e.g. the building of state houses has effectively come to a halt).

These policies have been sold as necessary to tame inflation and balance the books, but their real effect has been to protect the interests of capital at the expense of labour. Cuts to social spending and the refusal to expand welfare support have left ordinary people absorbing the full brunt of rising living costs, while tax settings remain tilted toward those with capital gains and high incomes.

The commentary in the media though is dominated by economists who endorse the Government's approach. One of the corporate media's favourite economic pundits is presently Brad Olsen. He has commended the Government for its 'restrained' economic stewardship in tough economic times. It's worth noting that, back in the day, Olsen was an economic policy advisor for the youth wing of the National Party. 

But the economic policies that Olsen supports are part of the same neoliberal orthodoxy that has dominated New Zealand’s economic thinking for decades — one that treats the market as the ultimate arbiter of fairness and efficiency and dismisses redistribution as a drag on growth. But while the Government's economic 'restraint' keeps the wealthy comfortable and protected, it ignores the reality of life for working people; the escalating supermarket prices, tenants struggling to meet the high rents demanded by landlords, the family skipping meals to pay the power bill.  

The 'two speed' narrative also ignores structural inequality. It suggests that the problem is simply that some industries or regions are recovering faster than others, rather than acknowledging that the economic system is designed to funnel gains to those who already hold considerable wealth. That's capitalism, folks. Little wonder that Christopher Luxon, the owner of half a dozen houses, has grabbed the 'two speed' explanation with both hands. 

But there is an alternative, one that rarely gets discussed in the mainstream media. That alternative is not to tinker with the failed neoliberal economy in the hope that, one day, it might work but transform it so that wealth and power are no longer hoarded at the top.

The only parliamentary party that is arguing for such an overhaul is the Green Party. In its Alternative Budget it proposes, among other things, a 2.5% annual wealth tax and increasing the rate of corporate tax. This is not a symbolic gesture — it implies a significant structural shift, one that would raise billions to invest directly in housing, health, education, and climate action. It would mean the supermarket worker, the nurse, the teacher, and the renter are no longer subsidising the lifestyles of the ultrarich through a tax system tilted against them.

These measures and others, like bringing back into public ownership essential social utilities, have inevitably been labelled 'Marxist', 'radical' 'anti-business' (gosh), and 'extremist'. But what could be more extremist than the current arrangement, where the richest 1% own more than the bottom half combined, and where government policy is written to protect and entrench their position?

The Government and its supporters want to pedal the fiction of the 'two speed recovery' and pretend that all of us in the slow lane will eventually catch up with those in the fast lane. In response to this nonsense, we need to first recognise that the road has been deliberately narrowed for the many and widened for the few — and then take the political steps needed to rebuild it. And it's not just about taxing wealth; it’s about redistributing power, so that the economy serves the people who keep it running, not just those who happen to own it.