'Trickle-down' economics still works - Simon Bridges

The AM Show 14/05/2018

Simon Bridges says he still believes in trickle-down economics, despite a damning report that suggests Aucklanders are facing the worst inequality since World War II.

Auckland Tourism, Events and Economic Development's new Prosperity Index found while northern and eastern areas of the city are doing fine, residents in the south and west aren't reaping the benefits the so-called 'rockstar economy'.

Trickle-down economics is the theory that reducing the tax burden on the wealthy will prompt them to invest more in the economy, leading to increased wealth for all. It was popularised in the 1980s by right-wing leaders such as Ronald Reagan and Margaret Thatcher, and the implemented here in New Zealand by the fourth Labour Government as 'Rogernomics'.

The theory has been widely questioned in recent years, with inequality in the UK, US and New Zealand growing in the decades since.

"I think there is some trickle-down effect actually, and a lot of people say no, no no," the National Party leader told The AM Show on Monday morning.

Mr Bridges said the Labour-NZ First coalition risked entrenching existing inequality with a "spray and walk away" approach to poverty alleviation.

"I live in Tauranga, we're seeing [homelessness] there - it's very worrying. So I say you know, money, but more than that you've got to get in and do the smart stuff. We're talking to the Prime Minister and the Government about that when it comes to the Child Poverty [Reduction] Bill.

"Because at the moment the fear is it's just the money, it's just that the targets, actually you've got to get in there and do the hard work that's required, otherwise it's... intergenerational... If you've grown up in a gang lifestyle... it's very hard to get away from that, isn't it?"

He said the Government is "doing a bad job" on jobs and housing.

"We've got an incredibly proud legacy in terms of growing the economy and all those things... We had great solutions, actually solutions this Government's taking up."

Unemployment is at a nine-year-low, falling to 4.5 percent in the December quarter and 4.4 percent in March - the lowest it's been since the end of 2008.

"The reality is getting out of the GFC, the earthquakes, all those things, the perception is we could have moved a bit faster," said Mr Bridges.

"The legacy of the last nine years is incredibly strong, but there's a lot of work that needs to be done and this Government is making a hash of it."

As for housing, Mr Bridges labelled the Government's flagship KiwiBuild policy 'KiwiHoax'. The scheme was originally going to see 100,000 affordable homes built; it now aims to 'facilitate' them, partly through buying private developments off the plans.

"They haven't got a hope in Hades of doing genuinely new housing," said Mr Bridges.

Watch the full interview with Simon Bridges above.

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