New Zealanders – as they launch into the general election campaign – at the same time will have to confront the harsh realities the economy presents. Already Opposition politicians are blaming the Labour government for the state of our economy and certainly it must shoulder some of the blame.
But all of it? Well not quite. Yet ministers such as the PM and the Finance Minister should be aware the economy moves in cycles and the good times are usually followed by more uncomfortable runs.
And the one hitting NZ now? Almost certainly it’s one of the roughest NZ has experienced in modern times. Yet few of our politicians seem concerned about it.
Take a look: The current account deficit has widened in the March year to $33bn, 8.4% of GDP, worse than Lativia.
Economists at the International Monetary Fund are warning NZ’s economic growth rate in 2024 will be the lowest in the Asia Pacific region and among the lowest in the world.
For NZ farmers the economic hard times are hitting them as a double whammy. Not only are costs savaging them, but external prices have been sliding all year to new lows. And there is little prospect they will bounce back soon. Some authorities are predicting dairy farm export receipts will be sliced by $5bn this season.
The IMF’s report forecast the New Zealand economy would grow at the snail’s pace of 1.1% this year and 1% next year as higher interest rates gradually worked to bring down inflation.
That would likely represent a decline in GDP per capita over the period, given the population is growing at a faster rate due to strong immigration.
The IMF described the increase in gross government debt to 45% of GDP as sustainable but said there needed to be “sufficient buffers” to address the risks from natural disasters.
“Given NZ’s exposure to climate shocks, natural disaster costs should be explicitly incorporated into the Budget framework,” it advised.
Earlier the Minister of Finance Grant Robertson revealed cost cuts to government programmes. The government claims it will save $4bn over the next four years. That may be only fiddling while Rome burns.
The claimed savings of $524m are worth about 0.4% of core crown expenses in 2023-24, which according to figures in the Budget will still continue to grow this year by about $2bn, to $128bn.
Perhaps it is not surprising that most New Zealanders did not grasp what was happening in the NZ economy during the Covid years. If so it may hit them— when it hits —- as a greater shock than otherwise it might have been.
But poll support for the Labour Party has been drifting down, suggesting the mood is changing.
What is missing from the election campaign – so far – is that brave politician who will speak with the realism essential to pull the NZ economy back from the edge of the precipice.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
And the one hitting NZ now? Almost certainly it’s one of the roughest NZ has experienced in modern times. Yet few of our politicians seem concerned about it.
Take a look: The current account deficit has widened in the March year to $33bn, 8.4% of GDP, worse than Lativia.
Economists at the International Monetary Fund are warning NZ’s economic growth rate in 2024 will be the lowest in the Asia Pacific region and among the lowest in the world.
For NZ farmers the economic hard times are hitting them as a double whammy. Not only are costs savaging them, but external prices have been sliding all year to new lows. And there is little prospect they will bounce back soon. Some authorities are predicting dairy farm export receipts will be sliced by $5bn this season.
The IMF’s report forecast the New Zealand economy would grow at the snail’s pace of 1.1% this year and 1% next year as higher interest rates gradually worked to bring down inflation.
That would likely represent a decline in GDP per capita over the period, given the population is growing at a faster rate due to strong immigration.
The IMF described the increase in gross government debt to 45% of GDP as sustainable but said there needed to be “sufficient buffers” to address the risks from natural disasters.
“Given NZ’s exposure to climate shocks, natural disaster costs should be explicitly incorporated into the Budget framework,” it advised.
Earlier the Minister of Finance Grant Robertson revealed cost cuts to government programmes. The government claims it will save $4bn over the next four years. That may be only fiddling while Rome burns.
The claimed savings of $524m are worth about 0.4% of core crown expenses in 2023-24, which according to figures in the Budget will still continue to grow this year by about $2bn, to $128bn.
Perhaps it is not surprising that most New Zealanders did not grasp what was happening in the NZ economy during the Covid years. If so it may hit them— when it hits —- as a greater shock than otherwise it might have been.
But poll support for the Labour Party has been drifting down, suggesting the mood is changing.
What is missing from the election campaign – so far – is that brave politician who will speak with the realism essential to pull the NZ economy back from the edge of the precipice.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
1 comment:
Bob & Ian - Sirs , Your last sentence requested a politician who will speak with realism essential to pull NZ economy back from a precipice . I suggest you study the ACT Election Policy 2023. they have bravely identified and will repeal the ethnic division swamping NZ with apartheid policy . David Seymour also clearly identified and targeted billions of dollars of Government waste through ineffective ministries and overuse of consultants and advisers . The issue for NZ is whether the dumb and dogmatic want NZ to flourish or vote for ideology, proven and disputed carbon - methane myths and paid media radio and TV opinion.
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