A must-read piece by Bernard Hickey:
Bill English is a careful man who is deeply familiar with New Zealand’s economic record. He has had the best facts and figures from Treasury, the OECD and the IMF at his fingertips for nearly nine years as Finance Minister and Prime Minister. So his outright rejection during the debate on Thursday of JB Were economist Bernard Doyle’s comments about a productivity recession were surprising.
“JB Were are just wrong. They are way over-stating the case,” he said.
Following up, Labour Leader Jacinda Ardern said productivity had flat-lined at best and she wanted to invest in people and skills through education to improve productivity.
So who is right? Here’s a detailed look at the evidence. If you are time poor, the answer is Bernard Doyle is right and Bill English is wrong.
Go read the full piece for five graphs from various data sources that illustrate the nature of the problem and the comparison with Australia. Hickey concludes:
English’s outright denial of a productivity problem in the debate was Trump-like in its brazenness and disappointing from a former Finance Minister who knows that productivity improvements are ultimately the only way New Zealanders get richer in the long run.
New Zealand’s economy has grown faster than others in the last four years, but only because of a surge in its population from migration and an increase in the labour force participation rate. New Zealand’s economy grew because more people arrived, more people worked and they worked longer hours.
They didn’t work smarter.
Being compared to Trump has got to hurt. And shouldn’t there be consequences when a PM flat out lies to the country on the state of the economy?