web analytics

Brave new world

Written By: - Date published: 6:45 am, June 22nd, 2012 - 24 comments
Categories: Economy - Tags:

When the government is hooting and hollering over 1.7% annual growth, it’s time to admit we’ve entered a new paradigm. In the past, you would have expected 4-5% growth coming out of a recession. Now, anything above the rate of population growth is treated as a miracle.

Growth as we used to know it isn’t coming back. If the global economy ever does show signs of life, we’ll just be slammed by unaffordable oil again.

What does that mean for economic policy?

24 comments on “Brave new world ”

  1. r0b 1

    Brian Fallow explains the current growth surge here:

    Exceptionally good growing conditions on the land saw economic growth shoot up in the first three months of the year.

    Gross domestic product rose 1.1 per cent in the March quarter, well ahead of economists’ expectations of 0.5 per cent and the strongest quarterly growth for five years. It pushed annual average growth to 1.7 per cent up from 1.3 per cent in calendar 2011. The dollar and wholesale interest rates rose in response.

    But the details of the data reveal a less verdant picture.

    Much of the growth was concentrated in agriculture and its downstream processing, reflecting a bumper growing season which has come and gone. Agricultural output jumped 2.3 per cent in the quarter to its highest level since December 2006. The food processing sector’s output jumped 3.2 per cent, driving a 1.9 per cent increase in manufacturing overall.

    But volumes are one thing, prices another. In the same quarter export prices for dairy products and meat fell 4.8 and 5.4 per cent respectively in New Zealand dollar terms, according to ANZ’s commodity price index.

    • Enough is Enough 1.1

      Exactly.

      This Government is fraudulent at best if they try to take any credit whatsoever for this growth figure. They have absolutley nothing do with it. Not a thing. Their actions have contracted the economy. It is the policies of the last Labour government, some wet weather and the hard graft of kiwi workers. Not that idiot John Key

  2. shorts 2

    when is growth not growth….

    “Taking away the stocks surge the economy actually shrank 0.5% in the quarter and grew only 0.3% in the year to March.”

    http://tonyalexander.co.nz/regular-publications/europe-worrying/#more-732

  3. Like I keep saying this dose not look good for Labor/green Kiwi Savers.
    Calling all honest politicians …. tell the truth

    • muzza 3.1

      It seems that once an individual has committed to Kiwi Save that the IRD state, you are not able to exit the scheme..

      Anyone have any details around this?

      • Te Reo Putake 3.1.1

        Not so, muzza. There are options to get out. The first one, obviously, is to get old. Then you are entitled to withdraw your savings. You can also do so if you are not going to earn in NZ any more due to significant injury or due to emigration. Savers can also take out money to use as a deposit on a house, which is another form of saving for your retirement, of course.
         
        It’s money for jam, particularly with the Gov’t top up. You’d be mad not to be in it.

        • You_Fool 3.1.1.1

          Though, as far as I am aware, that if you withdraw from the program early you only get your contributions back… Not the government nor your employers contribution….

          • Te Reo Putake 3.1.1.1.1

            Nope, the facts are here. I’d forgotten that you can also withdraw contributions if you are suffering significant financial hardship, as well as the other circ’s I already mentioned.

      • Lanthanide 3.1.2

        You can also go on a contributions holiday and not pay anything more into the scheme if you want.

  4. Tom Gould 4

    Can any economist out there tell me if the massive surge in the Auckland property market over the last 3 or 4 months show up in these figures? I seem to recall the Tories bashing Labour for ‘fake growth’ off the back of a property boom? Or was that just spin?

  5. burt 5

    When the government is hooting and hollering over 1.7% annual growth, it’s time to admit we’ve entered a new paradigm.

    For sure, we don’t have Labour and it’s send the economy into recession policies. Waa hoo – isn’t it great !

    • KJT 5.1

      Word from another planet again. Just look at growth rates under RW parties.

      The first ACT Government (1984) and National have even managed to have recessions when the rest of the world does not. Of course all those MT shop fronts during the 90’s and now were just in my imagination?

    • You_Fool 5.2

      Is it just me, or are you trying to blame the Global Financial Crisis on the NZ 5th Labour Government? That is an interesting position to take, and I guess all those US and European bankers can breathe a sigh of relief that their actions had no impact at all and they can start to sleep again….

    • Deano 5.3

      burt. you’ll be excited to learn that revisions to the figures now show we didn’t enter recession until June 2008.

      So your ‘Labour drove us into recession ahead of the rest of the world’ line no longer works – not that it did before –

      half the OECD went into recession in March 2008 and the other half in Juen 2008.

      • McFlock 5.3.1

        You know the logic – if it is bad and happens under Labour, it’s a Labour’s fault. If it’s bad and happens under National, it’s Labour’s fault (because they set the country up for it) and would have been much worse if not for National’s noble efforts. If it’s good and happens under Labour, it would have been so much better under National, and National should get the credit anyway (because they set the country up for it). It it’s good and under National, it never would have happened under Labour.
               
        With that logic, the true tory does not need to be encumbered with painful things like “facts” or “reality”.

         

    • mike e 5.4

      burt 3 months growth in 4 years and its all over already .
      labour 8 out of 9 years growth at above 3 %.
      burt stick to fairy stories and sesame st.

  6. ianmac 6

    Funny how the response to 1.7 growth is for Key/English to say, “Look how well our policies are working.”
    When growth is bad Key/English say, “Not our fault. Global fault outside our control.”

  7. Bill 7

    Not sure I understand the question posed in the post…or more precisely, why that particular question was posed.

    If growth rates are dropping then the only impact on economic policy will be in terms of finding a way to boost growth rates again. And that’s a really stupid thing to do for a whole host of reasons.

    Meanwhile, if ‘the market’ cannot produce growth, and since the market is predicated on ideas of growth, the obvious question that needs to be asked is one that is far more fundamental than anything to do with market based economic policy.

    • Deano 7.1

      right now, economic policy has growth at its centre.

      if we give up on growth because it ain’t happening, then what should economic policy be orientated towards?

      • Bill 7.1.1

        Why not economic policy with democratic participation at it’s center? Y’know… people having meaningful input into decisions around resource use and distribution as opposed to the present situation where a few powerful actors (measured in terms of the money they have accrued) more or less dictate economic activity.

        It seems to me that all business is simply a means to making money. And when viewed from a perspective of human need or environmental impact, it’s blatently obvious that very poor economic decisions flow from that undemocratic market context and its demand for growth.

      • Draco T Bastard 7.1.2

        Economic policy should always be oriented towards supplying what the society needs. It neither needs profit nor growth (although some development is always good).

Recent Comments

Recent Posts

  • Equitable response to Omicron vital
    The Green Party supports the Government’s decision to move Aotearoa New Zealand to traffic light level Red at 11.59pm tonight, but says its success will depend on the support that is made available to the most vulnerable. ...
    3 days ago
  • How we’re preparing for Omicron
    As countries around the world experience Omicron outbreaks, we’re taking steps now to ensure we’re as prepared as possible and our communities are protected. ...
    6 days ago
  • What’s Labour achieved so far?
    Quite a bit! This Government was elected to take on the toughest issues facing Aotearoa – and that’s what we’re doing. Since the start of the pandemic, protecting lives and livelihoods has been a priority, but we’ve also made progress on long-term challenges, to deliver a future the next generation ...
    2 weeks ago
  • Tackling the big issues in 2022
    This year, keeping Kiwis safe from COVID will remain a key priority of the Government – but we’re also pushing ahead on some of New Zealand’s biggest long-term challenges. In 2022, we’re working to get more Kiwis into homes, reduce emissions, lift children out of poverty, and ensure people get ...
    2 weeks ago

  • Government’s Family Package continues to deliver for New Zealanders
    The Families Package helped around 330,000 families in its first year - more than half of all families with children in NZ These families received an estimated $55 per week more from Families Package payments in 2018/19 than in 2017/18, on average Families Package increases to the maximum possible Accommodation ...
    BeehiveBy beehive.govt.nz
    2 hours ago
  • New Zealand retains top spot in global anti-corruption rankings
    Justice Minister Kris Faafoi has welcomed news of New Zealand’s ongoing position as top in the world anti-corruption rankings. The 2021 Corruption Perceptions Index released by global anti-corruption organisation, Transparency International, ranks New Zealand first equal with Denmark and Finland, with a score of 88 out of 100. “This is an ...
    BeehiveBy beehive.govt.nz
    15 hours ago
  • Testing improvements see New Zealand well prepared for Omicron
    New Zealand’s PCR testing capacity can be increased by nearly 20,000 tests per day to deal with a surge in cases as part of our wider COVID-19 testing strategy, Associate Minister of Health Dr Ayesha Verrall said. “We have continued to adapt our public health response to safeguard the health ...
    BeehiveBy beehive.govt.nz
    20 hours ago
  • 5,000 portable air cleaners for schools on their way
    As schools are preparing to return, Education Minister Chris Hipkins has announced 5,000 air cleaners have been ordered for New Zealand schools. “As we know, along with vaccination, testing, good hygiene and physical distancing, good ventilation is important in minimising the risk of airborne transmission of the virus that causes ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • New Zealand to move to Red from 11.59pm today
    All of New Zealand will move to the Red setting of the Covid Protection Framework (CPF) at 11:59pm today as Omicron is potentially now transmitting in the community, Prime Minister Jacinda Ardern says. “Nine COVID-19 cases reported yesterday in the Nelson/Marlborough region are now confirmed as Omicron, and a further ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Mandatory boosters for key workforces progressing well
    More than 5,785 (82%) border workers eligible for a booster vaccination at 6 months have received it so far, COVID-19 Response Minister Chris Hipkins says. “That’s a really strong uptake considering we announced the requirement the week before Christmas, but we need to continue this momentum,” Chris Hipkins said. “We ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • NZ to move to Red
    Nine COVID-19 cases reported yesterday in the Nelson/Marlborough region have now been confirmed as the Omicron variant, and a further case from the same household was confirmed late yesterday. These cases are in a single family that flew to Auckland on 13 January to attend a wedding and other events ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • New Zealand to provide further help for Tonga
    Aotearoa New Zealand is giving an additional $2 million in humanitarian funding for Tonga as the country recovers from a volcanic eruption and tsunami last weekend, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. This brings Aotearoa New Zealand’s contribution to $3 million. “This support will ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Quarterly benefit numbers show highest number of exits into work
    The Government’s strong focus on supporting more people into work is reflected in benefit figures released today which show a year-on-year fall of around 21,300 people receiving a main benefit in the December 2021 quarter, Minister for Social Development and Employment Carmel Sepuloni said. “Our response to COVID has helped ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Northland to move to Orange, NZ prepared for Omicron 
    Northland to move to Orange Rest of New Zealand stays at Orange in preparedness for Omicron All of New Zealand to move into Red in the event of Omicron community outbreak – no use of lockdowns Govt planning well advanced – new case management, close contact definition and testing rules ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • RNZAF C-130 Hercules flight departs for Tonga as Navy vessels draw nearer to Tongatapu
    A Royal New Zealand Air Force C-130 Hercules has departed Base Auckland Whenuapai for Tonga carrying aid supplies, as the New Zealand aid effort ramps up, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. “The aircraft is carrying humanitarian aid and disaster relief supplies, including water ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • New Zealand prepared to send support to Tonga
    New Zealand is ready to assist Tonga in its recovery from Saturday night’s undersea eruption and tsunami, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. “Following the successful surveillance and reconnaissance flight of a New Zealand P-3K2 Orion on Monday, imagery and details have been sent ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Aotearoa New Zealand stands ready to assist people of Tonga
    The thoughts of New Zealanders are with the people of Tonga following yesterday’s undersea volcanic eruption and subsequent tsunami waves, Foreign Affairs Minister Nanaia Mahuta says. “Damage assessments are under way and New Zealand has formally offered to provide assistance to Tonga,” said Nanaia Mahuta. New Zealand has made an ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Record high of new homes consented continues
    In the year ended November 2021, 48,522 new homes were consented, up 26 per cent from the November 2020 year. In November 2021, 4,688 new dwellings were consented. Auckland’s new homes consented numbers rose 25 per cent in the last year. Annual figures for the last nine months show more ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Report trumpets scope for ice cream exports
    Latest research into our premium ice cream industry suggests exporters could find new buyers in valuable overseas markets as consumers increasingly look for tip top quality in food. Economic Development Minister Stuart Nash has released a new report for the Food and Beverage Information Project. The project is run by ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Honouring the legacy of legendary kaumātua Muriwai Ihakara
    Associate Minister for Arts, Culture, and Heritage Kiri Allan expressed her great sadness and deepest condolences at the passing of esteemed kaumātua, Muriwai Ihakara. “Muriwai’s passing is not only a loss for the wider creative sector but for all of Aotearoa New Zealand. The country has lost a much beloved ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Have your say on proposed changes to make drinking water safer
    Associate Minister for the Environment Kiri Allan is urging all New Zealanders to give feedback on proposed changes aimed at making drinking water safer. “The current regulations are not fit for purpose and don’t offer enough protection, particularly for those whose water comes from smaller supplies,” Kiri Allan said. “This ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Planting the seeds for rewarding careers
    A boost in funding for a number of Jobs for Nature initiatives across Canterbury will provide sustainable employment opportunities for more than 70 people, Conservation Minister Kiri Allan says. “The six projects are diverse, ranging from establishing coastline trapping in Kaikōura, to setting up a native plant nursery, restoration planting ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • New Zealand congratulates Tonga's new Prime Minister on appointment
    Minister of Foreign Affairs Nanaia Mahuta today congratulated Hon Hu'akavameiliku Siaosi Sovaleni on being appointed Prime Minister of the Kingdom of Tonga. “Aotearoa New Zealand and Tonga have an enduring bond and the Kingdom is one of our closest neighbours in the Pacific. We look forward to working with Prime ...
    BeehiveBy beehive.govt.nz
    3 weeks ago