web analytics

Economic doldrums

Written By: - Date published: 9:56 am, September 19th, 2015 - 16 comments
Categories: economy, national, uncategorized - Tags: , ,

National’s mismanagement of the economy has left us in the economic doldrums. Here’s Brian Rudman:

Unemployment is heading back above 6 per cent, having never fallen below the 5.5 per cent recorded in September last year. Growth also peaked last year. It has been boosted by a surge in net immigration but that also means that in per capita terms, gross domestic product growth is a lot less than the headline rate.

By the latest June quarter, annual growth in expenditure GDP was 2.7 per cent but only 0.4 per cent per capita. And the Reserve Bank, in its latest monetary policy statement, now expects the output gap to remain negative for two more years. That would make nine – nine! – straight years in which the economy produced less than it could have. If that was as good as it gets, it wasn’t all that good.

But on the Reserve Bank’s forecasts, households face the unpleasant squeeze of a labour market which is weakening while inflation rises towards 2 per cent. In last week’s statement, the bank has slashed its forecast for economic growth in the current year to March 2016 by more than a percentage point, compared with what it thought in June.

So we are left with a picture of a cycle that never really came close to overstretching the economy’s resources and creating a seller’s market for labour. And now it is clearly on the downward slope.

Former Reserve Bank economist Michael Reddell now blogs as Croaking Cassandra. Earlier in the week he had this to say:

[Australian PM] Turnbull is quoted as saying

“John Key has been able to achieve very significant economic reforms in New Zealand …

I grabbed a piece of paper from my bedside table and starting trying to jot down on the back of the envelope the “very significant economic reforms” in New Zealand over the last seven years.

It was a short list.  I couldn’t think of any.

New Zealand has made no progress in closing gaps with Australia over the seven years John  Key has been Prime Minister –  not on GDP per capita, not on national income per capita, and not on productivity either.  If anything, we’ve drifted further backwards.

I’ve said it before and I’ll say it again – Labour is the party of economic competence in NZ.

16 comments on “Economic doldrums”

  1. Detrie 1

    Yes, this is typical of politics now. It’s been decades since we’ve taken politicians seriously, especially now that money and power, not principles or honest representation of the public will is the name of the game.

    To quote author Robert Hutton, an expert on this topic “Politician-speak has become so coded that it’s essentially another language — what you might call the language of uncommunication.” It just proves the old mantra. ‘How do you know if a politician is lying? Their lips move…” But to be fair, sometimes, they’re just plain ignorant or have a convenient ministerial ‘brain fade’. Our own Prime Minister frequently has them and it seems a valid excuse today.

    Ref http://bit.ly/wouldtheylie

  2. vto 2

    yep, economic doldrums for sure…. the ship’s sails are hanging flaccid, the sea calm ….. while the heavy southerly fronts intensify and move steadily closer ….

  3. Stuart Munro 3

    On the upside manufacturers of pikes, tumbrels, and guillotines can expect improving demand.

  4. Hence why Rudman is getting the sack.

  5. ianmac 5

    I do hope Brian gets another job equal to his talents somewhere where he is recognised as a competent honest writer.

  6. Adrian 6

    Getting rid of Brian Rudman is just part of the malaise at Granny.
    The coverge of the impending, albeit mini, tsunami was pretty much missing in action, even hours later using the map of potential wave hieghts, issued 12 hours before by NIWA, as WHERE they hit, and in a gossip type column.
    It’s rooted. Yay.

  7. Keith 7

    Its Brian Fallow and yes I read it yesterday. But it doesnt matter. Economic malaise becomes economic dynamic flexibiility, (meaningless but sounds good), it’s Bill English’s mythical 2-3% growth.

    All they do when bad news is knocking on the door is get David Farrar working busily behind the scenes, (this is what John Key means when he says he’s seeking advice) to polish the turd so the mentally lazy voting public can live with the shiny acceptable thing that looks suspiciously like a turd and on we go, polling in the 40’s as per normal.

  8. greywarshark 8

    A book that Chris Trotter published in 2007 No Left Turn fits in here. All about what happened after NZ was colonised by the Brits. There were two parallel aims from the first, onegroup wanted to make a better life than the old in defunct Britain, and the other to make a quick profit.
    See Trademe Start price: $16.99 Listing #: 951996364

    And that end of profit before else was pursued with “jamming radio broadcasts, political arson – even murder. From Massey’s Cossacks to Muldoon’s riot squads; violence and repression have been the Right’s weapons – not the Left’s. Charting the evolution of New Zealand’s unique brand of democratic socialism, Trotter offers insightful and often surprising verdicts on the leading participants, including John A Lee, Peter Fraser, Fintan Patrick Walsh, David Lange and Helen Clark.”
    – See more at: http://www.randomhouse.co.nz/books/chris-trotter/no-left-turn-the-distortion-of-new-zealands-history-by-greed-bigotry-and-right-wing-politics-9781869418090.aspx#sthash.nHga4R0Y.dpuf

  9. maui 9

    we’re told that these guys are the only people who can look after our economy, even though at least the last 15 years tells us differently. How stupid are kiwis really? they’ve been played and they still accept the spin. Don’t let the boogeyman into power is what they’re told and they still believe in the boogeyman and they’re adults!

  10. Bearded Git 10

    I couldn’t believe this rubbish from Gaynor in the (we don’t have any journalists left) Herald today singing the praises of the NZ economy compared with the Aussie economy. When you look at the stats there is not much in it and if you looked at the last 5 years Oz would be ahead.

    Rampaging house prices are in the “good” column. Mmmm…..

    Gaynor very much on-message for his Nat Party mates.

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11515616

  11. Draco T Bastard 11

    US STOCKS-Futures drop as Fed fuels global growth concerns

    An economic environment in which the Fed feels it cannot end the era of near-zero interest rates is not one likely to foster the kind of earnings growth needed to support stocks at their current, above-average valuations.

    Why China’s yuan may be set for 15% devaluation

    China, the world’s second-largest economy after the U.S., devalued its currency last month in a bid to help exporters. The country is grappling with a softening economy and wild swings in the stock market.

    “Having achieved a 3 percent move in a few weeks, they would not want to stop here. Their ultimate target is probably a 15 to 20 percent minimum move in the trade-weighted index,” IDEAglobal cited the source as saying in an interview.

    The reality is that we’re still in the GFC and that the world doesn’t appear to be coming out of it. The RWNJs only course is to do more of the same that caused the recession in the first place and so we have government austerity, increasing privatisation and tax cuts for the rich. All this will bring about is a further collapse of the economy – just as it did in the early 1930s.

    • aerobubble 11.1

      As people took on debt they needed to earn more to repay the interest, as companies took on more debt as people kept putting purchases on credit they needed to spend more on shop upgrades and so more debt. Prices rose and the finance industry boomed, the ability of the market to assess value was diluted as all that matter was who could take on debt. Globally China is sitting on a pile of IOUs and the west has been printing them. Everything costs too much, nobody is paid enough, even bankers need year on year million dollar bonuses to keep up, so I ask you why would you put in an extra hour to earn an extra dollar when the financial system prints, borrows over pays itself and you’ll be working for them not yourself. Doesn’t free markets mean that govt has no role and we being represented by parliament have no say now. Key summed it up, we all back the rugby because parliament does, and key say you know parliament represents us all. I.e those that don’t vote and those that don’t matter as all te analysts are free marketeers who don’t believe govt has any power or place.

  12. Ad 12

    Rudman is an unrepentant old lefty from waaaay back, which is why he’s been so impatient with a corporatist Lite-Labour like Mayor Brown.

    The Standard editors could simply reach out to him and get him to do columns right here, to keep his profile up. He would be great scrutinising candidates for the upcoming Auckland elections.

  13. Draco T Bastard 13

    Death and transfiguration

    A new report by the McKinsey Global Institute provides some invaluable statistics for any future Gibbon, which MGI calculated by crunching data from nearly 30,000 firms across the world. Corporate profits more than tripled in 1980-2013, rising from 7.6% of global GDP to 10%, of which Western companies captured more than two-thirds. The after-tax profits of American firms are at their highest level as a share of national income since 1929.

    And we know what happened just after that don’t we. Do the same things, get the same result.

  14. Ad 14

    Draco, Schumpeter seems to have the “dark Satanic mills” version of corporations in mind, eg mining companies, petro Giants, old telcos who didn’t successfully reinvent, car manufacturers, agribusiness, clothing giants etc.

    He is so wrong. Corporations now successfully contest states to a degree not seen since prior to WW1. But increasingly so do cities. And so too do regional trade blocs. Democracy and media-assisted accountability is also retreating globally faster than Fox Glacier. If we get another of Schumpeter’s “creative destruction” upheavals apropos the GFC, we will simply see the global banks and other corporations increase their global dominance, not lessen it.

    A globalised resistance to this is for another generation to take up.

Recent Comments

Recent Posts

  • More time for health workers and elderly to get flu vaccine
    The Government has extended by two weeks till April 27 the amount of time priority groups, such as health workers and those aged over 65, have to get their flu vaccine before it is made available to the wider public. This year’s vaccination campaign is a key component of the ...
    BeehiveBy beehive.govt.nz
    3 hours ago
  • Communities step up to help New Zealanders stay connected and fed during lockdown
    Communities stepping up to help New Zealanders stay at home to break the transmission of COVID-19 and save lives have received Government support, said Minister for Social Development Carmel Sepuloni. “Delivering groceries for the elderly who can’t shop online, providing data packs for low income families to keep them connected, and being ...
    BeehiveBy beehive.govt.nz
    18 hours ago
  • 120 COVID-19 testing centres now operating
    Across New Zealand 120 sites are taking samples to be tested for COVID-19.   68 community based assessment centres (CBACs) have been established to take samples from people with COVID-19 symptoms. Alongside this, 52 other centres including designated general practices, swabbing centres, and mobile clinics are now testing people for ...
    BeehiveBy beehive.govt.nz
    18 hours ago
  • Covid19: Government moving quickly to roll out learning from home
    The Ministry of Education is working with partners to develop a package of options so that students can learn at home when Term 2 begins on 15 April, Education Minister Chris Hipkins said today. Supports are also being prepared for households with children under five, to help parents and whānau ...
    BeehiveBy beehive.govt.nz
    19 hours ago
  • Making learning from home accessible to Māori learners and whānau
    Māori Television to begin educational te reo programmes Ki te Ao Mārama – a new online learning space Thousands of hard copy learning packs ready for distribution Helpdesk and advice service for kōhanga, kura and wharekura Television, the internet and hard copy learning packs are some of the ways whānau ...
    BeehiveBy beehive.govt.nz
    20 hours ago
  • New Zealand to provide assistance to Vanuatu following Tropical Cyclone Harold
    Foreign Affairs Minister Winston Peters has announced an initial package of support to help the people and the Government of Vanuatu respond to the impact of Tropical Cyclone Harold. “Our Pacific neighbours have been hit by a Category 5 Cyclone at the same time as dealing with the economic impacts ...
    BeehiveBy beehive.govt.nz
    21 hours ago
  • Planning for the future of tourism
    Tourism New Zealand to lead work reimagining the way tourism operates in post-COVID-19 world. Ministers to review International Visitor Conservation and Tourism Levy investment plan. The Government, industry and business are working together to develop a plan for how tourism will operate in a post-COVID-19 world, Tourism Minister Kelvin Davis ...
    BeehiveBy beehive.govt.nz
    23 hours ago
  • NZ horticulture sector feeding Kiwis and the world during COVID-19
    More New Zealanders are taking up the chance to work in horticulture as the sector keeps New Zealanders fed and in jobs during the COVID-19 Alert Level 4 lockdown. “Our horticulture sector has long been one of New Zealand’s export star performers, contributing around $6 billion a year to our ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Work to repurpose PGF funds begins
    The Provincial Development Unit is working through applications and projects to see where Provincial Growth Fund money can be repurposed for initiatives deemed more critical to fighting the economic impacts of the COVID-19 pandemic, Regional Economic Development Minister Shane Jones says. “We need to be throwing everything we have at ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • A million workers supported by Govt wage subsidy
    The Government’s wage subsidy to protect jobs and keep workers and businesses connected during the lockdown has now supported over a million New Zealanders, with $6.6 billion already paid out. “We’re supporting businesses to pay wages, and stay connected with their workers so that we are all in a better ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government helps Pacific communities fight COVID
    The Government is stepping up efforts to help protect New Zealand’s Pacific communities in the fight against COVID-19. Cabinet has agreed that $17 million will be allocated to support a COVID-19 Pacific Response Package, which will: Support Pacific health and disability services facing increased demand; Ramp up public health messaging ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Statement from the Prime Minister on Dr David Clark
    “Yesterday evening the Health Minister advised me of his trip to a beach during the lockdown and offered his resignation,” Jacinda Ardern said.  “Under normal conditions I would sack the Minister of Health. What he did was wrong, and there are no excuses.  “But right now, my priority is our ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Statement from David Clark
    Last night as part of my preparation for the Epidemic Response Committee, I provided the Prime Minister with a complete picture of my activity outside my home during Alert Level 4.  That included the fact that on the first weekend of the Alert Level 4 lockdown I drove my family ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • COVID-19 mental health support begins
    A range of support is being rolled out across New Zealand to help people look after their mental health during COVID-19 Health Minister David Clark said this morning. “COVID-19 has brought a lot of uncertainty into our lives and many of us will be feeling some level of distress or ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Zealanders in Peru to be assisted by Government charter flight
    The New Zealand Government has made arrangements to charter a flight for New Zealanders stranded in Peru to depart the country, following agreement with the Chilean government to allow the necessary transit through Chile, Foreign Affairs Minister Winston Peters announced today. “Like many travellers around the world at the moment, ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • COVID-19 Hospital Preparation Well Advanced
    Hospital preparations for COVID-19 are well advanced says Health Minister David Clark. “Hospitals across New Zealand are repurposing buildings and training staff to get ready for COVID-19 patients. This gives me confidence that we are well prepared for any potential increase in COVID-19 patients needing hospital level care,” said David ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Further measures to support businesses
    The Government will be introducing legislation to make changes to the Companies Act to help companies facing insolvency due to COVID-19 to remain viable and keep New Zealanders in jobs. The temporary changes include: Giving directors of companies facing significant liquidity problems because of COVID-19 a ‘safe harbour’ from insolvency ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Govt’s COVID plan, economic strength recognised
    The Government’s plan to cushion the blow of COVID-19 by supporting incomes, jobs and businesses, and position the economy to recover has been backed by another international report. International credit rating agency Moody’s today reaffirmed its highest Aaa credit rating on New Zealand, saying the economy is expected to remain ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Funding certainty for sports through COVID-19
    National sports organisations have been given certainty of funding to ensure they can remain viable through the COVID-19 pandemic, Sport and Recreation Minister Grant Robertson announced today. “The global spread of COVID-19 has had a significant impact on sport and recreation in New Zealand, including the cancellation or postponement of ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Butchers now allowed to process pork
    Changes have been made to allow butchers to process pork, only for supply to supermarkets or other processors or retailers that are open, Agriculture Minister Damien O’Connor has announced. “We carefully weighed the risk of allowing butchers to open their shops for retail customers, but the risk of spreading COVID-19 ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Essential workers leave scheme established
    Essential workers who take leave from work to comply with public health guidance are being supported with a leave scheme to ensure they will continue to receive income, say the Minister of Workplace Relations and Safety Iain Lees-Galloway and Minister for Social Development, Carmel Sepuloni. A number of essential businesses ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Govt WhatsApp helps share COVID-19 information
    A Government WhatsApp channel has been launched to help make information more easily accessible and shareable in the fight against COVID-19. Govt.NZ, which is free to use on any mobile device, will carry information and news for the public, businesses, healthcare providers, not for profits and local government. It can ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Managed departure plan for stranded foreign nationals enables safe, orderly exit
    The Government has announced a plan to enable the safe, orderly exit of tens of thousands of stranded foreign nationals from New Zealand during the current COVID-19 Alert Level 4 restrictions, Deputy Prime Minister and Foreign Minister Winston Peters has said. “When we moved into lockdown a week ago, the ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Government delivers COVID-19 support to GPs and Pharmacies
    Health Minister Dr David Clark says the Government is delivering on its commitment to support general practice doctors and nurses, and pharmacies on the front-line of our fight against COVID-19. "For us to overcome COVID-19, we need community health services such as general practice and community pharmacy to step up ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Susan Thomas the new Chief High Court Judge
    Justice Susan Thomas has been appointed Chief High Court Judge, Attorney-General David Parker announced today.  She replaces Justice Geoffrey Venning who has resigned from the position.   David Parker paid tribute to Justice Venning, who he said had stewarded the High Court very capably over the last five years.   “On behalf ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Business Finance Guarantee – applications open
    Businesses can start applying to their banks for loans under the Business Finance Guarantee Scheme set up to support the New Zealand economy during the COVID-19 pandemic. “We’re moving quickly to protect New Zealand businesses, jobs and the economy during this unprecedented global economic shock,” Finance Minister Grant Robertson said. ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Work starts on ways to fast-track consents to boost recovery from Covid-19 downturn
    Work is underway looking at measures to speed up consents for development and infrastructure projects during the recovery from COVID 19, to provide jobs and stimulate our economy.  Environment Minister David Parker said the COVID-19 pandemic is a serious global crisis that will have a wide ranging and lasting impact ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Advance payments to support contractors
    Advance payments will be made to transport construction industry contractors to retain the workforce and ensure it is ready to quickly gear up to build projects which will be vital to New Zealand’s COVID-19 economic recovery, Transport Minister Phil Twyford announced today. He said keeping the workforce required to build ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government seeks infrastructure projects
    The Government has tasked a group of industry leaders to seek out infrastructure projects that are ready to start as soon as the construction industry returns to normal to reduce the economic impact of the COVID-19 pandemic, Economic Development Minister Phil Twyford and Infrastructure Minister Shane Jones say. The Infrastructure ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Health system scaled up to prepare for COVID-19
    Work to scale up the health system in preparation for COVID-19 was today outlined by Health Minister David Clark, as he reported back to the new Epidemic Response Committee. “We are well placed to contain the spread of COVID-19. We have taken early and decisive action at our borders, and ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Essential media COVID-19 guidelines refined
    The Government is refining its COVID-19 essential business guidance to include the distribution of news publications for communities which are hard to reach. The Minister of Broadcasting, Communications and Digital Media, Kris Faafoi, said the move was in recognition of the importance for New Zealanders who might be harder to ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Supermarkets able to open on Easter Sunday
    The Government is ensuring supermarkets can open on Easter Sunday so we can buy groceries, but stay closed on Good Friday allowing workers to take a break. This provides a balanced approach and ensures we avoid large queues that two days closure may cause. “Supermarkets will be able to open ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand defence personnel conclude mission at Taji
    Following the successful conclusion of the Building Partner Capacity (BPC) mission at Taji, New Zealand defence personnel are returning to New Zealand from Iraq, in accordance with the Cabinet decision made in June 2019, Foreign Affairs Minister Winston Peters and Defence Minister Ron Mark announced today. “New Zealand is very ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • State of National Emergency extended
    The State of National Emergency to help stop the spread of COVID-19 has been extended for a further seven days, Minister of Civil Defence Peeni Henare said. The initial declaration on March 25 lasted seven days and can be extended as many times as necessary. “Since we went into isolation ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Strong Govt books support ‘go hard, go early’ response
    New Zealand’s ability to go hard and go early in the fight against COVID-19 has been underpinned by strong Government finances and the growing economy heading into this global pandemic, Finance Minister Grant Robertson says. The Treasury today released the Crown financial statements for the eight months to the end ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Christchurch Hospital Hagley ICU to open to support COVID-19 response
    Health Minister Dr David Clark says 36 new intensive care beds at Christchurch Hospital’s new Hagley building are being fast tracked so they are available for treatment of COVID-19 patients.   The Ministry of Health is working with contractor CPB and Canterbury DHB to enable access to the hospital’s ICU, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government supports Air NZ freight flights
    The Government has fast-tracked up to $1 million to help Air New Zealand move urgent freight to and from New Zealand, with the first flight to Shanghai leaving tonight, Transport Minister Phil Twyford announced today. Phil Twyford says it’s crucial that trade in vital goods such as medical supplies and ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Tariff concessions on COVID-19 related products
    New Zealand will temporarily remove tariffs on all medical and hygiene imports needed for the COVID-19 response. Trade and Export Growth Minister David Parker and Commerce and Consumer Affairs Minister Kris Faafoi said today that the New Zealand Customs Service will apply tariff concessions to all diagnostic reagents and testing ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Clarification of modification to wage subsidy scheme
    Minister of Finance Grant Robertson has clarified that the changes to the wage subsidy scheme announced yesterday mean that employers should be passing on the full subsidy to workers, except in the case where the person’s normal income is less than the level of the subsidy. “We still want employers ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Face masks flowing to DHBs
    Medical face masks from the national reserve supply are now being distributed to District Health Boards, while at the same time local production is being ramped up. Yesterday more than 640,000 masks were sent to DHBS – that is an immediate two week supply, with more to follow in coming ...
    BeehiveBy beehive.govt.nz
    2 weeks ago