I almost felt sorry for Christopher Luxon and Nicola Willis yesterday. Having to negatively paint a PREFU that was better than expected has clearly taxed their abilities.
The figures in PREFU were relatively stable.
Annual GDP is forecast to increase from 1.0% to 1.3% for the next financial year compared to budget figures. Inflation will be slightly higher at 3.8% compared to 3.3%. Unemployment will be slightly lower at 4.8% which is a remarkable achievement. Over the forecast period it will peak at 5.4% before declining back to 4.8%. The current account deficit will be 6.6% of GDP and it will take longer to reach the country’s debt goals. And wage growth will outpace declining inflation. Worker’s living conditions will improve over time.
And net debt will be slightly higher at 22.3% of GDP compared to 22%. Robertson’s recent budget realignment has clearly had an effect.
Luxon’s response was typically downbeat. The guy really needs to chill out and smile. All of this relentless negativity must be getting to him.
With typically overblown hyperbole he said Grant Robertson will go down as one of New Zealand’s “worst finance ministers”.
He and Willis then went into metaphor overdrive.
From One News:
Luxon said Labour’s “excessive spending” was driving economic pain and there was nothing to show for the additional spending.
“It’s not just about the numbers.
“Behind all the data… are Kiwi families [who] are facing tough choices every day.”
He said the state of New Zealand’s economy was driving Kiwis overseas.
“Grant Robertson is going to go down as one of the worst finance ministers this country has ever had.”
National finance spokesperson Nicola Willis said Labour had “left the cupboard bare”.
“The day of reckoning is now here.”
She said economic growth forecast was “lacklustre”.
Willis said National remained committed to tax cuts.
“We will mount the fiscal repair job New Zealand needs.”
His claim about Robertson being one of the worst Finance Ministers needs a bit of unpicking. During his tenure Robertson has overseen two upgrades and no downgrades to New Zealand’s credit rating given by the major ratings agencies. By comparison National’s Bill English achieved two increases but three downgrades.
And Rob Muldoon is clearly the worst Finance Minister. Ever. Not only did he sabotage the Douglas Super fund, the main reason why Australia’s economy has surged past New Zealand’s in the past 50 years, he also blew the country’s budget on the Think Big projects. Who can ever forget that our foreign exchange trading market had to be shut in 1984 to stop excessive speculation following the collapse of the dollar?
And shock horror stories about debt are fantastically overblown.
Clearly, NZ is in a full blown debt crisis…oh, wait! pic.twitter.com/p0juj9Kez7
— Econgrad (@Econgrad5143) September 12, 2023
As are the claims there is nothing to show for increased spending. Significant increases to benefits, nurses and teachers salaries, increased spending in health, winter energy payments and climate projects come at a cost.
Meanwhile Christopher Luxon has changed tack on his earlier promise that Health and Education budgets would be increased by at least the rate of inflation. Stand by for Health and Education to be gradually run into the ground if they win.
Hopefully more and more people will see through National’s overblown rhetoric. Because their current comments show that