A year ago, commercial building consents fell off a cliff as firms cut investment because of the recession. Now, that’s flowing into a big slow-down in the construction industry. NZIER says 20,000 jobs are at risk.
The latest NZIER quarterly predictions slashed growth forecast for the next year in half. They have GDP growth slowing to below population growth, a quarter of negative growth, and the economy missing a second dip into recession by a hair’s breadth. I reckon NZIER is being too optimistic, simply because these predictions tend to respond to events only slowly.
A construction collapse could be the tipping point for the faltering economy, if it doesn’t come from overseas first (big economists abroad are saying there’s a one-in-three chance of another global recession starting this year).
So, 20,000 more jobs at risk and healthy odds of another recession when we’re still a long way off recovering from the previous one.
What’s the government doing?
Well, Rodney Hide – fresh from stuffing up Auckland – has decided to make reforming dog control laws his last big achievement before he gets kicked out of Parliament next year. Peter Dunne is spending his time on child support. Tariana Turia is still pretending that Whanau Ora isn’t a joke that’s already months behind schedule. Kate Wilkinson is cutting our work rights. Bill English is handing over hundreds of millions to the rich (again). Anne Tolley is trying to piss off everyone in the education sector. Paula Bennett is making life harder for beneficiaries while cutting job creation programs. Tony Ryall is busily playing statistical games to make himself look good. Nick Smith is using the RMA reforms to sidestep public opposition to National’s Roads of National Significance. John Key is bouncing from cloud to cloud collecting autographs from foreign leaders. And the rest, who knows?
The Greens, at least, have a plan. It’s a lot like what we’re been talking about on The Standard.
There’s a shortage of quality housing in New Zealand, there’s a lot of construction workers about to lose their jobs, and there’s a hell of a lot of low quality government spending into motorways whose economic benefits barely outweigh the costs about to take place. The obvious solution: divert a chunk of that white elephant motorway spending to state housing construction (divert some more to public transport projects with decent benefit/cost ratios, and more to early childhood education with its 13:1 BCR).
The Greens reckon that building 6,000 extra state houses at a cost of $2 billion would create 28,000 jobs and provide about 20,000 New Zealanders with healthy, environmentally-friendly modern housing.
That’s the kind of visionary economic leadership we need. We’re not going to get it from National.