Our brilliant economy

Written By: - Date published: 10:49 am, June 16th, 2017 - 51 comments
Categories: class war, economy, national, useless - Tags: , , , , ,

Do voters really vote on “the economy”? I’m not so sure, but if they did, they shouldn’t vote for this lot. Grant Robertson:

Economy stalling after nine years of National’s complacency

The second successive quarterly fall in per person growth shows the need for a fresh approach to give all New Zealanders a fair share in prosperity, says Labour’s Finance spokesperson Grant Robertson.

Data released by Statistics New Zealand today shows that GDP per capita fell 0.1 per cent in the March Quarter, following an 0.2 per cent decline in the December Quarter. Exports fell 0.4 per cent, following a 3.2 per cent decline in the December Quarter and a 1.1 per cent decline in the September Quarter. The construction sector shrunk 2.1 per cent.

“After nine years, National is asleep at the wheel. The economy is going backwards on a per person basis, the export sector is in recession, and, now, construction is falling too. Relying on population growth and an overheated housing market to prop up the economy is a dangerously complacent approach.” …

In other headlines just this week:
Second quarter of slow growth for economy
NZ economy grows smaller-than-expected 0.5% in 1st quarter
Higher NZ deficit disappoints and surprises banks
Big Read: Hey! Where did my pay rise go?
NZ’s weak productivity in OECD’s sights
A cure for a productivity recession
Economy not meeting the needs of working people – where is the Governments strategy?
Our environment’s crucial role in the economy
NZ economy growing, but house prices a risk – OECD report
And one older piece:
New Zealand’s economic growth driven almost exclusively by rising population

I’m not a fan of “growth growth growth”. We need new thinking on the economy – zero emissions, sustainable, a big redistribution from rich to poor. But the list of woe above shows that even on their own old conventional terms the Nats are useless economic managers.

51 comments on “Our brilliant economy”

  1. Philj 1

    It’s mathematically impossible to have continuous growth. There must always be a reset or crash.
    Why do politicians or economists not acknowledge this?

    • Draco T Bastard 1.1

      It’s mathematically impossible to have continuous growth.

      Actually, it’s mathematically possible to have continuous exponential growth. If it wasn’t we’d have economists telling us that we can’t have it.

      But it is physically impossible which shows just how disconnected from reality economists, most politicians and all RWNJs are.

  2. Draco T Bastard 2

    Data released by Statistics New Zealand today shows that GDP per capita fell 0.1 per cent in the March Quarter, following an 0.2 per cent decline in the December Quarter.

    Definition of recession:

    In economics, a recession is a business cycle contraction which results in a general slowdown in economic activity.[1][2] Macroeconomic indicators such as GDP (gross domestic product), investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise. In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters.

    We’re now in a recession.

    So much for he ‘Rock Star Economy’ that National told us we had.

  3. Carolyn_nth 3

    I was stunned this week to hear Steven Joyce touting how the government was working on productivity, like they were already working on it… so all good for Natz, it seems.

    But, after 9 long years, the Natz with NZ productivity stalled or going backwards, the Natz are only now starting to work on it?

    And, yep, we need a sustainable economy that works positively for the many, not an economy that looks good on a spreadsheet but works well only for the few. And we need an economy that works for all people, communities and the environment.

  4. Sorrwerdna 4

    The sky is falling -OMG 0.1% decline

    • Draco T Bastard 4.1

      And the RWNJ comes in with the usual dismissal of the increasing poverty that their policies create.

      • Sorrwerdna 4.1.1

        I thought the discussion was on economic growth not poverty

        • Draco T Bastard 4.1.1.1

          GDP going down per capita means an increase in poverty.

          • Andrew 4.1.1.1.1

            And yet, GPD per capita is still much higher than when Labour where in office.

            • Draco T Bastard 4.1.1.1.1.1

              And?

              There’s still been an increase in poverty.

              Income inequality: How NZ is one of the worst in the world
              NZ’s child poverty highlighted in Amnesty report
              facts about poverty

              There may have been an increase in GDP but all the benefits and then some have gone to the rich.

              Striking it Richer: The Evolution of Top Incomes in the United States
              The Gains From the Economic Recovery Are Still Limited to the Top One Percent

              Those are from the US but the same thing is happening in NZ.

              What we’re seeing is how that increased poverty is now impacting the economy.

            • Grafton Gully 4.1.1.1.1.2

              There was an earthquake, remember ?

            • Macro 4.1.1.1.1.3

              what a load of cock!
              So you take it that GDP is a measure of welfare then?
              Obviously you are completely ignorant of just what it is that GDP measures.
              To quote Bobby Kennedy in 1968

              University of Kansas, March 18, 1968

              Even if we act to erase material poverty, there is another greater task, it is to confront the poverty of satisfaction – purpose and dignity – that afflicts us all.

              Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product – if we judge the United States of America by that – that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage.

              It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl.

              It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children.

              Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.

              It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.

              And it can tell us everything about America except why we are proud that we are Americans.

      • Gosman 4.1.2

        Poverty hasn’t moved much in the past 20 years

  5. Macro 5

    Those of us on the left know full well that it is perfectly possible to have prosperity without continual growth – assuming a stable population. Obviously if you have a growing population then the economic activity to provide the prosperity will need to grow as well.
    NZ already has sufficient economic activity to provide prosperity for all its citizens – the problem is that it is not equally distributed. We all know the reason why, and how it came about. However, the process to reverse this inequality will need a very strong vote from the population, because lets face it, the ones who did alright out of the changes 30 odd years ago are, by and large, (for purely selfish reasons) not going to want to reverse them. There is only one way we can reverse the “user pays” ideology of the mid ’80’s 90’s, .. etc. and that is to begin a movement for equity. And the only way you start a movement is through actually talking and listening to people. You don’t need fancy signage, you just need active people, committed to change, getting out door knocking, and saying “hello how are things with you?” This is the way JC in UK and Bernie in the US carried out their campaigns, and they are still doing today. Like Rachael used to say: “It won’t happen overnight – but it will happen”

  6. mlpc 6

    For a more balanced and impartial view:

    “New Zealand continues to enjoy a strong, broad-based economic expansion.

    Strong economic growth is being driven by booming tourism, strong net inward migration, solid construction activity, and supportive monetary policy.
    The fiscal position is sound, with low public debt and a balanced budget. The major vulnerability facing the economy is high levels of household debt associated
    with rapid house price increases, particularly in Auckland. New Zealand is also exposed to protectionist trade policies abroad and to slowing Chinese economic
    growth. While the short-term economic outlook is strong, there are long-term challenges from low productivity growth and a changing labour market. ”

    (OECD Economic Survey of New Zealand, 2017)

    Not brilliant, but far from bad, especially compared to most advanced economies.

    • Draco T Bastard 6.1

      Link?

    • peterh 6.2

      low public debt ? half a trillion and increasing

      • Andrew 6.2.1

        That would be private debt, not public. Compared to the rest of the world, NZ has one of the lowest public debt-to-gdp ratios in the world.

        • mlpc 6.2.1.1

          Correct, Andrew.
          According to the IMF, amongst advanced economies, only Estonia, Luxembourg and Hong Kong have a lower public debt to GDP ratio than NZ.

          • One Two 6.2.1.1.1

            How about you explain what ‘money’ really is then..

            Just how did the ‘debt’ accumulate, and to whom does the public of Nz ‘owe’ the ‘debt’ to?

            Should human beings be born into ‘debt’…do you think?

            • mlpc 6.2.1.1.1.1

              Not sure what you mean by the first bit, but there has been public debt for many years.
              It was around $20 billion for a while before the GFC and the earthquakes and then it blew out to around $70 billion. It is now in the low $60 billions and slowly decreasing.
              The debt is owed directly to banks in NZ and overseas, but it might be owed indirectly to you if you have Kiwisaver and other financial investments.

              Whether human beings should be born into debt is a good topic for debate, but I guess it depends on what the debt is for.
              Is debt ok if it is used for infrastructure investment? Most people would probably say yes.
              Is debt ok if it is used to cut the top rate of tax? Most people would probably say no.
              Some people pass on a debt to their kids if their mortgage is not paid off, but the kids probably wouldn’t complain if there is a good amount of equity.
              Many successful businesses have debt, but that is ok if it is less than the value of the assets and the businesses is profitable.

              • mordecai

                The majority of posters here would have no idea about the nations debt, they simply regurgitate the talking points handed to them by their labour party enablers.

                • Gosman

                  Agreed. Also they don’t understand the best way of dealing with the debt issue is to give Tax breaks to people so they can pay off their debt.

                  • left_forward

                    Neo-liberal dogma: Thereby increasing public debt and reducing expenditure on public services such as health and education.

                    • mordecai

                      Tax breaks actually lead to a higher tax take, because people use their higher disposal income to spend.

                • Stuart Munro

                  You’re unusually backward for a troll Mordecai – the Labour party want us to follow like good little sheep – they hate us.

                  • mordecai

                    I am neither a troll nor backward. You might not be a Labour supporter, but a large number here are.

                • left_forward

                  Most of the posters here will remember well the Clark Government’s successful reduction of public debt – which was quickly undermined when the Natz arrived by tax cuts for the wealthy and selling high earning public assets

                  • Stuart Munro

                    Yes, in fact I have much more respect for Cullen than I ever had for Clark. But the hate is true – they won’t talk to me, they mobilise their identity politics against us and play their weird games.

                    “Talking points from Labour” as if.

                  • mordecai

                    Rubbish. The Government borrowed to fund the rebuilding of Chch, and the GFC. Are you suggesting the left would have run down social spending instead?

                    • Stuart Munro

                      They borrowed more than enough to rebuild Christchurch but they misdirected it. It hasn’t been rebuilt.

                      That’s not what success looks like – that’s endgame of a failed state.

                    • left_forward

                      No not all, but (again) they wouldn’t have reduced taxes for the wealthy and sold high earning public assets.

                    • Grafton Gully

                      The Governement is tired and dysfunctional. All the little resentments and jealousies have built up. You can tell by looking at them. And that weird stuff with the likes of Chai Chuah. Time for a clean out !!

                    • mordecai

                      “It hasn’t been rebuilt.”
                      No. All those new properties, roads and other infrastructure I saw the other week are a figment of my imagination.

                    • mordecai

                      “No not all, but (again) they wouldn’t have reduced taxes for the wealthy and sold high earning public assets.”
                      1. Taxes were reduced for everyone, not just high income earners.
                      2. Those public assets are returning a higher dividend now than they did before.

                    • mordecai

                      “The Governement is tired and dysfunctional.”
                      And yet immensely popular.

        • Macro 6.2.1.2

          What a load of nonsense

          In 2016 New Zealand public debt was 53,698 million dollars, has increased 2,494 million since 2015.

          This amount means that the debt in 2016 reached 29.5% of New Zealand GDP, a 0.06 percentage point fall from 2015, when it was 29.56% of GDP.

          If we check the tables we can see the evolution of New Zealand debt. It has risen since 2006 in global debt terms, when it was 17,501 million dollars and also in terms of GDP percentage, when it amounted to 15.95%.

          According to the last data point published, New Zealand per capita debt in 2016 was 11,311 dollars per inhabitant. In 2015 it was 11,019 dollars, afterwards rising by 292 dollars, and if we again check 2006 we can see that then the debt per person was 4,158 dollars .

          The position of New Zealand, as compared with the rest of the world, has improved in 2016 in terms of GDP percentage. Currently it is country number 38 in the list of debt to GDP and 152 in debt per capita, out of the 185 we publish.

          http://countryeconomy.com/national-debt/new-zealand

  7. Keith 7

    Our housing market is now firmly run aground. We cannot and under National will not he able to build our way out of the mess they have overseen because land prices and land bankers are now halting expansion.

    Demand in their utopia will ALWAYS exceed demand.

    The National Party cannot fix this, they’re personally involved and ideologically blind.

    • Gosman 7.1

      What are Labour going to do to reduce land prices?

      • Craig H 7.1.1

        1% land tax on land values above $300K in area 1 on the new Accommodation Supplement list, $200K on area 2, $100K on area 3 & 4. You heard it here first!

  8. saveNZ 8

    Our brilliant economy… bit early for satire isn’t it?

  9. Gosman 9

    How come The Greens and Labour don’t seem to agree with you on the big redistribution from rich to poor?

    • left_forward 9.1

      Troll question – of course they do agree with this – but not yet enough for progressives

  10. Smilin 10

    This govt is an extractionist producer of wealth, repaying so little to the environment that we are in decline of a our natural resources
    This is a crime organised by bankers and the finance industry who are the last people you need in a govt
    Everything that happens is valued in monetary terms because its the easiest way to manipulate the population so the 1% can carry on creating a model to pressure human existence into what their idea of civilization is rather than what it should be that will sustain it and not head as at present to a never any decline and this country will be nothing in 100 yrs either by our efforts or natural events
    Get scared its going to happen

  11. Philj 11

    Informed youth are waking up to the seriousness of the modern world as reality is beginning to bite. We have to work together when powerful forces are driving us apart. This is global and inevitable. Love and respect, not hate and fear.

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