Why the world is leaving NZ behind

 

On 20 April the NBR ran an article on why we are being left behind, as the rest of the world moves into a growth phase. Quote:

If the domestic economy slows faster than expected in the next two years, it won’t be due to overseas trends.

Voters who backed a change of government back in September also chose a package of low-growth options over the status quo.

That realisation is already affecting economic forecasts, even though the world is in a synchronised growth mode for the first time in decades. End quote.

Surprise, surprise. Remember how Winston said capitalism has failed? Somehow the answer is to tank our economy and reduce growth at a time when the rest of the world is finally in a growth stage. Quote:

IMF Chief economist Maurice Obstfeld urged policymakers to use this buoyancy wisely to ensure against future downturns. “Countries need to rebuild fiscal buffers, enact structural reforms and steer monetary policy cautiously in an environment that is already complex and challenging.”

Some of this advice is being ignored by the Coalition government, particularly the reference to rebuilding fiscal buffers. Instead, it is reversing direction and will eliminate the surpluses of the past two years. End quote.

Why is it that socialist governments can never seem to see the benefit of a strong economy? If they kept growth numbers strong and kept tax rates reasonably low, they could afford their social programmes and would have the best of all worlds. Instead, they trash the economy, and increase taxes so that workers are simply going out to work to pay for others. No wonder those around the margins decide to quit working. Quote:

Already one forecaster, Infometrics, is predicting New Zealand will slow to 2.4% annual growth by the end of this year, and below 2% during 2019. This would be the worst annual outturn since the global financial crisis in 2008-9. Before the election, Infometrics was the most enthusiastic backer of Labour’s policies, so the switch is significant.

Chief forecaster Gareth Kiernan says the two main reasons for his downgrade are a decline in net migration, and the stalling of construction and infrastructure. End quote.

All this is in spite of Labour’s promises before the election. Ten thousand houses a year, of which 18 are in progress and they were started by National anyway. The end of the Roads of National Significance, or RONS. The development of RonAir. Obviously, someone should have put Ron Mark in charge of roads. Quote:

Unfortunately, these are not the only negative effects on business. Wage inflation tougher hiring and firing rules, and higher compliance costs have already slashed business confidence. End quote.

The thing is, this was part of what Steven Joyce meant when he talked about an $11.7 billion hole. He knew there were wage claims coming up from teachers and nurses. Labour studiously ignored these things during the election campaign, gave all the spare cash to tertiary students who didn’t need help, and then claimed, “Things are much worse than we thought.” If they hadn’t started out with a lolly scramble, it might have all been different. I’d rather see the money go to nurses than students from middle class families. Quote:

This can be interpreted as a greater dependence in future on government activity, and therefore an increasing tax burden, with a corresponding decline in the contribution of private investment and business. End quote.

Shall we party like it is 1999? Sure feels like it. Auntie Helen is even back in charge. Where is Marty McFly when you need him? Quote:

Confirmation comes in the bans on further irrigation schemes and privately funded offshore oil and gas exploration, which the Ministry of Business, Innovation and Enterprise says will have a long term loss of $6.2 billion to the economy. This includes nearly $1 billion in foregone royalties to a government that is detaching itself from the world economy. End quote.

Business is really struggling under Labour. Confidence is the lowest we have seen for at least a decade. When you have a government that are perfectly happy to trash a productive industry with no consultation, simply because they want to send virtue signals, you know you are in trouble. Even if you believe in climate change, everyone knows that trashing our exploration industry will have no effect at all. It will just cost more to import oil.

I am horrified by this government. The damage they are doing is massive. They had no idea, when they played student politics by announcing that there would be no new oil or gas exploration permits, that the industry would react immediately. They thought they had decades before it was going to be a problem. It just shows how stupid, naive and inexperienced they are. It also shows that they should not be in government.

The truth is that the ones who vote for this mob are the ones who will be affected the most. Petrol prices are already increasing, while the light rail to Auckland Airport is still years away. How is Jacinda helping all those children in poverty by pushing up basic living expenses? She isn’t. They will be worse off under Labour than they ever were under National.

They say a week is a long time in politics. Two and a half years seems like a century at least.

 


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