Here is a puzzle: why are ordinary New Zealanders not as excited about the state of their country’s economy as Finance Minister Grant Robertson whenever he talks about it in Parliament?.
Surveys have shown both business and consumer confidence sliding in recent months.
This week Robertson has been citing reports from international institutions to contend everything is going swimmingly for the NZ economy despite some risks, the greatest of which is a sharp economic contraction in China.
But, hey, not to worry, because “I have huge confidence in the businesses and the workers of NZ that are supported by a government that’s investing in skills, in research and development, in infrastructure”.
To assauge doubts, Robertson pointed to the OECD’s report – released publicly this week – which said that economic growth in NZ is” solid”.
The OECD also commended the government for its sound economic management and the Finance Minister thought it is equally pleasing the OECD’s recommendations support the policy direction the government is taking, including in the Wellbeing Budget.
“The 2019 survey looked at NZ through a wellbeing frame, with the OECD finding that ‘current wellbeing in NZ is generally high, [with our performance] very good for employment and unemployment,…health, social support, air quality, and life satisfaction.’”
The OECD did have a concern over the domestic risk of a contraction in the housing market, not because it expects one but because of the high levels of indebtedness that have been built up in the NZ housing market over previous decades.
Again, Robertson applied a reassuring balm: this government has a comprehensive housing plan that includes reform of urban planning systems, building affordable houses, changes to the rules around foreign buyers, and the extension of the brightline test.
As for the IMF, its report on NZ noted a slower rate of economic expansion, but added the near-term growth outlook is expected to improve on the back of government investment and accommodative monetary policy.
The IMF went on to say that Budget 2019 strikes an appropriate balance between supporting policy priorities and maintaining prudent debt levels. NZ’s sound fiscal framework had been further strengthened by the current government’s approach.
Robertson conceded these international authorities may have some different policy prescriptions from the government,but he is satisfied they agree the fundamentals of the NZ economy are strong and the government’s priorities are focused in the right areas.
So what’s to worry about then?
Yes, the rate of GDP growth has slowed.
Does that have an effect on the day-to-day lives of Kiwis – or their wellbeing?
Well, according to Robertson, “we all know that we need sustainable economic growth in NZ in order to support all of the things that we want for our country”
And here’s the clincher: “We continue to grow at a faster rate than most of the countries that we compare ourselves to”.
Strange, isn’t it, that those comparable countries have higher living standards than NZ.