Stripped of his housing portfolio, Phil Twyford has to rebuild his political reputation.
Given his spectacular failure with KiwiBuild, PM Jacinda Ardern might have been pardoned for leaving Twyford to work out his redemption in his other portfolio of Transport, which has enough problems of its own to demand the full-time attention of a struggling minister.
But Ardern has entrusted the Economic Development portfolio to Twyford. This has surprised some business leaders, and dismayed others.
NZ’s economic development is suffering from sustained and deep-seated malaise. Labour productivity, or output per hours worked, is around 40% lower than the output per hours worked of international peers. In a recent report the Productivity Commission noted the only members of the 36 countries within the OECD with both a lower productivity level and weaker productivity growth than NZ are Mexico and Greece. Continue reading “Our productivity growth has been flagging – so fixing this should be high on Phil’s new agenda”
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”.
Continue reading “Oh goody – our GDP growth rate is solid (but are we envied by countries which enjoy a better standard of living?)”
Finance Minister Grant Robertson was pretty chipper about the state of the NZ economy when he took questions in Parliament on the latest GDP data. He reckons the economy continues to grow “solidly”, in the face of global headwinds.
Noting the economy had expanded 2.7% in the March year, with growth of 0.6% in the last quarter, he was particularly pleased with the construction sector’s 3.7% growth.
“In summary – plenty to be cheerful about”.
He was especially chuffed the latest GDP data shows NZ continues to outpace many of its international peers. It grew faster than Australia, Canada, the UK, the euro area, and the OECD average. Continue reading “In the days before wellbeing our focus was on GDP – and hey, Robertson reckons we should be cheered by the latest data”
Finance Minister Grant Robertson could not disguise the rapture that had seized him, when he was questioned this week in Parliament on reactions to the budget.
He was excited, apparently, because the government had received an “overwhelming” response from the people of NZ to the wellbeing budget. There had been a vast amount of correspondence.
He cited the Salvation Army as seeing the budget as “a step on the path towards lifting New Zealanders out of poverty” and the Children’s Commissioner likewise believing it “takes seriously the need for a step-change in the way we support the wellbeing of NZ children”.
Good stuff, then, even though it may sound a bit weird to Kiwis who had believed their country’s living standards rank reasonably well against those of other developed nations. Continue reading “Outside of Parliament, the cold water thrown over the Wellbeing Budget should dampen Robertson’s rapture”
A view of economics that might well be reflected in Grant Robertson’s Wellbeing Budget was expressed by American Nobel laureate Joseph Stiglitz last month in an article headed The Economy We Need.
After 40 years of market fundamentalism, he wrote, America and like-minded European countries are failing the vast majority of their citizens.
“At this point, only a new social contract – guaranteeing citizens health care, education, retirement security, affordable housing, and decent work for decent pay – can save capitalism and liberal democracy.”
Stiglitz, an economics professor at Columbia University and chief economist at the Roosevelt Institute, is the author, most recently, of People, Power, and Profits: Progressive Capitalism for an Age of Discontent.
He has elaborated on his early-May article in After Neoliberalism in which he contends:
“For the past 40 years, the United States and other advanced economies have been pursuing a free-market agenda of low taxes, deregulation, and cuts to social programs. There can no longer be any doubt that this approach has failed spectacularly; the only question is what will – and should – come next.” Continue reading “Replacing neoliberal economics – the ideas of Joseph Stiglitz perhaps influenced authors of the Wellbeing Budget”
Jeffrey Frankel, Professor of Capital Formation and Growth at Harvard University, is one of several writers to have examined Donald Trump’s trade war with China in recent days and found American consumers are the major victims of the tariffs that are Trump’s major weapon.
In an article headed The Real Cost of Trump’s Tariffs Frankel writes:
Whereas winners tend to outnumber losers when trade is liberalized, raising tariffs normally has the opposite result. US President Donald Trump appears to have engineered a spectacular example of this: his trade war with China has hurt almost every segment of the US economy, and created very few winners.
The relevance of Trump’s economic blundering for New Zealand is ominously contained in the OECD warning that a US trade war with China could put an anchor on the global economy (see article here). Continue reading “Kiwis brace for fallout from Trump’s trade war, but Americans already are paying the price”
Finance Minister Grant Robertson drew diverse — and conflicting — responses to his announcement in a pre-budget speech that he has moved the Labour-led Coalition’s debt target from 20% of GDP to a range of between 15% and 25%, in the interests (he said) of greater flexibility to economic conditions.
From the Left, the CTU welcomed the move but said the government should go further and faster in relaxing the Budget Responsibility Rules because
“ … it is neither prudent nor responsible to privilege exceptionally low debt levels over major social, human, environmental and economic needs”.
From the Right, National’s Amy Adams insisted Robertson had “thrown in the towel” on the rules and is loosening the purse strings by tens of billions of dollars. Continue reading “Robertson changes the debt target and extols the fiscal virtues of flexibility”