World media report on our latest GDP stats – but RBNZ chairman’s reappointment was too trivial even for the govt’s website

Buzz from the Beehive

 We didn’t learn about it from the government’s official website (which contained no fresh news since we reported yesterday when we checked its contents an hour ago).

But we were tipped off that Finance Minister Nicola Willis had announced the reappointment of Professor Neil Quigley as Chair of the Reserve Bank of New Zealand Board for a further term of two years, until 30 June 2026.

Shane Jones and Tama Potaka invite Maori troughers to slurp into a $20m swill and Jones tells us his focus is on … guess what?

Buzz from the Beehive

Three of the latest posts on the government’s official website result from the Prime Minister’s trip to Japan, aided and abetted by Air New Zealand stepping in to provide transport for him and his entourage after their Defence Force aircraft got them no further than Papua New Guinea.

In one statement he enthused about finishing a successful three-day visit to Japan, where (he insists) he strengthened political relationships and boosted business links.

There is no Pākehā GDP, nor Māori GDP. The Government has published statistics that are wrong. NZ does not have two economies – only one.

• Robert MacCulloch writes –

I’ve been thinking – ever since the Leader of Te Pāti Māori said that the new National-ACT-NZ First Coalition wrote a Pākehā Budget for the Pākehā Economy. It’s a great line. But does it make sense? Do we have two economies – a Māori one and a Pākehā one, each with its own Gross Domestic Product (GDP)? I am going to argue neither exist. What’s more, Wellington has wasted millions of tax-payers dollars calculating incorrect GDP figures for the Māori & Pākehā economies. The term, “Māori Economy”, is sometimes traced back to a report published in 2012 by the Bureau of Economic Research Ltd (BERL), a Wellington consulting firm run by Ganesh Nana, the redundant former head of the defunct Productivity Commission. It has now been adopted right throughout government.

Reading the MPS numbers thinking about the fiscal situation

• Michael Reddell writes – 

The Reserve Bank doesn’t do independent fiscal forecasts so there is no news in the fiscal numbers in today’s Monetary Policy Statement themselves. The last official Treasury forecasts don’t take account of whatever the government is planning in next week’s Budget, and as the Bank notes they will need to update their assessment in light of whatever the spending and tax plans prove to be.

So I was more interested in the Bank’s numbers for the things they do forecast independently, and which in turn have implications for both the tax revenue the government could expect to collect on any given set of tax rates and for the likely expenditure pressures (from things like population growth and inflation).

The Treasury and productivity

• Michael Reddell writes – 

Late last week The Treasury released a new 40 page report on “The productivity slowdown: implications for the Treasury’s forecasts and projections” (productivity forecasts and projections that is, rather than any possible fiscal implications – the latter will, I guess, be articulated in the Budget documents).

In short, if (as it has) productivity growth has slowed down a lot, then it makes sense not to rely on optimistic assumptions about rebounds in productivity growth based on not much more than hopeful thinking. Fortunately, “wouldn’t it be nice if productivity were to grow faster” does not seem to be The Treasury’s style.

The post-Covid economy: is it in another long stagnation – and if so, why?

• Brian Easton writes –

This is about the time that the Treasury will be locking up its economic forecasts to be published in the 2024 Budget Economic and Fiscal Update (BEFU) on budget day, 30 May. I am not privy to what they will be (I will report on them in due course) but the Treasury are competent economists persuaded by the evidence, so other economists should be able to make reasonable guesses at what is bothering them.

Willis is undeterred by GDP slowdown and IMF advice, although she is talking of “tax relief” rather than tax cuts

Buzz  from the Beehive

One minister is talking tough while a colleague – whose ministry had acted tough and drawn a barrage of flak – has shown an official  softening.

Some ministers are doing what Labour was good at, which is distributing public funds to causes regarded as worthy or needy, while another has portended the prospect of a contentious Labour decision – to shut down the Marsden Point oil refinery – being reversed.

It’s Judith Collins, KC, (among other things) now – and here’s hoping she has noted what happened to Sir Francis Bacon

Buzz from the Beehive

What does Judith Collins have in common with Sir Francis Bacon? Oh – and with former Labour cabinet ministers Sir Geoffrey Palmer and Martyn Finlay?

All served as Attorney-General in their respective countries, but Sir Francis, Sir Geoffrey and Finlay also were King’s or Queen’s Counsel.

The practice of appointing KCs and QCs dates back to the late 1500s and early 1600s, with the appointment of Sir Francis Bacon.  Initially, the title was known as King’s Counsel and was only bestowed upon men but during the reign of a female sovereign, it was changed to Queen’s Counsel.

MICHAEL REDDELL: A few snippets from the IMF WEO

• Michael Reddell writes – 

The IMF released its latest World Economic Outlook and associated forecast tables overnight. There is no reason to think the IMF is any better as a forecaster than anyone else (ie not very good at all) but they do look at a bunch of advanced countries all at the same time, against a common global backdrop, so it is still worth looking at how they see things here relative to those other advanced countries. A few charts follow.

Here, as in various recent posts, I remove from the IMF advanced countries Andorra and San Marino (as too small to matter) and Hong Kong, Macao, and Puerto Rico (as not countries at all), and add in Poland and Hungary, both of which are OECD member countries and performing similarly economically to various central and eastern European countries the IMF includes in their advanced country grouping. That leaves a group of 38 countries, including New Zealand.

ROBERT MacCULLOCH: Hipkins, GDP and the media

Professor Robert MacCulloch, who holds the Matthew S. Abel Chair of Macroeconomics at Auckland University, over the past two days has posted two articles on the failure of the news media to challenge the PM when he boasts about New Zealand’s GDP growth. He writes – 

• October 11

Where’s our media? Where are the IMF GDP figures out yesterday proving Hipkin’s fabricated NZs rank?

On the front pages of the UK Times today it reports the latest IMF growth figures that came out yesterday, on 10th October. Just a few days ago our PM insisted on Mike Hosking’s Newstalk ZB show that NZ’s GDP growth numbers put us higher then “every country other than Japan”. I couldn’t work out what he was talking about.