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Andrew Dickens: We need to put perspective on the current state of our economy

Andrew Dickens,
Publish Date
Mon, 22 Apr 2024, 1:27pm

Andrew Dickens: We need to put perspective on the current state of our economy

Andrew Dickens,
Publish Date
Mon, 22 Apr 2024, 1:27pm

It is fair to say the country is not in a good place right now.

Job cuts dominate the headlines. A double-dip recession came true. Inflation is robbing us of our purchasing power.

Last week an IPSOS poll found that 60 percent of us think that New Zealand is in decline and 65 percent believe that the economy is rigged to benefit the rich and the powerful.

And when people bemoan our situation and wonder how we got here a common response is to blame the Labour Government and the Reserve Bank.

A common refrain is Robertson blew all the money so we can't afford to do anything now, even something as important as paying our police more so they don't quit or leave the country. You also hear that Labour caused a debt so large our children and their children will be paying for it for decades to come.

So I pricked up my ears last week when Mike Hosking talked to ASB economist Nick Tuffley about inflation and the economy in general.

Mike asked him how bad was our economy and he said pretty bad but still nowhere near what happened after the GFC.

To remind you, the GFC ended early in 2009 and John Key's government was in charge. To remedy the situation we borrowed, we opened up immigration and we went through austerity to a far greater degree than we're doing now. And it worked.

Need I remind you that within 5 years we were described as having a rock-star economy.

This is not to diminish the situation that we're in right now but it is to put a perspective on things.

But Nick was also asked why inflation and bad economic tidings were still happening here when other economies like the States, the UK and Australia are bouncing back. Economies with far greater debt and spending.

Tuffley essentially blamed our static productivity. He says considering we imported nearly 3 percent more population over the past 2 years our GDP should have raised, but it didn't.

We seem incapable of making more money per person year on year. And it's a problem that we've had ever since Ruth Richardson's Mother of all Budgets early in the 90s. And it's a problem that exists no matter the colour of the government.

It's something we need to look to ourselves for not something we can blame on the government.

And it relates to the comments that Christopher Luxon made overseas that angered some when he boasted that New Zealand is now open for business.

We've always been open for business. The real question is how much business are we open for?

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