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HDPA: GDP figures shows Govt has bungled economic response to virus

Author
Newstalk ZB,
Publish Date
Thu, 18 Jun 2020, 4:16PM

HDPA: GDP figures shows Govt has bungled economic response to virus

Author
Newstalk ZB,
Publish Date
Thu, 18 Jun 2020, 4:16PM

I’d imagine this week is going to go down as one of the worst for this current government PR-wise, and that’s saying something.

And today, the week just got a whole lot worse with those GDP figures out.

A 1.6% fall in GDP for the first quarter is huge.  We were expecting a fall of around 1% and that was bad enough.  We’ve just witnessed the biggest quarterly drop since 1991.

Australia by comparison took a knock of only 0.3%. That’s a huge difference.  It’s shows just how hard we locked down.  Unnecessarily.

Construction, according to Statistics NZ, “was the greatest contributor to the drop, declining 4.1 percent”. Imagine if we hadn’t shut it down the way Australia didn’t shut it down how much better the GDP data might be right now.

Now of course, it’s early days. The first quarter data only measures about six days of lockdown here in New Zealand and the comparison with Australia is limited in that they are dealing with a longer tail on their Covid-19.  It is fair enough to say the first quarter GDP data isn’t enough to rest a case on.

But it lines up with all the other data from economists, banks and the OECD predicting how much harder we are going to take the economic hit than Australia.

It’s been fairly obvious the government hoped throughout this crisis that voters would forgive them strangling the economy during the lockdown, in gratitude for how well they handled the health response.

But the trouble is, that doesn’t look so good now.  Our confidence in the health response is evaporating. Not just because of the one story of two women driving the length of the North Island with Covid-19, but because of all the stories that have emerged illustrating how badly they’re running the border facilities.

So now they can’t trumpet either of their responses - health nor economic - as a success.  One, judging by the GDP figures, is a failure.  The other, judging by the stories emerging from the quarantine facilities, threatens to become another.

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