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Mike's Minute: The economy is stuffed and the reports show it

Mike Hosking,
Publish Date
Wed, 8 May 2024, 9:43am

Mike's Minute: The economy is stuffed and the reports show it

Mike Hosking,
Publish Date
Wed, 8 May 2024, 9:43am

We now have three reports this week that help us understand just what an astonishingly bad place our economy is in. 

The OECD report on Monday, which was blunt and although slightly political in terms of ideas around capital gains tax, was irrefutably accurate when it talked of our issues around productivity, education, and debt. 

What the 2017-2023 Government left us is fiscally criminal. 

Then there was the Morningstar report on our KiwiSaver fund. In the first quarter its value is up $4 billion to $108 billion, which is the good news. 

The bad news is in the commentary. New Zealand's economy is likely to slow. What makes that worse is the world's isn't and that is where the funds growth came from, by tapping into the success others are having while we aren't. 

Report number three was from Treasury saying the deficit is blowing out. For the nine months to March, it's over $5 billion. Just to explain that that's $5 billion more than we have for just the nine months so far. That's over half a billion dollars worse than they thought it was going to be and they thought it was going to be bad already. 

Tax is your issue. When you are in a recession we don’t pay as much of it. 

The carbon markets played their part because the previous Government cocked them up so badly the return didn’t happen, nor did other returns from the Crown and state-owned enterprises. 

Our net debt is at 42.9% of the size of our economy. 

When Labour arrived, it was 19%. 

Personally, I would never ask Chris Hipkins another question about this current Government's actions or policies ever again, because between him and Jacinda Ardern, as these three reports so clearly point out, show there are few so-called "first world economies" on this planet that are as hopeless as we are right now. 

Everyone is suffering. Every second organisation, agency or charity has their hand out for more money and any number of groups are on a series of strikes or stop-works. 

The social and moral malaise is palpable, and the reports produce the numbers that explain why. 

I don't envy this new Government. No matter which way they turn there is mess. 

There should have been an amnesty on criticism because what they face is so bad that all we can do is wish them well and always remember that what they are undertaking is a repair job of historic proportions. 

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