National fiddles while growth burns

Labour Finance spokesperson David Cunliffe says today's very disappointing GDP growth figures confirm that the recovery is in trouble and that the Government has no effective economic plan for New Zealand.

David Cunliffe said GDP growth of only 0.2% in the June quarter is about one quarter of the 0.9% predicted by the Reserve Bank.

“It continues the decline from 0.5% in the March 2010 quarter and 1.0% in the December 2009 quarter.” "All New Zealanders will be very concerned at this troubling evidence that the recovery has run out of puff and that the economy is, in fact, sliding backwards,” David Cunliffe said.

"Of particular concern is the 4.0% decline in manufacturing activity, which confirms the recent decline in the manufacturing index, and successive months of declining business confidence.

"The decline in communication services activity, down 2.6% and down for the third successive quarter, also indicates a troubling decline in productive activity.

"This dark news calls into question the appropriateness of the Government's so called ‘rebalancing’, which has seen domestic output stagnate in the face of dwindling domestic demand and eroding confidence,” David Cunliffe said.

"It seems like a re-run of the early 1930s, where National's forebears believed the economy must be left to rebalance on its own and thus prolonged the Depression.

"Lacking a coherent strategy for growth and industry development, the Government is dependent on sagging world growth outlooks and commodity price swings for a turnaround,” David Cunliffe said.

"No wonder New Zealanders lack the confidence to invest, employ, produce and export."

ENDS

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