Greens Reveal Major Imbalances In NZ Economy

An economic report commissioned by the Green Party shows that the National Government’s stated objective of rebalancing the economy has failed and reveals major underlying vulnerabilities.

The Green Party commissioned report from BERL, Rebalancing the New Zealand Macroeconomic Environment – Progress Since 2008, shows that on four out of five rebalancing measures the National Government has moved backwards. The report found that “the underlying factors driving New Zealand’s macroeconomic imbalances not only remain…they have deteriorated considerably since 2008.”

“The National Government has failed to rebalance our economy as promised,” said Green Party Co-leader Dr Russel Norman.

“Future generations will be worse off as a result of this failure and our economy will be less resilient to future economic shocks.

“Bill English made rebalancing the economy his primary goal in earlier budgets. Now he doesn’t talk about rebalancing at all.

“On nearly all the key rebalancing measures we are going backwards.

“Employment in the tradable sector is declining while inflation remains driven by the non-tradable side of the economy.

“Worryingly, growth of finance for households is again outpacing that for industry and business by a factor of twelve. New Zealanders are speculating on property rather than investing in the productive enterprises that will enable us to pay our way in the world again.

“Under Bill English’s economic management, the productive economy has languished. This will not be a strong, sustainable recovery. This will not be a jobs-rich economic recovery.”

Dr Norman highlighted three initiatives that would work to rebalance the New Zealand economy.

“Our comprehensive tax on capital gains (excluding the family home) will drive much-needed investment from property speculation into the productive economy, assisting economic rebalancing,” Dr Norman said.

“The Green Party will strengthen Kiwibank, allowing it to retain its earnings to grow faster – adding a further capital injection, if necessary. We want to help build Kiwibank into a sophisticated retail and commercial bank, with the scale needed to lend to productive enterprise.

“Finally, the Reserve Bank needs both a broader mandate and new tools to address economic rebalancing.

“The Green Party is prepared to make the smart decisions needed to rebalance the economy to provide a better future and greater opportunities for young New Zealanders.”

ENDS

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