Business NZ Growth Scorecard shows mixed results

Business NZ Growth Scorecard shows mixed results

Business NZ's latest update on growth shows some minor changes for the better and one significant change for the worse.

An analysis in December 2001 ('Changing Gear') of the twenty key drivers of economic growth showed that New Zealand had a long way to go to regain its place in the OECD top 10 nations. The latest update against those drivers shows no change in most variables, slight improvement in four, and a large slide in one.

Those variables showing improvement related to Crown spending and debt, and education:

* Central government spending as a proportion of GDP - where the goal is to reduce it below 30% - has dropped from 34% (2001/2 forecast) to 33% (2002/3 forecast).

* Gross Crown debt as a proportion of GDP - where the goal is to reduce it below 25% in the short term - has dropped from 32.7% (2001/2 forecast) to 28.6% (2002/3 forecast).

* Numbers of people involved in formal industry training - where the short-term goal is 160,000 people involved over the year - have increased from 80,000 (in 2000) to 95,263 (in 2002).

* The proportion of school leavers with School Certificate/NCEA level 1 or above - where the goal is 100% - has increased from 80% (2000) to 83% (2001).

But The number of person days lost due to work stoppages, a key variable for the labour market - where the goal is less than 5,000 a year - showed a major increase, from 9,939 (year ended June 2001) to 55,849 (year ended June 2002).

Releasing the update, Business NZ Chief Executive Simon Carlaw said the prospects for growth remained mixed.

"The results relating to the management of the Crown's finances are encouraging, though it must be noted that the 2002/3 figures are forecasts only; moreover the forecasts for government spending in subsequent years do not show the same restraint. The results for industry training and school qualifications are clearly positive. "However, the work stoppages figure is a cause for significant concern, especially since the trend since June 2002 has been downhill further. So is the deterioration of New Zealand's global competitiveness, that should be trending in the opposite direction."

Mr Carlaw said Business NZ's 'Changing Gear' analysis was a useful tool for checking the country's progress against the key variables that had to be met to achieve better economic growth.

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