Don Brash National Finance Spokesperson

22 November 2002

National warns against complacency on growth

The positive picture painted by the OECD is no reason to be complacent about New Zealand's economic growth prospects, says National's Finance spokesman, Don Brash.

"The economy has indeed been buoyant over the last couple of years and the Government has enjoyed the benefit of high commodity prices, good growing weather down on the farm, low interest rates and a weak exchange rate.

"But even the Finance Minister knows this will not last.

"While the Reserve Bank has indicated that growth may actually crack 4 per cent in the current year, nobody is expecting this to continue. The Bank expects growth to decline in the next two years to about 2 ½ per cent, and the OECD projection for our growth, though a little higher, is still well short of the 4 per cent target.

"Four per cent is what most observers see as needed if we are to reduce the gap between our living standards and those in Australia.

"We don't stand a chance of achieving this on a sustained basis until the Government begins to focus on what really matters - the amount and quality of government spending, the poor quality of government investment, the tax burden and the regulatory environment," says Dr Brash.

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