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New Zealand economy falling further behind

18 December 2012
New Zealand economy falling further behind

The Government’s financial position is weaker than expected and, when benchmarked against other OECD economies, the New Zealand economy is being managed poorly, the Green Party said today.

Treasury figures released this afternoon in the Half Year Economic and Fiscal Update 2012 show that forecast growth will be lower, unemployment will remain high until 2015/16, while the current account deficit and net international investment position will continue to worsen.

“The National Government’s goal of returning the Government’s accounts back to surplus is looking more tenuous than ever,” said Green Party Co-leader Metiria Turei.

“National is just meeting its own, low economic performance benchmarks. However, when you benchmark the Government’s overall economic management, we’re doing worse than most other OECD countries.

“John Key needs to stop blaming the global financial crisis on his Government’s poor economic performance. Most other OECD countries have been managing the crisis better than our own.”

Parliamentary Library research commissioned by the Green Party shows that the New Zealand economy has performed relatively worse than the majority of countries in the OECD since 2009 – the trough of the global financial crisis. The data shows New Zealand scored 18th out of the 34 OECD countries for GDP growth, 22nd for changes in unemployment, 30th for the current account deficit, 28th for national savings growth, and 23rd for government debt.

“By nearly all measures of traditional economic success – growth, employment, the current account deficit, national savings, and government debt – New Zealand has performed relatively poorly when compared to the rest of the OECD,” Mrs Turei said.

“The National Government has made poor economic choices that have left the economy and the Government’s accounts worse off.

“Tax cuts for upper income earners were very expensive, did little to promote growth, and now make it more difficult for the Government to achieve a fiscal surplus.

“National’s failure to introduce a comprehensive tax on capital gains (excluding the family home) has not helped the Government’s accounts and failed to incentivise savings and investment in the productive economy.

“Spending $12 billion on new motorways with poor economic returns is another example of National’s failure to invest smartly in infrastructure to create jobs and secure our future prosperity.

“The Green Party has proposed measures the Government can adopt to create jobs and protect the environment while delivering a strong return to surplus.”

Parliamentary Library Research on New Zealand’s comparative economic performance:

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