Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


IMF confirms National’s failure to rebalance economy

15 May 2013

IMF confirms National’s failure to rebalance economy

The International Monetary Fund (IMF) has confirmed today that the economy remains seriously out of balance, with low household savings and high debt levels.

The IMF states: “New Zealand’s large net liabilities reflect historically low household savings rates and a structural savings-investment imbalance. They agreed that the causes of low household savings will need to be addressed to reduce pressure on the exchange rate and limit current account deficits.”

“The IMF has today confirmed that the wider New Zealand economy is seriously out of balance,” said Green Party Co-leader Dr Russel Norman.

“The National Government has failed to rebalance our economy as promised.

“National has focused its effort on trying to repair the damage done to the Government’s accounts by its $2 billion a year tax cuts to upper income earners and trying to get back into black with a margin of error surplus. National has ignored addressing systematic imbalances in the economy as a whole.

“At the start of the last economic cycle in 1998, average household debt was around 93% of disposable income. This time around, household debt is starting out at 153% of income.

“This is a debt time bomb which the Government can’t solve with its planned razor thin surplus.

“Households aren’t savings because National has failed to create jobs and lift wages, reduced KiwiSaver incentives, and has failed to address the overvalued kiwi dollar.

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

The IMF has endorsed two of the three Green Party’s solutions to address rebalancing.

“The IMF support a capital gains tax and has welcomed the Reserve Bank’s intention to use macroprudential tools to address the housing bubble,” Dr Norman said.

“The Green Party will also 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.

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

Link to IMF note on New Zealand:


Link to the BERL report, Rebalancing the New Zealand Macroeconomic Environment – Progress Since 2008:


Parliamentary Library graph on Bill English’s frequency of use of the term rebalancing:


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines



Relevant Consents Gained: Government Unveils RMA Reform Package

The government has formally hauled down the flag on its attempts to alter the balance of environmental and economic priorities in the Resource Management Act, unveiling a 180-page Resource Legislation Amendment Bill containing reforms that have been largely endorsed by most political parties. More>>


Closing Schools And Such: Interim Redcliffs Decision Announced

“While the school’s board has argued that circumstances that could give rise to potential disruption are extremely unlikely, advice from technical experts has shown these concerns cannot be ruled out." More>>


Jane Kelsey: High Court Can’t Make Groser Provide TPPA Information Faster

‘This week we went back to court to challenge Trade Minister Groser’s stalling tactics over the release of information on the Trans-Pacific Partnership Agreement negotiations, following a High Court order that he reconsider the Official Information Act request I made last January’, said University of Auckland law professor Jane Kelsey, first applicant in the case. More>>

Werewolf 58: No Climate For Change

The last time the global community tried to take collective action on climate change the world’s leaders finally came to agree that every not-too-onerous effort should be made to hold global warming to 2°C above the pre-industrial average. At Paris, all 150 participant countries nations will have put forward their pledges... On the information available, New Zealand's is the second weakest contribution of any nation in the developed world. More>>


Lambton Quay Shutdown: Object Was Made To Look Like Bomb

Police cordoned off part of Lambton Quay Wednesday afternoon, saying that a suspicious package had been found. Buildings were evacuated and buses were detoured. The army’s explosive ordnance disposal unit was brought to the Quay. More>>


Public Sector Still Shrinking: Record Low Number Of 'Backroom Bureaucrats'

Ongoing restraint in the public sector and a focus on better frontline services has seen a further reduction in the number of core Government employees, State Services Minister Paula Bennett says. More>>


Disobeying The Law: Police Censorship Of Crime Research “An Outrage”

The Green Party is calling on Police Minister Michael Woodhouse to ensure Police scrap controversial contracts that place onerous restrictions on academic researchers’ access to Police data, the Green Party says. More>>


Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news