Rt Hon Winston Peters

New Zealand First Leader

Member of Parliament for Northland
23 NOVEMBER 2016

Treasury Fiscal Update: A NZ First View

Treasury’s latest statement on New Zealand's fiscal position over the next 40 years avoids any critical analysis so its value and objectivity is limited, says New Zealand First Leader and Northland MP Rt Hon Winston Peters.

“The report’s analysis confirms the New Zealand First position that New Zealand Superannuation is affordable over the long term if sensible steps are taken to prevent abuse of the scheme. Treasury modelling has New Zealand Superannuation accounting for 7.9% of GDP by 2060.

“Although that is entirely supportable Treasury failed to say that if we were to double our GDP by 2050, whilst pursuing a rational immigration policy, the NZ Super costs as a percentage would be so much less.

“That said, most OECD countries would consider Treasury’s projected proportion of GDP to be an enviable level and in no sense unsustainable.

“The report is implicitly critical of the current immigration policy. Treasury draws attention to the role of Auckland in the NZ economy and that approximately half of all migrants settle there. However, if immigration were the economic panacea that the government proclaims it to be Auckland would be contributing much more than it is to NZ’s overall economic performance

“Treasury’s forecasting assumptions on net immigration have consistently fallen woefully short of actual numbers. It is ironic that the Treasury report was released on the same day that Statistics NZ data showed that net immigration in October had hit another record of over 70,000.

“Why Treasury regarded over 87,000 foreigners in the last 15 years gaining access to full NZ Super after 10 years living here as being of no moment is seriously hard to fathom.

“Their job is to give honest economic analysis not shirk from stating the obvious.

“And while Treasury can’t grasp the changing world, as evidenced by the Brexit and Trump campaigns and the recent Australian elections, it is probably explained by their neo-liberal penchant which, after 32 years, must be even more obvious to them as key instigators of it in 1984. We pay them the highest salaries in the civil service and it’s time that department justified it.

“The report does draw attention to the costs and opportunities that responding to climate change will create. Unfortunately, we have a government that is still refusing to put in place an effective sector by sector planning process for reducing carbon emissions as NZ First proposes.

“The report notes that New Zealand’s GDP per capita is below the OECD average. But the opportunity was missed to correct the government’s misleading propaganda that NZ has one of the highest growth rates in the OECD when, in reality, most of that growth is a result of population increase driven by record immigration

“In New Zealand First’s view in some areas the report is lacking:

• While there is reference to regional development much greater priority and investment is needed if the regions are to thrive

• There is no analysis of the detrimental impact of foreign ownership and the costs that is imposing on the economy

• New Zealand’s deep net international debt liability of $150 billion is not addressed

“The report concludes:

“By making well-informed choices today and over the next several years with a view to the long-term, governments can ensure long-term fiscal sustainability and help lift living standards for future generations.”

“If only!

“New Zealander’s will hope that the government will be prompted by Treasury’s report, as tame as it is, to abandon its recklessly short term approach to economic policy and adopt the longer term perspective of New Zealand First’s economic policies,” says Mr Peters.

ENDS

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