Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

W-shaped recession on the way says PEC

W-shaped recession on the way says Productive Economy Council

So the recession is over. At least Bill English is happy to say so and will spend the next month telling us we are out of recession and it's business as usual. That's fantastic news, or at least it would be if he was right.

But, says Selwyn Pellett of the Productive Economy Council, unfortunately he's wrong.

"Prior to the recession 30 percent of our GDP was from the export sector and that 30 percent is still very much in recession," says Pellett.

"How can we borrow $250 million a week to stimulate consumer and housing spending, thereby lifting the exchange rates and putting further pressure on the remaining exporters and then turn around and claim we have a sustainable recovery? The government can pump as much money as they like into the internal economy but it won't earn a cent towards paying it back," says Pellett.

"This bizarre idea that we can make exporters the whipping boys for the excesses of the internal economy has to stop. What is this government is doing for the Farmers and other exporters who are collectively having the hardest time in recent history?"

Federated Farmers have already come out and warned the government that the choice is either a short dose of reality now or the abyss when the economy inevitably crashes into a 'W' shaped recession, with spokesman Philip York saying :"If the Government believes its own rhetoric of an export led recovery then some hard decisions are needed immediately."

The export sector, says Pellett, don't want hand outs and don't want the internal economy getting them either.

"What we desperately want is for the hand outs to stop so the exchange rate can drop back where it belongs and that's less than 65 cents to the USD. The current rate is insanity relative to the state of the economy. "

"Bill English can talk up the economy all he likes but the reality is our real income as a country is export earnings and that income is plummeting. Even worse, the means of production and income generation are no longer being invested in due to the uncertainty of the returns."

"We have watched $7 billion in new loans go into new property lending while witnessing a reduction of $3 billion in business lending under this government's alleged focus on productivity," says Pellett.

"That's a recipe for disaster, and Bill English should understand that."

Bill English may talk about the government's "vision" to re-balance the economy but while those at the coal face of the economy continue to be hammered by policies aimed at pleasing the voting public rather than doing what is right for the country, that vision is merely a mirage, says Pellett.

"The exchange rate is killing sustainable jobs in our economy in the thousands. But as other countries have proven, you don't have to be a victim to the exchange rate. It is controllable if you implement the right policies. Those policies are well known, they are proven and they are within the Government's power to enact if it could muster the clarity of vision and fortitude to do so," says Pellett.

"When the export economy collapses Bill English won't be able to say it wasn't foreseeable, he won't be able to say he wasn't warned and he won't be able to blame it on the other guy. What will he say? Sorry?"

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

RNZ: Housing Boom Could Get Worse, Economist Warns

Economists are calling on the Reserve Bank to reinstate lending restrictions, warning the housing market is spiralling out of control. More>>

ALSO:

Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>

ALSO:

NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>

ALSO:

Economy: Double-Dip Recession Next Year, But Housing Rolls On

New Zealand's economy is expected to slip back into recession early next year as delayed job losses, falling consumer spending, and the absence of international tourists bites into growth. More>>

ALSO:

Microsoft New Zealand: Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific

New Zealand, 14 October 2020 – Today Microsoft for Startups launches the Highway to a Hundred Unicorns initiative in Asia Pacific to strengthen the region’s startup ecosystem. This follows the initiative’s success in India, where 56 startups were ... More>>

Economy: NZ Small Business Recovery Continues In September

Xero, the global small business platform, today released its Small Business Insights (XSBI) for September revealing an uptick in small business jobs and year-on-year revenue growth in New Zealand. Nationwide, the average number of jobs in the small ... More>>

ALSO:


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>

University of Canterbury: Proglacial Lakes Are Accelerating Glacier Ice Loss

Lake Tasman, New Zealand | 2016 | Photo: Dr Jenna Sutherland Meltwater lakes that form at glacier margins cause ice to recede much further and faster compared to glaciers that terminate on land, according to a new study. But the effects of these glacial ... More>>

ALSO: