Numbers good luck, not good management

The Finance Minister’s rhetoric around today’s December Economic and Fiscal Update can’t match the reality that this will be about as good as it gets, says National’s Finance spokesman, Don Brash.

“The revenue numbers reflect what we already know – New Zealand has enjoyed a buoyant economy over the last couple of years, thanks to good export prices, a relatively low exchange rate, good times down on the farm, strong immigration and, importantly, the beneficial effects of the reforms of the late 80’s and early 90’s.

“But Dr Cullen shouldn’t kid himself that we’re well on the path to the much-vaunted target of 4 per cent sustainable growth.

“Export prices are starting to come off, the exchange rate is going up and the Government is intent on slowing down immigration. There’s a raft of new legislation in the pipeline which will increase the costs and risks of doing business. This is starting to impact on growth, as reflected in today’s gloomy business confidence numbers”.

Dr Brash goes on to say that at no point in the projected numbers does the economy grow faster than 3 per cent after the present year.

“It falls well short of the 4 per cent target, the figure most observers see as necessary to reduce the gap between our living standards and those in Australia.

“Further, it is disappointing that government spending will continue to grow at roughly the same speed as the economy, with the ratio of government spending to GDP remaining steady at a fairly high 40 per cent,” says Dr Brash.

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