21 December 2007 Media Statement

GDP data confirms strength of NZ economy

The latest GDP data confirms New Zealand continues to enjoy its longest period of economic growth in over a generation, Finance Minister Michael Cullen said today.

GDP grew by 0.5 per cent in the September Quarter and 2.7 per cent for the year ended September 2007 according to Statistics New Zealand.

“New Zealand is continuing to enjoy the longest sustained period of growth in many decades,” Michael Cullen said. “Importantly, today’s figures also show that we are experiencing some of the rebalancing in the economy that we need to ensure this strong growth continues into the future.

“Business investment in plant, machinery, and equipment increased 7.3 per cent for the year. It is pleasing to see this strong investment, which will be an important driver of future productivity growth.

“Already, today’s figures confirm that productivity growth is now the best we have seen in four years. This has been achieved at a time when unemployment is the lowest ever recorded and participation in the workforce is very high by international standards.

“The Business Tax Package announced in Budget 2007, which delivers a cut to the company tax rate, tax incentives for savings, and research and development, and increased market development assistance should see a further acceleration in this direction.

“Over the last eight years, New Zealanders have benefited from this long period of growth through significantly higher real household incomes and historic levels of investment in health and education.

“Next year, the workers who have helped to drive this growth will enjoy a further dividend through Budget 2008’s personal tax cut initiative.”

ENDS

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