The newly released Performance of Services Index (PSI) shows that the services sector just had its weakest month in six years, National’s Finance spokesperson Amy Adams says.
“Bad economic policies and uncertainty about a Capital Gains Tax are weighing on business confidence and adding to the slowdown of the New Zealand economy.
“The services sector accounts for about two-thirds of the New Zealand economy so when it’s struggling, the New Zealand economy is struggling.
“The weakening services sector follows from last quarter’s GDP growth of just 2.3 per cent last year compared with 3 to 4 per cent growth when the Government came to office.
“What’s worse, economic growth per person has been zero over the past six months. That means, despite the rhetoric from the Government, the economy has only been growing because of population growth – confirmed by the rising migration numbers released last week.
“More evidence of the weakening economy include the drop in electronic card spending, lower economic growth forecasts by all major banks, weakening business confidence, rising jobseeker numbers, stalled job growth, a rising cost of living and a Reserve Bank that has recently signalled a cut in interest rates in order to stimulate the economy.
“Yet just two weeks ago the Prime Minister refused to accept the New Zealand economy has weakened.
“The Government is in denial that its bad economic policies are playing a role in slowing the economy down. Those policies include banning oil and gas exploration, restricting much-needed foreign investment, introducing union-friendly labour law changes, more taxes and the prospect of a Capital Gains Tax.
“A stronger economy means more jobs, higher incomes and a lower cost of living. National understands that the way to achieve a strong economy is through sensible economic policies that encourage businesses to grow, invest and hire new staff.”