The Government needs to get its head out of the sand, with this morning’s GDP figures for the March quarter a disappointing 0.5 per cent, meaning New Zealand’s economic growth is slowing at the same time the world economy is picking up speed, National’s Finance Spokesperson Amy Adams says.
“At 2.7 per cent New Zealand’s economic growth is performing below forecast, and is now at its lowest level since 2014.
“National left the country’s economy in good health following consecutive years of 4 and 3 per cent growth.
“Today’s figures show construction growth, in particular, has fallen off a cliff to 1.4 per cent following a booming 10.7 per cent increase last year.
“GDP per capita actually declined in the March quarter.
“These disappointing GDP figures come on the back of business confidence falling, businesses’ view of their own activity declining, and consumer confidence deteriorating.
“Together, this is a clear warning sign for the Government. Yet so far the Government is showing no concern about slowing growth and plummeting confidence.
“Slowing economic growth translates directly into fewer opportunities and lower incomes for Kiwi families trying to get ahead. Already we’ve seen job growth fall from 10,000 new jobs a month under National to just 4,000 new jobs a month under the new Government.
“Economic growth does not happen by accident, yet this Government takes it for granted.
“Finance Minister Grant Robertson needs to sort out his priorities. Policies like banning oil and gas exploration, strengthening the unions at the expense of workers, cutting foreign investment and taxing more for petrol will do nothing to improve New Zealand’s economic growth at the very time it needs nurturing.
“Denials by the Government that its policies won’t slow economic growth are wearing thin and it’s time it faced facts before it does serious damage to family incomes and jobs.”
The Government’s Bill to ban foreign buyers is a textbook example of bad law-making and the changes made at select committee will do nothing to alter the fact it’s a dog, National’s Finance Spokesperson Amy Adams says.
“National, along with countless experts, has repeatedly told Labour that the number of foreign buyers in New Zealand is very low and there is no evidence they are significantly driving up the cost of housing or taking houses from New Zealanders.
“Yet after cynically blaming foreigners with Chinese-sounding names, the Government has pushed ahead with the Overseas Investment Amendment Bill without proper policy development which has forced it to make several unworkable, poorly thought-out changes.
“Forestry investments have been given a free pass, while the same investments into viticulture have been effectively blocked without any clear justification for the distinction between the two.
“For residential properties, as 90 per cent of submitters pointed out, the Bill will do the opposite of what is intended which is to make housing more affordable for New Zealanders.
“To address housing affordability we need to build more houses, but banning all but a few foreign buyers will mean fewer housing developments proceeding at a time when we need to grow our housing stock.
“The Bill will also hamper the ability of New Zealand businesses to access foreign capital in order to expand and impose significant costs and delays on the housing sector.
“It also appears that the Government now thinks it will be able to pick and choose who of New Zealand’s trading partners will be able to invest in our housing market. First Australia, and now Singapore, have been carved out – and with trade negotiations looming with China, the EU, and the UK, who’s to say they won’t also demand an exemption?
“Furthermore, changes to the Bill make clear that if foreign individuals not already exempt from the ban make their case right, Ministers may also give them an advance green light to purchase whatever properties they like here. Just what sort of ‘case’ they would need to make remains to be seen.
“The changes in this Bill are not based on any clear or compelling evidence and are against the weight of submissions.
“It’s become a hallmark of this Government to not listen to evidence and advice it doesn’t like, so now we’re in a situation where its own Bill is likely to worsen the problem it is trying to solve.
“It’s about time Ministers stopped thinking they know better than the experts and started listening to the evidence.”
For years New Zealand’s ‘rock star’ economy has been the envy of the world, but according to Westpac, the Ardern-Peters Government is fast turning it into a ‘support act’ economy, National’s Finance Spokesperson Amy Adams says.
“This shocking turnaround should be a wake-up call to the Government and show Grant Robertson that growth cannot simply be taken as a given.
“Westpac further suggests that the New Zealand economy will ‘continue to underperform its peers for the next few years’ after previously being ‘an outperformer on the global stage’.
“This Government could not have hoped to have inherited a stronger economy, with annual GDP growth averaging around 4 per cent, accompanied with high levels of business confidence and around 10,000 new jobs being created each month.
“But under this Government, GDP per capita growth has fallen to just 0.1 per cent in the previous quarter.
“These early signs of economic slowdown reflect a combination of low business confidence and uncertainty in the Government’s policy agenda.
“Mr Robertson has continually claimed that business confidence has no relationship to the real economy. However, Westpac’s analysis suggests there are tangible effects in the form of lower economic growth and lower standards of living for New Zealanders.
“The new pessimistic economic outlook also appears to be an early reaction to the Government’s low-growth policies, like the ban on oil and gas exploration, removal of personal income tax cuts for all working New Zealanders, and regional fuel taxes.
“Mr Robertson is in serious danger of squandering all the hard work of New Zealand businesses and workers since the GFC. He must understand that growth is not inevitable.”
Finance Minister Grant Robertson admitted this afternoon no Treasury analysis has been completed on the economic impact of the Government’s decision to ban oil and gas exploration, National’s Finance spokesperson Amy Adams says.
“It is staggering that on such an important economic issue, the Government has commissioned no analysis from the Treasury regarding the Government’s abrupt call to end oil and gas exploration in New Zealand,” Ms Adams says.
“In front of Parliament’s Finance and Expenditure Select Committee Mr Robertson confirmed he has neither received nor sought advice on how the economy would respond, and how this would impact forecast economic growth and tax revenue, including factors like electricity generation capacity and security of supply.
“It defies belief to think that the exploration sector will not already be experiencing a significant chilling effect as a result of the Government’s announcement. Investment decisions will need to be made over the next few years, and businesses and households will bear the cost.
“The ban will have a double whammy of a downturn in exploration activity and rising wholesale prices that will both dampen economic growth, particularly in our regions.
“Mr Robertson stated the Government received no advice on long-term oil, gas and electricity prices, on cost of living impacts, on how it would affect New Zealand’s economy, or on the impact to the Government’s tax revenue.
“It appears Mr Robertson simply doesn’t want to know how his Government’s political decision will impact on workers and Kiwi families.”
The Government’s need to put Winston Peters first might be responsible for a major reduction in the number of inspectors charged with investigating child sex offences, National’s Finance Spokesperson Amy Adams says.
“In spite of having a billion dollars to throw at foreign aid and diplomats and $2.8 billion to make university free, the Government’s priorities have led to a reduction by one third of frontline staff in a critical unit charged with protecting the most vulnerable New Zealanders.
“The Department of Internal Affairs has said it will have to slash the number of fully trained inspectors from its censorship unit who are charged with investigating the creation and distribution of child sex imagery.
“DIA’s impending restructure will mean there will be only 10 investigators instead of 15, despite official advice which clearly outlines the need to increase the number of investigators.
“This appalling decision will leave more New Zealand victims unable to be identified and protected, and mean more New Zealand perpetrators remain free to ruin more lives.
“It will also mean New Zealand will not meet its international commitments under the Global Alliance Combatting the Sexual Abuse and Exploitation of Children Online to reduce the number of new child pornography images uploaded and the number of victims identified.
“Let’s not forget this decision is on top of the Government’s soft on crime stance, its pledge to put more offenders on the street by cutting the prison population by 30 per cent and its broken promise to recruit an extra 1800 new frontline police.
“This Government simply has its priorities wrong. It’s choosing diplomats over doctors and it’s putting political payback over protecting our most vulnerable. It’s not good enough and the Government needs to get its priorities right.”
The Government that promised not to increase the tax burden on Kiwis is already setting out to suck up the spare cash of Kiwi families and load more debt onto future generations, National’s Finance Spokesperson Amy Adams says.
“The Ardern-Peters Government talks a lot about lifting people’s incomes but not only do they refuse to let people keep more of what they earn, they’re actively taking more cash out of people’s wallets,” Ms Adams says.
“If you just take the petrol tax increases, the new regional fuel tax, the five year bright line test and the Amazon tax, then you have Kiwis paying around $2.27 billion more tax over the next four years.
“This from a Government who said they would introduce no new taxes in their first term.
“And of course they also cancelled National’s tax cuts which made an average income earner $1060 a year better off.
“Despite taxing more, the Government’s spending promises mean they are also planning to borrow an extra $10 billion over the next four years – increasing debt servicing costs by around $1.114 billion over this period, or $650 per household.
“Borrowing more and taxing more in strong economic conditions makes no sense and risks undoing all the hard work New Zealanders have done over the last few years.
“The Government’s total tax revenue is already predicted to increase nearly $20 billion by 2022 as the economy grows before additional taxes. Surely that’s enough for the spending wish list of any reasonable Government.
“This is real money being hoovered out of the pockets of New Zealand families.
“When New Zealanders wonder who to blame when they don’t seem to be getting any reward from a strong economy - all they have to do is look at Jacinda Ardern and Grant Robertson.”
The Finance Minister is already reduced to re-announcing five month old news in his major pre-Budget speech this morning, National’s Finance Spokesperson Amy Adams says.
“Grant Robertson’s key announcement today was exactly what he told us at his half-yearly update in December, namely that there would be a $42 billion capital spend over the next five years.
“It’s bizarre that he has absolutely nothing new to say in the pre-budget announcement for his first budget.
“What this number means in reality is that the Government will be racking up a further $10 billion of debt on behalf of New Zealanders despite having inherited a strong economy and growing surpluses.
“Business confidence is low with exporters and employers worried about the direction the Ardern-Peters Government is taking New Zealand in. This was Grant Robertson’s opportunity to reassure business leaders about his plan for New Zealand’s future economic growth. Instead he has re-heated five month old news.
“This Government is spending more, borrowing more and taxing people more, yet he has laid out no plans for how New Zealand can earn more.
“Actually they are pulling the handbrake on growth by attacking the regions, key industries like oil and gas, and our farmers.
“Surely New Zealanders deserve better than repeating five month old news.”
This weekend marks the point where ordinary hard-working New Zealanders start paying for the misguided policies of the Ardern-Peters Coalition Government, National Party Finance Spokesperson Amy Adams says.
“National’s 2017 Budget would have made workers on the average wage $1000 a year better off starting from this weekend thanks to tax threshold changes,” Ms Adams says.
“Also from this weekend superannuitant couples would have been better off by $676 a year in their superannuation.
“Instead, under the Labour-NZ First Coalition Government most hard-working wage earners get nothing on 1 April, and superannuitants and those receiving working for families will have to wait an extra three months for any gain. Even then superannuitants will simply be given the poorly conceived and designed winter energy payment which is neither for energy nor for winter.”
Ms Adams says workers and superannuitants are paying a big price just so that first year university students can get one year’s free tuition.
“All the money Labour saved from cancelling the tax changes has gone straight to first year tertiary students in a failed policy that has resulted in no extra people studying.
“Meanwhile the health sector has so far seen less than nothing - with the previous Government’s $100 million investment in new mental health initiatives sitting on the shelf. The allocation for health in the next budget is unlikely to be any more than what National would have provided.
“Cancelling National’s tax changes for hard working Kiwis and giving the money to tertiary students is poor policy.
“Unfortunately it’s now happening under Ardern and Peters.”
Finance Minister Grant Robertson should explain why New Zealand needs to change its monetary policy objectives when under the current settings he inherited one of the best performing economies and employment rates in the developed world, says National Party Finance Spokesperson Amy Adams.
“When our Finance Minister justifies change on the basis that this is what happens in other parts of the world, and yet we have performed better economically than many over the last few years, then questions must be asked,” Ms Adams says.
“He should be looking more at the policies he can directly control. Labour’s policies in a whole range of areas like employment relations, investment, immigration and tax will only take job creation and prosperity in New Zealand backwards.
“In fact, the new Policy Targets Agreement signed by Mr Robertson today specifically removes reference to economic growth which puts him at odds with a number of the other countries he says he is seeking to emulate.
“In relation to the maximum employment criteria in the PTA, New Zealand already has the third highest rate of employment in the OECD.
“On one level this change means nothing as the Reserve Bank has always been required to consider growth, incomes, and standard of living - and therefore employment.
“However monetary policy can’t deliver strong employment on its own. It must be applied in parallel with government microeconomic policies that boost employment, as has occurred in the last few years.
“We’ll be watching closely to ensure Grant Robertson doesn’t point the finger at the Central Bank should job creation and employment slow.
“With regards to committee decision making, National is on record as supporting formalizing the current committee structure operated by the Bank.
“However we have reservations that the move to make a significant proportion of the committee ministerial appointed external members, and enabling a senior Government official to be part of all decision making meetings (albeit not voting), creates a real risk of unwarranted political influence over Monetary Policy settings."
The Government needs to be careful with its economic policy settings as Stats NZ figures show growth slowed slightly at the end of last year, National Party Finance Spokesperson Amy Adams says.
“While growth for the year is a respectable 2.9 per cent, that is significantly slower than the 4 per cent experienced in the 2016 year, and the 3.5 per cent and 3.6 per cent in the two years before that,” Ms Adams says.
“We saw a slight slowing of growth in the end of last year, as weather and policy uncertainty started to take a little bit of the shine off the New Zealand story. It’s worrying that growth has slowed in the fisheries, forestry and agriculture sectors.
“The Government needs to take notice and be careful that its economic policy settings don’t put a handbrake on New Zealand over the next few years at the very time the world economy is picking up speed.
“Labour’s policies in areas like international investment, employment relations, and immigration could all combine negatively to restrict the capacity of New Zealand businesses to grow and succeed. That would be a major missed opportunity for our country and its prosperity.
“The benefits of having growth almost continuously over the last seven years is apparent in a range of areas.
“As we saw yesterday we have reduced out international debt from 84 per cent of GDP down to 52.8 per cent of GDP over the last nine years. That’s a huge contribution to New Zealand’s economic sovereignty.
“And the strong Government books have flowed through into opportunities for increased investment like the initiatives in child poverty in last year’s budget which were largely picked up by the new Government.
“Now is not the time to put barriers in the way of growth. We have experienced what it is like to have a Government focused on the economic strength of our country. The new Government needs to make sure it doesn’t allow the opportunities we have as a country to drift away.”