Growing economic pessimism is justified and will be reinforced further by National’s failure to grow the internationally competitive part of our economy, comprising of exports and import competing industries, the Green Party said today.
Growing economic pessimism is justified and will be reinforced further by National’s failure to grow the internationally competitive part of our economy, comprising of exports and import competing industries, the Green Party said today.
New analysis from the Parliamentary Library of New Zealand’s GDP shows that the tradable part of the economy has stagnated compared to the non-tradable sector and the gap between the two has now reached its largest since 2000.
“Early in National’s term of governance, Bill English promised to deliver ‘more saving, less debt-fuelled consumption, and a continued shift away from leveraged property investment’,” said Green Party Co-leader James Shaw.
“National has clearly failed to deliver a more balanced, internationally competitive economy.
“While a downturn in dairy export prices will hurt our economy in the short term, National’s failure to move our economy towards value-added exports is leaving us with a much more damaging legacy in the long-term.
“Economic growth in New Zealand has become increasingly based on housing and housing speculation, not high value-added exports.
“New Zealand’s GDP data tells the story of a two-speed economy: On one side, the domestic, spending side of the economy has grown, while the internationally competitive part of our economy has gone sideways. The gap between the two is now the largest ever since 2000.
“It’s the export-focused tradable sector of our economy that enables us to earn our way in the world. In the longer term, no exports equals no economy.
“National has consistently failed to address the key drivers for our appetite for property speculation resulting in house prices in Auckland increasing by 79 percent since January 2009.†
“Bill English has been happy to ride the short-term coat-tails of a property-led boom rather than make the tough calls, such as introducing a capital gains tax, to shift investment into more productive sectors.
“National should also have invested more in innovation and policies that support a broader, high value-added export sector.
“New Zealand invests half what most other developed countries do on research and development and National has failed to turn this number around after seven budgets.”
† REINZ’s median house price data
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