Finance Minister Grant Robertson says it’s important not to “overdramatise” the economic international scene but warns New Zealand will be affected by more trade war rhetoric.
Speaking at the New Zealand Debt Capital Market Summit on Wednesday, Robertson addressed some of the economic headwinds the country is facing, including the developing trade war between the US and China.
The Government was monitoring the international picture but it was “important not to overdramatise the situation”, he said, pointing out that global growth is projected to be 3.9% this year.
“But there are issues well beyond New Zealand’s control that we need to be mindful of.
“Tit-for-tat tariff restrictions, some slowdown in the Chinese economy and various international tensions are risks that, if they develop further, will affect New Zealand.”
Moments before Robertson took the podium, news broke that US President Donald Trump will impose a 25% tariff on $US16 billion worth of Chinese imports, starting later this month.
For most of his speech, Robertson pointed out how well the economy is performing.
This is despite the Government coming under fire recently as business confidence has fallen. Last week, ANZ figures showed firms’ optimism was at the lowest levels since the Global Financial Crisis.
Businesses’ perceptions of their own prospects – which have a closer link to GDP growth than the headline confidence figures – are at the lowest levels since May 2009.
But Robertson says this is not what he is hearing from the businesses he talks to.
“I’ve consistently heard similar messages: that businesses are optimistic about their own prospects, but that they do have some concerns.”
These include finding skilled workers, geopolitical tensions abroad as well as some aspects of the Government’s agenda they disagree with.
But the Finance Minister talked up New Zealand’s economic fundamentals, pointing to near record high terms of trade and a 5.5% growth in business investment over the last year and still low unemployment.
He also referenced the Government’s healthy books, citing a projected $3.1 billion surplus and low levels of net core crown debt.
As he has been for the past few weeks, he emphasised the “transition” the New Zealand economy is experiencing.
“I understand that in business there will always be a wariness of change, but to ensure that our growth is productive, sustainable and inclusive, we all know that change is necessary.”
21 Comments
Perhaps Grant needs to consult with his Deputy Prime Minister, Winston.
Grant's sentiment is not consistent with Winston's dramatic message when Winston announced the coalition agreement.
Is Grant just trying to talking the economy up?
Time will tell. Working for Families package will provide stimulus but lots of other negative signs other than business sentiment that are contrary to a buoyant NZ economy in the medium term which suggest that this could be a King Kanute wish.
A closer look at the business confidence survey explains a lot:
Retail understandably has record low levels of confidence - falling household spending, rising input costs, intense competition for limited shelf space and online sales growth on both sides of the Tasman is putting immense pressure on retail activity and profits. I guess the push towards faster minimum wage hikes is ill-timed in this scenario.
All sectors are concerned about ease of credit as monetary tightening in major money markets will soon start to pinch highly indebted businesses - definitely not a NZ-specific phenomenon.
Profits are under threat as input and borrowing costs are set to rise further and pricing intentions remain low. Several sectors in NZ have, for a while, resorted to cutting costs over innovation; I guess the former is no longer an option as the tide turns.
Sounds reasonable to me. You are only required to put a mark to vote, not write an essay as to why. The whole political process has become so dumbed down, witness parading Baby Neve articles, that I am happy to see the Taxinda moniker is gaining traction for votes. If you really want to see how bad it could get, wade into the American political cesspit.
True, heaven forbid any press coverage of Ardern's family occurs, or Key's or English's.
I've certainly observed the increasing Americanisation of NZ politics with interest, including the screeches of "Taxinda" and "Communist!" (until a handout is desired).
If rolling with "Taxinda" you're in good (dubious) company, what with Judith rocking out the fake news to try to get her disciples frothing at the mouth:
https://www.stuff.co.nz/national/politics/106100009/how-far-down-this-s…
https://www.stuff.co.nz/national/politics/106069638/judith-collins-digs…
Some interesting..."inconsitencies" in Collins' poison dropping:
She would not clarify whether or not she had read the whole article before tweeting it out.
"Just because I retweet, doesn't mean to say its an endorsement," Collins said. (Collins did not retweet the article - she tweeted it herself.)
And
Collins said she didn't call people out for "fake news" herself.
"I've never used the term to people and I've never used it about websites."
Collins called a Newshub story "total fake news" on Twitter in February.
And
Asked if she had discussed the tweet with party leader Bridges, Collins said no. Bridges, speaking at the same time to reporters around the National Party caucus corridor, said he had talked to Collins about the issue.
Bringing American politics to New Zealand, in the most shambolic fashion.
“I’ve consistently heard similar messages: that businesses are optimistic about their own prospects, but that they do have some concerns.”
These include finding skilled workers, geopolitical tensions abroad as well as some aspects of the Government’s agenda they disagree with.
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Well, the last bit is enough to break the camel's back ... he is talking it Up and that is the most that he could do ...
Not really sure what this "Transition" means and how long would it take to implement and come to fruition .. Oh, and at what cost?
I think business is mostly worried about the lack of serious planning, abrupt critical decisions (oil and gas), and an unclear way ahead -- so summed in one word: lack of Confidence in the Sailors, Not the Ship...and that is what GR and his boss don't (or like to) understand !
All they have seen so far is patching, settle old accounts to satisfy Unions, broken promises, increasing costs, and claims of the Gov not having enough money while spending large on ill thought ideas or "electioneering bribes" ... let alone ambiguous tax prospects ahead, and failing to adjust tax intake for inflation as the National tax cuts would have done.
Keep hearing this lack of skilled workers. Jacinda on the radio recently was just one example. But OECD ranks NZ as having a skilled workforce. Is it just a matter of the wrong skills so our just a shade short of best and finest study commerce and business and such like at uni and our too dumb or stuborn to pass exams are our trainee plumbers, builders, carpenters, gas fitters, etc. In Germany and Switzerland half of school leavers leave with acceptance to be apprentices whereas for NZ it is 2%. If that is the problem just restrict uni to say the top two deciles resulting in a halving of student numbers. Plenty of uni sites to be sold, halving of government expenditure on tertiary education, big win for govt finances. NZ's economy is a victim of intellectual snobbery.
@printer8
Why do we even have Working for Families ?
Instead of this complicated money- go round , why not simply have a tax rebate for each child and leave workers with more of the money they worked for and earned in the first place ?
WFF is messy , its complicated to administer , and it has a sting in the tail for households who get a pay increase from a promotion or working more hours
WFF costs a fortune to manage and control , and if one spouse starts working and the household income increases , they are forced to pay the IRD back in the subsequent year placing more stress on the family household budget
Hi Boatman
Not really strongly for or against WFF.
However, I think that the Government is planning that - along with the Regional Development Fund - it will provide economic stimulus to the economy.
What is interesting is the differences in party priorities:
National had proposed tax cuts which would have provided economic stimulus (but advantaging more-so their constituency of those earning and especially on the higher income levels)
Labour has scrapped that proposal and instead has WFF which will provide financial stimulus but aid their constituency (lower incomes and beneficiaries) more so, and
New Zealand First is right into the Regional Development Fund which will also provide financial stimulus but be of greater value to the provinces (especially Northland) which they are targeting for 2020.
Ah, Party self-interest Politics!
Well as a moderaely wealthy older folk I want children to be nutured - my pension comes fro the UK (NZ super tops it up) but if I live another 20 years I want it to be in a successful economy - todays babies are the future - as adults it doesn't matter too much whether they are paying taxes to support my pension ot paying them to support their own pension (the fairer choice); either way they need the good health and skills needed to be successful. Kids living in cars, motels, damp houses being fed inadequate food is not only morally wrong but a bloody waste.
Ah, but it keeps countless Brown Cardies in some semblance of a Job, mostly unionised, mostly Voting for the Hand Wot Feeds 'Em, complete with perverse incentives like larger salaries the Mo' Minions under yez.
It would take a Braver Crew than this lot, to take the Wrecking Ball to this munny-go-round. Too many tickets to clip, too much Power to Wield, too comfortable to contemplate Transition (to a Real Job in the productive sectors), too dumb to make it there anyway. Let's face it, it's the modern equivalent of the old Post Office staff who did naught but make up cable looms, or the Railways geezers who wandered around all day with a grease-pot and a mop greasing the points and anything else that moved.
Disguised Unemployment, really....
Robertson is sprouting nonsense .
He knows full well that most of our tangible exports are food , and every human on the planet needs the stuff
Secondly Australia and China ( with whom we have a free trade agreement ) account for the lions share of our exports , and this will remain even in a world -wide recession
Donald Trump's rhetoric is unlikely to affect us directly , and whatever happens in a Trade War is way outside our locus of control ............ so Robertson should focus on what he can influence and control , and that is the productive sector right here at home
We pay the lion's share of ALL taxes , and he needs to understand that if he pisses us off , he is going to have a mighty hard time with us .
Is Robertson on some kind of diet ?
Because he does not seem to use butter on his bread , and if he does , he does not seem to know which side the butter is on .
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