It is awkward for a Government, elected to get the economy back on track, to have spent its first full year in office watching output shrink almost $2 billion in inflation adjusted prices.
2024 was a year of recession by any definition of the word, although a more useful definition would show the New Zealand economy has been in a recession since September 2022.
Still, Prime Minister Christopher Luxon and his Coalition partners were supposed to turn things around; not make them worse. And yet, here we are, far from the track.
This may be unfair, but voters can be irrational. Consider the United States: after deciding Joe Biden was too elderly to be president, the electorate chose to replace him with someone who starts his term slightly older than Biden was at his own inauguration.
After a summer reflecting on what was going well (live worker exports to Australia) and what was going poorly (the National Party’s poll numbers), Luxon has returned to the Beehive and declared 2025 to be The Year of Economic Growth.
This began with a Cabinet reshuffle, primarily aimed at moving Shane Reti out of the health portfolio and replacing him with the more politically astute Simeon Brown. It also provided an opportunity for Luxon to signal to the public that he means business on the economy.
Nicola Willis was handed a new economic growth portfolio, which gave her oversight of the Ministry of Business, Employment and Innovation, and Todd McClay was given responsibility for attracting international investment, in addition to signing trade deals.
Bring in the cash
McClay’s expanded portfolio was followed up with the announcement of an expanded agency, Invest NZ, which will act as a concierge service for foreign investors. This function already exists within New Zealand Trade and Enterprise but it will soon be spun out into a stand-alone organisation.
Some critics were not particularly impressed by this announcement. It was all very well to usher investors through an unattractive investment environment, they argued, but much better to make it attractive in the first place.
This might involve reforming the overseas investment act, cutting the corporate tax rate, and slowly transforming the New Zealand economy into a place where you want to put your money.
Others were more enthusiastic. Kelly Newton, the managing director of BCG, said her firm’s research suggested it could be a game changer. Investors typically look at opportunities close to home because it’s easier, but the Government could act as “connective tissue” between that overseas capital and local opportunities.
“New Zealand’s geographical isolation and size can make it cumbersome for serious investors to commit time and resources to investigate and sift through potential opportunities, individually,” she said in an email.
“A one-stop shop approach, delivered and managed in a way that makes it easy for investors to access good investment opportunities, can be a game-changer, not only in attracting capital for individual business but also showcasing NZ Inc as a greenfield investment ecosystem worth paying attention to”.
Watch this space
Whether it will move the dial or not, it is just one part of a wider growth plan slated for release in the next few weeks. Nicola Willis, speaking in her new role as the economic growth tsar, said she would report twice a year on her reforms and their results.
“The publication of our economic growth plan should present a good opportunity for people like you to better understand what we’re doing and to kick the tyres on our priorities: what do you want to see sped-up and added to our agenda and what’s less important to you,” she told the Manawatū Business Chamber on Friday.
Willis said her plan will include quick wins, like getting more tourists and students into the country, and longer-term reforms such as replacing the Resource Management Act.
Last year, a group of left-leaning economists wrote a letter to the Government asking them to rethink their strategy and, more recently, former National MP Simon Bridges sent a similar message in an NZ Herald column.
He said the big issue facing New Zealand in 2025 was “a lack of investment and GDP growth” not balancing the Crown accounts or paying down debt.
“For the Government this means boldness in reform, a strong growth plan, and investing where there is a clear business case for doing so,” he said. As in, not just cutting spending and hoping the private sector is ready to take up all the slack immediately.
Despite perceptions, Finance Minister Nicola Willis is really a fiscal liberal and has held these kinds of views since she was opposition spokesperson. If you actually speak with her, you discover she wants to consolidate spending slowly and is not willing to sacrifice growth.
But without the option of fiscal stimulus, the Government’s economic plan will need much more than just a new investment office and general good intentions.
98 Comments
[Irrelevant fragment removed.]
Luxons speech lacked vision or direction. We’ve all heard these taglines before “open for business” but where was the clear outline of how we make ourselves a desirable destination to invest?
I sensed desperation in his pitch of “growth,growth,growth” clearly the books aren’t balanced and we will are staring down the barrel of deeper deficits with no apparent way out of this mess.
I'm not sure that boosting tourism numbers is even a 'quick win' anymore. Aside from the USA, many big economies around the world are not doing as well they were a decade ago. Flights are getting very costly. Increasingly, people are thinking about their emissions (especially so in Europe) and choosing holidays closer to home. Even the novelty of Lord of Rings is not what it used to be. Marketing campaigns for travel can take time - years - to affect consumer habits. If we turn back to low value tourism then that's ripping the scab off an old wound in my view, a wound that was at its most raw around 2018/19. It didn't make us especially rich then.
Luxon should also be wary of copying Ireland with the low tax rate as this could see NZ greylisted in the OECD. This strategy is also vulnerable to big jurisdictions like the USA changing their own legislation to mitigate tax advantages offshore (as happened to Ireland).
Also Ireland was a low tax gateway to the EC. We are the gateway to nowhere.
Not sure what you mean by low value tourism.
Backpackers stay longer , and are more likely to visit the regions, rather than take helicopter rides in the tourist hotshots.
One thing that could be pushed is conservation tourism, tourists coming to help with pest control, track maintenance etc.
Low value tourism was in past the big tour groups who prepaid everything to a foreign operator. The benefit to NZ was narrow as they would all follow more or less the same route and timetable (as opposed to independent travellers who wander, disperse, and explore) and limited as the foreign host would naturally try to take as much profit as possible.
Backpapers are on the whole brilliant for our country and we should be as accomodating to them as possible.
Conservation tourism is an oxymoron.
Resource-depleting tourism is the better description - they all fly here or come off cruise ships.
And conservation is not about track maintenance - that is a human-centric self-serving thing and nothing to do with real conservation. Which wouldn't be needed, if it weren't for our impacts... If you introduce continental species into an island arena, surprise surprise they dominate (the locals hadn't evolved to resist/defend - so didn't need to fly, in many cases). So we attempt to defend the locals, which logically needs the introduced species to be eradicated. Which is unachievable. So we pay lip-service, while allowing ourselves to tiki-tour throuh nature, tick our smug little boxes, and pretend all is well.
The best tourism can do for conservation, is to stay at home; a concept unlikely to be understood by those who need not to understand it.
Not necessarily - the #1 tourist destination in the world (in terms of both pax and $) is France, and has been for many years. Singapore and Dubai are examples of rich countries that have developed sizeable tourism industries too. You're sort of right, though I would say it is more so that tourism is what poor countries depend on.
Business/corporate visitors make up a significant portion of tourism in UAE and Singapore. Both countries are also considered attractive shopping destinations by foreign tourists owing to low tax/excise rates on retail goods.
UAE does tourism rather well, considering it was not among the 10-most visited countries in 2023 but was the 6th highest recipient of tourism dollars in the same year (US$ 51 billion).
Aside from the USA, many big economies around the world are not doing as well they were a decade ago.
The US has shown remarkable per capita productivity growth which other countries have not managed yet unfortunately. A lot of productivity growth has been in industries like technology and manufacturing, which other countries have let go overseas. The problem with the "comparative advantage" model of economics is that we have no way of knowing where future advantages might arise, if every decision is optimised for the immediate situation you will forfeit your future industrial and economic advantages.
Heard it all before. If NZ is to raise its output and standard of living, there has to be a major diversion of capital away from shitty run down houses to productive ideas and enterprises that make and sell stuff. These politicians are all the same. They like talking the talk with all their fancy speeches but are unwilling to do what everyone knows has to be done.
They all try to have their cake and eat it. Doesn’t work that way, never has.
The problem is that banks are actually prepared to lend leveraged to hoses, either as owner occupiers or investments.
Productive enterprise is a different story, if you want business loans you need proven cashflow and often property as security. There is no way that the 360bil would have ever been lent on business loans. Banks also have limited ability to access loans like this, they are setup as retail lending machines.
Bigger companies get the banks to issue corporate bonds, ie, like Air NZ.
We are told we cannot grow farming by increasing stock units, in fact target require a reduction. when food exports are more the a 1/3 of your total exports, limiting growth seems nuts to me.
And as I have already posted a few times, technology startups move offshore as there is no tie and their markets are offshore.
His reality is that we have relied on the Property Ponzi for 1/3 of our economy and its now very very sick and dragging on the other 2/3rds.
They like talking the talk with all their fancy speeches but are unwilling to do what everyone knows has to be done.
National supporters have more capital they will be the most impacted by necessary reforms, do not look to National for these reforms.
His reality is that we have relied on the Property Ponzi for 1/3 of our economy and its now very very sick and dragging on the other 2/3rds.
Actually, we rely on the Ponzi for approx 2/3 of our credit creation (money supply). Consumption is the primary driver of the economy, If you stop the credit impulse, then consumption collapses. Remember, the cunning plan of Aotearoa and Aussie is to import more people to pump the GDP scorecards (the measure of our economy). Hate to say it, but if the Ponzi goes, everything goes unfortunately.
Agreed Cam Baggrie called this the wealth multiplier, people using there ever increasing equity to buy cars, boats, go on holidays etc. It always feels ok to add to a winning trade, Now on the way down, nothing feels as good, car sales are down , so is furniture and house hold appliances as we are not swapping houses as much. Its now a demultiplier.
If the first home in AKL is average 700k ( I have no idea what the official FH price is or who tracks it,) then the next rung up the ladder must be another 200k if its in the same suburb or 5-600k to a better house in a better suburb, its no wonder people are not adding this type of debt to there lives, they cannot afford it.
J.C. The Ponzi is too big to save, the last bullet was fired making interest costs deductible again, its fix bayonets time now, hand to hand combat style. The only thing they can now offer is lower OCR and people moving to shorter terms.
NAct / RBNZ have two options,
- save the housing market and trash the NZD.
- save the NZD and trash the housing market.
We do not have a great balance of payments situation, we live in interesting times, a lower NZD will import huge inflation and more inflation will further reduce peoples ability to purchase expensive housing.
You pretty much nailed it there. And while I'm no fan of the wingnuts, Luxo has mentioned a few times that "we can't grow an economy selling things to each other." People take that to mean export-led growth is the solution, but I'm also thinking that what he's implicitly trying to say is that someone has whispered to him that there are trade-offs to the magic money machine associated with and which drives the Ponzi and economy.
My thinking is that they have little choice but to lower the price of money. Same old trick they've been using for what seems to be forever and a day. They will kid themselves that it's only a short-term safety measure but nobody will have the kahunas to end it. Nobody will be brave enough to say that people will be required to devalue their labor and offer more of their time for the 'greater good.' The problem as I see it is that few people seem ably to to see what's happening (assuming my understanding is representative of reality).
Yet we must exchange with each other. Whether it's buying and selling and based in different values than money is the question.
What's truly mind boggling is how we've conflated the cost of debt with the price of money. We now have a much wider cost of debt that's not connected to the interest rate.
Also note the word recess/recession - a break or period of rest and play, a retreat, but is now bad.
It would appear, among other factors, that economics is in reality the problem not the solution.
It’s true. Banks here are set up to lend on housing. For them it’s perfect. Very low risk and high margins for that risk. Even when smaller business lending happens, there is nearly always property used as equity.
I feel this is the point nearly always missed when people say “ we need to put our money towards more productive output “. We need the banks to be willing participants and they simply are not.
More competition will help with this. Maybe the plan to massively capitalise kiwi bank might actually work this time. Not holding my breath.
We need to drop the whole RBNZ needs to be independent rubbish and make them a department of government. They haven't been doing well as an independent entity.
We need to directly regulate bank loans. In my view, people engaging in “residential investment” property should be treated as businesses and assessed in the same way as any other business loan.
There should also be a differential. For example residential investment loans at 10%, vs productive business loans at 7% to send the message around we we want loans to go.
Doesn't matter what the percentages are when our regulatory framework allows leverage against property, but not against business.
A simple fix (guaranteed to crash our economy) is to remove banks' ability to leverage in this manner. Apply to them the same rule they apply to other businesses: you may only borrow equal to the cash you have.
The private sector has little real capacity left to borrow to invest in productive enterprises - because we've blown the wedge on houses, at prices which are multiples of the build cost. Of course there is some capacity, but not enough to move the dial.
Not so easy to just 'move' capital from houses to productive enterprise, because someone has to buy the house, and unless they're coming from overseas this just involves shuffling capital around internally.
Instead we could substantially reduce the size of the government (which doesn't produce anything much anyway), and significantly reduce taxes (add income tax, GST, fuel tax, car rego., acc, import taxes, rates, etc., and many kiwis are paying over half their earnings to the state). This would allow the national savings rate to increase, freeing up more capital for investment. But this appears unpalatable to the government because it involves short-term pain. Instead they propose to put resources into convincing investors from outside New Zealand to invest here.
So rather than acting responsibly to generate more of our own savings to invest, the govt has basically given that one away and are trying to attract saved capital from elsewhere.
More people need to think like this!
Trading houses with each other while borrowing from overseas is a negative sum game, but our tax incentives have made this the default option for ambitious people. Productivity doesn’t improve if you can make easy money with a leveraged property investment. Who would start a business with the risks involved?
He is so out of touch as to how the average NZ family is struggling to stay afloat financially , young and old. He needs to live amongst an average young family for a week and just shut up and observe. Then he would see what is needed. But he wont. He will carry on and achieve very little and soon will start thinking a lot about the election next year. I will not vote for him again.
Some for sure, but just as many in the USA did not like Trump, they despised Biden more.
If Labour have any chance they need to roll Hippy soon, this within 3 months of the election rule they have might be convenient but I do not think its going to work this cycle, Hippy carries the baggage of the lockdowns in Auckland and his Bonfire of his own policies (how crazy was that, a party having a policy bonfire).
What are their options ?
https://thespinoff.co.nz/politics/25-10-2023/who-will-lead-labour-into-…
Whoever needs to make there move this year IMHO , they have to have time to build the image that they are a capable leader, not just the next captain of a leaking ship.
They cannot address the future, until the public are told what it holds.
Which, in a word, is degrowth.
That is the media failure - fiercely defended by them too, when challenged.
To give Labour their due, they pushed than Overton Window as hard as it could be pushed, but made the mistake of trying to cultivate the Maori vote - perhaps shades of their past there.
Labour's biggest card is the fact that growth is in the rear-view mirror. Meaning that 'back on track' and MAGA are doomed to fail. And when the punters don't get what they were promised....
Agree re the Overton Window, JA was no HC.
She did not have control of her own party or enough life experience to know what the average person would think.
Shame she lives in Mt Eden, and has read the use of the stadium for more then sport so badly.
Re energy PDK, this is great news.
https://scitechdaily.com/chinas-artificial-sun-shatters-fusion-record-w…
Given the exponential acceleration of tech advance, we may only be decades away from virtually unlimited clean power.
Damien Grant: National are squandering an opportunity to reshape our faltering economy
https://www.stuff.co.nz/nz-news/360558458/damien-grant-national-are-squ…
I went to a company Xmas party at the Cordis, he is right, the Chicken is good.
The rank and file National party do not want to see changes like means testing super, capital gains tax, wealth tax, inheritance tax. Only Act propose turning the customer into the spender in education or health.
You can imagine Auckland Boys Grammar opening campuses in WGTN etc if they had a decent fees system where parents could choose their kids school. But this would impact school zones, and there house prices, its all too hard.
I think Sir Roger was correct with is idea own tax system should be 15.0% GST 15.0% income tax and 15.0% CGT rates, if all income is treated equally no one tries to distort investment returns like tax free housing investment. You may well need to add in a 0.3% wealth tax as well to replace the loss on income tax.
Change the way we tax and change the way people can direct the spend is possibly the path to success, but its a technology driven world today and have just made Dr Shane the Min of technology...............
"The (Only) Way Out for the Coalition (and NZ) in 2025 is to end welfare transfers to high income families"
"Budget 2025 should be the austerity budget that Finance Minister Nicola Willis didn't have the guts to deliver in 2024."
That's raw Kiwikids. But to be honest, I think it's probably correct - we need to cut welfare for the rich if they aren't clever enough to hide their wealth that prevents them from receiving state handouts. And in some ways, that constrains the Ponzi as people would be required to chip off pieces to fund themselves. I liked this:
Or is Willis so determined her four children will go to University without her paying - each receiving a subsidy of $50,000 per year - coming to a total of $600,000 for her own family ($50,000*3 years*4 children) that she will refuse to yield?
I agree kiwisaver could use some tweaking but it's a complex issue (eg without the subsidies there is less incentive to save and then we've got problems down the track).
But here's the rub; history and common sense both show that if you tax people with skills disproportionately they tend to leave, and the more you tax them the more of them leave. Then you're worse off. Both Australia and several republican inclined US states are very viable options for the skilled worker.
I’ve never voted National in my life, and greatly dislike Luxon. But I’d vote for them if there were an election tomorrow. There’s no other viable option.
ACT - race baiting
NZF - muldoonist
Labour - aroha professional managerial class muldoonist
Greens - lol
TOP - lol
TPM - socialist
I am not in favour of DOC land being utilised for mining activities but no objections to putting housing on it . . I have no problem with opening up the borders to RE but im doubtful it will have any meaningful impact given China will likely be not keen on seeing capital walk out the door this year additionally bare land values here are likely a hurdle. , Trumps trade tariffs will likely wreak havoc in the Pacific ... Lowering the OCR will likely throw a bone to those already carrying debt but I am not sure it will create the big pump NZ needs given how tight economic conditions are presently . Tourism could help but it needs to be the right sort of tourism (eco friendly) . Not gonna rattle on , Its gonna be a slog turning the page and a few speeches wont cut it....lol
Nice tone Dan! Colour me even more sceptical.
I think my biggest beef (of many) is this obsession with foreign investment. What happens when people and companies offshore invest in NZ? Do they just send millions over for giggles and sit back and feel good about their charity? Nope. They expect a return on that investment.
Foreign investment is a one-off sugar hit on our current account balance, quickly followed by decades of returns flowing the other way. Our current account deficit is about $27bn right now and half of that deficit is *income*; cash flowing into offshore ownership, sucking demand out of our economy. Our entire dairy industry exports are required just to offset the flow of 'dividends' (primary income) offshore already.
While we struggle to deliver infrastructure and lots of other stuff we need to become a serious 21st century country, the one thing we are not short of is cash. Govt has tens of billions of fiscal firepower it is refusing to use for purely ideological reasons. A significant Govt investment in the things we need to deliver a more efficient, resilient, and sustainable economy is the obvious move. The Govt bonds created would be gobbled up by the private sector onshore and offshore. Yes, that would create some flow of interest payments offshore, but those payments would be at a much lower % than the returns expected by foreign investors.
And, that should be the question asked here - why are we seeking expensive offshore investments (loans)? Why are we happy for our businesses to pile into even more expensive debt, raising the bar on the value of future exports we need to breakeven, while the Govt sits on a net positive financial worth? Has anyone spotted that our business sector has the highest negative net financial worth (% of GDP) in the OECD already? Why would we double down on this idiocy?
Jfoe I find myself agreeing with you again, at least in part! The difference between a locally owned business and the same business foreign owned, is not the local workers and running costs injected back into the NZ economy, which are the same in both cases, but the profits which are more likely to stay in NZ if the business is locally owned and vice versa.
Seeking to attract foreign investment implies there are opportunities here to invest in. Fine. But the pressing question is then why are locals (or equivalently, locally owned capital) unwilling or unable to take up those opportunities. The govt's announcement leaves this unanswered.
I suggest the direct cause is because there is inadequate capital available in NZ for this purpose. But why? One cause of this is there are not enough savings. Why...? Etc.
These are the hard questions for the govt to ask. Even if we disagree about the answers there is utility in discussing these fundamentals.
Agreement in part is a start ;-)
My post was making the point that Govt has very significant investment headroom - whereas our private sector is carrying massive amounts of debt - leveraged up on property prices that are falling in real terms. A structured programme of public investment would not only help us get things done - it would also allow the private sector to wind down its debt levels. We have made a start over the last couple of years, but there is a long way to go.
Unfortunately NZ Inc dosnt operate in a vacuum....what we do is noticed by international finance and if they dont get the opportunity for their cut (rent) then we may find ourselves left to play in our own sandpit.....not so much of a problem if we were equiped to cope on our own, but sadly we have become more dependent upon the rest of the world than ever before.
That would depend upon whether that plan enabled me to benefit. I (and nor does anyone) would not invest in an economy that wanted to take my money and give me nothing in return....that is the issue. It matters not whether the lack of return is due to incompetence or not. What matters is the return of the investment and additionally return on the investment.....remove that and i may as well stick my savings under my mattress.
Within that economy I would obviously be more inclined to invest in one with an actual plan.
The problem I am trying to highlight is reducing the ability for profit to be extracted from the economy to without must result in less investment from without....that means our investment must come from within....and that investment includes the raw materials and ability.
We are a long way from anything like that and it is far more than finance can address....how do we develop an economy that is not virtually wholly dependent on the without?...and would it be desirable to the overwhelming majority of its members?
Ultimately we will be forced to in any case.
I have no idea where you get that idea from.
Money goes where it can make a buck. Only governments try to block where money flows and money always finds a way to get there unless governments make it expensive to do so. Why would any foreign government try to block money coming into NZ?
Pay off a student loan
Save for a house while renting
Save via kiwisaver for old age
Bring up a few kids (pretty much the kiwi dream but yes not for everyone)
Aspire to give your kids a few experiences? skiing in nz or overseas trips?
sorry it is just easier hence I went to London and came back once I could afford NZ.
Those in the early post WWII era didn't begrudge a 66% top tax rat which was required to 1./ offset large government spending to fund large scale infrastructure, social housing etc and 2./ Prevent excessive accumulation of wealth. Many studied to become lawyers, engineers, scientists, surgeons etc and still earned more than most irrespective of the tax take, therefore they lead more comfortable lives from the additional income. The sad part being that the top tax bracket was reduced when they all started having families and felt hard done by, and now we are in a precarious situation today where greater infrastructure and healthcare spend is needed, but nobody wants to sacrifice a thing to pay for it.
Anyone else having partial or complete comments removed? I wasn’t racist, insulting or off topic yet someone at interest.co.nz has taken it upon themselves to delete my comments this morning when I challenged the authors viewpoint. Censorship is strong at interest.co.nz
They are the best in NZ - but have an intrinsic problem, like all NZ MSM. They are peddling something that has long been provable as a myth - the possibility of perpetual growth. At best, the MSM are oxymoronic - RNZ for example can run a news item on climate change, immediately followed by one lauding tourism. The lack of ability to cranially rationalise, to ask, to question, to compare - is breathtaking.
Also, as time has gone on, avoiding the hard asks is getting harder - so some (RNZ is the poster-child) have decided to virtu-signal (climate and lauding indigenous pre-colonialism cultures being the safest). I've even challenged one journo who replied: I'm reporting this economy ((rather, presumably, than the real material/energy throughput, entropy one). Sigh...
A further problem is that all MSM - RNZ the possible exception - are 'businesses' mostly dependent on the growth system. As it falters, they are getting squeezed - Upton Sinclair's famous quote comes to mind... in that, the media are rather like tertiary academia... needing to project that which their status-quo depends upon...
Is NZ reaching a point where we are in such a mess, are so broke, that we might see reforms of the magnitude (not necessarily of the same style) of 1980s Rogernomics? Will a brave political party stand up in front of the voters and say "we're stuffed, so we are going large on reforms" ? How would our voting public respond?
We had a fixed currency, and we where broke, now our dollar will just float lower and inflation for imported Petrol etc will just go nuts.
International funding will rocket and the mortgage rates will go through the roof, causing collapse of the entire NZ Economy, you want to be debt free with liquid assets at this point. RBNZ would have to smash the OCR up to try and hold the NZD.
The desperation allows change. At least we can feed ourselves, and have reasonable power supplies.
A little bit of solar and an old leaf EV would go a long way, even if it only had an 80km range.
A large block of the voting public will say no. They are 'wealthy and sorted', and get (edit: or will get) a UBI from government regardless.
We won't see any change until the boomers and their remaining parents are 6' under, and Gen-X who have been quietly riding their coat tails are able to be outvoted by the disenfranchised 'youth' - which will be most people under 60 at that point.
In an emergency they push things through, who expect Roger Douglas and Lange to go that nuts and they where Labour... It was 100% needed, Muldoon was in total denial. By the time we do it this time we will be in a way way worse place then 1990.
Look at the huge private debt that we have now
NZ needs far less 'foreign investment' than we're led to believe.
What we do need to do is use our pool of investment money on stuff that actually either a) creates new stuff, b) uses less existing stuff, and c) stops shoveling huge profits offshore.
There's a simple way to do this ... a Tax System Overhaul.
Both a) and b) above will be addressed in no time once taxes are lowered on those activities!
And with taxes increased for on sitting on capital while doing nothing that advances a) or b) except collecting rents with much of those rents going to c) - we have a much overdue and fundamental change.
Funny that you never hear this from the NACTF, ay? (And terribly sad that few comments thus far reflect this fundamental and significant structural problem.)
It's great that you still put forward what is extremely obvious to anyone with half a brain. But personally after the last election I got the message that the majority of voters just see BAU as the only option, and they do not wish to see personal taxes lowered nor any colour but blue or red in parliament.
Did any party campaign on a tax switch? TOP maybe?
If a party campaigned on a wealth or land tax that was used to lower personal taxes they may be onto a winner. Instead we get offered stupid CGT with no details of what will actually be taxed and it will never make enough money to offset anything.
Creating growth would require the undoing of 40 years of political and economic policy that's resulted in a narrowing of the economy to a few areas that we could do well by adding value, but don't as we're short on enterprise capital, the influence towards the unimaginative status-quo by entrenched interests, and the lack of government understanding about the need to support the development of a diversified economy.
Tourism is what poor countries do becasue they have no alternative. Observational humour: how was copper wire invented? Two backpackers struggling over a 10 cent piece. If we do tourism, far fewer tourists with much higher on shore spend would have to be preferable - but it would need us to develop levels of service that seem to be alien to the Kiwi mentality.
Agricultural products: we keep exporting commodity items rather that high value-add products. That Fronterra - the biggest agriproduct exporter(?) - has said they don't see their future with any kind of consumer products rather defies belief but underscores a lack of imagination. And we still keep sending logs overseas rather than much-higher value products - which is emblematic of failures in capital markets geared against, policy, and regulation.
And industrial policy and execution are sterile ground. Hard to know what that policy is, given it's created by people from non-making backgrounds and administered by a professional public service who, from interaction, seem to be overwhelmingly from academia and career public servants who have never done anything else. Try explaining a business that makes physical objects to a mid-20's anthropology graduate from MBIE - who thinks it's OK to turn up to an on-line meeting in a faded rugby jersey.
I've been refering to the Prime Minister as "one term Luxon" since early last year and, to be fair to some of your other commenters, I wasn't alone. Had Luxon become PM pre-Covid I think he might have been perceived as more successful. He'll be gone at the next election one way or another.
Unfortunately times have changed and there is now a need for positive, high impact economic and industrial policy to generate growth as interest rates have risen. The "wealth effect" brought by low interest rates that was widely lauded by previous governments is now more of an "impoverishment effect" as rates have risen and inflation looks persistent.
I don't envy the job of the next government at all, if they cannot get real (i.e. inflation adjusted) take-home pay rising very early on their tenure they will likely face the same outcome as Luxons government. The public are in no mood for excuses with many households under substantial financial pressure.
if they cannot get real (i.e. inflation adjusted) take-home pay rising very early on their tenure they will likely face the same outcome as Luxons government.
How do you increase the take home pay when there are failing businesses and mounting job losses? The govt have arguably already increased take home pay of public servants substantially and they cannot control the decisions of the private sector. If we had major tax reform then we would likely struggle for a half decade to readjust and recalibrate where we choose to invest out time, money and energy in the economy, which nobody would be happy with, but the longer term benefit would far outstrip the silly short-term mentality of "what benefits me right now, and I'll vote accordingly".
One country where tourism boomed last year. Maybe the few who went there forwent a holiday here.
https://www.youtube.com/watch?v=h0lOvY-PTH0
Spain's RECORD BREAKING Tourism Boom
The Coalition Government promises an economic growth plan within weeks!
So they don’t have a plan currently ?
Well knock me down with a feather!
Wonder if it’s a late night last minute assignment for the NZ Initiative in Wellington tonight.
i do notice a lot of their ideas are being suggested by other countries….all at the same conference or something?
Im 50 plus so what’s a few more weeks waiting
Lil ole backward NZ can't compete with the US IRAct, Chips Act worth over $500b+ of subsidies and the currency war and trade war about to kick off.
Isolationism and Protectionism is the future. NZ can't attract capital investment with government investment on a massive scale like that.
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