“Today’s GDP numbers show that New Zealand is halfway down the road to recession, as we forecast in March,” says ACT Leader David Seymour.
“The figures show the economy contracted by 0.2 per cent in the March quarter of this year. ACT predicted this in March when we said: "All leading economic indicators are falling through the floor, inflation and interest rates are skyrocketing, and Jacinda’s unworkable regulations are pushing us towards recession. ACT predicts we’ll see negative growth in Q1 and Q2, meaning we’ll be in recession."
“The Prime Minister is going to great lengths to say it’s all global headwinds, but that’s just spin. Australia’s economy grew in the same period, by 0.8 per cent, an annualised four per cent better than New Zealand.
"Australia beat its forecasts, with a market consensus of 0.5 it delivered 0.8. New Zealand forecasters had a consensus of flat growth, but it was negative. Not only are we performing worse than Australia, but comparatively worse than expectations.
“This will only serve as greater motivation for aspirational Kiwis to head across the Tasman. MBIE has already predicted 50,000 will leave this year, and emigration is the constant chatter amongst young New Zealanders. Their wages are higher and growing faster, their mortgage rates are lower, their inflation is lower, and they pay less tax.
“Beneath these figures, I’m hearing recession on the ground. People are running but standing still, pre-departure testing that is only being lifted months after it should have and hopeless and unworkably long isolation periods have put the brakes on growth.
“This morning I spoke to a business owner who said she’s ready to give up, burned out. Her staff keep calling in saying they have to isolate for COVID. Another Auckland establishment had 14 people call in sick on Friday, they biggest day of their week.
“The isolation periods are unworkable, allowing a person to take two weeks off for a household case then their own, even if they themselves are infectious for only a few days. We should take Singapore’s approach of 72 hours isolation, negative test and you’re out, as ACT advocated as early as March.
“Fundamentally, other countries were out of the blocks, moving on from COVID as early as possible. We are holding on to a long COVID hangover. It turns out an ‘abundance of caution’ is an abundance of cost for New Zealanders.
“The only thing that’s kept us going is inflationary Government spending and money printing, but that has a cost, too. Rising costs.
“Kiwis are paying more for almost everything, whether it’s at the pump or the checkout. Prices are rising because the Government has shut down production and compensated with a flood of borrowed and printed cash.
“This is why Kiwis can’t afford pharmaceuticals. Its why families have been hit harder by the cost of living crisis. It means there’s less money to put away for retirement.
“In the long run we have a productivity disaster. Lithuania, The Czech Republic, and Slovenia have all overtaken us for productivity in the past five years. Estonia looks set to overtake us next. We don’t even compare to Australia, Canada, the U.S. or Britain any more.
“There’s one sector of the economy that is not in recession. The Government. Thanks to inflation we have a Finance Minister who is raking in record taxes to pay for all of his spending. We’re overtaxed and over-regulated. Grant Robertson needs to take his foot off the throat of taxpayers.
“ACT was the only Party to produce a fully-costed alternative budget. We would reduce the tax burden on every earner by simplifying the system to two tax rates, we would reduce wasteful spending by $6.8 billion in 2023, we would pay down debt faster to get us in surplus next year, we would scrap pointless COVID rules that stifle productivity, and we would welcome investment from OECD countries.
“The question Kiwis must be asking themselves is do we want to carry on in comfortable decline until we slip away from first world status, or do we want real change?”