Thursday, 17 June 2021

GDP numbers a dead cat bounce


“The Reserve Bank printed $100 billion, the Government borrowed $60 billion - we've got an economy that’s running on a sugar hit,” says ACT Leader David Seymour.

“The Government has been focussed on all manner of initiatives, from bike bridges to public holidays, and paying people more to stay home, while the real need is for a serious post-COVID recovery plan.

“Businesses now face enormous shortages of skilled workers, energy, and supplies, which are leading to delays and price increases. These shortages are making the economy feel busy, but it is not productive to be waiting longer and paying more to do business.

“Each of the shortages are exacerbating the economic challenges caused by Government neglect or outright hostility to productive activity.

“Those trying to create jobs, pay their bills and serve their customers get no help from the Government, in fact the opposite. Minimum wage increases, new public holidays, and extra sick leave, now Parliament is debating whether employers should pay for parents to go to parent teacher interviews.

“When businesses are crying out for skills, the Government, far from showing a plan to safely reconnect with a post-COVID world, chose last month to give a mysterious speech saying that COVID is  a ‘change point’ for a ‘once-in-a-generation opportunity to change’ immigration. The Government described immigrants as increasingly low-skilled and that COVID ‘starkly highlighted our reliance on migrant labour. All this does is add to uncertainty.

“Low lake levels and a shortage of gas mean that New Zealand is facing the highest wholesale electricity prices ever. May 2021 saw the highest prices on record, and February, March and April were the fifth, fourth, and third most expensive months on record.

“Meanwhile businesses are suffering from havoc in global supply chains, exacerbated by New Zealand’s location at the end of the line. Once again, the Government has little plan for a safe reconnection.

“Infrastructure is a major problem for business, but in place of a coherent strategy, the Government is doing infrastructure-by-announcement, with congestion, housing shortages, and infrastructure failures such as polluted beaches becoming commonplace.

“What New Zealand needs is a Government that sees business for what it is: the voluntary coming together of investors, workers, entrepreneurs, and customers to achieve together what they could not achieve separately. The Government’s attitude should be to ask, ‘how do we create the environment for investment, jobs, and growth?’ Instead, it appears to be focused on day-to-day marketing and management, along with ideologically driven attacks on business.”