The Australian says the NZ Govt is pushing the economy off a cliff

Adam Creighton, the economics editor at The Australian writes:

New Zealand’s economy is in strife. Without major change, our constitutional cousin is in decline. Its public finances are in tatters, its biggest export, tourism, has been obliterated — Air New Zealand announced 4000 job losses this week — and New Zealand police now can enter people’s homes without a warrant. …

In one year, New Zealand has blown 30 years of hard-fought ­fiscal rectitude. Its public debt will explode from the equivalent of 19 per cent of gross domestic product last year to 54 per cent by 2022, on the government’s own figures.

Scott said expanding the deficit, expected to blow out to 10 per cent this year, was the right thing to do. “But looking further out, comparisons with other countries, such as the US and UK, are no basis to justify our large debt ratios; we’re a small, open economy with vulnerable export industries,” he said, noting the share of exports in GDP had been falling steadily for nine years.

30 years of fiscal rectitude gone in a year!

The Prime Minister and Finance Minister, who have not worked in the private sector, spruik the totems of modern left governments — renewable energy, trees, higher tax, equality — but without much to show for it. Plans for a billion trees and 100,000 houses have come close to almost naught, and a capital-gains tax was dumped. Labour made a song and dance about reducing child poverty too, but on six out of nine measures tracked by Statistics New Zealand it is unchanged or worse since 2017, including the share of children living in “material hardship”, which has risen to 13.4 per cent.

They managed 0.3% of their 100,000 houses and 2.5% of their billion trees.

The nation’s draconian response to the coronavirus was questionable, given it is an island with a massive moat and a small population spread over an area the size of Italy. Despite those obvious advantages, the stringency of its lockdown was higher than practically any other country, according to Oxford University’s Blavatnik School of Government. Deaths per million were the same as Australia’s — just four.

In fact, slightly higher.

Ardern is more popular than ever, and by all accounts is a good person and a great communicator. But if a COVID-19 vaccine remains elusive, New Zealanders may come to question her wisdom as they fall further down the global pecking order. Without economic growth, there won’t be money for more ICU beds.

A good reminder that economic growth is what allows us to have a public health system.

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