Congratulations to John Whitehead for his characteristically candid report on the few remaining options we have unless there is radical change, says PEC spokesperson Selwyn Pellett.

“Treasury’s 2009 ‘40 year outlook’ report delivers a message that basically says: “grow up New Zealand, the soft options have gone”. We just hope our politicians have the wisdom to read it from cover to cover and absorb the reality it portrays,” says Pellett.

“What it doesn’t do is talk of radical change in how we could increase our income and of course that’s where exporters are so critical to our future and solving this imbalance.” read more »

“If productivity growth were to improve by 2 per cent a year, labour force participation was 3 percentage points higher than it is today, and new migrants added 15,000 to national population annually instead of the 10,000 forecast, net debt would rise to 146 per cent of GDP by 2050. “This is still an unsustainable fiscal position,” the report says.”

Treasury paints a picture of a Third-World future for New Zealand.

From The NZ Herald

“Another plunge into global recession in 2010 or 2011 is being tipped by expatriate New Zealand economist Robert Wade – unless governments tackle the underlying causes of the past year’s crisis.”

From The NZ Herald

So the recession is over. At least Bill English is happy to say so and will spend the next month telling us we are out of recession and it’s business as usual. That’s fantastic news, or at least it would be if he was right.

But, says Selwyn Pellett of the Productive Economy Council, unfortunately he’s wrong.

“Prior to the recession 30 percent of our GDP was from the export sector and that 30 percent is still very much in recession,” says Pellett. read more »

As the dollar hits 76.4 cents to the US dollar, we are told there is nothing we can do to protect our own currency and that’s just not true. “Why are New Zealanders not being told the truth”, says Selwyn Pellett spokesperson for the Productive Economy Council. 
 
“The public are tired of hearing “Oh it’s the US Dollar or the Pound” and “We are in the same position as everyone else”.  Well this may serve the needs of banks and the politicians but it’s just not true.  In the 22 day period from the 1st of August the NZ Dollar has appreciated 5.1% against the US Dollar with a 0.1% improvement in GDP, while Singapore achieved a 15% improvement in GDP with just a 1.61% increase in its dollar against the US Dollar, and Taiwan’s currency decreased 0.6% in the same period. So let’s stop telling the New Zealand public we are helpless and can’t do anything.  The lack of leadership on this issue puts us in danger of becoming another Iceland.” says Pellett.
  read more »

Singapore has it right. We have it wrong. Here’s why.

Let’s look again at Monetary Policy (pptx)

Let’s look again at Monetary Policy (pdf)

The “Mr Nice Guys” like Prime Minister John Key – and US President Barack Obama – who have soared high on the basis of personal popularity and feel-good vibes – are now finding out the hard way that there is more to making a good political hamburger than mere sizzle.

If Key does not want to preside over a one-term Government, he must set about constructing a crucial point of difference by starting to act as his nation’s CEO instead of the prime political firefighter who repeatedly rides to the rescue to save his Government from fiascos caused by his own lax political management.

From The NZ Herald

Bill English, Dr Bollard and Treasury are doing their best to paint an accurate picture of where we are as a country. Unfortunately the Prime Minister seems to be presenting a very different landscape to the public. If borrowing an extra $250 million a week doesn’t make the Prime Minister and the average New Zealander think we have a problem with the way our economy is operating, what will asks Selwyn Pellett, the spokesperson for the Productive Economy Council.

“The fact is that we are living beyond our means and we need to restructure our economy. If we were talking about a business, the need for a restructure would be taken for granted. The shareholders would be demanding it and the CEO would see the need to make hard decisions or know they will be replaced by the board. Well, our economy is a business, and we are all shareholders. It’s time we made that demand, and it’s time the Prime Minister realised that hard decisions must be made,” says Pellett.
read more »

“Bold tax reforms and changes to the mix of monetary and fiscal policy are needed if New Zealand is to rebalance its economy and close the gap with Australia, according to the Treasury’s head.”

From the NZ Herald