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.
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This Powerpoint presentation outlines the PEC’s vision of where we’ve gone wrong economically as a country and what the PEC thinks we should do to get it right.

Download Growing up to business (1875KB)

The Prime Minister’s comments on Capital Gains Tax has brought into sharp focus his leadership style says Selwyn Pellett, spokesman for the Productive Economy Council.

“It is totally inappropriate to make these comments before the tax advisory group has officially released its findings,” says Pellett. “The Prime Minister has essentially said that the tax advisory group is wasting its time, because he is highly unlikely to listen to their findings if it involves a recommendation for any type of Capital Gains Tax. It looks like John Key is telling the advisory group and the rest of New Zealand that he doesn’t need to listen to advice from either experts or those economically affected by property speculation. That’s an enormously arrogant position for any Prime Minister to adopt so early in his term as Prime Minister.” read more »

“Dr Bollard’s comments about the need for a speculation tax are underwhelming in light of the rise of the NZD to 70 cents against the US dollar and the damage another bank fuelled property bubble will do to our economy. It’s time farmers and exporters joined together to tell the Prime Minister that Dr Bollard needs more sophisticated tools as the OCR is a very blunt instrument,” says Selwyn Pellett, spokesman for the Productive Economy Council.

It is the PEC’s position that property speculators are doing serious damage to the economy, aided by the banks and our outdated monetary policy. The PEC calls on Dr Bollard to be more candid with the country about just what the relationship between property speculation, monetary policy and the bank’s behaviour is and the effect it is having on the economic outlook for the country. read more »

The OCR has become a rod with which Dr Bollard can beat exporters while he remains powerless to punish speculators and banks, says the Productive Economy Council (PEC) in reference to the pending RBNZ statement out this week.

“The reports today suggest the recession is over for the average New Zealander and that may well be true. The housing market has again started to take off and bank lending follows. Yet the green shoots of economic recovery are still so fragile that any decent frost will wipe them out. The tradable economy (Exporters) is hurting more now than at the beginning of the recession and Dr Bollard must surely know that. As a result his options are actually very limited”, says Selwyn Pellett, spokesman for the Productive Economy Council. read more »

PEC’s submission to the Parliamentary Banking Inquiry can be viewed here (PDF).

The presentation by the New Zealand Manufacturers and Exporters Association to the Banking Inquiry can be viewed here and its full submission here.

In commenting today that “there is some evidence at the moment that the recovery could consist of a pickup in housing,” Finance Minister Bill English went on to tell reporters that “now that’s more of the problem than we had before and it would be a concern particularly if it goes with a high exchange rate that punishes our exporters.”

Productive Economy Council spokesman Selwyn Pellett says that while the government is 100% on target in identifying the problem that real wealth creation for the country can only come from exports, the PEC remains unconvinced about its commitment to solving it. read more »

As the revelations continue, we realise that it’s not the voters of New Zealand that have been holding back on implementing Capital Gains Tax (CGT) but rather a very small yet influential group of New Zealanders well connected to the political machinery of office,” says Selwyn Pellett, spokesman for the Productive Economy Council.

“We had no idea of the number of politicians on both sides of the house that are compromised by their own investment choices,” says Pellett. read more »

“The furore over Minister’s second homes once again raises the question of the lack of Capital Gains Tax incentivising property speculation, distorting our investment regime and depriving our productive sector of the financial oxygen it needs to grow”, says John Blackham, of the Productive Economy Council.

“If the income from property speculation, be it by Ministers of the Crown or private citizens, were taxed in line with what Joe average Kiwi citizen contributes through his weekly wage packet, then New Zealand would stand a better chance of competing with the rest of the developed world.” read more »

The Productive Economy Council has welcomed the announcement of an inquiry into bank profits by Labour, the Greens and the Progressives, but cautions that unless its terms of reference are broad enough, it may not get to the root of the problems the country faces with regards to banking and monetary policy.

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