GULP – Austerity Agenda sees GDP collapse

This Government’s Austerity Agenda is killing New Zealand economically, culturally and literally.

By
Martyn Bradbury
-
59
1792

Massive GDP fall: NZ in deep recession – worst since 1991

New Zealand’s gross domestic product (GDP) crashed by 1% in the September 2024 quarter, a much larger fall than economists had expected.

The slump came after a revised 1.1% decrease in the June quarter, according to figures released by Stats NZ today.

The previous figure for the June quarter was a fall of just just 0.2%. That puts New Zealand into the deepest recession since the Covid-related slump in 2020.

NO ONE should be surprised that our GDP has collapsed!

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This National, ACT and NZF Government can not keep pointing to the money the previous Government borrowed to protect us from a once in a century pandemic as the reason the Economy is in free fall!

This National, ACT and NZF Government decided to borrow more than Labour did for tax cuts we couldn’t afford creating a hollowed out Austerity Budget that cut the supply of constant infrastructure work and has led to an exodus of skilled workers to Australia.

The economic results are grim and damning…

“The data showed that the economy is growing more slowly than forecast just six months ago. Next year GDP growth was forecast to 1.7% at Budget, now its 0.5%. GDP is $20bn lower by 2028. Unemployment is higher in every year of the forecast – with 20,000 more people on jobseekers support by 2026. OBEGAL absent the new tricks of accounting – never comes back into surplus across the forecast period. Net Core Crown Debt increases across the forecast period by $58bn.

“The Budget Policy Statement signals that we are in for more cuts in the next few budgets. There is only $700m available at the next Budget to pay for everything outside health. That bakes in likely cuts to public investment and to the public sector workforce every year for the next few years. All to pay for the tax cuts that have now passed. The folly of that decision is now being uncovered.

…this isn’t Labour’s previous Covid spending, this is a direct result of the actions and virtue signal stunts of this Government!

When cuts beget cuts

Treasury’s Chief Economist Dominick Stephens warned yesterday the recession was worsening to be deeper than the one seen in the Global Financial Crisis and widening the Budget deficit. His comments echoed those of a group of 15 economists who yesterday called for a suspension to Government spending cuts, saying they weren’t needed and were creating a negative feedback loop of economic contraction.

Stephens couldn’t have been clearer:

Economic growth has proved slower than anticipated. Weaker economic growth means a smaller economy and less tax revenue, increasing the challenge for the Government in balancing its books. Treasury’s Chief Economist Dominick Stephens in a speech to the Chartered Accountants Australia and New Zealand (CAANZ) Annual Tax Conference.

…the austerity of this Government is causing public services to collapse because this Government hasn’t borrowed for public services, they’ve borrowed for tax cuts!

Economists call for end to Budget cuts

A group of economists, including former Treasury Chief Economist and former Productivity Commissioners, published a letter to PM Christopher Luxon this morning calling for an immediate suspension of budget cuts to avoid further worsening a recession they say is hollowing out businesses and conflicts with the Government’s goal of doubling exports.

They argued fiscal policy was needlessly worsening the recession, saying there was no clear rationale for projected budget cuts and little consideration about the short-term effects. They wrote:

For example, your Government’s cancellation of key infrastructure projects and sinking-lid cuts to the public service are powerful contributors to the current severe and prolonged recession. This is substantially worsening the contractionary effects on the economy of the Reserve Bank’s use of the Official Cash Rate to contain inflation.

All National have as economic philosophy is whatever the fuck their donor interests are, and their donors interests are all about deregulation so they can rape the environment without having to talk to da Maaaris.

This Austerity is literally killing us!

Look at the official annual Health Survey released last week for the last year under this National Government:

  • One in four children (27.0 percent) lived in households where food ran out often or sometimes, up from 21.3 percent in 2022/23
  • 10.7 percent of adults had an unmet need for professional help for their emotions, stress, mental health or substance use in 2023/24 – more than double the rate of 4.9 percent in 2016/17
  • One in 11 adults (9.1 percent) and 8.2 percent of children aged 2-14 years ate the recommended amount of vegetables
  • Fewer than half of adults (46.6 percent) met physical activity guidelines, ie at least 2.5 hours of moderate-intensity activity in the past week – down from 50.9 percent five years ago
  • One in three adults (1.5 million) classified as obese, rising to nearly half of those living in the most deprived neighbourhoods
  • Nearly half of adults (44.9 percent) reported unmet need for dental care due to cost. Rates were worse for Māori, Pacific, disabled, people living in the most deprived neighbourhoods and those aged 25-54 years
  • One in four adults (25.7 percent) and one in five children (18.5 percent) reported that “time taken to get an appointment was too long” as a barrier to visiting the GP in the 12 months prior to the 2023/24 survey. This is higher than the previous year (21.2 percent for adults and 14.8 percent for children). In 2021/22, the figure was 11.6 percent.

This Government’s Austerity Agenda is killing New Zealand economically, culturally and literally.

Using small business morality to pimp for venal corporate profit, selling out the common good for donor interests and using divisive race baiting stunts to eclipse the economic collapse by using culture war revenge fantasies masquerading as social policy to keep everyone divided IS NOT a fucking solution!

We are a better people than this hateful anti-Māori, anti-Treaty, anti-worker, anti-renter, anti-beneficiary and anti-environment agenda.

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59 COMMENTS

  1. Our GDP has collapsed because NZ doesn’t want to make money. If we did want make to money, we’d be…for example…exporting oil and coal instead of buying it. Or selling gas. Or minerals. But we don’t. There are too many left wing agendas in play to keep us poor. Being rich is a dirty word in NZ, where jealousy and envy drive govt policy.

        • Tops Jonzie. Great recovery from a possibly truthful jeer. But really you sized up the confusing way we are being run; run-down by this present neoliberal economic recipe for failure and death. The pollies and their sickopants (sic) have signed us up to treaties that are so constricting that they are cutting off our blood supply. We were going to need to work hard at keeping going as it was, but opening us up to being tasty morsels for the world’s financial gourmets has meant simple porridge for us, and that’s if we’re lucky.

          For me, I find real people with go, at the takeaways and admire their zing, and the Indians who deliver to homes. I visit about six nationalities, Kiwis are hard put to respond, while our regular, normal jobs are taken along with one’s living, housing, and everything. Can’t blame the internationals – they are all good. But we are swamped. Make Rob Hewitt our Kiwi leader – he knows about being staunch and keeping hopeful, controlled, and on top of the tide.

          • I think you are wandering or I am wondering RC. Short jibes don’t elucidate anything especially when they don’t indicate the commenter’s reference. We have to talk things through – the past decades have seen commenters solve our problems in short and concise ways multiplied by thousands. Pity that nothing has improved noticeably overall.

          • “Short jibes don’t elucidate anything especially when they don’t indicate the commenter’s reference.”

            Point long understood and already appreciated, but some (usually regular) commenters are well known enough as being beyond reasoning with, and despite an argument that replies to them can be geared toward being read by a wider audience, such persons only merit ridicule. To any intelligent reader their offerings are already prima facie vacuous.
            It’s just not worth anybody’s time/effort replying to beyond using simple derision.

        • The facts are …that Luxon, Willlis, Seymour and Peters’ naive stupidity has fucked the country in just 12 short months…not just economically , but in every other measure as well…

          And…. to make matter’s worse …there’s no coming back from this for a very very very loooong time….especially, perish thought , if they remain in power.

          Why?…because they are so stupid, ignorant and yet hubristic, that they are actually going to double down on what is actually not working….you couldn’t actually make this stuff up.

          They were warned pre election, even by economists that lean to the right, not to do what they have done …but no, their hubristic narcissistic egos knew best….Well, clearly, they don’t know jack shit …why would they??

          The myth that has always lingered around the world ….that ‘the right’ are the best economic managers, has once again, been proven to be just that…a convenient bit of propaganda to get elected.

          Statistics collated over many decades prove that propaganda to be the biggest lie.

    • Shorttermitis is a psychological disease…What happens when the oil, coal and gas runs out… they are all finite resources….

      What will keep you very, and, permanently poor, is rapid and extreme climate change …

      Which is where we are right now….so let’s just turbocharge it….what a great idea!…wish i’d thought of that one!!

    • Over the years New Zealand has exported a lot of gold, coal and oil and gas, but as a matter of policy successive colonialist governments have only required trifling royalties from the mining companies. So it is odd to argue that New Zealand should export more minerals. The question must be “For whose benefit?”

    • No Jonzie, the economy has collapsed because of poor economic management by this government. Admittedly the economy was on the down when the Coalition of Calamity (CoC – oh no the world is about to end unless we can stop gang ,members expressing themselves) took power, but austerity type measures have massively negatively impacted an already dicey economy much worse than the CoC predicted.

      When CoC took power, of course it said the economy was in an ‘unexpectedly’ bad situation which was entirely due to the previous L/G government (which was clearly wrong because the Covid response and supply chain issues that were created by Covid, and the war in Ukraine were major global impacts for every country). Obviously this was bovine excrement unless CoC are unable to read (PREFU) or write (evidenced by terrible policy already papered). The reality is that the notion that CoC will listen to the vast majority is clearly, fantasy, at best. Irrespective of the rhetoric of this CoC listening to the people the exact opposite is true. They may ‘act’ like they are listening but key decisions were made behind closed doors when bargaining for party contributions to policy were thrashed out just after the election – anything suggested as new policy after this is simply nonsense at best or worse intentional deception.

      But CoC (and supporters of CoC) will bang on about successes for this government – I can think of only 2 currently – one is inflation being brought under control and the other the greyhound racing ban. The racing ban was out of the blue and the best thing Winston has ever done – but I wonder what concession he made to allow this within the industry? We may never know. CoC do need to ‘pat on the back’ for the job on inflation but the damage to employment has been the significant concession made to achieve this.

      On the significant down side, this government is clearly seeking to destroy years of positive progress for workers and worker safety. CoC appear happy to continue to underfund public health and education – yet are happy to endorse expensive and unaccountable charter schools in the education system along with significant cuts in health across the sector. CoC have significantly gutted the public service yet expect better productivity from those that survive the cull – all at the same time as denying anything but miniscule pay increases.

      As New Zealand is a small and relatively isolated country we need more government involvement in a range of areas were this may not necessarily be needed in larger countries. For instance, the idea of centralising Polytechnics in NZ (done under previous government but undone by CoC – without any coherent option or rationale except ideology of Damien Grants beloved neoliberalism) was designed to ensure a range of relevant topics could be delivered through the network and there would be minimal double ups … along with ‘efficiencies of administration’.

      The are other areas of change that I could talk about but this already feels too long for most neolibs to read.

    • Spot on.
      We keep comparing ourselves to Aussue- who continually mine everything they can. We will never be rich in nz unless we change the direction.

  2. But Trevor said these guys are really good.

    Idiot New Zealanders need to wake up to the fact that these arseholes don’t have any plan. Better educated kids below working age, eating shit food, are not coming to our rescue anytime soon. Shane Jones is such an idiot he’s essentially proposing to make taxpayers pay for energy companies to come here, who probably have no interest in coming anyway.

    They lied, we all know they lied, as it was pointed out numerous times their numbers were rubbish. But the douche bags of ZB land are happy because they are inherently stupid

  3. They have betrayed all New Zealanders.

    Winston Peters – on Oct 19th, 2017, you said:
    “New Zealanders have come to view today’s Capitalism not as their friend but as their foe. And they are not all wrong. That is why we believe that Capitalism must regain its responsible……it’s human face. That perception has influenced deeply NZFirst’s negotiations.”

    So the question for Winston, and all NZFirst supporters: Why is a party that calls itself “New Zealand First” supporting this economic duplicity??
    Because it won’t get better. NAct are already signalling more economic vandalism next year.
    We are all staring down the barrel.
    “NZ FIRST”. Yeah right.

    • Winston has always been very flexible with his views. Whatever puts him into a position of power and influence, him personally, is what he thinks.
      He’s attached various corruptible people to his party and now we have Winston being completely unrecognizable from what he was.
      The people who voted for him thought, he still thought like he did in 2017. (Thank you for your excellent quote).
      They thought wrong, they hadn’t been listening and just went along for the ride.

      Yes, they all owe us an enormous apology, those 3 incompetent leaders and their dreadful ministers. And their thick supporters who haven’t had a sensible thought in their lives.

      I bet they are all off abroad for xmas. Too uncomfortable to be in NZ for their holiday, being accosted at their own parties by people with brains.
      They should be cancelling their own Christmas celebrations and staying at work like many people have to, to make some much needed changes to what they’re doing, unless they really don’t want to have a country to govern.

  5. I do not know if is true, but I was told that when Nicola Willis became Minister of Finance, an economist from Treasury gave her three envelopes. She was told that she should hide them in her desk and when she got into political trouble she should open the first envelope and follow the instructions. More trouble and open the envelops in turn and follow those instructions. She did not waste any time and opened the first envelope straight away. It told her to blame her predecessor for all her troubles. She was still in trouble so she opened the second envelop which told her to reorganise and put someone else in the firing line hence a new allocation of responsibilities. I happen to know what is in the last envelope. It says for her to prepare a new set of three envelopes for her successor.

  9. So what was the answer, keep spending like drunken Robertsons blowing inflation to 10% just so the economy looks good?

    Heard of a place called Zimbabwe?

    • HAVE YOU NOT HEARD the saying you have to spend money to make money .
      If we were still building the 25k state houses and the ferry terminals and had work under way on 3 waters NZ would still be booming .And had we not given Landlords 3 billion and not cut taxes for the other well off we would be looking good .
      When we have a change of government and get construction under way again we will need to train another 100k tradies to replace the ones that have now left as was the case 6 years ago following after another back wards thinking national government

      • 25k houses? But Jacinda said she was going to build 100,000

        You do that a govt spending money like crazy causes inflation which is just effectively a tax on the poor. Bloating Wellington with further public servants is like a sugar rush for the economy. Labour used COVID as a once in a lifetime opportunity to go nuts with the credit card, I mean who cares about who’s going to pay it back hey?

        • i was talking about the 25k state houses that Bishop has cancelled idiot .And I know you are suffering memory loss but in the six years of the labour government 50 k houses were built and 100k new tradies were trained at the governments expense because as you know none were left because national had driven them off shore and are doing so again .We may well not have 100k young people to train when the next progressive government gets elected .but I suppose we can just import inferior people to fill the gap and train them till they get a nz passport and piss off elswhere .

      • What people in general don’t realise is that they – National and their acolytes or patrons – are just here for the beer. They are cruising on an extended bargain hunt. You know when you put out the things you don’t want and people get them for free, just for looking and taking. But there is another approach – that I remember young upwardly mobile Oz solicitors used when I was there round about 70’s – and that is mortgagee sales.
        https://www.rnz.co.nz/news/business/521533/mortgagee-sales-on-the-rise-as-homeowners-let-it-all-go-too-long

        But also old NZ love to have rummage sales, and lord haven’t we been rummaged by foreign buyers from the hupper-class, high in the instep as is the argot in the Regency (1810s) romantic trash, that is so interesting,
        and light-hearted, cleverly written social history, that I read.

      • You tell ’em Gordon.

        I don’t like wasting my money either but at least I know when it will pay me, in the long run, to spend some and keep things ticking over.

    • Bg You have gone though the alphabet learning one thing starting with each letter and have gone right through to ‘z’. Good on you. Keep on as there is a lot more to know, and also that you can put those words together for sentences and that there is more than one way to think and conclude about each sentence. This could become a new craze, and you could be in the vanguard.

    • BG the “Zimbabwe” white supremacist meme neva gets stale unless you know the truth? Zimbabwe is sanctioned heavily by the US, which is why it struggled with momentum after expelling its colonial hordes it a country still with many resources and is climbing up the economic ladder in Africa as we speak stay tune

  10. Snapshot from Nelson. I am advised that two smaller building firms going bust. Roads crammed with wide bulky pick-ups, high people movers, big empty ev buses. The vans and pickups can’t all be tradies. How can they afford the payments on these behemoths? Mobile caravans stick out onto the roadway when angle parked.

    A new Jeep Wrangler or Ranger all square is to be seen. When Bob Semple built our own version of tank, all boxy just to prove we could do it at a pinch, he was laughed at. When from overseas Kiwi cringers accept and embrace.
    https://en.wikipedia.org/wiki/Bob_Semple_tank

  11. This coalition was too quick to dismantle instead of manage and grow. The ferries a good case in point. Aotearoa has absolutely nothing to look forward to instead of a miserable recession.

  12. Great to see the Coalition taking the correct action to put us back on track having been derailed by Labour’s reckless management of the economy.Without doubt I think Prime Minister Luxon is politician of the year.

    • If only you had an actual clue Bob. Like Trevor you are brainwashed into thinking this coalition is anything other than a train wreck. Conservative economists have said as much but wanker Luxon does a Trump and tries to say they are biased. It’s not a case of right or left, it’s right or wrong and these bought and paid for tossers are wrong.

  14. National did the same in 2010. The only reason I accepted that austerity was that the great Left economist Brian Easton said we were on the bones of our bums and had no other choice since it was in the midst of the GFC.

    This time they’ve buggered up right royally in full sight, as per Ruthie Richardson in ’91. They do keep doing this crap. That one was called ‘The Mother of all Budgets’ recession. I think we get to name this one ourselves. I’m not sure this minister of finance will share Richardson’s fate.

  15. Surely this CoC will finally destroy the BS myth that “the Right Wing are the better economic managers” ?

    Surely?

    I fucken hope so. These guys need to be thrown on the trash heap of history.

  16. Two things happen when we exploit our agriculture of its wealth. We go broke and we go hungry.
    If you want to find a chill to run up your spine then get in your car and drive into the countryside.
    See all those empty paddocks? You’re looking at the infrastructure of our primary industry.
    A word of advice from a farmer. If you buy the kids a pet for Christmas make sure it’s edible and wearable and you know all those dainty, decorative wee lawns about the city doing nothing? Just there being green? Those ones. Potatoes. Think about it.

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