Despite Government celebrating pitiful GDP growth, S&P downgrades 18 councils as consumer confidence crashes

ByMartyn Bradbury

The surprise increase in GDP growth is welcome but isn’t a solution, as NZCTU points out…

Figures released by Statistics New Zealand today showed that the economy grew by 0.7% ending the very deep recession seen over the past year, said NZCTU Te Kauae Kaimahi Economist Craig Renney. “Even though GDP grew in the three months to December, our economy is still 1.1% smaller than it was in December 2023. Unemployment is up. Annually, business Investment is falling. We are still very far away from being back on track.”

…while this was being celebrated by a Government wedded to austerity budgets and borrowing for tax cuts, S&P on the same day downgraded 18 councils while blaming government policy and consumer confidence crashes, Bernard Hickey makes the case…

S&P downgrades 18 councils, blaming Govt

S&P cuts 18 council debt ratings by one notch with another cut possible for Dunedin & Wellington; S&P cites new Government’s abrupt reversal of 3 Waters, cuts to capital grants & new unfunded mandates

Standard & Poor’s has cut the credit ratings of 18 councils, blaming the new Government’s abrupt reversal of 3 Waters, cuts to capital grants & new unfunded mandates. The downgrades, with the potential for one more cut for Wellington Regional Council, Wellington City Council and Dunedin City Council, are likely to increase interest costs for ratepayers and restrict their ability to invest in the infrastructure the Government says is needed to grow GDP faster.

Also, weeks after PM Christopher Luxon said he wanted to ‘go for growth’ in 2025, large parts of the economy fell into a hole. Data out yesterday showed consumer confidence collapsed in the March quarter and job advertisements resumed falling in February. This comes days after news of a surprise contraction in February in the services sector that comprise more than 60% of the economy, along with more signs the housing market is struggling to fire up under a wet blanket of new listings and sellers reluctant to crystallise capital losses.

…so that GDP growth was driven by tourists spending more here because of our low dollar, it wasn’t because the Government have guided us to the economic promised land.

As more media comes under the shadow of billionaires and vested interests you ability to know what is actually going on diminishes.

We are in deep trouble economically.

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18 Comments

  1. It’s like a dead cat will bounce if you drop it and the light at the end of the tunnel is a train coming the other way. Just more evidence that Willis has not got a clue.

  2. The picture says it all 3 idiots that think we are the idiots .They are partly right because a lot here voted them into government .Governments world wide are following our lead and crashing their economies which can only lead to a world wide depression .

  3. 18 Councils going to the wall is just the begining of the rot that will take NZ to the bottom of the OECD in the next 5 years .Central government is now shifting what should be their spending onto councils so they go to the wall then they will privatise them to the overseas ppp investors .

  4. Back on track. That’s Stats NZ speak for you. And the way is many see it. What does ‘back on track’ really mean anyway?

    1. ‘Back on track’: having our heads neatly placed across the rails ready for the efficiency mass-guillotine to come along driven by neolibs who aren’t prepared to learn the necessary controls to manage better and with integrity – hence the train-wreck. Tangiwai in1953 – ‘Why the tangi?’ over 70 years later.

  5. NOBOATS (after GDP figures released): We’ve turned the corner. The economy is robust and resilient. My astute careful economic management is now showing results. I’ve made our economy great again!

    NOBOATS (before GDP figures released): Oh crap, I think we’ve killed the economy, with all our cutbacks, clawbacks, fees, charges, surcharges, tolls, levys, excise, public servant sackings, and austerity, the economy is flatlining. Can anyone see any signs of life, any movement at all…I’m pumping in adrenalin and the defib is on max and I’m also giving it a kick. I’ll apply some of my makeup to it, to try and make it appear healthy. This is a complete disaster!

  6. History will show Willis is on target for being the most unqualified and ineffectual finance minister this country has ever had.

    1. What when she is up against Robinson whose management caused inflation and so much pain

      1. Only in your distorted view Trev, Grants policies that were in place would have had us all in better shape if dumb righty tighty chuck everything out with the bathwater ideology hadn’t gotten in the way. But don’t take my word for it just ask a few prominent economists.

  8. If you are looking at GDP as a measure of growth, you need to measure GDP per capita and also measure it in a common currency which is typically USD and also adjust for inflation.
    When GDP is measured correctly, we have been going backwards pretty much every year since John Key seized power.
    Trying to pretend this government is succeeding with such a pitiful growth in nominal GDP is just a sign of how desperate they are and the failure of the media to report the facts shows how complicit they are in the destruction of Aotearoa.

  9. Back on track. Knew I’d heard it before. Its the Nats slogan. And now Stats NZ are repeating it. It’s the mantra. The All Blacks will be chanting it soon. Perhaps we can all get blue hats embriodered with BonT.

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