OCR cut shows how bad economy is going vs Trump tariff reality

I think the Economy is screwed and that the OCR predictions of feeble growth suggests a terrible softness to the threads of our society.

The country is sicker and more hungry thanks to this Government’s Austerity Agenda…

• 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.

…every economic indicator is negative.

In the Budget, National allocated just 2.9% increase to health services but inflation was 3.3% and population growth 2.6% while an ageing population adds more to costs! National gave 2.9% for health but we needed 8% to stand still, this crisis has been manufactured!

Unemployment for New Zealand is 4.8% but 8% for Māori men and 8.9% for Māori women, at those levels unemployment starts becoming intergenerational doesn’t it? Why are Māori collateral damage again for the wider economy?

Insolvencies are up, cost of living continues to bite and we have a Government who have given. pittance back in tax cuts for the poor while cranking up user pays.

What’s the point of a $14 a week tax cut if costs are increasing by $30 a week?

Here are the experts…

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.

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.

…the moment Trump puts his tariffs on, it will make the US dollar soar while the Kiwi will sink, that will cause an enormous surge in petrol prices and that will restart the inflation engine.

We will have rising prices while joblessness continues.

We will have the worst of all conditions led by a Government whose focus is on their donor’s interests not the common good.

This is going to be a Summer of Discontent as companies that have held on till Christmas finally go under one last time and Christmas redundancies flood the nation.

 

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