The revised GDP growth figures are bad news for New Zealand, unless you inhabit the same fantasy world as  government Ministers.

Yesterday I posted about the way the government is massaging / contorting the quarterly GDP growth figures to make its performance appear better than it actually is. But as soon as I posted that article, Stats New Zealand came out with some revised GDP growth figures.

The revised figures show that GDP growth through National’s first twelve full quarters in office averaged a disappointing 0.5% per year. The previous figures showed a 0.8% average annual growth rate. Over the same period, facing the same international conditions, Australia grew at 2.4% per year, and the US and Canada each grew at about 1.3% per year. (Figures are from the OECD, cited in yesterday's post.)

The revised figures show New Zealand as the second worst OECD-23 performer outside of the embattled EuroZone, beating only the UK. Australia has outperformed us by nearly five to one since National took office, and the US and Canada have outperformed us by more than 2.5 to one.

In any reasonable universe, this would be treated as really bad news. But as we saw yesterday, Mssrs Key, English, and Joyce do not inhabit a reasonable universe when it comes to making conclusions from data.

There was one tiny bright spark in the revised Statistics New Zealand figures – the September 2010 quarter has been revised to show +0.1% growth, a slight change from its previous estimate of -0.1%. But the change does cross the supposedly-all-important zero line, meaning I can make a prediction…

Given the government’s predilection for self-congratulation-no-matter-the-appropriateness, I predict that Ministers will seize on this news about the September 2010 quarter, shift the start point of their self-analysis from Q2/2009 to Q3/2009, and declare ideological victory because, wait for it, “the economy has grown for the last ten consecutive quarters. Ten in a row, Mr Speaker!” Etc.

Please let me be wrong, surely they do not think we are that dumb. Surely they have more respect for us than that. Surely.

Comments (5)

by Ben Curran on May 17, 2012
Ben Curran

surely they do not think we are that dumb. Surely they have more respect for us than that. Surely.

Keep repeationg that. It might come true.

by Matthew Percival on May 17, 2012
Matthew Percival

If my memory serves me correctly there was something about an Earthquake in Christchurch?

Being New Zealands second largest city I would expect national growth to be minimal until that city gets back on it's feet (possibly starting 2nd half of this year but more realistically 2013).

Also, it is not the governments fault that the populus does not want to pursue activities of economic growth. Mining would have added something in the long term and a convention centre (at the expense of a few idiots) would also help. That's the choice we as the New Zealand people have made so we have the bear the consequences. We also have an ETS which inhibits economic growth.

That is the wish of the people. If we want to have a whinge about why we aren't a top economic performer we can only blame a combination of bad luck and ourselves.

by stuart munro on May 17, 2012
stuart munro

@ Matthew - Oh dear, the poor government can do nothing. If that were true then they should resign. It's not proper to receive payment for a job you're not doing. But I think the truth is that they are lazy, bigoted, and irresponsible - those few that are not corrupt.

NZ doesn't have good accountability structures. Sparta used to have two kings so that a single crazed idealogue couldn't lead them into a disasterous war. The folk who drafted the US constitution put a lot of effort into the separation of powers, a structural provision to reduce the executive capacity for abuse.

A structural solution also exists for New Zealand's perennial economic woes, and the looting of public assets that has caused them. That structure is called a scaffold, and the pertinent part, a gibbet.

by DeepRed on May 18, 2012
DeepRed

@Matthew Percival: by your logic, hosting nuclear missile silos and radioactive waste dumps will also deliver us to economic salvation. Problem gambling aside, the message being sent from the SkyCity wheeler deal is that you can forget about honest hard work, you just need the right family ties, old boys' connections, and wheeler-dealer psychopathy. The pro-market Fran O'Sullivan calls cronyism too. Sounds awfully like Sir Joh and the White Shoe Brigade in Queensland a generation ago.

And what if one of those "few idiots" breaks into your house or comes at you with a knife? No worries, John Key's given you a big enough tax cut for your own bodyguard and a bulletproof Hummer. Maybe one of these wheels would interest you?

The issue's not about economic growth per se, but about smart growth and dumb growth. Smart growth like ICT helps lift people out of poverty, dumb growth like casinos and "financial hubs" is inherently cargo cultist and concentrates wealth into the gated One Percenters. To boot, we've just been removed from a global money-laundering white list, potentially putting us in the same category as the Caymans and Bahamas.

I've heard major Silicon Valley companies would invest a lot more here, if it wasn't for the cartellised nature of the broadband market. Who we have in power now isn't pro-business, it's more like pro-cartel.

by Rob Salmond on May 23, 2012
Rob Salmond

And I was right. In answer to David Shearer yesterday, here is Key:

"I will make the point that the last quarter of negative growth we had was in 2009, before, actually, Bill English delivered his Budget."

Expect this line to be on high rotation this week and beyond, if only because all other GDP-based lines don't really work for the government.

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