Christmas grinch alive and well
OPINION: The Christmas Grinch is alive and well and living in New Zealand.
There are so many economic glad tidings at the moment it's starting to sound like a celestial choir, and yet Kiwis in their typical tall poppy, cup-half-full way still manage to find the bah humbug in it.
Last week Milford Asset Management executive director Brian Gaynor wrote a column predicting that 2014 will be a cracker of a year, comparable to the wool bonanza of 1951 and the meat boom of 1974.
The piece unleashed a flood of online 'poor me' comments.
"It will not mean much to the man on the street as he struggles", grumbled one. "No doubt the people waiting seven hours at the City Mission's food bank will be gratified,", wrote another. "Those at the top table will be rubbing their hands in glee as the bulk of any benefit goes to them," whinged a third. And so it went on. And on.
Let's have a quick look at the numbers, shall we? Yesterday's third quarter GDP figures reveal the New Zealand economy grew 2.6 per cent in the year to September, which in current global terms is not too shabby. Economists are expecting at least 3 per cent growth next year.
ANZ's Business Outlook for December shows business confidence is at its highest levels since February 1999, with a net 64 per cent of firms optimistic about their prospects. BNZ says taken at face value that sort of result is consistent with 7 per cent GDP growth in coming months.
In its half yearly update out this week Treasury predicted the government will meet its target of a return to surplus by the 2014-15 year - albeit by a modest $87 million - and that unemployment will steadily fall to reach 4.7 per cent by 2018.
For the life of me I cannot see where the bad news is in all of this.
To be fair the current account deficit expanded to 4.1 per cent of economic activity in the September year, but here's the thing: one of the main reasons was a rise in non-recurring imports such as capital equipment, which means businesses are investing in themselves. And given New Zealand's ongoing poor productivity levels in comparison with our friends across the Tasman this is a very good sign indeed.
It is also true to say we are due a bit of love in our pay packets. Wage and salary increases have been bumbling along at under 2 per cent annually for over four years now.
However all the indications are that workers are about to start seeing the upside. Increasing economic activity means more jobs and higher wages, as firms expand to meet demand and compete for skilled labour.
You would think we'd be gearing up to party like its 1999 (or even 1974). But no, the Green Party puts out its usual econo-babble, claiming the current account deficit is all due to National allowing reckless borrowing to fuel a housing bubble. Council of Trade Unions economist Bill Rosenberg has a go at the government for reducing debt, saying it should focus on the country's social deficit instead.
Like most developed nations we have a problem with a widening gap between rich and poor. But economic prosperity gives a government far more options, allowing it to invest in things like housing and education to create opportunities for those in the lower socio-economic stratas.
Perhaps Kiwis should make a New Year's resolution to stop viewing the generation of wealth as some sort of shameful state, and start looking for the collective benefits it can bring.
Maria Slade is the editor of Unlimited magazine.
- © Fairfax NZ News
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