David Clark – Dunedin North

Under the current Government, New Zealand’s economy has stagnated.  New Zealand appears to be bucking the OECD recovery trend. 

During National’s time the value of goods and services produced by each worker in NZ has fallen.  In economics speak: GDP per capita has fallen.  Analysis a few months ago demonstrated that median wage earners (those in the middle) are now worse off than they were before.  Things haven’t improved since.

Yet the Government is projecting a rosy picture: 4% economic growth not too far in the future.  Why should this projection be accepted?   And Treasury’s revenue forecasts are $4 Billion more optimistic than those the IRD is making (presumably based on the growth forecast).  In 2009 John Key said our economy was coming ‘aggressively out of recession’.  People will be a bit more sceptical this time around.

Massaging the figures is not just a New Zealand preoccupation. A recent Economist article shows how America paints a prettier picture of itself than it should.  Only problem with toying with statistics is that people wise-up to it eventually. 

I’m expecting journalists and opposition MPs will be asking the hard questions once the budget has been properly digested. Watch this space.  In the meantime, R0b at The Standard offers this wry comment on what lies behind Treasury’s numbers.