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Tuesday, 24 April 2018 04:05 pm

It’s fine… but – an economist explains the New Zealand economy.

Feb 13th, 2018 | By | Category: Editor's Picks, Latest News, News

New Zealand’s economy gets a bare pass mark from economist Shamabeel Equab, co-author of a damning report into the country’s housing issues released earlier this week.

Equab (right) describes the economy as “fine. It’s not great but we’re ok. Well, we’re still hanging on.”

Along with the Salvation Army’s Alan Johnston and Otago University Public Health professor Philippe Howden-Chapman, Equab authored the stocktake of housing report for the government released this week.

Equab says it’s not unusual to hear positive reports of an economy while seeing indicators of difficulty still at play.

He says that ‘real GDP’ – inflation adjusted growth domestic product per person – is one of the best economic ways to measure wellbeing.

Over the past year that figure has increased i3%.

Likewise, job growth has increased 4% in the last 12 months.

However, New Zealand is in a state of uneven growth with only some sectors growing and others holding the economy back.

One of those problem areas is where the job growth is happening, or rather, where it’s not.

While there are more jobs, information from Statistics New Zealand show that those new jobs aren’t being created for our youth.

They did show that more people over 65 years of age are choosing to stay in the workforce, and of the all the new people working after 65, nearly half of them are staying on past 70.

Income is another measurement that has not increased despite job creation numbers going up.

Equab cites big income jumps in IT, banking, and select high skilled professions while entry and low skilled job remuneration remains static.

He says the Consumer Price Index (CPI), “the shopping basket of national spending”, also appears to be out of balance.

It’s an indicator of how much the necessities of life cost for most people, things like food, rent, power, rates, insurance

Currently, the CPI, like inflation is low despite increasing job growth and an increase in real GDP. It’s not supposed to be like that.

So why is it?  “Rarely is it just one thing,” said Equab.

“In New Zealand you can look back over five years and see a number of things that have caused instability.

“The Christchurch quakes caused a huge construction boom but shut out other sectors’ growth in the region.

“Auckland is in the middle of a housing price crash.

“Dairy has had highs and lows.

“Agriculture can be weather dependent, and effected by trade agreements. Tourism can fluctuate.” Equab said.

Earlier this month, Prime Minister Jacinda Adern and Finance Minister Grant Robertson announced that my 2019 government budgets will be ‘wellness documents’ which incorporate living standards frameworks’

Equab’s co-author on the housing report, Alan Johnston, is the author of a report being released tomorrow on the State of the Nation which will look at the country’s wellness in social and economic temrs.

There will be coverage and analysis on Newswire.co.nz

 

 

 

 

 

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is Christchurch born, has lived in Auckland and is loving Wellington. She believes fairness, honesty, David Bowie, and accountability are the foundations of society. Something to tell her? Hit that email button or call her (+64) 27 254 7930.
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