“NZ is thrashing Australia in competitiveness rankings”

I’m not sure if anyone believed Winston Peters’ preaching doom and gloom and his claims that the New Zealand was headed in a dire condition. Just after the election from Peters:  Official Cash Rate Shows Complacency:

“Beneath the veneer of stability large risks are lurking in the global economy,” says New Zealand First Leader Rt Hon Winston Peters.

“The prolonged era of ultra-cheap money has created expectations that this unprecedented period will continue forever.

“Fed by cheap money, share and property markets are at record levels and have a long way to fall.  In particular, the US share market has had an amazing run with barely a hiccup. In China, debt levels are staggering.

“Irrational exuberance rules.

“It is impossible to predict when, but something will go wrong and New Zealand should be prepared,” says Mr Peters.

Things can always go wrong with economies, and New Zealand should always be prepared. But at the moment things are looking fairly good.

Stuff: Unemployment falls to eight-year low as job creation surges

On Wednesday Statistics New Zealand figures showed unemployment fell to 4.6 per cent, the lowest in almost nine years. The survey showed that the economy added more than 100,000 in a year.

Covering the three months to the end of September, marking the final weeks of National’s nine years in office.

Participation in the labour force rose to 71.1 per cent, while the employment rate rose to 67.8 per cent, both record highs.

The number of people unemployed stood at 126,000, which is actually slightly higher than the number unemployed back at the end of 2015, but now the workforce is substantially larger with another 221,000 people employed

That’s a good recovery after the combined impact of a local recession followed by the Global Financial Crisis, and on top of that the very costly Christchurch earthquakes.

And from across the ditch: Kiwis ‘thrashing’ Australia in competitiveness

MAJOR economic reforms over more than a decade have dramatically increased New Zealand’s global competitiveness at the same time as Australia plunged down the rankings.

While New Zealand’s new prime minister Jacinda Ardern claims capitalism has been a “blatant failure” for the country’s poor and homeless, “nothing could be further from the truth”, according to the Institute of Public Affairs.

In a parliamentary research note distributed to Federal MPs, the free-market think-tank compares how the two countries fare in the World Economic Forum’s annual Global Competitiveness Report, released at the end of September.

“New Zealand is thrashing Australia in the competitiveness rankings because they substantially liberalised their economy with welfare, industrial relations, and tax reform,” IPA research fellow Daniel Wild said.

In 2004, Australia was the ninth most competitive country, based on 114 indicators including macroeconomic health, quality of infrastructure and labour market efficiency. Today Australia ranks 21st.

Over the same period, New Zealand has improved its ranking from 18th to 13th.

“Kiwis clearly have the upper hand in the economic competitiveness stakes,” Mr Wild said.

“Australians have become complacent about their economic prospects following years of economic growth. However, growth is not automatic, and serious economic reform is required to ensure prosperity and opportunity for future generations.”

So the new Government has a very sound economic base to build on. It gives them some financial flexibility to implement some reforms. Providing they don’t take too many risks or commit to too much increased spending the New Zealand economy should continue to relatively well.

22 Comments

  1. Alan Wilkinson

     /  November 1, 2017

    Labour doesn’t have to take any risks to wreck the economy. It just has to do what it always does – spend and regulate. That is as certain to happen as night and day.

    • Alan Wilkinson

       /  November 1, 2017

      And just to top off the inflation, devaluation forecast I discussed earlier – that will certainly get into a vicious circle of inflation and wage strikes as soon as Labour unleashes its Union financiers. Already started I think at Fletcher Building. Cheers.

  2. David

     /  November 1, 2017

    The Aussies in my wider family are absolutely gob smacked that we would change such a successful government, the English side are equally shocked but all are sympathetic as they see we are headed to what they would desperately like to escape from.
    To say we are the envy of the world is an understatement and to have a rock star government who win a majority turfed out by a bitter pensioner leaves them scratching their heads.

  3. Blazer

     /  November 1, 2017

    this is quite fun..watching the melodrama and the angst…and only 5 mins into a new Govt.The prophets of doom.You two just don’t understand how the economy works,at all.Hey you can always…leave.

    • David

       /  November 1, 2017

      Quite the contrary Blazer I am well off enough the change is having zero effect on me, who knows they could leave me better off or I could put my feet up and relax after a frenetic 7 years… and that is because I do know how the economy works.
      Little will change and your next lesson is when she comes back having signed up to the TPP with isds clause still intact, you may have to learn to live with dissapointment or alternatively keep those rose tinted specs on.

      • Alan Wilkinson

         /  November 1, 2017

        I think it’s a red tint, David. Not sure if it’s more temperament or politic though.

      • Blazer

         /  November 1, 2017

        good for you David,you made money while the sun shone…as did other speculators…thats what National does..create a climate for the few to prosper.

        • alloytoo

           /  November 1, 2017

          Full employment, low inflation, Low interest rates, and a stable currency are the most benign economic conditions you could imagine.

          • Blazer

             /  November 1, 2017

            wunderbar…lets do this…get in behind..for NZ.

            • Alan Wilkinson

               /  November 1, 2017

              They will certainly get NZ behind again, B. Being not only clueless but also deluded is their guarantee of failure however much Sir Gerald’s “Yes, Minister” Wellington friends attempt to reduce and remedy their sublimely misplaced confidences.

            • Blazer

               /  November 1, 2017

              @don’t know why you are so negative,such a doom merchant Al.This is a wonderful country,we do not need to sell it to… the highest bidder.

            • Alan Wilkinson

               /  November 1, 2017

              NZ is not going anywhere, B. So long as we screen who lives and votes here we have control of sovereignty as well. In fact we do need to sell our goods and services to those who value them most within the terms that are acceptable to us.

              I’m just pointing out the inevitable consequences of the bad policies and practices the new Government is clearly and deeply committed to. But don’t blame me for them, blame those who voted for them.

            • Blazer

               /  November 1, 2017

              Al…peruse some of the clauses in the TPP..they abdicate sovereignty to Corporate litigation.

            • Alan Wilkinson

               /  November 1, 2017

              No they don’t, B. Parliament remains sovereign and can repudiate any treaty at will.

            • Blazer

               /  November 1, 2017

              @Al…upticking your own comments is not…cool.

            • patupaiarehe

               /  November 1, 2017

              And the pot calling the kettle black… is rather… entertaining… 😛

            • Gezza

               /  November 1, 2017

              i’d put money on it that Al did not uptick his own comment. (I didn’t either because of his typically ungenerous rudeness about Sir Gerald’s good friends in their thankless service of the public.) It was probably patu – making trouble.

            • Gezza

               /  November 1, 2017

              No they don’t, B. Parliament remains sovereign and can repudiate any treaty at will.

              Isn’t that a bit disingenuous, Al, when some Corporations we might have signed up to let screw us over almost own their governments and theirs and their government’s retaliation for doing could be extremely awkward for us?

            • Gezza

               /  November 1, 2017

              * for doing SO (i.e. repudiating the agreement)

            • Alan Wilkinson

               /  November 2, 2017

              Of course there could/would be repercussions following whatever Parliament decided to do, G. Just as there would be if it did nothing. That is why we have a Government and sovereignty to make those choices and deal with consequences. As ever we can roll over or fight. You are right about the uptick of course.

            • Gezza

               /  November 2, 2017

              I’m not often wrong, Al.
              Just ask your Mrs.

  4. The two provisos in your last paragraph are what worries me.