Venkat Raman
Auckland, September 15, 2022
While the rest of the world is reeling from the adverse effects of the Covid-19 pandemic, the war in Ukraine and other debacles, New Zealand can expect to maintain positive growth, albeit, at less than forecast levels, Deputy Prime Minister and Finance Minister Grant Robertson have said.
Speaking at the Westpac Breakfast Meeting in Wellington today, he cited several reasons for his optimism, the most significant of which, according to him is that “We are a country that is in demand, even more so following our people-first Covid response.”
“Our goods exports are near record highs, because even though the global economy is struggling, what we offer to the world is something the world needs. We have statistics just in that our ski season in Queenstown has hit 80% of pre-Covid times,” he said.
Mr Robertson said that most economies of the world are experiencing an energy price shock, skills shortages and supply chain blockages while at the same time interest rates are being lifted to battle the inflation impacts of all these adversities.
“Europe is entering unchartered waters this winter with energy prices 10 times higher than before Russia’s war on Ukraine. Globally, diesel prices increased 74% in the last year. A Citi Group forecast has said that the expected inflation in the United Kingdom is 18% in the first quarter of 2023, the highest for the UK since 1976. US inflation is at its highest in a generation, and there are fears of entrenchment. The Chinese economy is slowing, with growth below 4%. They are still focused on a Covid elimination strategy that sees more than 40 cities in lockdown. Declining orders from China and Hong Kong are causing concern across the rest of Asia. In Australia, my new counterpart Jim Chalmers has said the global downturn could have a “significant” impact on the economy of our closest partner,” he said.
GDP Growth
Mr Robertson’s optimism was matched by the figures released by Statistics New Zealand shortly after his speech.
The country’s Gross Domestic Product (GDP) rose by 1.7% in the three months ending in June 2022 after a surprise contraction in the first quarter. This compares well with the GDP figure of 1% recorded during the same (June) quarter in 2021.
Economists said that the growth has been orchestrated by strong consumer spending and increasing tourist numbers.
Mr Robertson said that international student enrolments are nearly at 50% of the Pre-Covid times just one month after reopening, and months before the academic year begins.
“Our strong action on climate change is in part what is getting free trade agreements over the line with the EU and UK, and what is underpinning the $53 billion record in agricultural exports.
Our green credentials are growing stronger. We now have some of the highest rates of electric and more fuel-efficient hybrid cars in the world, making up 20% of new imports. Tech companies are investing in New Zealand for our renewable energy sources. This includes Amazon, which is setting up a multi-billion dollar cloud investment here, following the expansion plans of Microsoft,” he said.
Labour shortages addressed
Mr Robertson acknowledged acute labour shortages affecting the productivity and profitability of companies but was confident that New Zealand’s ‘Reconnecting Strategy and Immigration Rebalance’ will attract the people needed.
“More than 7200 job check applications have been approved allowing employers to recruit internationally for over 48,000 positions. More than 25,000 working holiday scheme applications have been approved since March 2022 and thousands more working holidaymakers are expected to arrive in the coming months. We have helped keep 50,000 apprentices in trades and training, knowing that they were the first to be let go during the Global Financial Crisis a decade ago,” he said.
Mr Robertson said that the number of people undergoing various apprenticeship programmes has recorded a 50% increase since the Labour government took office in October 2017 and that the construction sector accounts for 20,000 workers more this year compared to 2021.
“Our young people are outperforming every other age group in entering the workforce. Filled jobs for people aged 15-19 are up 18% compared year-on-year. There are challenges ahead, but there is also every reason to be optimistic about the future. That is because of the hard work all New Zealanders have done to put us into a strong position, the work that we already have underway and the plan that will drive home our unique advantages. As a government, just as we have been there in the tough times we are right alongside New Zealanders to take the opportunities that lie ahead,” Mr Robertson said.
