ROB MacCULLOCH: NZ's Big News Story should be ...
- Administrator
- Sep 13, 2023
- 2 min read
Updated: Sep 13, 2023
NZ's Big News Story should be "Treasury Pre-Election Update shows plummeting consumption per capita"
I can't make sense of the Finance Minister's statements today regards the "Pre-Election Economic and Fiscal Update" by the NZ Treasury. He claims the country is in better shape than expected and that the "forecasts showed New Zealand would avoid recession, with wages keeping ahead of inflation".
So here's my question - GDP growth up to June 2024 is forecast to be just over 1% (the forecast has been raised slightly from 1.0 to 1.3%). On the other hand, it is also stated immigration is now running at 100,000 a year, corresponding to an increase in 2% of our entire population. But if total GDP is only growing at a bit over 1% and the population is growing at 2%, then GDP per capita must be declining (since GDP per capita equals total GDP over population size).
In other words, from an individual perspective, we are entering a deep recession. But the Finance Minister says Kiwis are getting better off since our inflation-adjusted incomes are rising. Can a journalist please ask Robertson how GDP per capita, which measures the average income of a Kiwi, is falling based on his own Pre-Election Economic Update whilst at the same time tells 5 million Kiwis that we're getting better off?
If you don't believe me, then take a look at the graph of GDP per capita on page 7 of the Treasury's Pre-election report (see link below). What really blows my mind is the following figure - in particular the black line that shows the amount Kiwis are consuming on a per capita basis, after adjusting for cost-of-living changes:
It's set to plummet at a rate not far off from what occurred during the first lock-down in 2020. And consumption is a good measure of living standards. According to former Chair of the Reserve Bank Board, Arthur Grimes, consumption is the best predictor of well-being and we are meant to have a "well-being" government. Kiwis are going backwards.
Sources:
First published at Down to Earth Kiwi. Robert MacCulloch worked at the Reserve Bank of NZ, before he travelled to the UK to complete a PhD in Economics at Oxford University. He pursued research interests at London School of Economics and Princeton University, before joining Imperial College London Business School. Robert subsequently returned to his alma mater in NZ.
But GDP should not be confused with reality : fact is that not all increase in GDP is based on real production. For example, hardly any of the many thousands more government jobs actually produce anything. Neither does the wild spending on government ads on a variety of issues. Most of the expenses on government consultants are in the same category - and without a doubt there are others.
Yet they all add to GDP.
This is the correct graph, please Admin fix this! Thank you!
GDP is for the birds.
What does it include or exclude ?.
For example. If the Government spends xyz dollars on a given internal project, does that count towards domestic product income or expenditure.
Just asking for a friend.
The normal gaslighting lying manipulative bollacks from the Govt and their cronies MSM, to keep those brainwashed still in their little bubbles of make believe. I can't wait for MSM+ to be fully investigated and lined up and Jailed.
What's the point of the PREFU when Pooh Bah couldn't understand a word or number in it? NZ's (notional) Chancellor of the Exchequer* was previously a mere uni cafe assistant bookkeeper. He's better in his Sports Minister portfolio.
He's so far out of the abilities range required there needs to be an accounting for his appointment.
Without adequate economic understanding NZ has been left to suffer the global impact yet to come. Biden is stuffing up the USA and that in time will affect us. There may not be a one world govt but there is certainly a one world interbank system where monetary flows affect all. A drop in the US dollar impacts us as do changes in their…