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.
Picture of Luxon missing Ask this blithering idiot why he cannot tell a graph from a bird's nest. Ask this idiot what Greenland looked like when the Vikings settled there in the mediaeval warm period. Ask this idiot what Fiordland looked like 20,000 years ago. Ask this idiot how the polynesians navigated the Pacific and brought the kumara from South America in the mediaeval warm period. Has this idiot even heard of the mediaeval warm period? He is simply too dim to figure out that he has been suckered by the fraudsters on the climate gravy train. And you voted for this left of Labour buffoon to lead the National Party!!!!!!!!!!!!!!!!!!!!!
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Inflation adjusted incomes may be rising, but the real question is whether this is derived from increased productivity, particularly exported value. If not then it is another sign of living in fantasy land beyond our means, which will bite us very hard in the bum starting shortly, perhaps as the graph indicates.
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.