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We update the nation's economic benchmarks for a second time, this one after the "year of delivery". Overall, there nothing here that suggests 'transformation'

We update the nation's economic benchmarks for a second time, this one after the "year of delivery". Overall, there nothing here that suggests 'transformation'

By David Chaston

Two years ago we recorded some benchmarks when the new Ardern/Peters/Shaw Government was formed.

These are economic metrics and as such only part of how we should review progress.

But as it is the economic side of life that we cover, we can look at life through that lens. We did this a year ago, and this is the update of that initial review.

The improvers:

The government's net debt is significantly lower, down -13.3% in one year. But in year two it rose slightly.

Exports are up +13.3%, but when measured on a world price basis, the gain is less.

Interest rates are significantly lower. The OCR has fallen, and key mortgage rates are well down.

Inflation is much lower.

Median incomes are up +7% in two years, up +3.6% in the past year.

Median house prices are up +13.7 in two years, up +7.4% in the latest year alone.

Public spending on health services are up +8.1% overall, up faster in the latest year (+11.8%).

Tax rates haven't changed.

Immigration levels are essentially unchanged. They fell a fraction in year one, but picked up again in year two.

The population is up +2.6% of which +1.2% of that is in the past year.

Where things have got weaker:

Consumer confidence has improved in the past year, but still remains lower than at the start.

The Crown surplus has turned into a deficit, although the tighter OBEGAL is still in surplus. But overall, the track is weaker.

Our exchange rate is lower by -6.6% on a TWI-17 basis. That is lower than the -4.9% decline a year ago. That means our incomes need to be this much higher just to ensure their buying power is not slipping on an international basis, and of course we never got anywhere near that.

GDP growth is weaker.

Our current account deficit has risen, both in NZD terms and USD terms. It is even higher as a proportion of GDP. But in the past year there has been a tiny reversal.

There is no improvement in our jobs market. Gains that we have had for years have stopped.

The improvement in our net overseas liabilities ended this year, but the overall impact is still an improvement

Renters are paying +11% more for a median three bedroom house. But these median rents slipped in the latest year, even if only marginally.

Median house prices are up +13.7 in two years, up +7.4% in the latest year alone.

Tax rates haven't changed. (Although taxes have gone up noticeably on fuel, and some other user charges.)

There are more people on a public-funded benefit.

Public spending on health services are up +8.1% overall, up faster in the latest year (+11.8%).

The core public service is the fastest growing component of our jobs market.

Immigration levels are essentially unchanged. They fell a fraction in year one, but picked up again in year two.

The population is up +2.6% of which +1.2% of that is in the past year.

The scorecard

Ok then, how is the balance of these changes? It will depend on your point of view of course and how you weight them in importance. We are not saying that the 'improvers' are all the result of the new Government's policy actions, nor that the weaker items are as well. All we are recording here is what has happened on their watch.

First up, there are marginally more 'weaker' than 'improver' items. The raw score is 10 improvers with 11 weaker in the past year with 3 unchanged. Note that this is the score in the table below - in the lists above some items are in both categories (allowing for differing points of view !)

But rather than set out what we think, we would like to hear how you would analyse and assess the progress. The comment facility below is where you should record your judgment.

Here is the data:

Benchmark updated: 19-Dec-19 Source NZ$   NZ$ US$   NZ$ US$   NZ$ US$
    2008   2017   2018   2019
Consumer confidence ANZ-Roy Morgan 102.3   126.3     117.6   121.0  
Crown surplus/(deficit) (bln) Treasury -$0.5   +$12.3 +$8.7   +$8.4 +$5.8 -$2.3 -$1.6
Exchange rate TWI-17 RBNZ 63.3   75.6     71.8   70.8  
Government net debt bln Treasury $10.2   $66.3 $47.1   $57.5 $39.8 $57.7 $39.4
Country's net overseas liabilities % GDP RBNZ -80.4%   -58.5%     -52.1%   -55.3%  
Exports (Goods + Services) bln pa Stats NZ $58.9   $75.0 $53.3   $82.3 $57.0 $85.0 $58.1
Current account deficit bln Stats NZ -$14.1   -$7.5 -$5.3   -$10.5 -$7.3 -$10.3 -$7.0
C/A as % of GDP Stats NZ -7.5%   -2.8%     -3.6%   -3.4%  
Unemployment rate Stats NZ 4.1%   4.6%     4.4%   4.0%  
Employment rate Stats NZ 65.4%   67.8%     67.5%   - 67.5%  
Participation rate Stats NZ 68.0%   70.6%     70.6%   70.0%  
Inflation / CPI Stats NZ +5.1%   +1.9%     +1.9%   +1.5%  
Official cash rate RBNZ 7.50%   1.75%     1.75%   1.00%  
2 year fixed mortgage rate (avg) 8.56%   4.78%     4.48%   3.57%  
GDP growth Stats NZ -1.7%   +2.7%     +2.6%   +2.3%  
Median income, week Stats NZ $919   $1,175 $835   $1,213 $841 $1,257 $859
Median house price $(000) REINZ $335   $525 $373   $556 $385 $597 $408
Median rent $/week 3br house MBIE $295   $400 $284   $450 $312 $445 $304
Health spending (bln) pa Treasury $11.9   $18.4 $13.1   $17.8 $12.3 $19.9 $13.6
Income tax rate (max) IRD 39%   33%     33%   - 33%  
GST IRD 12.5%   15%     15%   - 15%  
Annual net permanent migration (000) R Stats NZ +4.3   +55.8     +49.1   +54.6  
Core public service (000) FTE SSC 45.9   48.9     51.4   54.3  
Number of people on a benefit (000) MSD 269.6   277.2     284.3   292.0  
Population (mln) Stats NZ 4.270   4.818     4.885   4,943  
NZ$1 = US$ RBNZ 0.7145   0.7110     0.6930   0.6835  

Deputy Prime Minister Winston Peters last year claimed "one year on, and New Zealand has a brighter future" but the evidence is that their first year was a non-transformational toss-up, one where we simply marked time while other countries got further ahead. On the economic front, 2019 has not been a "year of delivery" either, one that has not transformed anything in the economic landscape. That claim turned out to be shallow wishful thinking, rather than heralding an actual political drive.

My view is that, based on the benchmarks above, we have gone from being a nondescript "quite good" to "decidedly average", and that is being generous. New Zealand should be able to do much better than that. It continues to be disappointing to keep on slipping back internationally.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.



"New Zealand should be able to do much better..."
Absolutely! But which of us is prepared to take the hit that is required to accomplish that? Anyone?
Thought so.
Have we forgotten where we were 60 years ago? "The official number of people unemployed in 1959 was only 21. A year later it was 22"
Until we change the way New Zealand presently runs her society and economy, then hoping for an improved Future will result in just that - hope.
(Hope = One version of what is left at the bottom of Pandora's Box - " Hope could be argued as “evil” in that it prolongs man’s suffering. It makes men believe that better can come when it may not.")

Wow 1959! We only just beat the entertaining and popular Lions, and they wore short shorts. Since then though. The pill, TV, after 6pm closing, wine and dine, jet travel, computers, women’s lib, mini skirts, The Beatles, man on the moon, penicillin . If you took an average adult from Edwardian England and placed them in 1959, apart from better cars & planes & phones , things were not much different, they would fit in, no trouble. Take an adult though from say 1950 and drop them into 1999. Well, you have to admit that would have to be one huge catch up. The 1960’s, for better or worse, saw change just get strapped to a rocket and little old far away NZ could not have stayed the same anymore than the rest of the world.

Disagree – I think take the 1900’s world into the 1950’s world and the leap was enormous.

1950’s to now are obviously vast improvements on what already existed but that’s it – nothing new – apart from computing and the internet – and there’s probably always going to be an “apart from” – in this case, computing and the internet.

Bw - Interesting stats on unemployment ! I'm not sure but probably there was no benefit like today so those numbers could be blurred ? For all the good stats that could be produced over say the 50's/60's my memory of that time certainly does not want us to return there. In the 50's and 60's NZ was a Victorian era back water that was dull and boring. The world including NZ has changed soo much through the cultural revolution - the Beatle's/drugs/the pill etc and the technical revolution TV/cell phones/ internet etc the difference is staggering. I come from a farming background as so many Boomers have and all though NZ rated high on the OECD in the 50's/60's score card people where poor in that there was little or no discretionary income and little or no cool things to spend it on anyway ! I have lived in the south of France ( rural ) for 6 months recently a country that today scores high on the OECD score card but you do not see or feel it ! It feels more like NZ from the 60's very old school public service, high taxes, surprisingly low wages about 2000 Euro's/month net is a good wage like for a techer or policeman. Anyway I just wanted to say that the era we live in, life in NZ is the best it's ever been in my life time and there's no reason to think it won't keep getting better. There are struggles and difficulties for all of yes but there always has been and always will be because life is a test for us all and it's all about how we individually deal with things that determines our outcome. Happy Festive season to all !

Agreed. Very much so. Overall though, post WW2, this has been something of a golden age. No great global war. No great global depression. Certainly my parents were deeply affected by those catastrophic events and the preceding generations as well . We tend to overlook that there was hardly a gap from a war on the Continent even after Napoleon. But the early so called boomers nevertheless grew up in the shadows of all of that, and were educated accordingly. I would wager that there is still though a stronger and more enduring link between those generations than nowadays.


I agree. At my boarding school in the Scottish Highlands, we had a civil defence platoon in the school corps, the sole purpose of which was to what to do in the event of nuclear war. The Cuba crisis was very real to my generation, but we have been incredibly fortunate to have seen no global conflict, allowing us and our children to live without that fear.



So we're drifting. We have known this for years. How bad to things have to get before committed, able, national action? Property price inflation and an immigration flood are no measures of a productive, secure, forward-looking economy. The questions remain politically unasked and unanswered- what kind of society, economy, prospects, etc, do we as a nation want? Until there is any sign of consensus and leadership in these issues, we shall continue the slide into political disarray, economic inefficacy and social disunion.

Feels like we are drifting more than before, feels like things going in the wrong direction.

And a big contrast between what we are/were told and what we see/how its turned out.

Do you really want to "live in a society"?

Two contributing factors:
1. lack of transformational businesses whether public or private to increase productivity growth and sustain productivity level

2. absolutely lack of direction and consistency from any government on NZ's future real development (I am not talking about the whole energy this government putting on reducing carbon dioxide emissions, which is a farce at best)

Surplus in exports to China will just get bigger as they struggle to feed their massive population...and watch inflation take off. University's nowcbanning free thought but students rebelling...


'and watch inflation take off" Why? I struggle to see the relationship. It may have escaped your notice, but our exports to China have grown massively in recent years, without any inflationary pressures appearing. You might want to read Bernard Hickey's article in newsroom.

What are the arrow for, comparing change since when? It doesn't seem consistent.

Govt net debt is up against 2018 and down vs 2017, it gets an up arrow
consumer confidence is up vs 2018, and down vs 2017 it gets a down arrow.
Employment rate is the same as 2018 it gets a dash (no change).

Annual permanent migration 2008…. +4.3 (000).

What on earth have we done to ourselves since, and really, what do we have to show for it.


More courier drivers (Logistics Experts), retail store workers (Commerce Managers) and fast food workers (Chefs)?

Uber drivers ( IT anythings)?

Fewer part time jobs for local teenagers to get a start in work. Easier just to hire a full time readily exploitable migrant.

For me, the big issue is the huge change in culture we have been forced to accept over the past 30 years. After the share market crash in 1987 there were empty homes in Auckland, & all over the place. We had two next to us in Pakuranga. There were many others. House prices dropped 15-20% from memory. We lived there & we hoped for 15%, the reality was probably closer to minus 20%. It took 7 years for prices to recover.
Many people left NZ for Australia & have never returned. From that moment on, NZ changed forever.
From 1988 onwards the so-called ''Asian invasion'' of NZ took hold & for 2 or 3 years it seemed like that was the only money keeping us afloat. Remember, big David Lange's brave new world & the 20% devaluation of the kiwi dollar was not long before this, just after Muldoon's autocratic regime finally fell apart. We were financially f.......d & we had to suck it up. Importing people (mostly Chinese) kept what was left of the country afloat, after the economic earthquakes of the 1980's. As it turns out those decisions have been both good & not so good, but I can confirm that the New Zealand I was born into changed (died) from that moment & we became another Get Out of China Quickly country, because of our cheap English education & our fresh air opportunities. Today we are now almost 10% Asian, nearly 20% Maori, 55% European, almost 10% Pacific Island & 5% others (read mostly Indian). This cultural surgery changed NZ dramatically & forever. You can argue for the better or worse til the cows come home, but I say to you, it is not today the same country I was born in. Yes, it's the same land (islands) but not the same country.
So, are we better or worse off this year than last? Well, today, we are still importing tens of thousands of people every year, many still from Asia, which many will argue is our future?
Would someone please tell that to the new All Black coaches.

I remember in the late 80’s there was a clifftop town house for sale in Herne bay – Mortgagee Sale.

Had a look at it – needed some work – I thought, let’s see what happens.

Auction time – Asian lady bought it - $385,000 – such perceived bravery, everyone at the auction applauded.

We all thought we were being saved.

the New Zealand I was born into changed (died) from that moment

It would be kind of odd if NZ stayed stuck in the 70s. You have to go in a certain direction or stagnate. NZ like all the other Western countries hitched its wagon to the the culture of the US and so goes in that direction. Neo-liberalism, globalism, consumerism, corporatism, the cult of the individual. The other direction would have been focusing on and developing our own culture but people didn't want to do that and the notion is generally vilified and mocked if you are French, English or German. In NZ it was hard as the founding cultures are British Imperialism and Māoritanga. Attempts have been made to develop and integrate it somehow but it is rather forced and people just pay lip service to it as it cant really compete with the attractions of modern globalist individualism.

Um, ya don't (can't) go "focusing on and developing our own culture". Culture (business school definition) is simply 'what we do around here'. It's emergent, hence inherently unpredictable. While it is obviously influenced by history (Brit common law, the treaty) and some top-down/environment context (what's legal, what's tolerable etc) it cannot be planned for in any real sense of the word, let alone 'developed'. Period.

Emergent yes but not unpredictable. EG our highly expansive immigration policies are significantly changing our culture in ways that are broadly predictable. The identity politics theme that strongly influences our university curricula is effecting incremental but ultimately profound change to NZs culture.

That's ridiculous waymad, of course you can focus on and develop a culture. A culture is a human artifact, a creation of humans. Whether you would want to is another matter as it may require enforcement through the establishment of strict laws and a warrior/priest order tasked with ensuring everyone keeps the faith. There have been numerous examples of this throughout history. Christian Europe was developed through enforced conversion, warfare, outright extermination, cultural cleansing followed by centuries of often brutal enforcement. Not saying it would necessarily last forever although conceivably would be possible. It could also be achieved to various degrees at various times.

The Byzantine Empire lasted for a thousand years. It fluctuated during periods of loss of focus but re-established itself a few times when it decided to focus and develop again through the reconquest of lost territories. I imagine this thousand year achievement must have involved taking some active steps rather than just letting it all hang out and doing whatever. Certainly history seems to show that and it was also a culture that changed very little over its history.

Well I know one culture we don't want - AGRI culture. What we need is a multi culture.

NZ like all the other Western countries hitched its wagon to the the culture of the US and so goes in that direction. Neo-liberalism, globalism, consumerism, corporatism, the cult of the individual.

That's not correct. Actually NZ has been integral to the evolution of neo-liberalism. You could almost say NZ helped draft the plans for what it has become.

I think NZ was developed as a sort of petri dish to try out some of these things first.

California is far more progressive than NZ, I can't wait until we become like San Fransisco.

Human Migration, with all the incidental collision, conflicts, and fusions of peoples and of cultures which they occasion, have been accounted among the decisive forces in history. Every advance in culture, it has been said, commences with a new period of migration and movement of populations. Have we not been going through mass migration of cultures created by the ease of travel in the last 50, 60 years.

I agree, we need more immigration in order to have the most advanced culture on Earth.

Thank you, Mr Chaston, for acknowledging the limited nature of your appraisal.

Politicians are hamstrung, having to promise what folk are taught to expect.

Those who do the teaching are ultimately culpable.

Have a read of this, DC. Read it all.
It's the piece of the day.

Then ask what your 'scorecard' was based on? Extraction from a finite source, and bets on ever-more of same, I suggest.

No political Party can alter physics, no more than Canute could. So GDP - fact-avoiding measure though it is - will still reduce globally to zero. If it included entropy, it already has.

You need to factor in three things, to be truthful.
One is the draw-down of, and remaining stock of, finite resources.
The second is the overdrawing rate of renewable resources (almost every one is being overdrawn).
The third is the capacity of sinks to absorb, and the over-dumping rate (again, by almost every measure).

If you wanted to add another number, run the above three per head of population.

Gonna be an interesting few years.


I have read the article in full. Are you shorting the Dollar?

Good on you - you'd have to think so, wouldn't you? But then, I don't have any....

Looking at the stats in a general way 2008 - 2017 National Govt Quakes/GFC and reasonable improvements and gains across the board. 2017 Labour led Govt - onwards most stats show deterioration especially those influenced by Govt - could there by a cause & effect or just a coincidence?

Congratulations, you are fake news conspiracy theory.

Looking through the numbers the real answer is that NZ is in its 35th year post 1984 of being financially colonialised by global finance. The capital exporting mechanism of foreign owned firms is securely in place in virtually all aspects of our economy so all profits flow off shore. Theres little retained earnings left in NZ companies to do anything transformational not that any of the management would anyway as they are just working their way up the structure so would never rock the boat anyhow. What that term 'transformational' really amounts to on the ground is a friendlier WINZ, slightly better employment conditions and a few thousand more HNZ homes to give people a choice against a car or garage tenancy. Which is good news to those who benefit from the changes because the river of capital being sucked out of this country has to come from somewhere, dramatically lowered living standards being one of them. None of this is gonna change till we ditch the economic paradigm causing the problems and replace it with something fairer.

You missed the more important issues
Guns - eliminated
Child Poverty - eliminated
Hijabs worn - up 600000%
Progress made - 1000000%
Plastic straws - eliminated
Number of cows - down 50%
I give this government a double plus good. No other government has done half as much for us as the current government.

House prices up 13.7% in 2 years
Median income up 7%
Rent up 11% in one year cf income of 3.6% increase.
Meanwhile David tells us that we need 4.5% rise in incomes to compensate for imports prices going up.
No wonder, affordability worsening.

Not really, if you are making 3 million + per year and your wage goes up by 7% thats an extra 210k per year which more than makes up for the increase in house prices and or rents.

Inadequate tax revenue to do much in NZ.
No party could get elected wanting to raise it, never mind admitting such.
"Adult" pop wants lots of spending but does not want to pay for it.
Borrowing yes, real payment, no.

Just borrowing is fine, international banks are happy to lend to NZ which now has the safest banking system in the world. .

Nowhere do I see a measurement of the nations productivity. It is the only thing that will make any real difference to the well being of the nation. This confirms that there has been no transformation with this government away from our chronic foolish focus on short termism.