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Originally Posted by
Daytr
BP, the EPA approve virtually everything that is put in front of them barring a few obvious declines around a very controversial practice, being seabed mining. What is more efficient when it comes to social policy? Its not all about money, but outcomes. The fact is National advocated the Salvos as their shining example & hadn't even spoken to them! They are now touting around the world for buyers. Do they actually even think these things through before launching ahead? The DOC restructure they did 18 months ago is now being reversed. At what cost? Both financially & at what cost to the department in regards people that left in regards experience?
What is wrong with selling power companies? Higher power prices for NZers to pay shareholders, that's what, although I am less against that as at least they kept 51%, than I am of selling or corporatizing social services.
There are actually plenty of examples overseas where corporatization of government services has gone horribly wrong.
We are going down a US model where multi-nationals own government policy & just in time for the TPPA which will give corporates even more influence. Nope I don't like it, not one bit.
Fix what's broken, don't sell it to someone else.
I have to agree daytr. What would labour have done differently over these last seven years?
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8/7/2015 — Economics, Politics and Government
Researcher’s cooler view on GDP
By Simon Hartley
All eyes are focussing on lowering predictions of New Zealand's gross domestic product (GDP) output and the implications of inflation as the dairy downturn continues to bite.
Inflation is well below the bottom of the Reserve Bank's target 1%-3%, barely registering at 0.1%, but concerns are mounting there could be an inflation spike on the way.
BNZ head of research, Stephen Toplis, said many were “scurrying” to lower their GDP expectations, given the plummet in dairy prices, construction activity in Canterbury peaking, with the flow-on impact of both feeding through the wider economy.
“In addition, interest rate expectations are plummeting,” Toplis said.
“The biggest shock to the economy has been the ongoing demise of the dairy sector,” he said.
Because of the further slump in the latest dairy auction price last week and confirmation that the ban on dairy imports into Russia, from the EU, the US and others will continue, Toplis had lowered the BNZ's expected 2015/16 milk price forecast, from $5.70 to $5.20 per kg.
“Unfortunately, downside risks remain. Our forecast is still reliant on some pricing recovery over the next 12 months,” he said.
Toplis said the BNZ's GDP forecasts were already on the pessimistic side of consensus, and lower than the Reserve Bank's.
He is forecasting annual average GDP growth of 2.4% for calendar 2015, following a 3.3% increase in 2014, and over the next two years, forecast growth averaging 2.1%.
The income effect of the dairy decline feeds through to the wider economy, adversely impacting private consumption, investment and Government revenues.
“So, while agriculture production is not significantly impacted other parts of GDP most definitely are,” he said.
In part, the demise of dairy will be having an impact on economy-wide confidence “and it's not only agriculture where this shows up. There is a notable softening in construction expectations as the contribution to growth from the residential component of the Christchurch rebuild begins to peak,” Toplis said.
We have been warning for some time now that there was a very real chance that GDP growth would falter, the NZ$ would respond, and that the falling dollar might create an inflation problem, even as economic activity diminished.
“In our opinion, this process is now well in train,'' Toplis said.
As at the Reserve Bank's last monetary policy statement, inflation was already forecast to rise to the mid-point of the bank's target band - 1%-3%.
He said the recent slump in the exchange rate must surely push that forecast higher. The Reserve Bank had its work cut out, given the risks around GDP growth falling to zero while coinciding with the possibility that inflation heads to 3% - and that was before it has to consider the impact of the booming housing market.
*Simon Hartley is senior business reporter and assistant chief reporter for the Otago Daily Times.