The NZ Economy

[Shareguy]

This is worth reading in my opinion

https://newsroom.co.nz/2025/09/22/the-painful-reality-of-economic-contraction/1

[winner (n)]

And Cameron Bagrie says Q3 will offset Q2 and then the economy is on a roll.

This bit so true - The funny thing about a downturn is that it drives productivity growth. The good take over the bad. Sometimes you need a good clean to get rid of rubbish.

https://businessdesk.co.nz/article/opinion/gdp-figures-welcome-to-the-l-shaped-recovery

[Shareguy]

And Cameron Bagrie says Q3 will offset Q2 and then the economy is on a roll.

This bit so true - The funny thing about a downturn is that it drives productivity growth. The good take over the bad. Sometimes you need a good clean to get rid of rubbish.

https://businessdesk.co.nz/article/opinion/gdp-figures-welcome-to-the-l-shaped-recovery

Yes lets forget about 2025.  Its all going to happen next year or so we are told.........

[Cod]

My view is:

The cleanout of the economy from all of the excess and unproductive covid spending will not happen in just one business cycle, it will take two. Therefore I believe it is likely that we will have another cycle, similar but less deep, that we are going through now. I believe this is why some commentators depict the RBNZ has been slow to lower OCR rates, the RBNZ know full well the situation we find ourselves in and are trying to wash out as much of the loose fiscal policy moves as possible. Alas political realities will prevail and another boom and bust cycle will eventuate.

[Shareguy]

https://www.interest.co.nz/economy/135321/country-needs-reserve-banks-foot-firmly-accelerator-wake-last-weeks-shock-gdp-plunge

[Waltzing]

AI - generated report on the RBNZ and NZ economy..

You cannot view this attachment.

[KW]

This bit so true - The funny thing about a downturn is that it drives productivity growth. The good take over the bad. Sometimes you need a good clean to get rid of rubbish.

Unless the good simply leave the country.  Which is what is happening.  People tend to think that the only people leaving NZ are the unemployed desperately looking for work.  But its not - its highly skilled people who are leaving for much better pay, conditions and future opportunities.  Doctors, nurses, teachers, engineers, tradespeople, tech workers, entrepreneurs, small business owners, police officers.  All the "productive" people.  NZ gets the unemployed and unemployable back after they fail to make it in Australia (or are deported).

Who is left to take over the "bad" - who is stepping up to replace the shut down saw mills, fish processors, and fruit canners?  We will import foreign made products now, sending more of what little money we have overseas.  NZ doesnt win from this.

Are we really better off now that we no longer have chocolate fish, jaffas and snifters? 

[LoungeLizard]

Unless the good simply leave the country.  Which is what is happening.  People tend to think that the only people leaving NZ are the unemployed desperately looking for work.  But its not - its highly skilled people who are leaving for much better pay, conditions and future opportunities.  Doctors, nurses, teachers, engineers, tradespeople, tech workers, entrepreneurs, small business owners, police officers.  All the "productive" people.  NZ gets the unemployed and unemployable back after they fail to make it in Australia (or are deported).

Who is left to take over the "bad" - who is stepping up to replace the shut down saw mills, fish processors, and fruit canners?  We will import foreign made products now, sending more of what little money we have overseas.  NZ doesnt win from this.

Totally agree. NZ has been in the lower third of OECD productivity tables for decades, due mainly to chronic underinvestment in technology, infrastructure and its inability to hang on to its most ambitious and qualified citizens. We have used immigration and the fools gold of rising house prices to kid ourselves that our economy has been booming, when in fact it never has. Strip the effects of those two things out of the equation and we have in fact been stagnating or going backwards in real terms for a long, long time.
Now that immigration is slowing and house prices stagnating everyone can now see that the emperor isn't wearing any clothes. Unfortunately we have a Government that thinks austerity politics is the answer and a PM that more and more looks and behaves like a possum caught between car headlights.

[Shareguy]

Totally agree. NZ has been in the lower third of OECD productivity tables for decades, due mainly to chronic underinvestment in technology, infrastructure and its inability to hang on to its most ambitious and qualified citizens. We have used immigration and the fools gold of rising house prices to kid ourselves that our economy has been booming, when in fact it never has. Strip the effects of those two things out of the equation and we have in fact been stagnating or going backwards in real terms for a long, long time.
Now that immigration is slowing and house prices stagnating everyone can now see that the emperor isn't wearing any clothes. Unfortunately we have a Government that thinks austerity politics is the answer and a PM that more and more looks and behaves like a possum caught between car headlights.

Yep that's the truth of it. I don't like the  alternative though.

[LoungeLizard]

Yep that's the truth of it. I don't like the  alternative though.

You're right there. Seems like the choice is between Labours lolly scramble and Nationals austerity. NZ is what happens when ideology takes over from sound economic thinking. There's a lot of that going around in the world at the moment...

[HAWKDOG]

Is National really about austerity? Or just cutting off benefits to the average person to pay for other things?

"This new Defence Capability Plan contains $12 billion of funding over the next four years, which includes $9 billion of new spending. This will raise New Zealand's defence spending from just over one per cent of GDP to more than two per cent in the next eight years."

I am not for or against military spending but its seems like a move to appease President Pedo.

According to this article National is borrowing more than Labour did?

https://mountaintui.substack.com/p/nicola-williss-debt-already-higher?utm_campaign=post&utm_medium=web&triedRedirect=true

Current & planned debt will surpass Labour's full term debt in less years. Willis also admitted Budget 2024 had a higher deficit than all of Grant Robertson's bar Covid.

[LoungeLizard]

There's a lot of sleight of hand with this Government over planned and actual expenditure. Lot's of infrastructure projects were allocated budget but were put on the back burner and no money actually spent. Just ask Mark Malpass, Steel and Tube CEO.

This Government dug a hole for itself delivering tax cuts that weren't fully funded. That is one of the reasons why total debt under national is now higher than it was under Labour and forecasted to rise further. For example, it is estimated that the government's reversal of Labours Bright-Line test rules and tax on mortgage interest for investment properties, cost them 2.9 billion dollars in lost revenue. That's a lot of money to go back into the pockets of investment property owners that could have been used much more productively elsewhere.

[HAWKDOG]

Excellent points.

I hope they take action on equity investing to align it with property investing.
There's a lot of talk about people not saving money for retirement, but not much is done to encourage it.
A person pays tax on their pay cheque, saves some of that in the bank, and gets taxed again on the interest.
I can see why property is the go-to in NZ.

Canada, for example, has a tax-free savings account - you can deposit up to $ 5,500 in the account annually and invest it tax-free, then withdraw it tax-free.  That's on top of the RRSP program, where you get tax back up to a certain amount depending on how much you contribute.

[Waltzing]

There you have it folks.. it the US doesnt invade Canada and you can find a small hunting and fishing hut which does not freeze over for more than 6 months a year... well thats your RV , retirement villa...

you cant beat that scheme... its a wonder the top dogs in the US arnt fleeing to the Canack border in droves..

Salmon fishing anyone...watch out for the bears...

[Basil]

Plenty of bears here too.  People will feel a bit better after a couple of 50 bps interest rate cuts.
RBNZ is so far behind with policy its ludicrous.