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'We don't know how lucky we are' - Bollard

Economic growth in New Zealand could be as much as 10% higher than we think, says Reserve Bank governor Alan Bollard.

In a speech in Auckland today, Dr Bollard said New Zealand has historically used some quite conservative statistical methods for calculating economic performance compared to other countries.

In comparing with New Zealand and Australia – to take the most sensitive comparison, “a very rough, broad, ballpark might put this up to 10% higher than official data, compared with Australia,” Dr Bollard told a Trans Tasman Business Circle lunch in Auckland today.

There are different ways of measuring GDP and, over the years, Dr Bollard said, “Australia has tended to take the optimistic alternative and New Zealand the conservative one.

“Could this be a reflection on our national characters?”

The work done by the Reserve Bank thus far does not deal with the question of whether New Zealand is “catching up to Australia” and he also notes that simply changing the way data is calculated is not going to put any more money in anyone’s pockets.

The increasing harmonisation of the two economies –and the recent directive from the prime ministers of both countries to respective Productivity Commissions to look at increasing that integration – means the question of comparable economic data needs to be looked at.

“A useful contribution could be to improve harmonisation of statistical measurement in Australia and New Zealand, where appropriate, to improve data comparability.”

New Zealand adopts a new international standard in the 2013/14 year and that alone could add 3% to GDP, he said.

Other factors are changing the way the “unobserved economy” - cash jobs, work undertaken by households for their own usage, and the like, which could add about 2% to GDP; changes to the valuation of residential buildings could add another 1.5%.

Taken along with a batch of smaller and more technical changes, “ a rough estimate might put our GDP at up to 10% higher than official data, compared with Australia.”

More by Rob Hosking

Comments and questions

I'd be feeling lucky too if my salary was $400k...

You don't get to that level of salary by being lucky...

“Could this be a reflection on our national characters?”
Our anthems confirm this statement........
Advance Australia Fair or God Defend NZ

Bollard sounds like a monty python sketch.

Where does Bollard get this 10% pye in the sky stuff if this is true why isnt the economy booming instead its just plodding along like a boat with out a captain.This guy is a $400k joke.

Bollard is saying 10% better than we think.
If we think 1% then he is saying it could be 1.1%.
This is not radically different.

I bet he can spell "pie" though.

more to the point if this has been the case for some time why not disclose earlier? Why disclose now?

What a load of Cr*p
These people in a world of fairyland


Reminds me of the comment:

Isn't it strange? The same people who laugh at gypsy fortune tellers take economists seriously.

The guy's a fool, a total fool.

"Economic could be as much as 10% higher than we think, says Reserve Bank governor."...Have you outsourced your proofreading?

Alan you need to stop smoking that dac mate

You are not only a retard you have just encouraged FX speculators to buy the NZ dollar and it will go up another 5% further screwing the export sector which we desperately need to do well to pull us through.

LMAO, dac smoking retard. That's funny.

At least Don Brash had the balls to tell it like it is. Unlike this waffle.

Bollard is supposed to be the country's leading economic brain and he's saying things like "could be". He has been in Wellington too long. One trip to Australia and just a walk around the streets and he'll see radically higher levels of consumer spending, optimism, standards of living and wealth.

The longer these muppets keep denying the obvious, and trying to kid the masses into more of the "she'll be right" attitude that got us here in the first place, the greater the outflow of skilled labour and capital, and the greater the need for foreign buyers of our vacant and underperforming lands and businesses.

NZ is fast becoming the land of deniers, from John Key and Allan Bollard down.

You have to wonder what is in the water in Wellington nowadays, with all the economic clap-trap been espoused by the local bureaucracy. 170,000 jobs in 4 years?? Variances perhaps of 2 $bill on pending asset sales?? And now this idiotic statement?? These overpaid cretins really need to get off their r’ses and run a business like I do, then maybe they'll realise just how stuffed the NZ economy is. This bullsh*t has got to stop. P-L-E-A-S-E can we get some real economic leadership in NZ.???

Paul Marsden you make me laugh,ive to been self employed for decades and these munchcins are absolute IMBERSEALS theirs no leadership left in NZ, like a boat with out a rudder.

seems to be a complete flip flop from his fiscal warnings (now removed), now true, as contained in 2011 Budget - page 57.

I agree with Magdar on this one..Don Brash told it like it is..New Zealand would still be a great little place to live in .If we could get rid of these Poly Groveling pikers in the Government.

Comparing the incomparable.

Absolutely unbelievable that it taken them this long to work out a basic fact --Ausssie and NZ calculate some economic indicator figures differently.
Whether the 10% guess is right or wrong is almost irrelevant -- more than a few heads should roll over this. Everyone school kid knows that if you are going to care two things you should be comparing apples with apples as best you can.