The political and economic week in review: Decoding the exchanges over the economy

NBR’s Rob Hosking decodes the exchanges over the economy in Parliament and asks if the politicians are, yet again, confusing the government accounts with the real economy.

Is there a recession on the way? Labour’s Grant Robertson appears to be saying so – but as the exchanges with Finance Minister Bill English carried on this week it became clear Robertson's main priority is defending and exalting the previous Labour government, and trying to get Mr English to repeat some nice things he once said about Dr Cullen.

Mr English managed to do so, kind of, but only as a way of putting Mr Robertson down.

There isn't really any evidence of a recession on the way: in fact, this week the New Zealand Institute of Economic Research upgraded rather than downgraded forecasts and it is now forecasting 3% growth in GDP.

The institute is only the latest economic group to upgrade its GDP outlook.

But returning to the politicians’ obsession with the events of 2008 or even before that year, there are some figures English could have used but did not in Parliament.

Figures Mr English did not draw on include the fact government spending increased, on average, $5.5 billion a year between 2004 and 2008. Since 2009, it is increased on average $1.8 billion a year, and that includes a massive spike over the 2011-12 years due to the Canterbury earthquakes.

The final point being the politicians are, yet again, talking as though the government accounts are the real economy.

It is never a good sign when this happens.

Tune into NBR Radio’s Sunday Business with Andrew Patterson, launching this Sunday morning, for analysis and feature-length interviews.

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Fri, 04 Mar 2016

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The political and economic week in review: Decoding the exchanges over the economy