New Zealand Economy Going Nowhere

Latest data shows New Zealand's economy is still struggling to claw its way out of an extended rut, Labour's Economic Development spokesperson David Cunliffe says.

"Statistics NZ today revealed total electronic card transactions are down 0.2 per cent and tourism guest nights are down 2 per cent, with international arrivals down in both Islands, reflecting four straight years of decline for tourism receipts.

"On top of that the NZ Institute of Economic Research published its highly regarded Quarterly Survey of Business Opinion (QSBO) this week. That showed a 'crab-like recovery' of an economy 'going sideways'," David Cunliffe said.

"NZIER's findings are disturbing. Trading activity of firms is flat - at 0 per cent - and there has been no acceleration in the recovery over the last nine months.

"There is a worrying absence of business investment. Investment intentions are down in line with capacity pressures. This is hardly surprising with an exchange rate that is consistently overvalued and the lack of a credible government economic growth plan.

"At the same time there are predictable but mounting labour and housing shortages in Canterbury, which alongside the standoff between EQC and insurers, is hugely debilitating for the earthquake rebuild.

"Business and Economic Research Ltd's (Berl) latest forecasts show the economy is 'in a holding pattern at best, or at worst a double dip recession'. They warn of a 'two speed economy' with declining export performance, falling commodity prices and tourism receipts and further delays in Christchurch; offset against a rent-driven housing surge in Auckland.

"Isn't this precisely the kind of rollercoaster the government said it would get us off?

"New Zealand needs a credible plan for growth and jobs that builds on our unique natural resource base and talented, innovative people," David Cunliffe said.

"Three and a half years into this sorry Government and Kiwis are still waiting for one."