gross domestic product

?GDP up” just the war cry the CTU was waiting for

Just when the economy is going gang busters along come the unions with their bludging, grubby hands out.

The latest figures show gross domestic product (GDP) grew 0.9 percent in the June quarter, taking annual growth to 3.6 percent.

Driven by housing, strong demand for exports and immigration, New Zealand now has the third highest growth rate in the OECD.

However, how much of the increased growth is getting through to workers?

ANZ chief economist Cameron Bagrie says any growth flows into the economy and eventually into wages.

“If we continue to see unemployment track down, wages will start to move up and people will start to get ahead.

“We’re seeing real wage growth at the moment of 1.5 percent, but I’m expecting that to grow to 2.5 percent over the next 24 months.”

However, critics say we’re relying on immigration and on a per person basis New Zealand’s hardly growing at all.

“The biggest disappointment is the fact that it’s driven by population growth rather than by increasing the quality of what we are doing. Our productivity growth is probably going backwards,” says CTU economist Bill Rosenberg.

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How is Robbo going to spin this good news?

Labour likes to talk down New Zealand and its economy. They are trying, and failing, to convince voters that they have better solutions.

I doubt even Robbo could spin this news negatively.

This Thursday GDP figures are expected to show the New Zealand economy grew by at least 3.5 per cent in the year to June 30.

ASB’s economists are picking it to be as high as 3.7 per cent.

“We expect GDP lifted a whopping 1.2 per cent over the June quarter, led by construction, manufacturing and retail activity,” ASB senior economist Jane Turner writes in her preview.

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More good news

New Zealand is doing well, coming in fourth in the list of the Prosperity Index.

Labour will be having kittens because they see New Zealand as an economic basket case.

Every year, the Legatum Institute, a London-based think tank, releases its annual global Prosperity Index, a huge survey that ranks the most prosperous countries in the world.

The amount of money a country has is one factor of prosperity, but the Legatum Institute considers more than that in its ranking.

The organisation compares 89 variables to come up with its list. These variables include traditional indicators like per capita gross domestic product and the number of people in full-time work as well as more interesting figures such as the number of secure internet servers a country has and how well rested people feel on a day-to-day basis.

The variables are then split into eight subindexes: economy, entrepreneurship and opportunity, governance, education, health, safety and security, personal freedom, and social capital.

The index looked at the 142 countries that have the most available data.

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Farrar slams Little’s invented stats

David Farrar knows a thing or?two about statistics, and a fair amount?about politics. When he isn’t writing about arts, lifestyle and travel topics he dabbles in politics.

Today he slams Andrew Little’s made up stats from his pre-budget speech yesterday.

Stuff further reports:

Little said just 37 per cent of economic growth had gone into the pay packets of working families since National came to power ? down from over 50 per cent under the previous Labour government.?

That meant the average family had lost out on more than $13,000 under the Government, and would miss out on?$50 a week this year.

The use of this statistic is rather revealing, as to both how desperate and also how ill informed Labour are. Three things I?d note: ? Read more »

More good news: GDP up

Labour’s willingness to talk down the economy is proven wrong time and again by facts.

GDP has risen again, showing the economy is still growing.

GDP increased 0.9 percent?in the?December 2015 quarter, boosted by the service industries, Statistics New Zealand said today.

?The service industries grew 0.8 percent overall,? national accounts senior manager Gary Dunnet said. ?Business services in particular, posted a strong increase, as well as retail trade and accommodation.?

The strong performance of the service industries this quarter was?offset by?falls in?the?agriculture and manufacturing sectors. ? Read more »

Paul Keating comes good

Known as the Lizard of Oz, Paul Keating isn’t that popular but he has come good by suggesting that the?Federal government take an axe to?the?budget rather than look at raising taxes.

It should be possible to strip $90?billion out of the federal budget ? a cut of 20 per cent ? Paul Keating claims, based on his achievement as treasurer through the late 1980s.

The former prime minister said yesterday that the burning issue should not be taxes but rather how to adjust the budget to the reality that the income the world was paying us had fallen, and this was cutting both personal and company taxes.

?All these things are pushing down on commonwealth revenue and, when it has been so affected, the penny ought to drop that we ought to be cutting spending,? he said, noting that Scott Morrison was correct to highlight this. ?? Read more »

John Roughan on the TPPA

John Roughan points out some serious inconsistency in?the thinking of those?opposing the TPPA.

The agreement runs to 6000 pages of difficult legal and technical references, but law professor Jane Kelsey has been studying trade position papers for years and I’ve been waiting for her to find something explosive in the fine print. She provided a conclusion in a column published in this paper on Thursday.

Whereas previously she had feared the US would gets its way on practically every issue, now she hopes and expects the deal will be rejected by the US Congress because the terms finally agreed are not very favourable to the US after all.

A World Bank assessment this week came to the same conclusion. That will not help its reception in the Congress but professional bodies in this country ought to acknowledge it is not the spectre they had been given to expect. Pharmac is going to be okay. The US has not got its way on pharmaceutical protection periods. Our IT innovation appears to be under no more pressure from US patent law than it was before.

Their only remaining concern may be investors’ rights to sue for compensation in independent international tribunals if a government’s action unreasonably reduces the value of an investment. But that is not new, disputes tribunals were part of post-war international trade rules, and the principle is perfectly reasonable.

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It looks like the manufacturing crisis that Labour declared is well and truly over

A few years back Labour declared a crisis in manufacturing and set up their own inquiry into manufacturing. Then, on the?day the report into the crisis was released, figures came out showing that manufacturing was going gang busters.

Since then there has been nothing but good news from manufacturing and the crisis that Labour declared is well and truly over.

Yesterday even more data was released to show manufacturing enjoying increased and record sales.

New Zealand manufacturing sales volumes rose at the fastest pace in almost two years in the third quarter, boosted by a pickup in meat and dairy activity.

This has prompted economists to revise up their forecasts for economic growth.

Total seasonally adjusted sales volumes increased 3.5% in the three months ended September 30, after growth stalled in the second quarter, Statistics New Zealand figures reveal. That’s the fastest pace since the fourth quarter of 2013 when sales volumes rose 4%.

Manufacturing volumes for dairy and meat products, the country’s two largest commodity export earners, increased 6.3% in the third quarter, the biggest gain since the 2013 fourth quarter when sales volumes soared 12%. ? Read more »

Not such a bad place after all

New Zealand isn’t such a bad place after all…not so the opposition has noticed however.

New Zealand families have the third-highest material living standard in the world, a local study has found.

Researchers at public policy research institute Motu used data from 800,000 households across 40 countries to create the new measure for wellbeing, which took into account homes that included a 15-year-old.

The measure is based on ownership of possessions such as books, internet connections, whiteware and cars, as well as the number of bedrooms and bathrooms in a house.

In 2012, New Zealand ranked just behind the United States and Canada, and ahead of Australia and all the Scandinavian countries. ?? Read more »

Alarming rise in reporting about inequality, it’s a hockey stick I tell you

Peter Cresswell blogs at Not PC.

Firstly a bit of history and some facts. Inequality is not rising.

The last few years have shown a sharp rise in the number of newspaper articles devoted to inequality. ? Inequality is clearly seen as a serious and rising problem.The only problem with that is that the data says otherwise.

Yeah…not rising.

Work by both the Ministry for Social Development and Treasury shows that while inequality rose through the reforms of the late 80s and early 90s, it since plateaued or even dropped. The Ministry of Social Development concluded that there has been no rise or fall in income inequality in the last twenty years across a range of measures.

Treasury work by Christopher Ball and John Creedy found, in addition to a mild decline in Gini measures of income inequality since 2001, there has been substantial reduction in consumption inequality. Inequality in consumption has, since 2010, been rising mildly, but is currently below 1984?s level.

What is rising though is the media pimping the poor to set a narrative:

Yet as inequality has either flattened or declined, media conversations about rising inequality has exploded ? as the graph below comparing media mentions with the actual data. Clearly, their campaigning against rising inequality may be motivated by many things, but one of them is not the evidence ?

image_thumb[2] Read more »