HSBC economist Paul Bloxham labelled our economy a rock-star one.
In the print edition of the NBR, (not on-line) Rob Hosking cautions points out the dangers in that:
New Zealand’s economic rock-star excesses of the 1970s led to a long and painful rehabilitation in the 1980s and 1990s.
New Zealand’s economy is in fact more of a good solid alt-country band – one whose members have been through rehab, kicked the worst of their nasty habits (though not all – see those household debt figures mentioned above) and which is now carving out a more mature, less over-the-top style.
It is one we should stick to.
New Zealand’s economy is growing again and it needs to keep doing so.
It’s the only way we can afford to repay debt and afford the first world goods, service and infrastructure, public and private, we want.
Falling off the responsible wagon will return us to the over-indulgence and excesses funded by over-taxing and spending which put New Zealand into recession long before the GFC.
The damage that would do would eventually require another long and painful rehabilitation and we don’t want to go back there.
Friday’s announcement that the operating deficit before gains and losses was $379 million higher than forecast shows there is no capacity for excess.
. . . “Given the large size of both the revenue and spending bases, overall we are still tracking reasonably close to forecast for the first six months of the financial year,” Mr English says. “And we remain on track to surplus in 2014/15. As we’ve said many times, this will require ongoing discipline and responsible fiscal and economic management. “New Zealand certainly doesn’t need irresponsible and expensive spending promises – which we’re already seeing from other political parties – more than a year before we’ve even posted a surplus.” . . .
What we need is more of what we’ve got – disciplined spending and policies which promote growth.