PM faces economic questions
From baby bliss to soothing economic fears, Prime Minister Jacinda Ardern faces an immediate crisis to quell over growing levels of uncertainty about her Government’s agenda.
When Ardern returns to Parliament on Monday – following six weeks of maternity leave – she is set to walk into a building storm over plummeting business confidence that threatens to shake the economy in real terms.
In an interview with Stuff, ahead of her return, Ardern gave assurances that her Government’s agenda did not come at the expense of economic growth.
They went ‘‘hand in hand’’.
‘‘I absolutely believe that our agenda will grow the economy, will make sure businesses are in a position to grow and prosper, because I need that economic growth to be able to lift the wellbeing of all New Zealanders.
‘‘These are not two separate agendas – they absolutely work handin-hand. I think New Zealanders absolutely see my emphasis on the wellbeing of New Zealanders. Now what I’m hoping they’ll also see is the agenda that’s always existed for us around growing the economy,’’ Ardern said.
Her comments come at the same time figures showed a slight rise in unemployment – the first since December 2016 – though unemployment remained low. Job creation had slowed, two major construction companies had collapsed in recent weeks and more industrial action was in the offing. But while economic growth had slowed, the overall picture remained positive. Migration was strong, the Government accounts were solid and spending was up. Despite farmers registering low levels of confidence, commodity prices were strong and the dollar was down, benefiting exporters. Despite that, New Zealand had dropped from near the top of one OECD table on business confidence, to second from bottom, and that threatened to slow investment and growth. Arguments remained over how much of that the Government could reasonably be held responsible for, but what was once just the ‘‘elephant in the room’’ had become a dark pall that the Government had to address.
National Party finance spokeswoman Amy Adams said the Government had to ‘‘change course’’.
‘‘With New Zealanders bombarded with negative economic indicators this week, it’s time for the Government to get its head out of the sand, recognise the damage it’s doing and focus on turning things around.
‘‘Economists are now predicting New Zealand’s economic growth could drop to as low as 1.5 per cent at the same time the world economy is forecast to grow at around 3.9 per cent in the coming year. This matters to New Zealanders. Every lost 1 per cent of GDP means $800 million less revenue for government,’’ Adams said.
Ardern was expected to make a significant announcement at her postcabinet press conference on Monday.
It’s understood the trade-related announcement would be a signal to business about the Government’s seriousness in addressing confidence issues.
And she also hinted at further moves designed to bring business around to the Government’s way of thinking.
‘‘What I intend to do is, within a month at least, bring together some of the work we’ve been doing in earnest around working together with the business community, to make sure that we are tackling some of the challenges that we’re facing collectively,’’ Ardern said.
‘‘But what I’m really proud of is that we know and recognise some of the challenges that businesses are saying to us they have.
‘‘Finding and attracting skilled labour, making sure that we grow our exports, diversifying our economy beyond housing and dairy.
‘‘Those are challenges we’re tackling head on.’’
Ardern conceded there was big change ahead, but the economy was in a good position.