Latest / Early Edition with Ryan Bridge / Craig Renney: Council of Trade Unions Economist on the rising GDP, NZ leaving a recession

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Craig Renney: Council of Trade Unions Economist on the rising GDP, NZ leaving a recession · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Starting to look out for New Zealand as all signs
• 0:02
  Speaker 1: point to a stronger economy. The GDP rose by zero
• 0:05
  Speaker 1: point seven percent in the December quarter, indicating we've come
• 0:09
  Speaker 1: out the other side of the recession, not in any
• 0:11
  Speaker 1: great rush, you could say. Council of Trade Unions economist
• 0:14
  Speaker 1: Craig Greeny is with us now. Good morning, Craig.
• 0:17
  Speaker 2: Good morning.
• 0:18
  Speaker 1: We're out of the recession. But does it feel that way.
• 0:22
  Speaker 2: It won't feel like we're for many people. We're out
• 0:24
  Speaker 2: of the recession on a quarterly basis, as you say,
• 0:26
  Speaker 2: we grew zero point seven percent in the last few months,
• 0:29
  Speaker 2: but on an annual basis, we're still down. We're still
• 0:31
  Speaker 2: down one point one percent, so you know where we're
• 0:35
  Speaker 2: certainly stopped the recession, but we're still the economy is
• 0:38
  Speaker 2: still smaller, and with unemployment rising and the cost of
• 0:42
  Speaker 2: living still being a real challenge for many people, it
• 0:44
  Speaker 2: won't feel like we're genuinely seen recovery yet for many
• 0:48
  Speaker 2: people around our heather.
• 0:50
  Speaker 1: What is it going to take for us to feel
• 0:53
  Speaker 1: like the economy is recovering properly? Do you think I.
• 0:57
  Speaker 2: Think many people are going to need to feel that
• 0:58
  Speaker 2: difference in their wallets going to need to feel security
• 1:01
  Speaker 2: and confidence. One of the things we know is that
• 1:04
  Speaker 2: businesses are aren't confident to invest. We saw in the
• 1:07
  Speaker 2: GDP Day of Today yesterday, then business investments for whether
• 1:12
  Speaker 2: consumers are going to need to feel confident and go
• 1:14
  Speaker 2: gotten by a thing, So we saw durable birds, washing machines,
• 1:19
  Speaker 2: those sorts of things. The consumption of those fell last year.
• 1:23
  Speaker 2: I think confidence is really lacking still in an ezialand
• 1:26
  Speaker 2: e colony right now, and that's a function of rising
• 1:29
  Speaker 2: and employment.
• 1:30
  Speaker 1: Sadly, well, we've noticed that we've seen that, haven't we
• 1:33
  Speaker 1: We've seen a recent slamp and consumer confidence. So there's
• 1:36
  Speaker 1: growth that we have seen. Do you think it's sustainable?
• 1:39
  Speaker 2: You honest? Like everything else in the economics, we'll find out.
• 1:42
  Speaker 2: But in terms of the next few months, we expect
• 1:46
  Speaker 2: GDP to keep growing. What happens after that really depends
• 1:50
  Speaker 2: upon international factors, including Donald Trump and tariffs, and the
• 1:55
  Speaker 2: extent to which we see more changes at the budget
• 1:59
  Speaker 2: that again reduce consumer confidence and reduce the confidence of
• 2:03
  Speaker 2: businesses to invest.
• 2:04
  Speaker 1: Unemployment has expected to keep rising. What might every day
• 2:07
  Speaker 1: workers win? Might every day workers sort of see some relief?
• 2:12
  Speaker 2: Well, we keep expecting unemployments to keep rising over the
• 2:16
  Speaker 2: next year, so employments are lagging indicator. So we started
• 2:19
  Speaker 2: to see some growth, but it would be a while
• 2:20
  Speaker 2: before start recruiting in a serious way again, so we
• 2:25
  Speaker 2: expect an employment to keep rising during the yester. By
• 2:27
  Speaker 2: the end of twenty twenty five, workers might feel more
• 2:31
  Speaker 2: confident because of employment's on its way down, but it's
• 2:34
  Speaker 2: the extent to which again that translates into pay packets
• 2:37
  Speaker 2: for workers. Forty six percent of workers last year got
• 2:41
  Speaker 2: to pay rise less than inflation, and we saw many
• 2:45
  Speaker 2: workers heading over says, particularly to Australia where pain conditions
• 2:50
  Speaker 2: are better. So it's going to be a while before
• 2:53
  Speaker 2: or workers feel any benefit from any growth in the economy,
• 2:57
  Speaker 2: and we saw that in the data yesterday where fits
• 3:00
  Speaker 2: were rising at more than three times the speed of
• 3:03
  Speaker 2: wages in New Zealand. So if there is a recovery,
• 3:07
  Speaker 2: it seems to be tilted towards the side of businesses
• 3:10
  Speaker 2: at the moment rather than workers in their pay packet.
• 3:13
  Speaker 1: The beans itsid yesterday that on a per capita basis,
• 3:15
  Speaker 1: our forecast seduced the previous peak and activity won't be
• 3:18
  Speaker 1: achieved until early twenty twenty eight. Would you agree with that?
• 3:23
  Speaker 2: Certainly know the GDP per capita has fallen for two years.
• 3:28
  Speaker 2: It's it's taken a real battering. It's now more it
• 3:30
  Speaker 2: was in more than five percent lower than it's peak.
• 3:33
  Speaker 2: It's going to take a very long time to get
• 3:35
  Speaker 2: back to it. You know, it's peak pre the start
• 3:39
  Speaker 2: of these falls. I hope it doesn't take that long,
• 3:43
  Speaker 2: but it may well be that it takes a very
• 3:45
  Speaker 2: long time to get back to the twenty twenty is
• 3:48
  Speaker 2: raising it as at the matter, but certainly a long
• 3:51
  Speaker 2: way off.
• 3:51
  Speaker 1: Craig I thought the government. The response from the government
• 3:54
  Speaker 1: was very restrained yesterday at that positive result. They're very
• 3:59
  Speaker 1: aware there is a long way to go before New
• 4:02
  Speaker 1: Zealanders feel like we, you know, probably have turned a
• 4:05
  Speaker 1: corner or heading to a good place. What do you
• 4:08
  Speaker 1: want to see from the government in terms of an economic.
• 4:11
  Speaker 2: Plan, Well, that's exactly what I'd like to say, is
• 4:15
  Speaker 2: an economic plan. We had the Going for Growth document
• 4:19
  Speaker 2: which was their economic strategy, and it was eighty bullet points,
• 4:25
  Speaker 2: forty of which have already been done. So it's not
• 4:29
  Speaker 2: really a plan. There's no plan for investment right now.
• 4:32
  Speaker 2: Investment every falls every year over the next four years
• 4:37
  Speaker 2: on physical things like roads, schools, hospitals. We don't have
• 4:42
  Speaker 2: a plan for the workforce. We don't have a plan
• 4:44
  Speaker 2: to tackle that rising unemployment. We don't have a plan
• 4:48
  Speaker 2: to help low income families. And it's probably tackle those
• 4:52
  Speaker 2: things that will start to see the returning confidence, and
• 4:55
  Speaker 2: that returning confidence will result in higher investments and therefore
• 4:58
  Speaker 2: more jobs and the great economic security for workers. And
• 5:02
  Speaker 2: that's what we need at the moment, is is that
• 5:04
  Speaker 2: sense of an economic plan, and sadly it's still missing.
• 5:06
  Speaker 1: Craig, Thank you so much for your time. That was
• 5:08
  Speaker 1: Craig really their Council of Trade Union's economist.
• 5:12
  Speaker 2: For more from early edition with Ryan Bridge. Listen live
• 5:15
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• 5:18
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