I spoke to former Productivity Chair
Nana this morning about the letter he and a group of other economists sent to PM Christopher Luxon to urge the Government to urgently suspend cuts to spending and investment for the sake of the economy, struggling businesses and the wellbeing of vulnerable workers, many of whom are giving up and emigrating.Heres the article I sent to all subscribers earlier this morning as part of my daily Dawn Chorus email newsletter and podcast for paying subscribers. Here’s the article Ganesh wrote on his substack and here’s the full letter itself.
This is a summary of our conversation above and there is a transcript with the video.
Summary
In our conversation, Ganesh Nana discusses the pressing economic issues facing New Zealand, particularly the government's focus on fiscal policy at the expense of addressing external debt and investing in infrastructure. He emphasizes the need for a shift in focus towards export growth and the importance of investing in the economy to avoid hollowing out key sectors. The conversation highlights the urgency of creating a long-term vision for New Zealand's economic future, moving away from austerity measures and towards sustainable growth.
Takeaways
The focus on government debt overshadows the critical issue of external debt.
Investment in infrastructure is essential for economic growth.
Doubling exports requires a significant shift in strategy and investment.
Austerity measures can lead to long-term economic hollowing out.
The government must prioritise a vision for the future of New Zealand.
Export growth has been primarily volume-based rather than value-based.
Leadership and investment are crucial for transitioning to a value-based economy.
The current government focus is detrimental to long-term economic prosperity.
A lack of vision contributes to the emigration of skilled workers.
Sustainable economic growth requires a collaborative approach among stakeholders.
Chapters
00:00 Introduction to Economic Concerns
02:52 The Importance of External Debt
05:53 Investment vs. Austerity: The Call for Infrastructure
09:08 The Risk of Hollowing Out the Economy
10:24 The Future Vision for New Zealand
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