“Adrian Orr has today admitted there’s a risk of recession for New Zealand,” says ACT’s Associate Finance spokesperson Damien Smith.
“Speaking to the Finance and Expenditure Select Committee, the Reserve Bank Governor wouldn’t explicitly commit to a prediction of recession before Christmas, but he admitted that high inflation and weakening demand bring risk of recession.
“ACT’s forecast is clearer, we predicted months ago that we’ll see negative growth in Q1 and Q2, meaning we’ll be in recession. The brain drain budget showed the Government has no plan to turn this around and Kiwis will suffer the consequences.
“All leading economic indicators are falling through the floor, inflation and interest rates are skyrocketing, and the Prime Minister’s unworkable regulations are pushing us towards recession.
“Kiwi families are facing record prices for everything they buy, while their mortgage rates are increasing as the Reserve Bank makes up for the Government’s out of control spending.
“To make matters worse, New Zealanders will face these costs with no tax relief. Beside rising prices and rising mortgage interest rates, Kiwi battlers are facing rising tax takes. Annual taxation per worker has risen $8,744 since 2019. The clearest way to stop inflation and the pain it’s causing would be to reduce spending and cut taxes.
"ACT would reduce Government spending and let people keep more of their own money. With the political will, the Government could get back into surplus immediately, and cut taxes. A nurse at the middle of the income scale would be $2,300 better off under ACT.
“New Zealand’s COVID response has been a grand illusion, hiding behind the twin oceans of the Pacific and printed money. Now that ocean of printed money is washing up as inflation at the pump, the checkout, and the cost of housing.
“Kiwis are suffering from a perfect storm of reduced productivity due to border settings, and Labour’s spending addiction which are driving inflation. Last week’s Budget was a chance for Labour to right the ship, but instead it proved to ambitious Kiwis that they have no idea how to sort inflation and make New Zealand a prosperous nation again. It was the Brain Drain Budget.
“It’s time for real change. Everyday New Zealanders can’t afford to keep paying the price of Labour’s one-dimensional approach to COVID and pointless vanity projects.”