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The BulletinSeptember 20, 2019

The Bulletin: What does slowing GDP growth mean?


Good morning, and welcome to The Bulletin. In today’s edition: GDP growth slows in the latest quarter, questions raised over utter NZDF incompetence, and NZTA sends money intended for light rail elsewhere.

The numbers are in, and GDP growth has slowed down for the second quarter of the year. Radio NZ reports it is the slowest level of annual growth in six years, and was at 0.5% for the quarter. Primary industries and services were up, while construction and manufacturing were down. So what does it all mean?

A quick note on terminology – we’re still talking about economic growth here, rather than anything that could remotely be described as a recession. GDP is a relatively blunt measurement for the overall health of the economy. There are also a few things to take into account, such as slowing global growth, and international factors which affect New Zealand but are outside of our control. The slowing growth is also pretty much in line with what was being forecast by economists – if anything, slightly on the optimistic side. Regardless, National has accused the government of “economic vandalism”, reports Stuff, saying it is a reflection of low business confidence and stalled infrastructure development.

On the other hand, all of those factors mentioned above are still relevant. And given those factors, it could also be argued that the economy is doing okay – not amazing, but okay. Writing in the NZ Herald, Liam Dann’s argument is largely that people will take whatever meaning from these sorts of updates that suits their pre-existing ideas. And with much more government spending likely to kick in next year, there will almost certainly be something of a rebound.

Should someone in a position of power do something more? Another cut in interest rates looks likely to come from the Reserve Bank at some stage over the next 12 months anyway. But drums are also quietly beating for more fiscal spending to be unleashed if needed – including to simply give those on low incomes and beneficiaries money, because it’s the great way to keep money flowing through the economy among those who will need it the most.

Another opinion piece on the now-suspended Operation Burnham inquiry, which doesn’t pull any punches. The NZ Herald’s (paywalled) David Fisher writes that it is a story of “extraordinary incompetence” on the part of the Defence Force, who have revealed a constant catalogue of errors and shoddy oversight, even on the most serious matter of possible civilian deaths. It has also emerged that a crucial piece of evidence – which had previously been missing – has now mysteriously turned up again, and witnesses will need to be re-examined. Fisher goes on to question why the NZDF isn’t itself overseen by some sort of independent body, so that this incompetence doesn’t just reveal itself when something goes dramatically wrong.

More than $300 million worth of NZTA money intended for light rail in Auckland will now be spent elsewhere, reports Thomas Coughlan for Stuff. The money is going elsewhere because the project itself has been pushed back so far. But it’s another muddle in a term of government defined so far by delays in ambitious, big ticket projects. Meanwhile, a huge swathe of the NZTA board has been cleaned out, with five new members appointed.

The number of people on remand has hit an all time high, reports Laura Walters from Newsroom. They are people who are awaiting sentencing – and the number of post-sentence prisoners has fallen. However, the high remand population is putting pressure on the prison system, with the blame in part being placed on the court system, with people having to make multiple appearances, with an increasing amount of time between each.

A framework for managing climate change risks has been unveiled by climate change minister James Shaw, reports Newshub‘s Zane Small. It’s part of the (still un-passed) Zero Carbon bill, but Shaw says there’s no reason to wait around in developing this aspect of it. The idea behind it all is that the country should be better prepared for what is coming, and better informed about what risks are greater for different regions. Speaking of the Zero Carbon bill, Josie Adams from The Spinoff has collected some of the wildest submissions made on it.

Plans are underway to bring in tough new restrictions on vaping, reports Radio NZ. That’s according to director-general of health Dr Ashley Bloomfield, who says the move will restrict flavours to just those that taste like dirty durries, and packaging restrictions. He said vaping should only be done by those quitting smoking.

Yet another decision has been handed down in the long running post-politics legal career of Colin Craig. The NZ Herald’s Anna Leask reports that a ruling has now been made that he did in fact sexually harass his former press secretary Rachel McGregor, among other judgements. McGregor said of the latest case, regarding Craig’s constant efforts to take her to court, as “a new form of harassment that has lasted longer and been more painful than I could have ever imagined.”

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Right now on The Spinoff: Don Rowe sits down with Queenstown mayor Jim Boult and came out with an excellent profile both of him, and the challenges facing the region. Opportunities Party leader Geoff Simmons dismisses the need for a ‘champion for the elderly’ parliamentary commissioner. Simon Day writes about the Nissan Leaf, and the potential for the role of cars in society to change dramatically. Mirjam Guesgen writes about changes to the emissions trading scheme, and what it will mean for business.

Finally, please be warned that reading this piece may be traumatic for some. A mother has written a harrowing account of what it’s like trying to save your child from suicide, and the toll it takes on everyone involved.

The lower levels of professional tennis seem like a particularly cruel place to try and eke out a living. This long read from the BBC goes deep into one player’s story – a Swedish teenage prodigy called Marina Yudanov who chucked the game away, decided years later to have another crack, and is now battling away ranked 556 in the world. It’s no centre-court at Wimbledon, that’s for sure. Here’s an excerpt:

“We were more than three hours away from Tokyo airport. What if we played a long match? I’d probably miss my flight. What if I won? I’d definitely miss my flight.

“A new ticket home would cost £550, which would hurt. So what did I do?

“The match was long, I lost in three sets, and then embarked on the most frantic trip of my life, leaving the club without showering, and going taxi-train-train-plane-plane until I arrived, more than 24 hours later, still dressed in tennis skirt and tank top in nearly sub-zero temperature and snow in Copenhagen. Then it was just a four-hour train up home.

“Had we played three minutes longer, I would have missed that plane and been in limbo in Tokyo airport.”

In case you had missed it, the Rugby World Cup begins tonight. And in case you weren’t quite sure how to watch it, Tara Ward has put together a handy guide. It’s pretty easy, it’ll just cost you a bit. New Zealand’s first game is a difficult one against South Africa on Saturday night, and they’ve named a team which isn’t a long way away from being full strength.

That’s it for The Bulletin. If you liked what you read, and know other people who would find it useful, pass on this signup form to them. And if you want to support the work we do at The Spinoff, please check out our membership programme.

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