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Source: New Zealand Parliament – Hansard

Question No. 2—Finance

2. GREG O’CONNOR (Labour—Ōhāriu) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): Today, ASB have produced their quarterly economic forecast for New Zealand, entitled A demonstration of resilience. It states that they now expect that the economic decline as a consequence of COVID-19 to be “around half the decline we anticipated”. They state that this reflects the level of Government support, the quick exit from lockdown, and continued consumer spending. As ASB has put it, “Fear of losing jobs has quickly given way to fear of missing out on a bargain or some fun.” Their quarterly report also states, “[New Zealand’s] economic activity bounced back remarkably quickly once alert level restrictions were gradually eased through May and June, and by July the [New Zealand] economy almost felt like business as usual.” While there are many New Zealanders who continue to struggle with the impacts of COVID-19, the New Zealand economy is recovering.

Greg O’Connor: Has the Minister seen any reports on small business activity?

Hon GRANT ROBERTSON: Well, yes, I have. I’ve seen data from Xero’s Small Business Insights report, that analyses trends from small businesses across New Zealand. Their latest data shows the number of jobs in small businesses across Aotearoa grew 1.4 percent during the month and they’re now above pre-crisis levels. Craig Hudson from Xero noted that “With the exception of hospitality, jobs in all industries across the country have recovered to, at or above pre-crisis levels. The manufacturing and retail industries in particular have seen good recovery during the month.”

Hon Julie Anne Genter: Is he concerned by reports from Westpac chief economist Dominick Stephens that suggest putting up the top tax rate to 39 percent without implementing a capital gains tax will further increase house prices and thereby inequality?

Hon GRANT ROBERTSON: I’ve seen a range of views on that matter, including from Dominick Stephens. What I can say is that on this side of the House, we believe that it is the right measure to see those who earn the most in our economy pay a little bit more to ensure that we can go on with our COVID recovery and continue to provide health and education services.

Hon Julie Anne Genter: Has he seen data from the OECD that house price increase over the past year in New Zealand has been many times higher than in comparable countries that also happen to have capital gains taxes or other types of asset taxes?

Hon GRANT ROBERTSON: Well, I’ve actually seen conflicting advice on that matter, particularly in terms of recent months.