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Economic Bulletin March 2024

Economic Bulletin March 2024

Welcome to the March 2024 NZCTU Economic Bulletin.

In our monthly feature we look at the Budget Policy Statement (BPS) that the new government released in late March. The role of the BPS is to outline the government’s fiscal strategy and what it will be spending over the next few years. However, this year’s BPS is short on detail. Particularly concerning is the lack of detail on the government’s tax cut programme. We are still none the wiser as to what tax changes are going to be made, how they will be paid for, and when they will occur. Our view is that the BPS was a missed opportunity for the new government to demonstrate some economic leadership, and reinforced the sense that it doesn’t have an economic plan.

We also introduce a new Bulletin feature – a summary of key economic statistics for trade unionists. This is intended as a one-page, quick reference guide for trade unionists on key economic indicators, the latest forecasts, and annual wage growth by sector, sex, and industry. We will update this each month as new data comes in.

In our regular updates, we discuss the GDP data for the December 2023 quarter. This shows that the New Zealand economy was in “technical recession” for the second half of last year. It also shows that the growth we have experienced in the past year or so has largely been driven by population growth. On a per-capita basis, GDP has fallen 1.6% in the past year.

We update our rent-to-minimum-wage index, which shows that someone on minimum wage needs to work 34.5 hours just to cover the median rent. Our index shows that rents have consistently risen faster than the minimum wage for the past decade-and-a-half. From 2009 to 2023, the minimum wage increased 82%, while the median rent rose 110% and lower quartile rent rose 117%. The new government’s real terms cut to the minimum wage will only exacerbate this problem.

We also summarise the latest inflation, migration, balance of payments, consumer confidence, and housing data and summarise the government accounts. The overall picture is of a weakening economy.

For the consumer inflation and household living costs data for the December 2023 quarter, please see the January 2024 Bulletin. For the wage and employment data for the December 2023 quarter, please see the February 2024 Bulletin.