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PM warns New Zealand faces no growth, big job losses
Posted: 15 January 2009 1732 hrs
WELLINGTON : New Zealand faces the prospect of no economic growth and a jump in unemployment this year because of the impact of the global financial crisis, Prime Minister John Key said Thursday.
Key said that the international situation had deteriorated since last month and that New Zealand was moving closer to the "downside scenario" put forward by the Treasury at the end of last year.
"If that scenario plays out, the economy in 2009 will stand still," he said at a press conference after meeting senior economic ministers.
He said unemployment could rise to 7 per cent later in the year from the latest figure of 4.2 per cent, and keep going up to 7.5 per cent in 2010.
New Zealand sank into recession in the first three quarters of last year due to the impact of a drought and the bursting of the country's long-running housing bubble.
Key said it would be vital to restore business confidence, which has sunk over the last year.
"You can get to the point where all economic activity stops because people just talk themselves into a negative funk," he said.
"It's important that we don't get ourselves into a doom and gloom spiral downwards."
The government will hold an employment summit next month to finds ways of maintaining jobs, and Key said measures already announced -- including personal tax cuts starting in April -- would pump at least seven billion dollars (3.9 billion US dollars) into the economy.
Further measures would be announced on February 4, he said.
"We should use our balance sheet to take the rough edges off the recession. We've got to make sure we provide as much stimulus to the economy as we can, without blowing the budget," he said.
Helping small and medium-sized businesses would be a priority, and the government plans to bring forward infrastructure projects.
The employment summit to be held on February 27 will be chaired by New Zealand Stock Exchange chief executive Mark Weldon, and participants would be drawn from the business sector, the prime minister said.
"This isn't about inviting a whole lot of bureaucrats, it's about people who actually call the shots in the boardrooms and small businesses around New Zealand," he said.
"We're not sitting around with a bunch of people for a photo opportunity ... I want real actions to flow from it."
- AFP/ir
Posted: 15 January 2009 1732 hrs
WELLINGTON : New Zealand faces the prospect of no economic growth and a jump in unemployment this year because of the impact of the global financial crisis, Prime Minister John Key said Thursday.
Key said that the international situation had deteriorated since last month and that New Zealand was moving closer to the "downside scenario" put forward by the Treasury at the end of last year.
"If that scenario plays out, the economy in 2009 will stand still," he said at a press conference after meeting senior economic ministers.
He said unemployment could rise to 7 per cent later in the year from the latest figure of 4.2 per cent, and keep going up to 7.5 per cent in 2010.
New Zealand sank into recession in the first three quarters of last year due to the impact of a drought and the bursting of the country's long-running housing bubble.
Key said it would be vital to restore business confidence, which has sunk over the last year.
"You can get to the point where all economic activity stops because people just talk themselves into a negative funk," he said.
"It's important that we don't get ourselves into a doom and gloom spiral downwards."
The government will hold an employment summit next month to finds ways of maintaining jobs, and Key said measures already announced -- including personal tax cuts starting in April -- would pump at least seven billion dollars (3.9 billion US dollars) into the economy.
Further measures would be announced on February 4, he said.
"We should use our balance sheet to take the rough edges off the recession. We've got to make sure we provide as much stimulus to the economy as we can, without blowing the budget," he said.
Helping small and medium-sized businesses would be a priority, and the government plans to bring forward infrastructure projects.
The employment summit to be held on February 27 will be chaired by New Zealand Stock Exchange chief executive Mark Weldon, and participants would be drawn from the business sector, the prime minister said.
"This isn't about inviting a whole lot of bureaucrats, it's about people who actually call the shots in the boardrooms and small businesses around New Zealand," he said.
"We're not sitting around with a bunch of people for a photo opportunity ... I want real actions to flow from it."
- AFP/ir
