Finance Minister Grant Robertson says it'll take decades to improve NZ's productivity

With economic growth slowing and the cost of borrowing at a record low, the Finance Minister has been urged in recent months to open the purse strings and spend up.

"Right now what we need is fiscal stimulus, right?" economist Shamubeel Eaqub told The AM Show on Thursday, urging the Government to literally give money to poor people.

"That's the big thing that's going to work. The Reserve Bank's monetary policy's impotent. It's not going to work. At these low rates, nothing matters."

But Grant Robertson on Saturday said he has been spending up.

"We are investing significantly more," he told Newshub Nation.

"We have a Budget that came into life on the first of July that has $3.8 billion worth, per annum, of new spending in our operating area - our public services; around $10 billion of spending on capital expenditure, infrastructure, new money. 

"That's a significant investment - way more than what was planned by the previous Government, and indeed more than we planned last year, so we are beginning that process. We're keeping a wary eye on what's happening in the rest of the world, and if we see a further deterioration in economic conditions, we will act in response to that."

GDP growth slipped to 2.1 percent this week, the lowest since 2013. National leader Simon Bridges said on Twitter Robertson would "no doubt keep blaming everyone but themselves and their failed policies for the drop".

But it's higher than the OECD average of 1.6 percent growth over the 12 months to June, and on par with the latest quarter across the economic bloc. 

Robertson brushed off criticism the present Government had cancelled much of National's planned infrastructure investments, saying "many of them were just proposals and ideas. There actually wasn't money set aside for them... We're spending significantly more money than had originally been planned, but we will keep a close eye on what's happening, because global conditions are deteriorating, and if they deteriorate further, we will act."

Per capita, New Zealand's GDP has been going sideways for about five years, with the growth largely dependant on growing the population. Robertson said improving this statistic is a "decades-long challenge".

"That's why we're investing in skills for things like fees-free and the training programmes that we've got. All of those things are important shifts for the New Zealand economy, but they will take time to bed down."



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