Likewise the Christchurch rebuild got into full swing and probably added a further 0.6 per cent. So real GDP growth per capita, excluding the one-off effects of surging commodity prices and the Christchurch rebuild, was about 0.3 per cent. Not quite so flash.
The big problem is that the quality of our GDP growth has been low.
GDP growth per capita is a much better measure of increased prosperity than simple GDP growth because it adjusts for the growth in our population. New citizens place demands on our social and physical infrastructure and the costs of those demands need to be met from the overall economic pie.
Given that the media and most economists tend to focus on overall GDP growth, it's no wonder politicians are hooked on the drug that is immigration: it's an easy way to boost perceived GDP growth, despite significant cost to our infrastructure. Those costs tend to be hidden in the short term; pressure on housing, demand for social services and further congestion on motorway and transport systems already at breaking point.
Given we are a small, open economy, we need to be smart about what we do. The world is finely balanced at the moment: global growth is tepid and China's growth in particular is slowing rapidly which may cause serious problems.
Government debt levels globally are at record highs, Europe is a mess and Australia is facing real economic challenges as unemployment threatens to rise to 7 per cent by the year's end.
I sense that as a nation we lack a plan and there is a real absence of leadership at both a local and a national level. We need to ask: What sort of economy do we want and how do we achieve it?
Let's look at a number of areas where our policy settings may be sub-optimal. Firstly immigration. Despite our unemployment rate trending up to 5.7 per cent at the end of last year, and well above pre-global financial crisis (GFC) levels, the net annual inflow of migrants has doubled to a record 54,700 in the year ended February 2015.
Immigrants bring new ideas, connections and an entrepreneurial spirit to the country's long term benefit. But is it sensible to allow in record numbers given the pressure on housing and infrastructure?
Our focus tends to be on simple GDP growth, but should we be more focused on per capita or lifestyle measures? Are we valuing our citizenship and lifestyle highly enough or are we selling it too cheap? Should we be training our own people more effectively to fill vacancies?
Secondly, more than 20 central banks, including the ECB, have cut interest rates so far this year, but New Zealand has some of the highest real interest rates in the developed world and an economy that may slow quickly from this point. Headline inflation is effectively zero.
Our interest rates have artificially pushed up our exchange rate which is damaging the productive part of the economy. Last year's increases in the official cash rate were a mistake and would probably be reversed if not for the exuberant Auckland housing market.
Apart from sensible steps to aid a more efficient supply-side housing response, plus targeted immigration and limiting ownership to NZ residents, we should also limit the amount of bank debt available.
The big four banks are very heavily leveraged to one of the most overvalued assets on the planet - Australasian housing. As we saw in the GFC, banks are effectively tax-payer guaranteed.
The average return on equity among the big four is currently around 16 per cent which is remarkable given the risk-free rate is about 3 per cent.
It's a technical area, but the amount of regulatory capital held against residential mortgages should be increased substantially, not just tinkered with around the edges as is currently happening. This would limit the amount of debt available for mortgages.
Thirdly, New Zealand, particularly Auckland, desperately needs massive expenditure on infrastructure.
This demand happily coincides with a time when global long-term interest rates are at all-time historic lows and the world is awash with investors keen to fund long-term infrastructure projects. Yet our progress in bringing in private sector investment to help fund these infrastructure needs remains poor.
It is instructive to look across the Ditch. Australia has attracted around $65 billion in public-private partnership infrastructure funding since 2012 while New Zealand has attracted only $1.5 billion, more than half of which was for the Transmission Gully roading project in Wellington.
Australia has also used the high asset price environment to realise excellent value for tax and rate payers by releasing equity (though not control) in state assets such as ports. We know there is a wall of capital willing to invest in New Zealand, we need to broaden our funding models and provide investor-ready information and vehicles to make this happen.
I firmly believe we live in the best small country in the world, but we need to start thinking smarter about the type of country we want.
Paul Glass is principal at Devon Funds Management This column is general in nature and should not be regarded as specific investment advice.
