Paul Holmes' fears for the economy in his column last weekend provoked a flurry of responses from readers.
Your article was scary, horrifying and down to earth. Unfortunately, life here in the UK is exactly the same.
- Ann Page, East Sussex, UK
No one really has the answer. Labour let the finance companies collapse, and over-taxed and over-governed us. National has not done much since it got in and is really only playing with things. Bill English hopes that by cutting taxes and expenditure the economy will grow. What amazed and worried me was that when the government called that jobs creation summit last year, all of those great minds could not come up with any good ideas to create jobs now. Some things that keep New Zealanders poor are local government rules and regulations and rates, and high electricity prices.
- Digby Green, Tauranga
Interest rates high
New Zealand is beholden to the export market and if the value of our produce in New Zealand dollars is too expensive overseas then the primary sector will suffer. This in turn will feed into the urban cities and unemployment will deteriorate further. Our interest rates are too high and this attracts interest in the NZD, much to the frustration of everyone. I would direct my attention not to the politicians - they can't do a darn thing - instead it should be directed at the Reserve Bank to reduce the yield carry on New Zealand and therefore the attraction for investors to simply just keep pushing up the value of the NZD.
- John Fulton, Surrey, England
Worse to come
Many self employed people I know are really feeling it right now, significantly more so than last year. The data is so far behind the reality, it will not be until October when the June/July numbers come out and, like you, I believe they will be far worse than last year. I am a retailer, my business opened last June and even though our year-on-year sales in July were up (I guess I am one of the lucky ones), I have friends in retail who have stopped putting a brave face on things and are now looking like they carry the weight of the world on their shoulders. I have friends in real estate who say the market has ground to a halt; friends in cafes who say people are not coming in like they used to; friends in retail who say sales are way down on last year, and people in service industries getting absolutely no business. This is way worse than last year - the recession has a definite sting, and it is paralysing our country.
- Stu Jordan, Auckland
Lack of knowledge
I think you are quite correct that the economy is struggling. Unfortunately our policy makers don't get out much and don't understand this. They obsess about inflation and returning interest rates to "normal" instead of trying to work out how a heavily indebted and capital constrained country can move forward. As you note, they are basically clueless because really the only thing they can do is something they don't want to even consider. You say governments cannot invent money. That's not quite true. They can create money if they choose to do so. At the moment that process is undertaken by the commercial banks when they create new loans and add to the money supply. This supply has been contracting for 18 months now. That means there is less money in the economy. That explains why businesses don't have enough cash to pay each other. Yet nothing is done about this. Why? Because our esteemed policy makers know only what they know. The government can issue new money into the economy anytime. This can be done interest-free as opposed to bank debt which carris interest. If this doesn't happen soon the economy will continue to contract.
- Raf Manji, Christchurch
Better in China
The New Zealand economy is in big trouble. I have been in China for two and a half years and I am thinking of coming back to New Zealand at Christmas - although if the job situation is so bad that may not happen now. I remember sitting around the smoko table four years ago and saying that the spending that was going on could not be sustained and that it would have to come to an end. Everyone at the table thought I was wrong. I am not trying to say I told you so but the spending culture that seems to have gripped our fine country is a disappointment to me and I am trying to instill in my daughters the need not to spend on aimless and worthless things - although I feel I am fighting a losing battle. Our politicians can do nothing in this crisis except try to soften the blow if they can.
- Richard Power, China
The economy is in big trouble. I am a sheep and cattle farmer and we are going broke. If my wife didn't work we could not pay the bills. The crap we get from the overpaid politicians and good-news boys is driving me mad. My only hope is to sell out to the dairy farmers and go join my four children overseas.
- John Mackay, Dannevirke
If Paul Holmes wanted the rest of us to join his blind funk about the economy last week, sorry it won't happen. That's because there really are far too many reasons for staying upbeat. The outlook for New Zealand's economic future is brighter than for most. Holmes whingeing in public on and on, and wringing his hands and pulling the rest of his hair out, and blaming the commentators and politicians is really too awful. Yes, it is sad Paul can't sell his olive oil in New Zealand at present because it is good oil. But way overpriced, and olive oil from Chile, Spain, Portugal, Turkey and so on, can easily be as good, and far cheaper. Maybe Kiwis are discovering that. Maybe that's why Paul can't sell it locally. He could try exporting his oil.
- Gilbert Peterson, Communications Manager, Employers & Manufacturers Association, Auckland
Optimism the key after tough winter
It is definitely tough out there and New Zealand retailers are feeling it this winter. Household budgets are being hit from all directions with fixed costs up and wages and salaries flat. Consumer and business confidence remains very wobbly. However I want to offer readers three rays of light. Across-the board personal tax cuts kick in on October 1. Dairy giant Fonterra is promising its 11,000 farmer shareholders a solid payout this coming season, and after months of uncertainty Auckland will soon have a new council and can finally start planning its future in a unified way. Yes this winter has been damn tough, but let's pin some optimism on the coming summer. It can only help.
- Cameron Brewer, Chief Executive, Newmarket Business Association
I'm very sorry that Paul Holmes had a bad experience at The Food Show. As the event's CEO I can report that sales by exhibitors were not down on last year, in fact most exhibitors have reported higher sales. The Village Press, another olive oil producer from the same area as Holmes sold out. Overall attendance was only slightly down on last year. We certainly could not take the result as an indicator of economic gloom or the sobriety or otherwise of what Mr Holmes calls "stockbroker types".
- Dona White, CEO, North Port Events