By VERNON SMALL deputy political editor
The Government is talking up growth prospects for the economy and blaming misunderstandings about the Employment Relations Bill for a fall in business confidence.
Finance Minister Michael Cullen yesterday said proposed changes being considered for the bill should allay some business fears.
Dr Cullen gave an upbeat assessment of the economy, saying the Treasury would forecast slightly stronger growth in the June Budget than it had in the Budget Policy Statement in March. "I'm very confident we can realise those predictions over the next year and beyond ... It is important that we don't talk ourselves into a bit of a blue funk."
In March, Treasury forecast 3.7 per cent growth in the year to next March followed by 2.7 per cent and 2.1 per cent in the following two years.
Dr Cullen expected that the Government would be able to beat the improved forecasts, especially in 2002 and 2003.
"All the forecasts are for strong growth - the outlook is a very bright one. We can always talk ourselves into trouble but if we talk to each other clearly and honestly we have the capacity to realise a very strong economic future over the next few years."
He said media headlines had wrongly said the economy was nose-diving. It was in reality experiencing "a 5-plus per cent upward nose-dive."
"The danger with ... what I will call Armageddon economic analysis is that it becomes self-fulfilling if it infects and undermines business confidence," he told the Wellington Chamber of Commerce.
A Canterbury Employers Chamber of Commerce survey released this week has pointed to a sharp drop in business confidence over the past three months.
Previous surveys by the chamber have proved to be accurate indicators of economic growth.
Chamber chief executive Peter Townsend said the result was a wake-up call for the Government.
But Dr Cullen said the main negative impact on business confidence was a misunderstanding of the Employment Relations Bill fuelled by its opponents.
"The issue is not what is in the bill, it is what they think is in the bill."
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