National leader Simon Bridges claims that by 2022, every New Zealander will be on average $1600 worse off a year because of the Government's "anti-growth" policies.
Mr Bridges made the comments after the New Zealand Institute of Economic Research (NZIER) released its quarterly predictions on Wednesday, describing a reasonably solid economic outlook, but with increasing downsides.
NZIER's latest quarterly projections show growth slowing to average three percent over the next five years. The institute has also shifted its outlook for an official cash rate (OCR) increase from 2019 to 2020.
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"Although growth is expected to moderate on the back of a continued slowing in population growth, we forecast annual GDP growth to average just under three percent over the next five years - still a respectable outcome," said NZIER principal economist Christina Leung.
However, Ms Leung made the point that businesses "are feeling increasingly pessimistic about the economy, with deteriorating profitability a concern for many".
Finance Minister Grant Robertson told Newshub GDP growth of around three percent in the coming years is in line with Treasury and the Reserve Bank of New Zealand (RBNZ) forecasts. He said it's a "solid result".
The Government shares concerns around international risks, Mr Robertson said, and is working with New Zealand business to "modernise and future-proof" the economy.
"We are addressing the issues they raise with us around access to skills, unlocking regional growth, and building infrastructure. Our focus is on transforming the economy to make it more productive, sustainable and inclusive."
But Mr Bridges isn't convinced, slating the Labour-led Government's "bad economic policies" in a statement, where he says New Zealanders will be "thousands of dollars a year worse off".
"In the last three months alone, NZIER has revised down their GDP growth forecasts which means every man, woman and child will be $1600 a year worse off on average by 2022. That is $6400 for a family of four," he said.
Prime Minister Jacinda Ardern said on Tuesday there are a number of positive signs in the economy which makes the idea of low business confidence "a paradox". She said the Government has seen low unemployment and low external debt.
Mr Bridges said the reason GDP growth is slowing is because the Government has "imposed a wide range of policies that are bad for growth". His comments came as NZIER said businesses in New Zealand are "feeling more downbeat about the economy".
"Costs are rising, and with businesses finding it difficult to pass these on to customers in the form of higher prices this is impacting negatively on profitability," NZIER said.
"The recent announcement by Fonterra of a downward revision to its payout and dividend will also dampen confidence in the rural sector."
Resident and non-residential construction demand remains strong, the independent think-tank admits, but capacity restraints "limit the extent to which construction activity can ramp up".
"Extremely tight margins in the construction sector have seen major construction firms exit the industry, raising questions about who will lead the construction of large-scale developments. We expect a more protracted construction cycle as a result."
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Ms Ardern is fighting to maintain the Government's social and environmental message while also adhering to business needs. On Tuesday, she announced the formation of a new business council aimed at strengthening the relationship between business and Government.
She's received support from Air New Zealand chief executive Christopher Luxon, who will be chair of the council, which will provide a forum for business leaders to advise the Prime Minister and the Government directly.
Business New Zealand chief executive Kirk Hope has also come to Ms Ardern's defence, welcoming the new business council, and agreeing with Ms Ardern that it will build closer relationships between Government and business.
But Mr Bridges has criticised the Government for creating "another working group". He believes the Government needs to "understand that lower growth has real consequences for New Zealand families".
Newshub.
