Prime Minister Jacinda Ardern has defended her Government against claims its policies are dragging the economy down, insisting global factors have "played a part".
National leader Simon Bridges challenged Ardern on the economy in Parliament on Tuesday over reports that suggested growth is slowing.
ANZ's Business Outlook Survey for March showed the New Zealand economy is "quietly losing steam" and that respondents expected general business conditions to deteriorate in the year ahead.
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Bridges also pointed to the Treasury's Monthly Economic Indicators March report. It said "uncertainty around upcoming policy changes is holding back investment" - particularly those in the agriculture sector.
Bridges said the report indicated uncertainty for businesses around "factors such as weakened consumer sentiment, rent inflation, the rising cost of living and uncertainty around the capital gains tax" which have "all weighed on the economy".
But Ardern said the Government has responded to those issues through a number of changes, including dropping some ACC levies and pursuing free trade agreements, as well as proposing changes to the country's skills and trade training.
"This is the kind of investment and focus that a Government should be making, and this Government is making," Ardern said.
She linked the economic slowdown in New Zealand to global factors. She pointed to Australia, Canada, the European Union and Japan, saying they are "all experiencing growth at a lower rate per quarter than what New Zealand is".
There are indeed concerns about the global economy. IMF managing director Christine Lagarde said this week that global growth has lost momentum since the start of the year, which has left the global community in a "precarious" position.
Lagarde said increased stimulus from the Chinese government would benefit the global economy, but warned Britain's exit from the European Union and high debt in some countries, as well as trade tensions, risk the global economy dropping.
The Prime Minister said even China, which has had "significantly higher growth rates" than most, has "experienced some softening".
She said China's trade tensions with the United States "does play into the commentary we've seen from the likes of Christine Lagarde over why there is a slowing rate of growth among economies that we liken ourselves to, like Australia".
Bridges then turned back to the domestic economy, asking Ardern: "Does she accept that in addition to global factors, that the weakening of New Zealand's economy is due to domestic factors and her Government's policies?"
The Prime Minister responded: "I, unlike the member, believe that, actually, the global environment plays a significant part in the outlook amongst our businesses and their investment decisions."
The debate comes as Finance Minister Grant Robertson will join other finance ministers and central bankers in Washington, DC, next week for meetings of the IMF and World Bank, where the global economy will be a hot topic.
As an outward-facing export nation, Robertson said New Zealand is "not immune to this global uncertainty and we have to bear that in mind as we transition to a more productive, sustainable and inclusive economy".
But he said reports indicate the New Zealand economy "continues to outperform its international peers".
Newshub.
