National leader Judith Collins is "staggered" after Finance Minister Grant Robertson said the latest GDP results confirming a recession don't reflect the wellbeing of the country.
Stats NZ announced on Thursday that gross domestic product (GDP), the total value of goods and services produced in New Zealand, shrank during the June quarter, showing the impact of the strict March and April lockdown.
It means New Zealand is now officially in a recession, the first time in 11 years, but the Finance Minister is optimistic because the 12.2 percent figure is not as bad as the 16 percent predicted by Treasury on Wednesday.
"The June quarter includes almost the entire time New Zealand was in alert level 4 which we moved into on March 26, so this result is not surprising. Going hard and early means that we can come back faster and stronger," Robertson said.
"We already know we have bounced back since the end of June, with the New Zealand activity index in July up 2 percent on the same period last year. Electronic card spending was also 11 percent higher in July than the same period in 2019."
Robertson also said the GDP recession result shows the limitations of GDP as a measure of the wellbeing of a country.
"While the economy slowed during lockdown, the benefits of moving into alert level 4 are not taken into account - including potentially saving thousands of lives, not overburdening the health system and getting on top of the virus so we could bounce back faster," he said.
"Our investments like the wage subsidy scheme, the small business cashflow scheme and business tax changes have cushioned the blow through this health crisis, and our focus now is on supporting the economy to recover and rebuild."
Collins said she was "staggered" that Robertson would say it's "all GDP's fault".
"What a failure comment from a Minister of Finance, I mean for goodness sake. The Minister of Finance should understand that people will feel happier when they have money in their pockets," she said on Thursday.
New Zealand is now facing its worst recession since the current GDP framework began in 1987. Since it began, the biggest fall in GDP was a 2.4 percent decline in the March 1991 quarter.
"This is the deepest recession in living memory. It is already having a devastating impact on Kiwi families. An extra 70,000 New Zealanders have lost their job since March, and a further 100,000 are forecast to lose their jobs in the next two years," National's Paul Goldsmith said.
"The lack of pragmatism and a clear plan from Labour has made the economic hole deeper and the impact harder than it needed to be. This economic damage was recorded in three months but will last for decades to come."
New Zealand's result compares to falls of 7 percent in Australia, 11.5 percent in Canada, 7.9 percent in Japan, 20.4 percent in the United Kingdom, and 9.1 percent in the United States.
"Today's figures show what New Zealanders, I'm hearing up and down this country, already know. The Government has failed to balance its approach to COVID-19," ACT leader David Seymour said.
"It's been too busy lecturing New Zealanders from the podium and hosing money at dubious projects when it should have been asking, 'What economic activity can we safely allow?'"
ACT wants to make sweeping cuts to pay back the billions of dollars of debt the Government has accrued, such as pausing Super Fund payments, returning benefits to pre-COVID-19 levels, ending the winter energy payment, and reversing Working for Families increases, to name a few.
Collins said Kiwis would have to "wait and see" if ACT's cuts will be considered by National. She said National will release its fiscal plan on Friday.
"I want to say this really clearly: it's very obvious that some of the decisions being made at the moment are not entirely made on health advice," Collins said.
"We have a plan to move our country forward in a positive way which people will understand is significantly different from the current more welfare, more taxes, more excuses that we get from Grant Robertson and Jacinda Ardern."
ASB analysts said the GDP decline was relatively close to its own and market expectations.
"Despite the elevated level of uncertainty heading into the release, there were no material surprises from our perspective. The falls were largest in industries most exposed to border closures or unable to operate under alert level restrictions."
The analysts said in terms of economic implications, it's not so much the size of the decline, but the size of the recovery which matters.
