Grant Robertson believes there is a "case for optimism" despite the ongoing effects of COVID-19 and the war in Ukraine causing a "significant cost of living crisis" for Kiwis.
The Finance Minister's speech on Thursday laying out the "unique advantages" for New Zealand's economy comes after a series of hiccups for the Government, including its much-hyped cost of living payment going to people overseas and the short-lived - but widely criticised - plan to extend GST to large managed fund providers.
He also got in ahead of the latest Gross Domestic Product (GDP) figures being released, which economists predict will show only slight growth in the second quarter of 2022. That would mean we've just narrowly missed being in a technical recession, but, as one economist put it, the economy is "stagnant".
Robertson was well aware of the "threat" of recession when speaking to attendees of a Westpac business breakfast and also acknowledged that inflation has caused "hardship for many".
He laid out the international context he said drove much of this, including low global growth, energy price hikes, supply chain blockages, and a slowing Chinese economy stifled by lockdowns.
"Here at home, we of course are not immune from the impacts of all that," he said.
However, Robertson cited a "frank lesson" from the Art of War: "In the midst of chaos there is always opportunity".
"I articulate the state of the world not to cause despair, but to define the turbulence so that we don't allow it to define us," he said.
"It would be as remiss not to speak to it, just as it would be to delay confronting it. We can confront it, aware of the challenges but with economic advantages that are, in many cases, unique to us in New Zealand."
He argued New Zealand's economy is well-positioned in an "increasingly turbulent global situation" and put forward a "case for optimism" as the country drops its COVID restrictions.
"We are a country that is in demand, even more so following our people-first COVID response," the minister said. "Our goods exports are near record highs, because, even though the global economy is struggling, what we offer to the world is something the world needs."
Robertson told the audience that people are returning to ski slopes, international student enrolments are coming back, New Zealand has secured Free Trade Agreements (FTAs) with the United Kingdom and the European Union, and the Government's building more homes than in decades.
"I know that labour force shortages are of significant concern to businesses, but there are green shoots here too. As the world grapples with skills shortages, our Reconnecting Strategy and Immigration Rebalance are designed to attract the people we need," Robertson said.
The Government's new immigration settings have come under some fire - particularly from the health sector - for not allowing some individuals quick pathways to residency.
But the minister said more than 7200 job check applications have been approved "allowing employers to go out and recruit internationally for over 48,00 positions".
Robertson also highlighted the Prime Minister's various international trade trips, saying businesses won't be left alone to build resilience and diversification.
"Government helps build New Zealand's credentials too, and we'll keep doing that. But we all have a responsibility in these times to chart a course through some pretty rocky global seas together," he said.
"Despite all that is in front of us, I believe without a doubt that we will succeed."
Going forward, Robertson said it was possible for New Zealand to "build on the success we've had", repeating that "from chaos comes opportunity".
As Finance Minister, he said he will keep a focus on maintaining "responsible debt levels and ensuring our path back to surplus".
"This must not be done through austerity cuts to spending. These would do more damage than any problem we are trying to solve," he said.
He noted the Government's five-point economic plan: "unleashing" business potential, strengthening international connections, increasing capabilities and opportunities, supporting Maori and Pacific aspirations and strengthening economic foundations.
"As the global economy changes, we will change with it. We've shown during COVID our ability to remain agile and change when the conditions do.
"We will need to face what the global economy is about to throw at us. We will be targeting our investments to where they will pay the greatest dividends."
However, the Government's been hit with a number of criticisms over the last month as the cost of living continues to bite.
With inflation at a 30-year high, the Government began sending out its cost of living payment in August, intended to support low and middle-income New Zealanders not supported by other initiatives, like the Winter Energy Payment.
However, some money went to foreigners and expats overseas. The Auditor General wrote a scathing letter on the issue, saying the Government's focus on quickly getting the money out the door meant it wasn't as accurate with who it sent the payments to.
There was also uproar when it emerged the Government intended to extend GST to fees of managed fund providers, including those who oversee KiwiSaver schemes. Ministers were warned the costs would likely be passed on to customers, but went ahead with the proposal anyway. Following criticism, and no support from smaller providers already paying GST, the idea was scrapped.
The Reserve Bank has been aggressively dialling up interest rates to try to get on top of inflation before it becomes too entrenched. In its latest forecasts, the bank predicted inflation wouldn't return to the target range of between 1 and 3 percent until June 2024, while the Official Cash Rate would peak at 4.1 percent next year.
The latest food price data out on Wednesday showed the largest increase in 13 years, with fruit and vegetable prices a large driver of the hikes. The Government is currently implementing a number of Commerce Commission recommendations to grow competition in the grocery sector.
When inflation began jumping earlier this year, the Government was initially hesistant to say there was a cost of living crisis, but has since taken a number of steps intended to help Kiwis, such as the cost of living payment, cutting fuel taxes and halving public transport fares.
