John Pask: BusinessNZ Chief Economist on the economy emerging from stagnation, the debt levels

A view the Government has to get a handle on debt, with forecasts showing the economy's now finally recovering. 

BusinessNZ's Planning Forecast projects the GDP will grow at just under 3% per year to 2027. 

But it warns that an ageing population's set to drive superannuation and healthcare costs to unsustainable levels, consuming all income tax revenue by the late 2040s. 

Chief Economist John Pask told Mike Hosking we’re not getting back to surplus until 2028/29, and even that’s touch and go. 

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Episode Transcript

Speaker 1 (00:00):
New economic forecast to have a look at comes from
Business New Zealand. They're calling a GDP number of just
under three percent by the end of twenty seven. They
see momentum coming in manufacturing, construction, tourism. They talk of
asset sales, which is interesting. John Paska is the Business
New Zealand chief economist and is well, there's John, morning
to you.

Speaker 2 (00:16):
Good morning.

Speaker 1 (00:17):
Having had a good look at this report this morning.
Year in the retirement healthcare camp of people who say
this is all going to be unaffordable and we're going
to need to make some fairly serious decisions, do you
reckon we're up for it?

Speaker 2 (00:29):
Well, I think that it's the success the governments are
ready sort of kick this can down down the road.
But I think there's more and more public debate now
that not only from you know, Treasury, but even healthcare
organizations and age care that they realize that this is
going to have to be addressed, and sooner rather than

(00:52):
later would be desirable.

Speaker 1 (00:53):
And what about the government idea around debt. I mean,
I'm so glad people are starting to talk about debt.
I mean, the debt is just a problem. I mean,
we're not even getting back to surplus until twenty eight
twenty nine, and even then it's touch and go. Do
you think people get that bit.

Speaker 2 (01:06):
Well, I think it's been We went through obviously difficult
years under COVID, but I think there was almost like
an impression that, you know, we had low levels of
debt and it wasn't a problem of the sort of
government borrowing up the eyeballs and you consider it buying
the government to bail you out. And I you know,
once you start dealing with really really big numbers, people
know the price of the copper coffee, but when you
start talking about you know, fifty or one hundred billion dollars,

(01:28):
there's their eyes glaze over and they can't really get
in that space. So I think unless you actually sort
of try and simplify it and sort of say, look,
you know, your average household is basically in debt of
you know, a couple hundred thousand or whatever, then that
sort of gets a bit of reality into the process,
as it were.

Speaker 1 (01:45):
Are you for rasset sales or the regeneration of income
from assets?

Speaker 2 (01:50):
Well, I think you have to look at everything and
it's in its own merits. It's not a case of
you know, just simply selling off the family silver. But
you've got to sort of really question, you know, why
do we have stay owned farms, you know, potentially state
owned electricity generation and so on. So and it's not
only that, but it's actually getting more efficient use of
resources and also potentially opening up areas of government monopolies

(02:14):
to competition. So you know, private sector generally has greater
incentives than the public sector and are not not prone
to political motivations. So generally the private sector does better
overall and over time in terms of managing assets.

Speaker 1 (02:29):
Regrowth GDP is next year real, it's going to happen.

Speaker 2 (02:33):
Yeah, yeah, no, no, it's I think if you're looking
at you know, there's a lot of indicators coming out,
both both official from stats but forward looking indicators that
show really across the board, things are hanging a lot
more positive positive. So you know, obviously it starts with
business confidence and consumer confidence. Business confidence is high. You know,
I've always taken some of these confidence surveys with a

(02:55):
grain of salt because people can you know, it depends
with the all blacks one or not, and that can
determine whether I feel positive. But it's actually the data
what's sexually happening at the individual enterprise level. That's the
important stuff and that's sexually improving.

Speaker 1 (03:07):
Good to hear, John, Well done. John Pascu is the
Business New Zealand Chief Economist.

Speaker 2 (03:11):
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