“A tough year will tell me the message is sinking in, savings rates are lifting and resources are shifting to more productive investment,” said Bagrie back in January. “This will be about setting the scene for sustainable and robust expansion. The period in the lead-up to the global financial crisis was abnormal, characterised by excessive risk-taking, credit growth and double-digit asset price increases. This is unlikely to be repeated again. But if we try it on, then odds are we’ll see another recession couple of years out.
“The medium-term story for New Zealand is very positive. We are rich in natural resources including commodities, water and natural beauty (think tourism). The world needs food. We sit on the doorstep of the world’s fastest growing region. China now has middle class that is bigger than the entire population of Japan. This presents tremendous opportunity, if we dig in and do some hard yards over the coming years first. Given New Zealand’s huge amount of untapped resources and potential there is real opportunity to take things by the scruff of the neck and define NZ Inc for the next 50 years. Or we can settle for things as they are, but watch our kids continue to depart for richer pastures.”
