nz's economic future

I think we all need to consider a few specific points. The World has dramatically changed and as such, Economists (and all us) cannot apply the same logic of the past, to the future.
I am not really sure what our Country will meet on the economical road ahead. But we are seeing small pieces of similarity to what took place at the end of the Spansh Flu. Apart from one large missing piece. The World today is not trying to recover and rebuild from the likes of WW1.
At the end of the Spanish Flu, some 70 million people had been taken out of the pool of Humanity. The world experienced a massive labour shortage. The Wealth or 70 to 100 million people was effectively up for grabs you could say. The result was that the Word experienced a massive period of "luxury" we now call the 20's. The down side of the 20's era was that there was little to spend their new gained wealth on, like all the toys we have today. So people became bored and created the "partying" atmosphere and lifestyle of the 20's.

In my view, Economists are currently making one big mistake. They are not taking into consideration that the World outside of NZ is temporarily on Hold and the music quitely playing in the background. Once the music stops and Countries get back toward normal again, the first issue they will come up against is a labour shortage. Actually that is the second thing. The first is already happening, being a goods shortage.
Back in the time after WW1, the Flu and then WW2, NZ was in a prime postion of being able to help restock the World by selling Meat and products. That will not be the case today, as Europe and other Countries are not all piles of Rubble like last time.
Just how we come out of this I think is a guess at best. Most certainly economists cannot take the old standard and apply it today. In fact they made that mistake with the first wave of Covid. We ended up having much higher GDP than any of the economists predicted and the Gvt suddenly found they had money they were not expecting. That may or maynot happen again. Many suggest it won't and it certainly won't if Omicron has it's way with us. But then again, we might come through unscathed as well. It's all a guess.
The other part to ponder in the equation is that we are currently experiencing a labour shortage. For instance, the Trucking indutry is screaming for drivers. Farming of labour intensive fruit picking has often meant crops being left on the ground to rot, because there are not enoug pickers.

As I said, I don't have an answer as to what will happen. But coming out of this is going to create opportunity as well. Just because we have seen Businesses have to close their doors, doesn't mean those Businesses will never reopen again. It may be a new owner, but if there is a need in the market, someone will take the opportunity to fill the position.

The main reason we have seen higher GDP is that the economy has been pumped full of cash (taken from future tax payers) and low interest rates. We have a massive asset bubble across housing, cars boats etc.

We and for example the USA are now seeing the consequences of excess demand and constricted supply i.e. inflation. This will now compound into already inflating costs, wages and salaries, fuel etc. Already there are articles about how employees want more money, this will escalate.

Unfortunately we are likely to head into a requirement for fiscal restraint and tighter monetary policy settings. Our current RB boss, Adrian does not have the stomach for the harder choices that are necessary to compensate for a free spending government. Just wait until next year and see how many lollies Labour start throwing around to try and win the election.

Yes and No.
GDP or Gross Domestic Product, is defined as the total market value of all final goods and services produced within a country in a given period.
 It includes private and public consumption, private and public investment, and exports less imports.
It does not take into consideration cash put back into the Economy as such. But if that cash aided in a Business making a profit, then yes that is related to GDP.
However, there will be tax to pay on that profit and that tax will not be seen by the Gvt till (in theory) the 7th of Feb the following year.
So no, the higher than expected GDP did not come about from the Gvt pouring money into the Economy. The economy performed better the year before. That is before Covid was a glint in the eye of the Bat with the runny nose.

Reasons for the better tax take was due to seveal reasons. One was IRD's new computer system. Another was many loopholes being closed up. And the rest was just growth. Overseas trade has increased and will continue to increase as other Countries remove tarrifs and so on.

Yes it is correct that throwing money into an economy can cause inflation to spike. But this time, inflation has spiked for many other reasons. Shipping costs and supply issues have increased product costs dramatically. Mortgages for Homes over a million mean People need to earn much more to pay the mortgage and still have McD's and KFC and the Boat and Jetski. Labour is in short supply, so Employers are having to pay much better to get and retain staff. And with the increases in Wages and Salaries, there is an increase in consumerism, so our GDP increases. And all that extra earning results in a higher GDP and yes, inflation and the RB then steps in a raises Interest to curb that spending and ..................

IT all goes "pear shape" is when we have a shrinking economy and yet still have all the inflationary issues. People can't meet Mortgage payments etc and house prices fall and inflation rises and people go the the wall and we see mortgagee sales and so on and that is all bad stuff.

Your debating with a double tradie, epidemiologist, virologist. , economist, bus driver. You haven't got a chance.

Labour is making a pretty good show of showing all those basic economic theories are right, while trying to show all the old disproven ones were actually OK.

GDP is not tax, it is a measure of economic output. GDP is not calculated from tax take. You are conflating the governments financial accounts with the country's national economic accounts. They are not the same thing. Former macro-economist.

But GDP is rought with issues ..
GDP deals in aggregates; GDP per capita in averages. In an age where a huge cause of social dislocation is inequality, GDP has nothing to say about distribution. Averages are misleading. Medians are better than means. A rise in average GDP could actually be retrograde, if it leaves 99% of people resentful at how the 1% is making good

In general, GDP measures only cash transactions. In Europe that includes heroin and prostitution. However, volunteer work, housework or looking after an ageing relative count for nothing. GDP has skewed priorities.

In poor countries, the informal sector is practically invisible to GDP. Yet in much of the world, the informal economy counts for most. Monitoring economic activity from space, through satellite images of nightlights, might be more accurate than on-the-ground GDP, academic studies have found