Incomes in New Zealand are dropping on a per-person basis, Finance Minister Bill English has admitted.
Although figures out yesterday showed strong economic growth – at 2.5 percent overall – much of that had been driven by strong immigration flows, with a net gain of about 65,000 people in the past year.The real national disposable income per capita fell 0.4 percent for the year. But Mr English told Morning Report in the long-run the numbers would shift.
“You’ve got a big drop in national income, because dairy prices are down. “At the same time you’ve had surprisingly high migration numbers. So it’s not surprising that when you work the figures you get a drop in national disposable income.
“Now when you look out ahead you ask yourself ‘is it likely that dairy prices will drop further?’ Probably not.” Mr English said he did not think too many people were moving to New Zealand, but he expected migration would slow in the future. He said rates of immigration had stayed high for longer than expected.
He said low inflation and a surprisingly resilient labour market after the Christchurch earthquake were also factors. “The labour market turned out to be quite a bit more flexible than we were expecting.”
He said he thought New Zealand’s economic growth was in a “reasonable position to keep growing at 2 to 3 percent”.
-more at RNZ