In today's email, we look at the latest National Accounts which show productivity remains woeful, we ask just how many new social houses are going to be built in Auckland, and we detail why both Uber and taxi firms are unhappy with the latest recommendations out of the Transport and Industrial Relations select committee.
1. Where's the productivity?
The economy came off the boil in the December quarter and is stubbornly refusing to produce much GDP growth per capita.
National Accounts published yesterday for the 2016 year show a fast-growing overall economy, but one that is not generating much output growth per person.
Record high net migration and a buoyant services sector helped expand the economy and offset weak manufacturing and farm output in the December quarter.
Productivity, which is the measure of output growth per hour worked and is the ultimate driver of wealth, remains woeful.
It is the great conundrum of the New Zealand economy: the shops and cafes are full, the motorways are packed, construction is roaring and yet wages are soft and there are shortages of housing and skilled workers and a squeeze on disposable incomes.
2. Migration-fueled growth
The GDP figures reinforced the picture of an economy growing because of strong net migration, construction, a tourism boom and a strong-growing business services sector.
But it also showed real GDP actually fell 0.2 percent per capita in the December quarter. It was up just 0.6 percent from the same quarter a year ago and was up just 0.9 percent for the full year. GDP per capita also rose just 0.5 percent in calendar 2015.
These sorts of annual GDP per capita growth rates are half the annual average rate seen since 1993.
It's mostly about population growth, which was 2.1 percent in calendar 2016. This plays straight into the hands of the Opposition, which argues strong economic growth is simply being bought by record high net migration that is creating its own infrastructure and housing cost pressures.
3. Less than expected
But the total growth was also underwhelming. The 0.4 percent seen during the December quarter was less than economists expected and the stellar growth rate of 1.1 percent previously booked for the September quarter was revised down to 0.8 percent.
Growth in the December quarter from the same quarter a year ago was 2.7 percent and the growth for full 2016 from 2015 was 3.1 percent.
However, the weather played a partial role in part of the softness in manufacturing output, with dairy volumes hit by a very wet spring restricting grass growth in the Waikato in particular.
The New Zealand dollar fell after the data came out because it made an early Reserve Bank rate hike less likely, although the currency had risen earlier in the day because the Federal Reserve's 'dot plot' projections for future interest rates was unchanged from its last publication. It still only sees three rate hikes this year and three next year. That made the US dollar slightly less attractive.
4. The political dimension
The Opposition leapt on the numbers showing per capita growth was weak for the year and negative for the quarter.
Labour Finance Spokesman Grant Robertson described the figures as showing New Zealanders were working harder and harder for less.
"A slump in productivity of this nature exposes National’s failure to build a resilient and adaptable economy," Robertson said.
"What this shows is that population growth, rather than improving productivity, is propping up the New Zealand economy," he said.
Finance Minister Steven Joyce focused on the overall growth being stronger than most other developed countries.
"We have seen particularly impressive growth in construction and services partly offset by a fall in primary production and the related manufacturing sector," Joyce said.
5. 'Use different goalposts'
Green Co-Leader James Shaw called for a change away from GDP as the main measure of progress and pointed to his private member's bill that creates a range of development indicators.
We'll have a deeper look at this issue of using other measures for economic and social performance at a later date. Treasury has developed some living standards frameworks, but they are barely used by the Government in its rhetoric about the economy's performance.
6. 'Over-promising and under-delivering'
Just how many new social houses is Housing New Zealand building in Auckland as part of the Government's often-promoted ramping up of housing supply?
Labour Housing Spokesman Phil Twyford has more than a few doubts that the numbers promised by the Government for building in Special Housing Areas are actually being delivered.
Twyford supplied data from an analysis of Housing New Zealand's consent applications to the Auckland Council for Special Housing Areas that he said showed that an announcement in October last year by then Housing NZ Minister Bill English of an extra 1,297 homes meant just 770 new Housing NZ homes would be built.
"They spend more time spinning than they do actually building houses," Twyford told Newsroom, adding that the October announcement was more about submitting consents before the expiry of the SHA Act than announcing a true ramp up.
Labour's researchers went through Housing NZ's resource consent applications and compared them with what was originally estimated for the land.
They said the original 1,297 was whittled down to a net 770 new Housing NZ homes on the SHA land because 356 homes were being demolished and 174 would not be held by Housing NZ.
7. 'It's 2,250 all over Auckland'
A spokesman for new Housing NZ Minister Amy Adams did not address the Labour analysis and referred me back to Housing NZ. I'll be approaching them today to find out more.
The spokesman said Housing NZ would add 1,400 new social housing places in Auckland over the next three years and Community Housing Providers will add another 857. This is across Auckland, including both SHAs and other areas.
"Overall in Auckland this will result in around an additional 2,250 social housing places in the next three years. This is on top of the 800 affordable and market houses that Housing NZ will build in Auckland," he said.
He said the net movement included houses built by both Housing NZ and Community Housing Providers.
8. 'Only 3 stars for Uber'
Our National Affairs Editor Shane Cowlishaw reports from the Transport and Industrial Relations Select Committee that Uber will be far from pleased with committee’s assessment of the Land Transport Amendment Bill.
Uber already has a testy relationship with the Government, after ditching the need for its drivers to hold P endorsements and essentially sanctioning breaking the law.
But its hopes for other concessions took a hit when the committee reported back yesterday recommending the Bill require Uber drivers to keep logbooks of their work like regular taxi drivers.
Perhaps more interesting was the committee's refusal to drop a requirement that a person “in control of a service” must live in this country. This puts Uber in a sticky situation; the service is run through an app that is developed and maintained overseas.
How the fine points of this bed in remains to be seen, but there will no doubt be more frantic lobbying on Uber’s part.
But Uber’s opponents are unhappy as well. Taxi group Blue Bubble is upset the committee upheld the decision to drop mandatory security cameras in vehicles. Here's more from Shane over at our sister site Newsroom.