The Government risks "snatching economic defeat from the jaws of victory" if it continues its reversal of reforms, says a business magazine.
The Economist's damning report on the New Zealand economy says Government policies such as raising the top tax rate, halting privatisation, changing labour laws and increasing regulation of businesses are "alarming" and represent a step in the wrong direction - making the country less attractive to investors.
"If anything, New Zealand should do the reverse: press on with reform, as most other economies around the world are now doing."
The magazine points to warning signs: recent OECD and IMF surveys that highlighted the country's low level of savings, a large current account deficit and the "brain drain" of professional people.
Although the Government's policies are only a part-reversal of the reforms of the previous 15 years, the rub-off effect has been more damaging than expected, it says. Business and consumer confidence plummeted and GDP fell in the second quarter of the year.
The Economist says NZ's gross domestic product growth since 1984 has been the slowest in the developed world. But GDP figures take no account of stellar improvements in product quality and the vast increase in consumer choice.
- NZPA
NZ retreating: journal
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