Business NZ economic conditions index improves

Calls for Government spending restraint have received little attention, says Business NZ. Photo / Mark Mitchell

Business New Zealand is cautioning against reading too much into an improvement in an index of economic conditions it compiles, arguing it may not reflect reality because of the quality of statistics it monitors.

The BusinessNZ Economic Conditions Index was 15 for the December 2010 quarter, up 20 from the previous quarter and up three on a year ago. The index tracks 33 indicators on a quarterly basis.

In general, increases in the index are seen as positive but Business New Zealand said the latest result, while very positive, should be taken with a healthy grain of salt.

"Some largely unjustifiable swings raise question marks over the quality of some official statistics which have not necessarily reflected market reality over the last year."

The business lobby group said the second report of the 2025 Taskforce provided a sobering picture of what is required if New Zealand is serious about trying to catch up with Australia by 2025 and many of its recommendations were mainstream economics.

The lobby group also felt that calls for expenditure restraint by Government from Treasury and the Reserve Bank had received little attention.

Business New Zealand identified New Zealand superannuation, Kiwisaver and interest-free student loans as three areas in need of urgent reform.

It also noted that Working for Families currently applies to about 300,000 New Zealand households, equating to a total cost of around $2.2 billion for 2010.

- NZPA