KEY POINTS:
There is a somewhat dispiriting contrast of scale between the rather modest nature of many proposals the Jobs Summit came up with and the daunting magnitude of the challenges the country faces.
The immediate cyclical challenges were starkly laid out by Reserve Bank Governor Alan Bollard and the deeper structural ones by Treasury Secretary John Whitehead.
"This is huge," said Bollard. No one in the room had seen anything on this scale in their lifetime.
The world is reeling from wealth destruction measured in trillions of dollars - $30 trillion in sharemarkets and rising, $4 trillion in housing markets and rising, $2 trillion in bank capital lost and rising.
A trillion dollars laid end to end would stretch to the sun and half way back, he said.
Mounting unemployment rolls back the source of most of the economic growth of recent years, which had come from putting more people to work rather than raising productivity - which Whitehead said is our biggest structural challenge.
We were deluding ourselves if we thought we could spend our way out of trouble, he said. The Treasury is forecasting structural Budget deficits as far ahead as the eye can see.
They would drive the cost of servicing Government debt to around $1000 a year for every man woman and child, and push up the cost for borrowing for firms and households.
But we have some things going for us in all this, Bollard said.
Unemployment at 4.6 per cent is still relatively low, and unlikely to reach the heights (11 per cent) seen in the early 1990s.
The exchange rate is working for us for a change, he said, helping to cushion the blow of falling commodity prices.
To that list he added the strength of New Zealand's banks, which in stark contrast to many in the Northern Hemisphere are well capitalised, have high-quality loan books, and have very high credit ratings.
The best thing the banks can do to preserve and create jobs, is to keep the wheels of commerce turning.The credit growth statistics indicate that so far they are.
Hence the air of injured innocence they radiate when they are attacked as excessively tight-fisted, as they were yesterday.
