Finance Minister Michael Cullen says NZ is at a “critical crossroads.” He’s warning NZers must accept the current economic slowdown is not a run-of-the-mill low point in the economic cycle. “While I have full confidence NZ will start growing again later this year, no-one should expect that once growth returns the world will keep ticking along as it has in the past two decades. Fundamental change in the global economy is occurring right now and we need to get ready for it.” Cullen says it is being driven by three inter-related forces: the price of food is rising sharply, driven up by the other two forces, the sharp increase in oil prices, and the early effects of global climate change.
The slowdown has been influenced by the global credit crunch, and we should be wary of anyone who takes a casual attitude to debt in this financial climate. “Will the NZ economy embrace the transformation we need, or will we fall behind all of our major competitors and keep our heads firmly buried in the sand?” These are the challenges which are driving the next wave of the Labour-led Govt’s work for NZ. Just how those challenges are influencing infrastructure investment decisions can be seen in the NZ Fast Forward Fund and last month’s buyback of KiwiRail.

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