- By Charles Miller
The recent release of New Zealand’s Budget 2024 and the March Quarter GDP data is another important way point on the nation’s economic journey.
The fiscal strategy is focused on economic growth, cost-of-living relief, and productive public services, with a spotlight on education, health, and infrastructure investments, as well as cost cuts in some areas.
Budget 2024, presented by Finance Minister Nicola Willis, emphasises a balanced approach to stimulate the economy while maintaining fiscal discipline.
Key initiatives include $3.68 billion annually for tax relief and the Family Boost package, $16.68 billion for health services, and significant investments in education and infrastructure.
However, the Budget also forecasts lower GDP growth than expected, predicting a return to surplus by 2027/28, a year later than previously anticipated.
The GDP data for the March Quarter of 2024 indicate a negligible growth rate, with the risk of ongoing economic challenges, and possibly more difficult times ahead.
The battle against inflation and accompanying high interest rates looks set to drag on.
Whilst some economists are predicting inflation to fall within the 1-3 per cent target band by late 2024, others expect his to be later, more like early-to mid-2025.
It is probable our situation will worsen before it improves, especially impacting retail sales, residential construction, and hospitality.
Given regulators are searching for signals the economy is adjusting, and inflationary pressures are abating, businesses should, wherever possible, do whatever they can to lift productivity and absorb cost pressures without passing them on in price increases.
This is one way every business can assist in hastening interest rate reductions and a return to growth.
Small businesses will survive and thrive this landscape by getting back to basics.
Focus on core values, make your team and culture your number-one priority, always deliver exceptional customer service, divest or cease non profitable business operations, and quit nonperforming capacity and assets.
But remember, the economy has slowed down, not shut down, so invest in understanding and meeting your customer’s needs, invest in quality, targeted marketing, invest in productivity initiatives, and don’t watch the news.
Focus only on what you can control, and you will survive through to 2025, and even thrive.
