'These budget cuts are counter-productive and make no sense'

I spoke to former Productivity Chair Ganesh R Ahirao Nana this morning about the letter he and a group of other economists sent to PM Christopher Luxon to urge the Government to urgently suspend cuts to spending and investment for the sake of the economy, struggling businesses and the wellbeing of vulnerable workers, many of whom are giving up and emigrating. Heres the article I sent to all subscribers earlier this morning as part of my daily Dawn Chorus email newsletter and podcast for paying subscribers. Here’s the article Ganesh wrote on his substack and here’s the full letter itself. This is a summary of our conversation above and there is a transcript with the video.SummaryIn our conversation, Ganesh Nana discusses the pressing economic issues facing New Zealand, particularly the government's focus on fiscal policy at the expense of addressing external debt and investing in infrastructure. He emphasizes the need for a shift in focus towards export growth and the importance of investing in the economy to avoid hollowing out key sectors. The conversation highlights the urgency of creating a long-term vision for New Zealand's economic future, moving away from austerity measures and towards sustainable growth.Takeaways* The focus on government debt overshadows the critical issue of external debt.* Investment in infrastructure is essential for economic growth.* Doubling exports requires a significant shift in strategy and investment.* Austerity measures can lead to long-term economic hollowing out.* The government must prioritise a vision for the future of New Zealand.* Export growth has been primarily volume-based rather than value-based.* Leadership and investment are crucial for transitioning to a value-based economy.* The current government focus is detrimental to long-term economic prosperity.* A lack of vision contributes to the emigration of skilled workers.* Sustainable economic growth requires a collaborative approach among stakeholders.Chapters00:00 Introduction to Economic Concerns02:52 The Importance of External Debt05:53 Investment vs. Austerity: The Call for Infrastructure09:08 The Risk of Hollowing Out the Economy10:24 The Future Vision for New Zealand This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe