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NZ has the edge, not just in rugby

NZ Newswire logoNZ Newswire 21/09/2016 Colin Brinsden, NZN Economics Correspondent

At seemingly every opportunity the Turnbull government is beating its chest about the nation's recent economic growth figures.

Apparently we're "the envy of the world".

But one country which probably isn't as green-eyed as our ministers make out is our trans-Tasman rival.

Coming just weeks after the Wallabies were totally outplayed by the All Blacks in two Bledisloe Cup games, New Zealand's economy has also outclassed Australia.

Our economy may have put in a good performance in the June quarter, expanding by 0.5 per cent for a spritely 3.3 per cent over the year, but NZ went even better.

It scored a quarterly rate of 0.9 per cent for an annual pace of 3.6 per cent - or a "rockstar revival" as HSBC chief economist Paul Bloxham puts it.

Likewise, while the Australian jobless rate ticked down to 5.6 per cent in August, the quarterly NZ rate was 5.1 per cent as of June.

Sure, Australia has completed 25 years without a recession, the world's second-longest run of continuous economic expansion by any country and a tremendous achievement in anyone's reckoning.

Across the ditch, NZ last suffered a downturn with the rest of the world during the 2008-2009 global financial crisis.

But you wouldn't think so now looking at their comparative budgets.

NZ Finance Minister Bill English can already boast he has got his budget back in balance even after the shock of the GFC, while for Treasurer Scott Morrison it's still a dream for 2020/21.

Former Liberal leader John Hewson says the treasurer still faces a considerable task with the government's recent budget repair successes a mere "spit in the ocean".

Cumulative deficits since GFC are bigger than the cumulative deficits of Australia's last two recessions, and he warns we could still wake up one morning and the credit rating will be downgraded.

Still, it hasn't stopped Malcolm Turnbull boasting Australia's virtues during a chin-wag with US Treasury Secretary Jack Lew while he's been in New York.

"Of course there is great admiration for the strong growth in the Australian economy," the prime minister said after his phone link-up with Lew.

Lew would have probably swooned when speaking to Kiwi PM John Key.

Still, the Australian government isn't totally ignoring the successes of New Zealand.

Social Services Minister Christian Porter wants to mimic Key's NZ welfare system through an "investment approach" aimed at breaking lifetime dependency on benefits that is costing the Australian taxpayer $160 billion a year.

Flagged in the May budget, the government is pouring $96 million into a program targeting thousands of young carers, students and parents.

Porter is concerned while these benefits flow, nothing changes for many people and lives don't improve.

"I'm not proposing that we spend less money. What I've said is spending more money on more of the same isn't the answer," he told the National Press Club this week.

Not that New Zealand's approach is a foolproof system to get people into work.

Just ask Key himself.

In a recent interview he was defending his country's high immigration rate so jobs left vacant, because of the attitude of his fellow Kiwis, can be filled.

"Ask the employers and they will say some of these people won't pass a drug test, some of these people won't turn up for work," he said of his countrymen.

It takes former Australian treasurer Joe Hockey's 'lifters and learners" barb to a new level.

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