Recession in early-end shock

Clearly caught on the hop, market players burnt the midnight oil as they juggled their strategic holdings and revised their profit forecasts for the coming year.

And officials were convened in an emergency session of the Economic Response Unit (ERU) in the Beehive bunker. 

“Clearly, we were not ready for this announcement, as we had not expected the recession to end until early next year. All our planning was based on this expectation, so clearly our response now will have to be modified”, said the ERU head and Chief Economic Advisor Professor Econoh Miste.

However, some were more scathing in their comments regarding our preparedness.

“This is just the worst-case scenario,” said tourism operator Mr Sqee Slowpe.

“We could have done with this announcement a few weeks ago.  What this means is that the country’s biggest export earner has to wait another six months before we can cash in on this recovery.  It’s just not good enough.”

And Skills and Training Chair Ms Polly Tek, also thought the timing was all wrong.

“Right in the middle of term time, this just doesn’t help. Such an announcement was needed later, not earlier. While the announcement is welcome, this timing is just disruptive. These international organisations just need to consider the impact more deeply, before they go off and make these ad hoc announcements.”

Similar concerns were voiced by kiwifruit and apple exporters, who bemoaned the end-of-season start for the recovery – “if only this was a few weeks earlier, then we would have been jumping for joy” was a common theme.

This was reflected by the glum mood of the Secretary for Exports as he emerged from the ERU emergency session. 

“This is not good timing because next year’s export-earning season is likely to miss out as the recovery will push the NZ $ even higher,” Mr T Raid said. 

“We just have to get these different arms of government working together more cohesively,” Secretary Raid continued. 

“The export story is now going to have to quickly shift from a holding pattern to one where competitiveness and productivity goals are again at the forefront. These continuing shifts in focus are not helpful for long-term business development.”

Professor Miste was, however, quick to reject criticism that New Zealand was unprepared for the recovery and sought to calm nerves.

“We have in place a flexible response plan for the economy. Indeed, the ERU completed a very successful mock exercise in 2007, as to how our processes would respond to such surprises.”

The first action of this plan is already underway. MPs have been summoned to an emergency session where the Ministry for the Recession (MER) will be officially abolished and replaced with a reactivated Ministry for Economic Analysis (MEA). 

The earlier activities of the MEA had lapsed and were replaced with the infrastructure investment and skills development focus of the MER. Now that business-as-usual had returned, and the focus on these aspects was no longer necessary, the ERU response plan has the MEA being reinstated. 

It was unclear whether there would be redundancies at the now defunct MER, as many would likely return to their previous posts in the MEA.