New Zealand's economic update is "very dire reading", says National leader Judith Collins, who added that the Government have "a lot to answer for".
Treasury today released the Pre-Election Economic and Fiscal Update (PREFU) - painting a picture of sustained deficits and a forecast contraction in GDP of 16 per cent in the June 2022 quarter.
"We are looking at or are in, the worst economic recession in living memory," Collins said.
"It's not just our children that pay for this, but most likely our grandchildren. This is a really serious time."
She said the Government "has a lot to answer for".
"The Australians have a seven per cent drop, we are looking at a 16 per cent drop.
"The Government didn't need to shut down the construction industry - that's just a starter.
"Instead we've been yo-yo-ing in and out of lockdown, we've still got all of the country in at least Level 2, that is really hard for people."
Unemployment was expected to peak at 7.8 per cent in the March 2022 quarter, with the near-term economic outlook "less negative" than previously forecast.
"Unemployment will be substantially worse in 2022 and 2023. Treasury predicts 100,000 more New Zealanders will lose their jobs in the next two years," Collins said.
Finance Minister Grant Robertson said the unaudited Crown accounts to June 2020 showed "a rebounding economy, with core Crown tax revenue of $84.9 billion coming in higher than the $82.3 billion forecast, indicating more activity than expected".
He said the outlook for global economic activity was worsening, however the New Zealand economy was forecast to grow at three per cent a year over the next three years.
NZ First leader Winston Peters said the PREFU was a "wake up call for New Zealanders".
"The PREFU projections are the worst in our country’s history and reinforce to the voting public why they need experienced hands in government after the 2020 General Election.
"Voters are facing a serious economic crisis. That is neither debatable nor in doubt."
ACT's David Seymour said the current fiscal track "is totally unsustainable" and accused the Government of "cherry-picking" the situation.
"It’s not good enough for us to kick the can down the road. We need an honest conversation now about our out-of-control spending and debt."
Summary of the Pre-Election Economic and Fiscal Update (PREFU):
- Annual average GDP growth expected to fall to -3.1 per cent in the June 2020 quarter
- GDP forecast to contract by 16 per cent in the June 2020 quarter
- Unemployment rate expected to hit 7.8 per cent in March 2022 quarter
- Core Crown expenses expected to reach $119.6b in 2020/21
- Deficit reached $23.4b in 2019/20, expected to worsen to $31.7b in 2020/21, 7.7 per cent of GDP at June 30, 2020.
- Net core Crown debt increased by $25.7b to $83.4b, sitting at 27.6 per cent of GDP at June 30, 2020.