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New Zealand Data:
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Annual (December 2008)
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Annual (December 2008) per capita
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Our Expenditure on Gross Domestic Product in current prices
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$179,816,000,000
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$41,954
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Our Real Gross National Disposable Income
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$135,182,000,000
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$31,540
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The Shortfall or “The Gap” between available income and total prices
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$44,634,000,000
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$10,414
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Hover the mouse over the graphs to see more detailed info
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The graph below shows The Gap between available income and total prices 2000 to 2008. See Data Table 11 and Data Sources
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Below - a graph showing the Gap between available income and total prices as Percentage of GDP (2000 to 2008) See Data Table 10 and Data Sources
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Below - a graph showing the Per Capita Gap between available income and total prices (2000 to 2008) See Data Table 12 and Data Sources
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THE GAP BETWEEN GDP AND PURCHASING POWER:
The $178.06 billion GDP minus $130.20 billion of purchasing power equals $47.86 billion. From an orthodox point of view this shows us, quite simply, that we do not earn enough to buy what we produce. If we look at this situation from a different standpoint we could explain that the New Zealand economy is currently the most productive it has been in its history. We have utilised the skills, technology and accumulated knowledge developed over decades to produce a surplus of goods to purchase.
Since we have produced our GDP with such low labour costs, $47.86 billion of surplus goods should be seen as our New Zealand (Citizens) dividend - but no it is seen as a shortfall because it still appears in prices.
It is a given that the entire $178.06 billion worth of goods and services need to be paid for. This is currently achieved by you the consumer spending the $130.20 billion of income purchasing power and by supplementing it with debt. You must borrow to be able to purchase the $47.86 shortfall between GDP and income purchasing power. This is one of the processes which causes our nation’s debt levels to increase year by year.
To be continued ....
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