Cunliffe says Joyce is on another planet

Economic Development Minister Steven Joyce has dismissed a pessimistic Treasury report on the economy as "grumpy" but the Labour Party says he is on another planet.

Having assessed economic data released during September, the Treasury has concluded that strong growth since the start of the year is tapering off and the risks to its economic forecasts are all on the downside.

The economy grew by 1% in the first quarter of 2012 and by 0.6% in the second. The Treasury says it is still set to grow in the last half of the year but not as quickly.

Mr Joyce says the Treasury has previously underestimated growth and he hopes it continues to get the numbers wrong.

But Labour's David Cunliffe says the minister is living on Planet Joyce if he can't recognise the economy is struggling.

Mr Cunliffe says the Government has failed to take the action needed to lift the economy, such as putting skills training in place quickly enough in Canterbury.

Minister sees many positive signs

Earlier on Tuesday, Mr Joyce told Morning Report that companies are winning big contracts, dairy prices are rising at auction, the Christchurch rebuild is gaining momentum and employer confidence about recruiting is positive.

"Probably the biggest issue remains unemployment, that's higher than what we would like and we do want to see further job growth, but actually if you're going to be anywhere in the world right now you'd be struggling to pick a better developed country than New Zealand."

Mr Joyce says niche manufacturers are also doing well, and there are positive signs for the third quarter of the year.