Exports in permanent decline under National

Exports under National are in permanent decline – a result that causes long-term damage to our country’s wealth and makes Bill English’s admission that he has no new ideas all the more serious, Labour’s Finance spokesperson David Parker says.
“National promised that exports as a percentage of GDP would increase from 33 per cent to 40 per cent under its watch. The opposite is happening. Exports have declined to 29 per cent and will drop even further to 26 per cent.
“This is despite the strongest terms of trade in a generation.
“That is the real story of National’s economic management. As a nation we are going backwards. The way to increase our wealth is to export more to our trading partners. That will lead to better jobs with higher wages.
“That won’t happen under National. Bill English admitted on The Nation he has no new ideas to turn around the economy. That’s worth showing again.
Lisa Owen: Mr English, I’m going to give you one last chance, Mr English. Have you got a new idea to boost our economy?
English: We want to keep going in the direction we’re going.
“It isn’t working. Labour has a real plan to boost exports. Our Economic Upgrade will focus on investment, innovation and industry to support exporting businesses.
“We will boost investment through making KiwiSaver universal to increase our national investment pool and use our capital gains tax to ensure that money goes into productive businesses.

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Interest rate rise will hit the regions

The latest interest rate rise will hit the fragile regional economies of New Zealand and hurt exporters by putting more upward pressure on the exchange rate, says Labour’s Finance spokesperson David Parker.

“The regions are already hit by dropping export prices for dairy products and timber prices plus they have flat housing markets from LVRs . Now they have to endure another interest rate rise which is a direct result of the Auckland housing price bubble.

““The Reserve Bank Governor has already said mortgage interest rates will get close to 7% by the end of the year, adding $233 to monthly costs on a $300,000 mortgage.
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KiwiSaver innovations needed to build wealth

The innovative changes to KiwiSaver suggested by the Financial Services Council today will be seriously considered by Labour as part of plans to make KiwiSaver universal, Labour’s Finance spokesperson David Parker says.
“Universal KiwiSaver is an essential part of Labour’s plan to grow the wealth of New Zealand and create better jobs that pay higher wages.
“Currently young people are defaulted into conservative funds that invest mainly in bonds and cash rather than productive businesses. These also limit the amount young people can save for retirement.
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Government has no solutions to tackle risks to economy

The National Government has no solutions to tackle the serious risks to the economy identified by the Reserve Bank today, Labour’s Finance spokesperson David Parker says.
“Reserve Bank Governor Graeme Wheeler this morning highlighted falling dairy prices, declining log exports, strong immigration and high house price inflation as factors threatening the economic recovery. The Governor also noted that the exchange rate was at an unsustainable level.
“The quarter-point rise in the Official Cash Rate to 3.25 per cent means mortgage interest rates are well on their way towards 9 per cent.
“These pressures will add to the increasing cost of living. Kiwis know times are tough when 46 per cent of working New Zealanders have had no increase in their wage rate in the past year.
“National’s tool box is empty.
“Conversely, Labour has ideas to curb all these risks.
“Interest rates are going up because house prices are out of control in Auckland. Continue reading


Fonterra payout shows need for diverse economy

The drop in the Fonterra payout shows New Zealand needs to diversify its economy and provide the settings to allow other industries and sectors to grow, Labour’s Finance spokesperson David Parker says.
“Fonterra’s 2.9 per cent cut in the forecast milk payout highlights the concerns Labour has repeatedly expressed over our economy being too reliant on the price of one commodity.
“Yesterday’s NZIER forecasts confirm growth in this country is driven by two areas – dairy and the Christchurch rebuild. A significant drop in milk prices could have serious flow-on effects for the economy.
“Labour’s Economic Upgrade will diversify our export economy and support other sectors through policies to support investment, innovation and industry.
“We will encourage investment through universal KiwiSaver that will boost our investment pool. Our capital gains tax will get that money away from property speculation and into productive businesses. This will lift wages and take pressure of house prices.
“We will support innovation through our research and development tax credits and tax incentives to encourage investment in new technology which will encourage businesses to expand.
“Our industry support policies for manufacturing and forestry have been well received by business and more will be released in the coming months.
“Our Reserve Bank Upgrade will lower the dollar and keep interest rates and the cost of capital lower for business.
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Lower interest rates, a more competitive dollar and better jobs from Reserve Bank changes

Labour’s Reserve Bank Upgrade will lead to lower interest rates, a more competitive dollar and better jobs with higher wages, says Labour’s Finance spokesperson David Parker.

“The next Labour Government will upgrade the Reserve Bank Act by broadening its objective and giving it a new tool that will enable it to tackle our high overvalued dollar, help create jobs and keep interest rates low.

“Governments around the world have changed how they operate monetary policy since the global financial crisis. New Zealanders have a dollar overvalued by up to 15 per cent, a weakened export sector and mortgage rates that are among the highest in the developed world.

“Labour will make the following changes to the Reserve Bank Act as part of our Economic Upgrade:

1) Broaden the Reserve Bank’s objective beyond inflation and price stability to also assist to achieve a positive national external balance, which will boost economic growth and create more jobs.

2) Encourage the Bank to use its current tools differently, in a way that will help exporters and home owners.

3) Introduce a new tool – a variable savings rate or VSR – allowing the Bank to vary KiwiSaver savings rates (which would be universal under Labour) as an alternative to raising the OCR to take the heat out of the economy. This VSR would mean Kiwis would pay money to their retirement savings instead of higher mortgage payments to overseas banks.

“The independence of the Reserve Bank, and its ability to meet its inflation control target, are maintained.

“Labour’s changes will work with our Economic Upgrade focussing on investment, innovation and industry policies.

Alongside a capital gains tax, our KiwiBuild housing policy, universal KiwiSaver and reduced costs to businesses through NZ Power, Labour is offering an alternative that will help Kiwi families and ensure our economy can create better jobs and higher wages,” says David Parker.

29 April 2014 MEDIA STATEMENT


Better jobs and higher wages in Reserve Bank changes

What really matters to New Zealanders is a strong economy that provides secure work and good wages, says Labour’s Finance spokesperson David Parker.

“On Tuesday Labour will detail its changes to the Reserve Bank Act. These changes will help create jobs and take pressure off interest rates.

“For forty years New Zealand has not exported enough to cover the costs of our imports and interest.

“Our Reserve Bank changes, combined with our wider Economic Upgrade, will help New Zealanders by creating better jobs that pay higher wages for Kiwis by helping our exporters compete overseas.

“Labour’s changes will work with our Economic Upgrade focussing on investment, innovation and industry policies.
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