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.
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.
The growing current account deficit is a serious long term threat to the economy which is being completely ignored by this short term Government, says Labour’s Finance spokesperson David Parker.
“The balance of payments released today shows that the current account deficit is 4.1 per cent of GDP and our net international liabilities are $150 billion. That has a serious impact on the jobs and investment New Zealand needs to provide the opportunities and higher wages New Zealanders need.
“The current account is the deficit National refuses to talk about. Bill English and John Key repeatedly sweep these figures under the carpet. In yesterday’s HYEFU Bill English spoke a lot about Government’s deficit but he ignored the forecast that the current account deficit – the national deficit – will reach $17 billion by 2017.
“Bill English promised that he would rebalance the economy towards exports and fix the current account. He has failed.
“Ignoring the deficit is economic negligence and wastes opportunities for New Zealanders. As a country we are losing money and becoming more indebted to foreign lenders. Our interest bill and dividends paid overseas add up and the spiral continues.
“Any family that gets into too much debt understands that, eventually, you have to pay that debt off. As a country it means land and companies are sold overseas, jobs are cut and wages stagnate.
“I won’t stand for that. Labour will rebalance the economy so New Zealand is once more a country that sells more overseas than it spends. That’s the true path to a wealthy nation.
18 December 2013 MEDIA STATEMENT
The manufacturing sector is struggling under National as new figures show manufacturing company closures have outnumbered start-ups for the fifth year in a row, says Labour’s Finance spokesperson David Parker.
“The new Business Demography statistics show that the number of manufacturing start-ups has dropped by a quarter in five years, from over 2000 in 2008 to 1451 in 2013 – the lowest number since this series began.
“Manufacturing closures outnumbered start-ups by more than 300 this year. Manufacturing exports have fallen 10 per cent in real terms in the last year and 19 per cent in real terms since 2008.
“Respected international manufacturing economist Goran Roos will be speaking on these issues this weekend.
The loss of 180 highly-skilled jobs at Air New Zealand in Auckland shows the National Government is sitting on its hands while Kiwis are joining the dole queue, moving to Australia or into less secure low-paid jobs, Labour’s Finance spokesperson David Parker says.
“National has no plans to boost employment despite promising two years ago it would create 170,000 new jobs.
“Today’s job losses represent 180 workers with families to feed and mortgages to pay. Labour extends its sympathy to those affected,” David Parker says.
“Kiwis deserve to have well-paid secure jobs, but they fear for their positions more than ever. Aircraft engineers are the type of highly-skilled workers New Zealand needs to retain.
Exports have tumbled eight per cent compared to May last year, showing the Government’s attempts to rebalance the economy lie in tatters, said Labour’s Finance spokesperson David Parker and Economic Development spokesperson David Clark.
“National is creating a two-speed economy where exporters struggle but speculators flourish,” said David Parker.
“Bill English promised to rebalance the economy but this drop in exports shows he has failed, yet again. Meanwhile property speculators are having a great time in Auckland.