New Zealand has not experienced such a convergence of negative economic indicators in over a decade, said ACT Leader Hon Richard Prebble.

An Institute of Economic Research survey released today shows that business trading was flat in the last quarter and that the New Zealand economy is static. Annual inflation is at three per cent and expected to rise to 4.5 per cent by the middle of next year while the dollar reached a record low last night of $US39.48 cents.

“New Zealand is integrated in, answerable to and totally dependant on an international marketplace. While factors like the oil prices are not the Government’s responsibility, they must take responsibility for those factors that are.

“Businesses are increasingly having margins squeezed through compliance costs in ACC and the Employment Relations Act. Big businesses are able to absorb these increases or move offshore. It is small businesses and their employees who will be ground under. Inevitable national wage award demands, the threat of whole industry strikes, and a dismal consumer outlook will see many New Zealand small businesses at breaking point by Christmas.

“The Government’s answer is to stage a public relations exercise. By inviting “vetted” business guests to a chinwag, and announcing export guarantees and R&D tax breaks for the select few, Helen Clark hopes to deflect debate from the fact that New Zealand is becoming a third world economy.

“Our closest trading partner is now publicly bagging Helen Clark’s economic mismanagement.

“Yesterday the Australian Financial Review’s editorial slammed the “Labour Government’s ‘backward-looking’ economic agenda” and “Ms Clark’s old-fashioned “let Wellington solve it” economic agenda,” before finishing “if Ms Clark’s Labour Government continues to thumb its nose at the economic reform agenda, the world will rightly figure that New Zealand has lost the plot.”

“New Zealand is no longer combating its geographical isolation with superior policies. New Zealand must implement a 20 per cent business and personal tax rate, repeal the Employment Relations Act, and develop progressive and intelligent economic policies to attract our skilled and talented back home.

“The Government must promise a significant change in economic policies as meaningless public relations exercises will not soften the stagflation blow,” said Hon Richard Prebble.

ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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