29 January 2001

Free Market Policies Fuel Trade Deficit

The Green Party says the free market policies of successful governments are responsible for New Zealand’s latest trade deficit.

Statistics NZ figures released today show the deficit for the year to December was $1.562 Billion, with the cost of crude oil imports more than doubling to $2.2 Billion.

“The latest trade deficit highlights New Zealand’s excessive dependence on imports,” said Green Party Co-Leader Rod Donald.

“Despite exports increasing 24% for the year, New Zealand still suffered its sixth successive December trade deficit.

“Last year the $630M Te Mana frigate was held responsible. This year the $1.156 Billion increase in the cost of crude oil is getting the blame.

“Everyone refuses to face up to the fact that over both years consumer goods imports increased by $1.39 Billion to $7.343 Billion and are more than double what they where only a few years ago.

“New Zealand would have a trade surplus if governments had protected domestic manufacturing (and the jobs that went with it) and supported the CNG and LPG industries.

“New Zealand used to have the largest CNG vehicle fleet in the world but it, and the infrastructure to fuel it, has almost disappeared because previous governments withdrew their support, claiming ‘the free market knows best’.

“We are now totally exposed to the increasing cost of imported transport fuel.

“Similarly, our manufacturing sector has been so undermined by cheap imports made in low wage economies that it is not in a position to take full advantage of the competitive value of the New Zealand dollar.

“The December trade figures confirm that relying solely on exports will not get New Zealand’s trade deficit back into the black.

“The Labour-Alliance Government needs to give equal attention to reducing our dependence on imports,” he said.

ENDS

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