EMA Central Suggests Treasury Gets Creative
January 17, 2002
The Employers & Manufacturer’s Association (Central) congratulates Treasury on its attempt to find ways to work around a couple of age-old economic problems, New Zealand’s size and its distance from the rest of the world.
EMA Central chief executive Paul Winter says it is heartening to hear Treasury’s “economic transformation” project is attempting to work out why New Zealand continues to struggle to achieve the levels of growth reached by comparable economies.
“Many hard-working and intelligent people have given this issue considerable thought since New Zealand began to lose its way economically in the mid-70s. We’ve had all kinds of government-led attempts to revive our heady days of growth back in the 60s,” Mr Winter says.
EMA Central’s advice to Treasury would be to think outside the square. Find ways to compete which overcome the tyranny of distance.
“Just one example would be to think more seriously about aligning our currency with our trading partners, most obviously, Australia. Many New Zealand businesses are small and struggle to do business overseas, even too Australia. A steady foreign exchange relationship with that country would do much to help Kiwi exporters build their markets.
“We don’t need to lose our own distinctive banknotes. All we do is fix our exchange rate say at NZD$1 to A.80c, our dollar then moves right along with the Aussie dollar on the international markets, and our exporters always know where they stand.
“This is not rocket science, and it’s not new. Hong Kong already pegs its dollar in the same way to the US dollar,” Mr Winter says.