Scoop has an Ethical Paywall
CAD shows need for savings and local investment
Current account deficit shows need for savings and local investment
The Council of Trade Unions says that a major concern in the current account deficit figures announced today is the continuing trend towards repatriation of profits to foreign owned firms in New Zealand.
Statistics NZ noted today that “the larger investment income deficit was mainly due to an increase in profits earned by foreign-owned New Zealand companies, and higher interest payments made on New Zealand's rising levels of overseas debt.”
CTU Economist Peter Conway said today that many lose sight of the fact that the balances on goods and services are completely overwhelmed by the deficit on investment income.
“In fact, out of the $14.2 billion deficit on the current account, $12.4 billion (87 per cent) is from the investment income deficit.”
“This reflects increased debt due to bank borrowing to fund high debt in the housing market as house prices have surged and interest rates have gone up, along with a continued stream of profits and capital repayments accruing to foreign-owned firms based in New Zealand.”
Peter Conway said this shows the need for KiwiSaver and other savings to flow through to investment by New Zealanders in our economy so that profits remain here rather than leaving our shores to such a great extent.
The CTU would also like to see more joint ventures so that a higher proportion of profits accrue to New Zealand firms.
In addition the CTU has argued for a number of measures to improve the affordability of home ownership and reduce the debt burden on householders, Peter Conway said.
ENDS
New Zealand Council of Trade Unions
Te Kauae Kaimahi
The New Zealand Council of Trade Unions Te Kauae Kaimahi brings together over 350,000 New Zealand union members in 40 affiliated unions. We are the united voice for working people and their families in New Zealand.
John Mazenier: Gaffer Tape And Glue Delivering New Zealand’s Mission Critical Services
Earthquake Commission: Ivan Skinner Award Winner Inspired By Real-life Earthquake Experience
Reserve Bank: Consultation Opens On A Digital Currency For New Zealand
NIWA: Ship Anchors May Cause Extensive And Long-lasting Damage To The Seafloor, According To New Research
New Zealand Customs Service: A Step Forward For Simpler Trade Between New Zealand And Singapore
Horizon Research: 68% Say Make Banks Offer Fraud Protection
