Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

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

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Voluntary Administration: Renaissance Brewing Up For Sale

Renaissance Brewing, the first local company to raise capital through equity crowdfunding, is up for sale after cash flow woes and product management issues led to the appointment of voluntary administrators. More>>

Elsewhere:

Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>

ALSO:

Media Mega Merger: Full Steam Ahead For Appeal

New Zealand's two largest news publishers have confirmed they are committed to pursuing their appeal against the Commerce Commission's rejection of the proposal to merge their operations. More>>

Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>

ALSO:

Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>