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High dollar and Govt spending wrecking business


High dollar and Government spending wrecking business says Seafood Industry

27 February 2008

The rising New Zealand dollar and big spending by Government is causing huge financial losses for the industry and the country, says the New Zealand Seafood Industry Council’s chief executive Owen Symmans.

“It’s an appalling situation for export-dependent industries such as ours. Every one cent rise in the exchange rate equates to a full year loss of NZ$20 million for the seafood sector. The move in the dollar in the past 12 months is estimated to have cost the industry around $120 million in lost revenue.”

The combination of high exchange rates, high interest rates, and growing Government spending without a relative increase in productivity is disastrous for the seafood sector, he said.

“The huge increase in Government spending is creating inflationary pressures resulting in high interest rates and an overvalued exchange rate.”

Over the last five years, there has been an increase of Ministry of Fisheries staffing of 38 percent and expenditure increase of 26 percent without any gains for the industry. The Ministry is proposing to increase cost recovery soon from the industry by another $8 million annually.

“At the same time, the introduction of greenhouse gas pricing is going to increase industry costs by an estimated minimum $8 million,” Mr Symmans said.

This is an additional $16 million in Government charges in one year, which is completely unsustainable and will have wide implications for the industry and the country, he said.

“Hard working New Zealanders have already lost their jobs and businesses, and more will follow. Businesses will be forced to look overseas in order to reduce their production costs and mitigate this intractable combination of high exchange and interest rates, and excessive government spending.”

Industry will be eager to see some action from Government that recognises the importance of a good, strong business environment for Kiwi firms, he said.

“We’ve been disappointed so far, and it’s going to start hitting all New Zealanders hard very, very soon.”

ENDS

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