Farmers Deliver The Goods, For Now
"The New Zealand economy has once again been rescued by the productive sector, with higher commodity prices contributing significantly to improved growth forecasts in the December Economic and Fiscal Update," National's Finance spokesman Bill English said today.
"The figures are looking better than they were in this year's Budget, but a big question mark hangs over how robust that economic growth will be.
"What that creates is doubt over whether the books will look as optimistic in a year or even six months time.
"The farming sector is generating increased returns because of the low dollar coupled with good commodity prices on the international market.
"Already there are signs that cannot last. Lower world growth will see lower prices in the months ahead, while the recovering New Zealand dollar will also reduce farmgate returns.
"So after a jump to 3.7% growth over 2001, the economy quickly returns to average; a disappointing 2.7% over the following three years.
"That sort of growth rate will do nothing to close the ever increasing gap between New Zealand's economic performance and that of the rest of the world.
"Good policy needs to focus on lifting the performance of the New Zealand economy on a sustainable basis. This requires policies that enhance our international competitiveness, rather than detract from it.
"The gap that needs to be closed is the gap between New Zealand and the rest of the world. In doing that, other gaps will take care of themselves.
"The Government has shown few signs of sound economic stewardship to date," Mr English said.