Kiwi Rises, Future Falls
13 June 2002
“The Kiwi dollar rose against most currencies, so goes the almost daily market report. And each time it does our future prospects fall,” New Zealand First Leader, Winston Peters said.
“New Zealand’s economic performance has been poor since the mid 1980s even allowing for some good returns from the rural sector in recent times. There is an expectation that the good times are over but there is no reason why that should be the case. For too long we have seen a focus on the reduction of inflation and, for the most part, a mean-minded approach to social spending.
“Success with inflation has come at a huge price. New Zealand’s real GDP growth rate (2001) was 1.8%. Average GDP volume growth (from 1985 – 2001) was 2.0%. This compares unfavourably with the OECD average of 2.7%. Predicted growth of around 3%, while being described as ‘robust’ by the present government continues to lag behind predicted growth in other OECD countries and is far below both our potential and our requirements.
“How do we fix it?
“The more flexible monetary policy prescription
promoted by New Zealand First in 1996 contributed to a
substantial lowering of both exchange and interest rates and
was a factor in the improved export returns recently seen.
New Zealand First will:
promote a balanced and flexible monetary policy of low exchange and interest rates conducive to real export and employment growth, and amend the Reserve Bank Act and make export, growth, and employment objectives part of the policy targets agreement between the new government and the Governor of the Reserve Bank.
“When our monetary policy focuses on growth and not just on inflation then we will have taken a major step towards securing our export future,” Mr Peters said.