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Collins - Faltering economy needs attention

3 February 2006

Collins Comments - Faltering economy needs urgent attention NOW

As the income gap between New Zealanders and Australians keeps widening, more than 600 Kiwis a week continue to move to Australia. Most New Zealanders would be able to earn around $200 per week more in Australia.

This is an extraordinarily dangerous situation for a small country like ours. We have interest rates rising, redundancies are pushing the South Island towards a recession and exporters from farmers to manufacturers are getting ready for a hard landing. Still Helen Clark's Labour government continues to see only that the sun is shining and there are taxpayers to keep paying for every whim and fancy that she and Michael Cullen have.

There is no greater economic expert in New Zealand than Don Brash. Yet, according to the Clark Government, Treasury has got it wrong, Dr Brash has got it wrong, exporters have got it wrong and business confidence is low for reasons unconnected with reality.

As Don Brash said at Orewa this week, "The collapse in business confidence is like the warning light on your petrol tank - ignore it at your peril. Well, it is flashing, and the Government is asleep at the wheel."

Later in his speech, Don said "We have the unedifying spectacle of a Prime Minister who is supposed to be leading the country, instead frozen like a possum in the headlights of an oncoming Aussie truck. She just does not seem to understand how close we are to disaster."

Why do we care so much about New Zealand's position with Australia? It's because when Helen Clark became the Prime Minister, the gap between Australian and New Zealand incomes was 20%. Now it is 33%. That's why! If as a country we don't get more productive, smarter, better educated, less welfare dependent and less taxed then we can kiss good bye to our children and grandchildren because they simply won't be staying around.

New Zealand is, in my opinion, the most beautiful country and New Zealanders the most generous, kind and decent people. Unfortunately, that is under threat because this tax and spend government continues to want to treat New Zealanders as if we are all too stupid to make our own decisions from how we spend our money to how our children are educated.

We cannot as a very small country in the middle of the Pacific Ocean simply strive to be on the same footing as Australia. We must do better. Our exporters know that. If only Helen Clark's government could accept the challenge that New Zealand farmers and exporters have had to take up for years.

This year, National will concentrate on three main areas:

* Immigration and its importance to the economy and to society
* Health where the biggest spend up in living memory has resulted in little overall gain
* The tension between our desperate need for better infrastructure and sustained economic growth and the need to preserve the environment.
With my colleagues, I wish you all a happy New Year and we look forward to working with you for the benefit of New Zealand.


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