David
PARKER
Spokesperson for Finance

19 December 2012 MEDIA STATEMENT
New Zealand Deficit in the danger zone

National’s failed promise to rebalance the economy has been shown in today’s current account figures, with the deficit totalling $9.9 billion in the year to September, says Labour’s Finance spokesperson David Parker.

“John Key wants Kiwis to believe he is a good economic manager. Yesterday a 33% increase in the cost of superannuation over the next four years was ignored by him, growth forecasts were further lowered, and unemployment was predicted to stay higher for longer.

"Today's $10 billion external deficit is further bad news. National has spent the last 4 years trying to ignore its promise to rebalance the economy, despite job losses in export industries and the danger to our economy. Economists call it the external or Current Account Deficit. I call it The New Zealand Deficit.

“Yesterday's forecasts show it’s set to get worse, hitting -$17 billion in 2017. The IMF say New Zealand’s external deficit will be second worst in the developed world after Greece this year and worst bar none next year.

“A widening external deficit combined with a stagnant economy and high unemployment is a recipe for failure.

“As a country we are spending more on our imports and interest than we are earning from our exports. We have to sell more assets or take on more debt to cover the costs. That means our companies either go overseas or become less competitive.

“The rules have changed since the global financial crisis. There is far less tolerance for large external deficits. The Government is ignoring this threat at our peril.

“Bill English says there is little the Government can do. He is wrong.

“Labour would increase our savings through universal KiwiSaver, reducing our need to borrow overseas. We would make sure those funds are invested in high-growth exporting companies through tax reform such as a capital gains tax and a research and development tax credit, helping us earn more from overseas and creating more export jobs.

“We would also require the Reserve Bank to consider the exchange rate and other important aspects of the economy, instead of the primacy of inflation trumping exports. That will help make our currency more competitive and stable, something exporters are crying out for.

“These solutions are needed now. A massive New Zealand Deficit will be a legacy of this National Government.”

© Scoop Media

Gordon Campbell: On The 2013 Budget

Among Thursday’s main talking points:

We are apparently on track for a margin-of-error $75 million surplus, now in sight for 2014/15. But this sickly creature is hobbling out of the lab on the basis of all kinds of facilitative conjuring: such as trimming by $200 million the amount of new spending next time around.

With this strictly nominal surplus in sight, the 1984-ish justification for eternal austerity will have a news talisman: namely, getting Crown debt down to 20% of GDP by 2020. More>>

Budget Report, Lockup Audio & Images: Budget Day 2013 As always and especially after the managerial mishaps of the past few weeks and months, (e.g. Aaron Gilmore, the Mighty River Power share float, the GCSB mishaps) Budget Day 2013 was always going to be a pageant of reassurance... More>>

Budget 2013 Comment: Plain Sailing, But It's No America's Cup Pattrick Smellie: Compared to the last four budgets, this year's reflects an economy moving out of recession and into calmer waters... Yet if the fastest annual growth rate we can expect over the next two years is 3 percent - with the Christchurch rebuild in full swing - then you'd have to say New Zealand's underlying low-growth problem is far from fixed. More>>

Auckland Discord: Govt’s Power Hungry Housing Approach A Threat - Labour

Last week the Government said this, ‘The Government commits not to use any proposed or existing powers ... to override the council's planning and consenting processes’. But its housing Bill says this; ‘If an accord cannot be reached in an area of severe housing unaffordability, the Government can intervene by establishing special housing areas and issuing consents for developers’. More>>

ALSO:

• NZ Govt - Housing accords legislation passes first reading - Legislation For Housing Accords, Land Supply - Housing package improves affordability, access
• Greens - Budget numbers show National’s failure on home affordability
• Auckland Chamber of Commerce - Budget 2013: Housing intervention needed
• Out-Link - Gareth Morgan: Response to housing problem limp-wristed
• Earlier, Pre-Budget - Auckland Accord announced

Extending Protest Ban, Relaxing Permit Rules: Govt Abuses Urgency To Extend Anadarko Amendment

The Government is trying to pass legislation under urgency which would make the Anadarko Amendment – which limits protest at sea – apply to an additional 1.7 million square kilometres, the Green Party said today. More>>

ALSO:

• Parliament Today - Parliament Resumes To Pass Budget Bills
• Labour - Government to extend protest ban
• Greenpeace NZ - Oil Companies Lacking ‘Expertise’ and ‘Financial Ability’ Set to Be Handed Drilling Permits
• 2010 image via: Pacific.Scoop - Media watcher gives NZ press nil score card for China oil spill coverage