20 March 2013

Nats fail to rebalance the economy

The $10 billion a year current account deficit is proof of National’s failure to manage the economy and puts New Zealand on a dangerous path of unsustainable debt, Green Party Co-leader Dr Russel Norman said today.

“The sucking sound is getting louder as more and more of New Zealand’s wealth is siphoned out of our country and heads overseas,” said Dr Norman.

“National has failed to rebalance the economy. Our current account deficit is now over $10 billion a year and growing.

“The over-valued dollar is hurting our exporters and letting imports undercut local businesses. The result is we’re importing more than we export.

“That costs jobs and means we have to take on debt or sell assets to cover the gap. We now owe the world a net $150 billion.

“In the last year, we lost $10 billion in net interest payments and dividends to overseas investors. That’s a huge slice of the wealth our economy created disappearing overseas.

“National’s response is to bury its head in the sand and pretend there’s no problem. But the forecasts are clear. On our current path, Treasury projects that our net international debt will explode to over $200 billion within four years.

“To turn this situation around we urgently need a suite of measures that bring down the currency so our businesses can compete on a level playing field and that control foreign investment to stem the flood of money that we’re losing overseas.

“The smart, green solutions are not revolutionary, or even unorthodox. They’re sensible, well-proven measures like capital gains tax excluding the family home; giving the Reserve Bank a mandate to protect Kiwi jobs and the tools to do it; and government procurement policy that unapologetically favours Kiwi businesses and Kiwi jobs.

“If we want a successful economy, we need to fix the problems that are leading us into unsustainable debt. If we stay on the path we’re on, the destination is Greek-style collapse,” said Dr Norman.

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