David Parker
Spokesperson for Finance

28 May 2014

Fonterra payout shows need for diverse economy

The drop in the Fonterra payout shows New Zealand needs to diversify its economy and provide the settings to allow other industries and sectors to grow, Labour’s Finance spokesperson David Parker says.

“Fonterra’s 2.9 per cent cut in the forecast milk payout highlights the concerns Labour has repeatedly expressed over our economy being too reliant on the price of one commodity.

“Yesterday’s NZIER forecasts confirm growth in this country is driven by two areas – dairy and the Christchurch rebuild. A significant drop in milk prices could have serious flow-on effects for the economy.

“Labour’s Economic Upgrade will diversify our export economy and support other sectors through policies to support investment, innovation and industry.

“We will encourage investment through universal KiwiSaver that will boost our investment pool. Our capital gains tax will get that money away from property speculation and into productive businesses. This will lift wages and take pressure of house prices.

“We will support innovation through our research and development tax credits and tax incentives to encourage investment in new technology which will encourage businesses to expand.

“Our industry support policies for manufacturing and forestry have been well received by business and more will be released in the coming months.

“Our Reserve Bank Upgrade will lower the dollar and keep interest rates and the cost of capital lower for business.

“All of these policies link up to strengthen the New Zealand economy to support higher wages.

“New Zealand’s economy is too reliant on the dairy industry. Labour supports a strong dairy sector – we founded Fonterra and breathed life into it via the China free trade agreement – but we need other sectors to expand,” David Parker says.

ENDS

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