3 June 2015 MEDIA STATEMENT

Dairy price fall shows Treasury forecasts way off

National’s rosy predictions of a global dairy price rise to lift the Government books out of the red are off the mark again with the latest fall showing how wrong Treasury’s forecasts were, says Labour’s Finance spokesperson Grant Robertson.

“Dairy prices have fallen yet again, down four per cent overnight, 28 per cent since February and 54 per cent since the peak early last year.

“This makes the overoptimistic predictions of milk price rises from National and Treasury even more remarkable.

“In the Budget Treasury predicted the Global Dairy Trade Index would be around 870 in June 2015 and steadily rise. It is now 683 and going down.

“National is relying on those forecasts to be correct if it is going to avoid an eighth deficit in a row. It shows how much of a knife edge this Government’s economic management is on.

“The fall in dairy prices has a much wider economic effect. It has created a $13 billion economic black hole over two seasons that will suck in regions reliant on dairy and crucial industries.

“The lion’s share of the milk price pain will be felt in regions that National is neglecting. Many small communities are now mainly reliant on dairy farming. We want the dairy industry to thrive but it isn’t good for farmers to have to carry much of the burden of economic growth on their own.

“New Zealand needs a modern, diverse economy that creates well-paying jobs across all industries,” Grant Robertson says.

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