A huge deficit in New Zealand's net investment income shows the idiocy of Government and Treasury claims that assets sales are good for the economy, the Alliance says.

And Alliance leader Jim Anderton says the level of profit being claimed by the overseas-owned financial sector shows the need for a New Zealand bank.

Official figures released today show that since the beginning of 1998, overseas investors have made $8501 million from their investments in New Zealand. In contrast, New Zealand's investments overseas have lost $21 million.

"The $8.5 billion deficit on investment income is the reason most New Zealanders feel they are working harder and going backwards," Jim Anderton said.

"The world is making much more money out of New Zealand than we are making out of the rest of the world.

"It amounts to nearly $40 a week per person in higher prices, higher interest rates, reduced wages and reduced profits.

"Selling publicly-owned assets has meant that overseas owners are now taking huge sums out of the country. It makes a complete mockery of claims from Treasury and the Government this week that asset sales have been good for the economy. Asset sales are helping to make us worse off by at least six to seven billion dollars a year."

Statistics New Zealand identified the financial sector as a principle cause of the New Zealand's loss on investment income. 'The increase in direct investment income debits was entirely due to increasing profits of New Zealand enterprises owned by foreign parent enterprises, particularly the financial sector,' it said.

Jim Anderton says that's why we need a publicly-owned New Zealand bank.

The Alliance wants a bank established using the network of New Zealand Post branches.

"Instead of sending all that wealth out of New Zealand to overseas owners of our banks, it could be kept here for our own community," Jim Anderton said.

© Scoop Media

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