Business confidence back into the negative

Bill English National Finance Spokesman

10 April 2001

Business confidence back into the negative

The latest NZIER survey of business confidence shows Dr Cullen's smug attitude isn't washing with the business community, National's Finance spokesman Bill English said today.

"While businesses remain optimistic about their own outlook, manufacturers in particular are concerned about the impact on our economy from slower growth in Australia and the United States. These countries are our two major markets for exports of manufactured goods.

"Michael Cullen is on record as saying "We have sufficient economic momentum in New Zealand to carry us through any temporary external downturn". Manufacturers don't seem to place much weight on that assurance.

"The New Zealand economy bounced back very quickly from the 1998 downturn because of the competitiveness of the New Zealand export sector.

"The business community is looking beyond the current set of positive numbers and is starting to wonder whether higher taxes, a re-regulated labour market and higher compliance costs will help them out of the downturn in trading partner growth as it starts to impact on New Zealand.

"This downturn in business confidence is significant just two months out from the Budget. It makes it more important than ever that the economic projections underlying this Budget are realistic and credible.

"Dr Cullen has had an easy ride so far, but the Budget is likely to reflect the growing gap between his view and that of the business community," Bill English said.

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