28 March 2002

Finance Minister Michael Cullen today welcomed the IMF’s assessment that the New Zealand economy is “well-placed to absorb external shocks” and that the macroeconomic framework underpinning it is “sound.”

Dr Cullen was commenting on the latest IMF report on New Zealand.

“I also welcome the IMF’s support for the partial pre-funding of New Zealand Superannuation and for the government’s focus on innovation, skills and international trade liberalisation,” he said.

But he said no amount of repetition by the IMF of its already familiar policy mantra – time limited benefits, pension cuts, a tax on home ownership – would persuade the Labour-Alliance coalition that these policies were desirable or would contribute to the improvement of living standards.

“The IMF’s credibility is not assisted by the fact that it tends to apply the same policy template regardless of the country circumstances. The challenge in New Zealand is to raise productivity and none of the suggestions the IMF is offering would contribute much toward the achievement of that objective,” Dr Cullen said.

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