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Doctors' Fatal Prescription

Media Release
2 October 2003

Doctors' Fatal Prescription

New Zealand First is calling on Doctors Bollard and Cullen to administer some first aid to the New Zealand economy by helping exporters with a lower exchange rate.

“The Official Cash Rate is too high because of the immigration-inspired over-stimulation of the housing market. The Reserve Bank must give greater weighting to the three ‘Es’: exports, employment, and economic growth and cut the rate now,” said New Zealand First leader, Winston Peters.

“As the Kiwi dollar rises our exporters’ prospects diminish. This combination of high interest and exchange rates is a fatal prescription for a country aiming to drag itself back into the first world.

“The Finance Minister also needs to be less selective in his measurement of the economy’s performance. While congratulating himself on a high tax take and an internal surplus Dr Cullen needs to pay greater heed to a current account deficit approaching $6b, quarterly growth of 0.2%, and alarming foreign debt equal to 80% of GDP,” said Mr. Peters.

“First home buyers can’t afford overpriced houses and exporters are facing disadvantageous terms of trade because of overvalued exchange rates and high interest rates. The economic doctors need to alter their policy prescriptions in support of farmers, manufacturers and other exporters.

“New Zealand is a trading nation – not a transit camp for migrants,” said Mr Peters.

ENDS

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