21 September 2005

Current account deficit poses big challenge for new govt

While Finance Minister Michael Cullen has done a sterling job to achieve a fiscal surplus, the country's accounts have got out of hand, Green Co-Leader Rod Donald says.

Today, Statistics NZ announced an all-time record current account deficit of $11.9 billion for the year to June 2005. This is a record in dollar terms ($11.9 billion), as percentage of exports (24%) and as a percentage of GDP (7.9%, estimated from the PREFU).

"One of the biggest challenges for the new government will be to manage New Zealand's economy out of the red and back into the black," Mr Donald said.

"The Green Party has been concerned for many years that the policies and practices of successive governments have exacerbated our trade and current account deficits and foreign debt levels. It will therefore be no surprise that we will be proposing constructive policies to steer New Zealand's economy towards sustainability and self-reliance in any negotiations we have with Michael Cullen and Helen Clark.

"We have already signalled a Buy Kiwi Made campaign as one of our headline policies. We believe that, if New Zealanders showed more loyalty to Kiwi businesses and people who worked in them, this would not only create more jobs and strengthen our manufacturing sector, it would also reduce our unhealthy dependence on imported goods. That would in turn reduce our trade and current account deficits."

ENDS

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