Media Release

01 December 2005

Interest Rates Rise Hurts Primary Production

New Zealand First says the Reserve Bank’s plan to lift interest rates even further next week will impact on the export potential of the fishing, forestry and manufacturing sectors during what should be a busy period for overseas sales.

“High interest rates and an over-valued New Zealand dollar have made it extremely difficult for our exporters to compete on world markets,“ said Primary Production spokesperson Doug Woolerton.

”Instead of removing obstacles to grow exports, we have created an importers’ paradise.

“The strong base of primary production, both on the land and sea, provide downstream jobs for hundreds of businesses and thousands of people. It remains the backbone of this country, and we cannot afford to stifle its growth with shortsighted economic and trading policies.

“For far too long interest rates have been used as a blunt instrument to control inflation, with little consideration of their detrimental impact on other aspects of the economy.

“We need to promote a balanced and flexible monetary policy of lower exchange and interest rates conducive to real export and employment growth for our primary sector.

“New Zealand First is looking forward to 2007’s “Export Year”, as stated in our confidence and supply agreement with the Government. The prioritization of measures to significantly grow our export sector is essential if we want to expand our economy,” concluded Mr Woolerton.

ENDS

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