Hon. Bill English MP National Party Deputy Finance Spokesman

21 December 2005

Cullen's chickens come home to roost

"The balance of payments figures released today show the New Zealand economy is even more unbalanced than economic analysts had previously thought," says National Party Deputy Finance spokesman Bill English. The current account deficit has plunged to 8.5% of GDP, the biggest it has been for almost 20 years, and one of the biggest deficits of any country in the OECD.

"The way things are going, the current account deficit is likely to be in double digits before long," says Mr English. "In Opposition, Dr Cullen said he would address New Zealand's current account problems when he became Minister of Finance.

"But on his watch the current account deficit has plunged from 4.6% of GDP in 1999 to 8.5%. Clearly Labour's policies have had no impact on what is a serious structural problem in the New Zealand economy. "The reality is that they have made things worse.

"High levels of public spending have kept domestic demand strong, which has pushed up imports. On the other hand, exporters have been smothered by the high dollar and increased regulation.

"The widening gulf between imports and exports has further increased the risk of a hard landing for the economy," says Mr English.

ENDS

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