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Export-led recovery increasingly the stuff of myth

10 December 2009
Media Statement

Export-led recovery increasingly the stuff of myths

The Reserve Bank has confirmed that New Zealand is unlikely to experience an export-led economic recovery despite Finance Minister Bill English’s boasting, says Labour Finance spokesperson David Cunliffe.

“This underlines again just how few ideas National has to improve the standard of living of hard-working New Zealanders,” David Cunliffe said. “Bill English has no plan. All he has is a hope that exporters will lead a recovery. That hope has now been well and truly squashed.”

David Cunliffe said today’s Monetary Policy Statement revealed that while export commodity prices have increased significantly, the Reserve Bank expects these gains to be largely offset by recent appreciation in the New Zealand dollar.

“The Reserve Bank’s outlook for modest export earnings growth is relatively unchanged. This is in direct contradiction to Mr English's claim.”

David Cunliffe said there was more bad news in the Monetary Policy Statement in terms of unemployment for Kiwis struggling to make ends meet.

“Prime Minister John Key has also been boasting, claiming that National with its non-existent plan is doing a pretty good job of getting people back into work.

“Well, the Reserve Bank’s statement shows that claim to be hollow. The MPS shows that many firms elected to retain workers through the recession, and many workers gave up hours to keep their jobs. It is likely that increased demand will initially be met by increasing the hours of existing staff, rather than through new hiring or capital investment,” David Cunliffe said.

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“This is bad news on two fronts. Firstly, it shows how out of touch John Key is, but, more crucially, it points to a large hidden group of New Zealanders who have suffered through the recession as a result of lost hours.

“These are Kiwis who are really struggling, and they can be justifiably angry at the level of John Key’s smugness.

“We have heard today that Australia has now created a whopping 100,000 jobs over the past three months. Kiwis can only ask --- where is John Key, where is Bill English? They are certainly not out there working on behalf of those Kiwis who are most helpless in terms of countering the downturn.”

ENDS

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