Good trade news masks increasing oil vulnerability

Positive news released today on New Zealand’s balance of trade figures mask an increasing vulnerability of our economy to oil prices, the Green Party says.

“Growth in exports outstripped growth in imports this month on the back of higher prices and demand for milk powder.

“However, this good news story hides the increases in oil imports simultaneously occurring — evidence that our economy is becoming increasingly vulnerable to oil price shocks, not less," says Russel Norman, Green Party Co-Leader.

The annual trade balance for the year ended October 2010 was a surplus of $1.2 billion. On the import side, petroleum and petroleum products had the largest increase, up $156 million (34 percent), due to increases in crude oil, up $130 million (47 percent), and petroleum bitumen which increased $21 million. Vehicles, parts, and accessories had the second-largest increase, up $91 million (28 percent). This increase was led by passenger vehicles, particularly new petrol cars with a cylinder capacity of 1500cc–3000cc.

“While there is enormous static in these figures, the underlining trend remains: We have a major structural problem in the economy and the Government needs to do more than cross its fingers and hope it will get better as a result of a falling dollar — we need a public transport plan,” said Dr Norman.

“We can make a plan to move freight off the roads and onto shipping and rail, and a plan to move passenger transport onto buses, trains and cycling in our urban centres.

“If we don’t decouple the prosperity of our economy from cheap energy in the form of oil, we’ll stagnate and never build the resilient economy needed to weather the looming climate and oil price storms on the horizon.

“Instead of prudent economic management, the Government is pushing through a motorway building spending spree.

“Reducing our dependence on imported oil would be good for the economy, it would be good for the environment by reducing our greenhouse gas emissions, and it would be good for people caught between inadequate public transport and high petrol prices.

"We’re facing the end of cheap oil. Let's prepare ourselves for it," said Dr. Norman.