CAD figures show economic rebalancing failing

Today's worsening current account deficit figures reveal that the National Government's goal of rebalancing the New Zealand economy is failing, Green Party Co-leader Russel Norman said today.

For the year to June 2012, the current account deficit rose to $10.1 billion, or 4.9 percent of GDP, well ahead of Government forecasts made at the time of the May 2012 Budget.

"National has failed to put in place the drivers that will assist with economic rebalancing," said Dr Norman.

"We're living beyond our means, going further into debt to the rest of the world, and the rising current account deficit reflects this unsustainable trend.

The headline drivers of the worsening deficit were increased bank profits being sent overseas and the increasing costs of importing oil.

"The high concentration of foreign ownership in our banking sector has left us incredibly vulnerable to capital drain," Dr Norman said.

"Ninety-five percent of our banking industry is foreign-owned and the National Government has done nothing to address this major structural weakness in our economy.

"The Green Party would invest in Kiwibank to enable it to better compete with the big four Australian banks and become the Government's banker - securing the largest banking contract in New Zealand.

"National's one-sided investment in motorway infrastructure has made our whole economy more vulnerable to rising oil prices, not less."

"The Green Party would take a more balanced approach to transport infrastructure investment, investing in rail in Auckland to make their economy more resilient to oil price rises," Dr Norman said.