Current account deficit at $10b shows need for change

The Current Account Deficit has hit $10 billion, showing that bold new ideas are needed to ensure New Zealand pays its way in the world, says Labour’s Finance spokesperson David Parker.

“Today’s figures show that New Zealand simply isn’t paying its way and, in truth, it’s been that way for 30 years.

“Our Current Account Deficit is a symbol of our inability to sell enough exports to cover the costs of our imports and interest. We see the ramifications echoing through the economy in the form of job losses across major industries. New Zealand needs to earn more by selling overseas but this Government doesn’t have the ideas or gumption to make that happen.

“In contrast Labour does. We would increase our savings through universal KiwiSaver and make sure those funds are invested in high-growth exporting companies through tax reform such as a capital gains tax.

“We would also require the Reserve Bank to consider the exchange rate and other important aspects of the economy, instead of the primacy of inflation trumping exports. That will make our currency more competitive and stable, something exporters are crying out for.

“I hear from directly from exporters, pleading with us to get the Government to listen. Time and again they are telling us that the inflated dollar is killing their businesses and costing jobs.

“Giving primacy to inflation targeting has passed its use-by date, but National refuses to realise the rules of the game have changed. They are taking New Zealand nowhere and letting hard-working Kiwis and good businesses down.”