Currency Slump No Flash In The Pan Problem

Business patience with the main political parties is wearing thin over their failure to demonstrate economic and financial leadership to shore up New Zealanders standards of living, the Northern Employers & Manufacturers Association says.

"Every drop in the value of the kiwi dollar means we are all poorer," said Alasdair Thompson, the EMA's chief executive.

"The present cycle has been going on for about six years. Our savings and assets are losing value. June 1994 was the last time we achieved a trade surplus.

"But in fact the last time we achieved a current account surplus, including interest payments, licence fees and the like, was 27 years ago in 1973.

"The way back to prosperity is through exports, but to lift the sector's performance, much more investment is required.

"While waiting for overseas investors to find us on their 'radar screens' again, now would be a good time for New Zealanders to demonstrate they believe in their own country's future.

"They could do this by weighting their investment portfolios heavily towards export related production, marketing, R&D, and skills training in their own country.

"For this to happen, our businesses expect some leadership and strategic vision to emerge from Parliament. We want our political parties to get over their divisiveness.

"Business wants to see Government engaging with the whole country, not just for the sectional interests they think voted for their parties.

"Policies that encourage savings, lower corporate tax rates, provide for the expensing of R&D, and promote skills training and quality education are what we need.

"Each of these must be agreed by Parliament across political party lines to establish long term certainty to encourage and accelerate export boosting investments.

"The Reserve Bank can't fix our current account deficit even by raising interest rates again.

"To restore the value of our dollar and the health of our economy, our businesses need the confidence from Government that it can effectively manage the transition to an permanent export-led and knowledge rich economy."

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