Media Release September 19, 2000
Debt correction exposes opportunities for leadership
The correction of the current account deficit for the year ended March from 8.2% of GDP to 7.1% is most welcome, but has
called further into question the Government's grasp of economic reality, says the Employers & Manufacturers Association (Northern).
"Regardless of the percentage of GDP that last year's deficit represents, the fact is we added a further $7.3 billion to
our overseas debt in the year ended March," said Alasdair Thompson, EMA's chief executive.
"As a result of the amendment by Statistics New Zealand, instead of a rapidly worsening trend, our economic performance
on this basis has now returned to the same level it was in 1997, with the current account deficit running at 7.1 per
cent of GDP.
"It was very poor then, and its still very poor.
"Nevertheless the amended figures represent a more manageable situation than previously. Combined with the low value of
our dollar, a platform for a much stronger and sustainable import substitution and export production base must be built.
"For business to invest in the transition to achieve this will require leadership with a definite vision of the
opportunities and how to grasp them.
"The Prime Minister saying yesterday that the current account deficit has "fallen on this Government's plate to
endeavour to deal with it" just does not cut it. A week or so ago she said the Government could do nothing about the
value of the dollar.
"These expressions of passivity and helplessness are not the sort of talk we need.
"If the PM listened to a wider range of advice she would have known many months ago that the present situation was
"Communications Minister Paul Swain is articulating the sort of vision for New Zealand's telecommunications future that
we need to hear for other sectors of the economy, especially for local production and exports.
"The rise of the US dollar has flattened inflation completely in the United States and is cutting into its producers
margins and profits there, so there will be a correction.
"New Zealand must make smart use of the present opportunity to increase our business presence and markets in the US
while the favourable conditions last.
"On this and for other development opportunities, business and everyone else wants to hear how the Government intends to
lead the country out of the present cul de sac and into a more secure future."
Further comments: Alasdair Thompson tel 09 367 0911 (bus) 09 303 3951 (hme) 025 982 024