To Economists: Unblock Barriers to Progress

20 July 2007

Media Release

Message to Economists – Be a Team NZ Dedicated to Unblocking Barriers to Progress

NZ has one opportunity for growing a healthy economy and high living standards – profitable exporting. “Yet this is the very sector that’s suffering badly from the consequences to our dollar of Reserve Bank actions to lift interest rates,” notes Auckland Chamber of Commerce chief executive Michael Barnett.

Economists and other would be commentators urging Reserve Bank Governor Dr Alan Bollard to keep pushing up interest rates ignore that many mainly small-medium businesses are doing unprofitable business in world markets to try and retain hard-won customers over many years. “They live in hope that the dollar will soon fall back to a realistic level, but cannot be expected to do this for too much longer without shedding jobs or walking away from markets it will take years to get back,” said Mr Barnett.

Bigger businesses may be okay because they have spare capital to draw from. It is the large number of vulnerable SME exporters in sectors such as wine, fishing and cut flowers who are bleeding heavily, putting on hold innovation, investment and market development.

For the good of NZ, it would help if our economists could pool their combined knowledge and wisdom to offer a shared solution that helps secure profitable exporting and gives confidence to SME exporters, the group on which our economy ultimately lives or dies.

ENDS

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