Get our helium-filled Kiwi dollar back to earth, says Seafood Industry

19th July 2007

“The seafood industry is appealing to the government to rescue New Zealand’s food producing economy which is at severe risk with the dollar worth close to US80 cents,” said Alastair Macfarlane, General Manager of the Seafood Industry Council.

“Dr Cullen is right to think the unthinkable and consider using section 12 of the Reserve Bank Act to temporarily redirect the Bank’s primary objective away from “achieving and maintaining stability” in the general level of prices.

“If invoking section 12 is too hard to contemplate, then the seafood industry urges Dr Cullen to look again at all alternative courses of action, no matter how unpalatable, to bring the helium-filled kiwi dollar back to earth, ” said Mr Macfarlane.

Mr Macfarlane noted that last year the NZ/US dollar rate ranged between US62 and US69 cents and the seafood industry managed to earn NZ$1.35 billion on sales worth about US$900 million.

“This was a creditable performance in very difficult conditions. But at today’s exchange rate over US79 cents, those sales would be worth NZ$1.14 billion and falling NZ$20 million for every cent the NZ dollar strengthens.”

Mr Macfarlane suggested that Dr Cullen should also “think the unthinkable” in other areas of his portfolio, apart from section 12 of the Reserve Bank Act. The size of central and local government has ballooned under his watch and its dead weight cost is something that the Minister has authority to address.

“The international competitiveness of New Zealand’s food producing economy is now in grave danger. New Zealand’s economy fundamentally rests on being competitive in international food markets,” said Mr Macfarlane.

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