Echoes of GFC with huge trade deficit

New Zealand is now experiencing the worst annual trade deficit since the height of the global financial crisis because the National Government has failed to diversify the economy away from dairy and oil, the Green Party said.

“The $2.6 billion trade deficit for the year ended April 2015 is the largest since June 2009 when the global economy was deep in crisis,” Green Party Co-leader Dr Russel Norman said.

“National has failed to put in place an economic strategy to diversify our economy and now we’re paying the price.

“Falling global prices for dairy products and oil led to a massive $240 million drop in exports in April 2015, compared to April 2014.

“National’s pollution economy is clearly not working.

“The Budget last week was quite clear that the Government’s positive economic predictions rely on increasing dairy revenue, but the trends show that this is unlikely. The future under National is not looking bright.

“Last week’s Budget failed to kick-start the development of a smarter, cleaner economy.

“Research and Development spending is still well below the OECD average, and the Government is failing to address the massive skills shortage in the high tech and ICT sectors.

“The Green Party has a plan to create an innovative, high-tech, high wage economy.

“R&D tax credits would support all businesses of all sizes to innovate, not just a chosen few.

“Boosting education funding would set up young New Zealanders to create prosperity for themselves and the country.

“We can help close the trade deficit gap by using Government procurement to grow and champion local expertise.

“A Green Investment Bank would help finance the development of a high-tech, low-carbon economy less at the mercy of international commodity prices.

“National’s narrow-minded focus on dairy and oil is a failed strategy,” said Dr Norman.

Link to Statistics NZ Overseas Merchandise Trade statistics.