Bad week for NZ economy gets worse

The bad news for the New Zealand economy got worse this morning with the 8th successive drop in dairy prices at this morning’s global dairy auction, again exposing the absence of any Plan B from the National Government, Labour’s Finance spokesperson Grant Robertson says.

“Dairy prices have fallen another 5.9 per cent overnight, down 34 per cent since March and falling 57 per cent since last year’s peak. Prices are now at their lowest level in six years.

“This latest fall comes on the back of business confidence turning negative for the first time in four years, stubbornly high unemployment, declining job advertisements, falling wage and employment confidence and a precipitous drop in exports. 

“The warning signs are clear for everyone to see, yet the Government continues to sit on its hands as more and more jobs and incomes are put at risk. Riding the wave of commodity prices was never going to be sustainable.

“The Reserve Bank Governor has warned declining dairy prices represent a major financial risk to our economy.  If prices continue to remain low, more and more farms will be at risk of foreclosure. The expanding $13 billion economic black hole of collapsing dairy prices is already sucking in the regions that are reliant on dairy and other supporting industries.

“Of course New Zealand is affected by major international events beyond our control such as the slow-down in China and the Greek crisis. But sitting on our hands cannot be the answer.

“Labour believes a responsible government would have made far greater efforts to build new industries, invest more in our regions and in Research and Development.

“National has squandered the opportunities of recent years and continues to deny the reality of an economy that is going from a stumble to a stagger,” Grant Robertson says.