The forecast drop in exports and predicted halving of growth shows that it’s downhill from here with National, Labour’s Finance spokesperson David Parker says.
“Growth under this Government peaked in June and halves to two per cent in coming years. At the same time wages will stagnate and interest rates will rise relentlessly.
“Under National, New Zealand has become ever more reliant on raw commodities such as milk and logs while non-primary manufacturing exports and other industries struggle. It is now clear this narrow focus is hurting the economy and shows New Zealand needs an economic upgrade that only Labour can deliver.
“The fiscal update shows that exports will fall from 33 per cent of GDP when National came into office to 26 per cent of GDP. Their promise of increasing exports to 40 per cent of GDP is nothing more than a pipe dream.
“At the same time too much capital goes into housing speculation rather than productive businesses. New Zealand will never get rich selling houses and farms to each other or to foreigners.
“To prove that, the external deficit hits $15 billion a year and net international liabilities will rise from 65 per cent of GDP to 77 per cent of GDP, worse than predicted.
“John Key and Bill English can't blame the GFC or the Canterbury earthquakes for taking New Zealand backwards in exports as a proportion of our economy. It is their mismanagement that is to blame.
“Labour will continue where we left off - running surpluses - because sound fiscal management is important. But good economic management is about more than fiscal management.
“Treasury has unusually highlighted that the cost of Superannuation will rise by $3.4 billion a year between 2012/13 to 2017/18.
“Superannuation now costs more than all benefits combined, accommodation supplements and Working for Families. Next year it passes the amount the Government spends on all education from pre-school to tertiary. That’s irresponsible fiscal management.
“Labour’s Economic Upgrade plan will diversify our economy and boost exports through a focus on investment, innovation and industry. We will increase investment through universal KiwiSaver and use a capital gains tax (excluding the family home) to direct it to productive businesses and jobs.
“We will boost innovation through research and development tax credits and tax incentives to encourage investment in new technology.
“We will support crucial industries through upgrade plans for sectors such as forestry, manufacturing and ICT.
"The choice on economic management this election is clear – more of the same or a much-needed upgrade,” David Parker says.