The latest drop in the dairy price shows a rebound is not coming soon and the Government needs get moving on diversification, says Labour’s Finance spokesperson Grant Robertson.
“The latest fall in global dairy trade auction is a further clarion call for diversification of the economy. National’s claim the price drop will have a limited fallout ignores yesterday’s MYOB Business Monitor showing that over a fifth of small businesses have been affected.
With a fifth of small businesses hit by the fall in the dairy price it’s time the Government stopped being so complacent about the effects on the economy, says Labour’s Small Business spokesperson Jacinda Ardern.
“MYOB’s latest Business Monitor shows 21 per cent of SMEs are feeling the effects of the fall in dairy prices. In rural areas this is 34 per cent but even Auckland and Christchurch are feeling the effects.
The OCR cut today shows National needs to step up and support the Reserve Bank to ensure the country is able to handle ‘the increasing risks to the economy’, says Labour’s Finance spokesperson Grant Robertson.
“The cut to the OCR shows the economy is in need of stimulus, with growing concerns about dairy, the international economy, and the housing market. Current growth is being driven by short-term, non-sustainable factors like migration. As the Reserve Bank said, ‘Growth per person hasn’t been as strong as it might have been’. In fact it has been close to zero over the last year.
National’s 2010 review of the Holiday’s Act identified challenges around holiday payments but failed to fix issues within the former Labour Department, says Labour’s Economic Development spokesperson David Clark.
“In 2010 Cabinet signed off on the recommendations of a working group set up to investigate payroll problems. The Cabinet paper considered recommendations on holiday pay but Cabinet didn’t adopt them.
New figures show the shocking extent of troubles in the regions, with Southland’s GDP falling by 10 per cent, and the West Coast by five per cent in the year to March 2015, says Labour’s Economic Development spokesperson David Clark.
“The collapsing dairy prices and struggling mining and gas industries have caused serious economic problems for many regions with some going backwards as shown in today’s regional GDP figures.
Bill English has admitted the dairy industry is in the Reserve Bank’s severe scenario which could lead to almost half of dairy farmers defaulting on their loans, says Labour’s Finance spokesperson Grant Robertson.
“On Morning Report Bill English said the dairy industry is in an extreme or severe scenario, following the fall in Fonterra’s payout to below $4. In the Reserve Bank’s modelling that could lead to 44 per cent of farmers defaulting on their loans. That’s 5,000 farmers and a huge flow-on effect to their communities.
The escalating payroll scandal that threatens to effect a huge number of employees further exposes this Government’s basic management incompetence, Labour’s Economic Development spokesperson David Clark.
“This is a serious management issue from the Government. It has been in power for eight years but cannot guarantee people have been paid properly.
Fonterra’s forecast payout has more than halved in two years, creating an $8.2b hole in the economy – which must finally be a wake-up call for National, says Labour’s Finance spokesperson Grant Robertson.
“The fall in the payout means it will be approximately just $7b, a fall from $15b two years ago. This will put real pressure on rural communities and farmers that are struggling to cope with high debt levels and three seasons of a low payout.