10 September 2000

Dr Cullen's medicine makes us sick

The Green Party says the minority Labour-Alliance Government's economic formula will not improve the health of the New Zealand economy and could make it even more fragile than it currently is.

Responding to the September edition of 'Dr Cullen's Casebook', Green Party Co-Leader Rod Donald said the Government clearly hadn't got the message that increasing New Zealand's exposure to the whims of the global marketplace is not the way forward.

"Instead of acknowledging that the last government's policies are the root cause of our economic woes, Dr Cullen is advocating even more of the same medicine: more free trade, more foreign investment, more gambling for even higher stakes in the global casino economy," said Mr Donald.

"The Labour-Alliance Government needs to give serious attention to the debit side of the national accounts. To date it has focused solely on increasing sales (exports) and has refused to tackle purchases (imports), despite the Alliance previously supporting tariffs.

"The bottom line result is that we now have the worst ever trade deficit in our country's history, at over $3 billion for the last year," said Mr Donald.

'Dr Cullen's Casebook' says the Government's economic strategy 'focuses around two themes: to increase our export earnings and to improve the quantity and composition of our savings'.

"That sounds fine as far as it goes. The Green Party certainly supports increasing the value of our exports. We also want to reduce domestic consumption and use the savings to increase investment in our own economy and thereby reduce our exposure to foreign profit-takers," said Mr Donald.

"However, we believe that Dr Cullen should be taking a radically different approach to building a healthy, sustainable economy. It's time to apply preventative therapies instead of continuing to inflame the symptoms," he said.

"Unfortunately this government, like the last one, is fixated by free trade. Cullen's formula focuses on expanding 'the volume of exports' by promoting free trade with Singapore, expanding CER with Australia, developing trade with Latin America and pushing free trade through APEC and the WTO.

"Surely the goal should be to increase the value of our exports rather than the volume?" said Rod Donald.

"Adding value to what we already export, for example, by converting to organic agriculture, rather than increasing the volume is far more effective, both in terms of generating revenue and creating jobs for New Zealanders.

"Meanwhile, as a direct consequence of free trade, New Zealand's level of consumer goods imports has more than doubled in the last decade to $7 billion dollars per year. If those extra goods were made in New Zealand by New Zealanders, we would create at least 60,000 jobs and the trade deficit would be back in the black.

"Across the Tasman, Australian state and federal governments are implementing strenuous buy-local strategies by ensuring that state spending boosts regional development and local job creation. Our own Government could be getting our economy back on its feet by adopting similar 'import substitution' strategies to reduce our dependence on imports, restore trade surpluses, create jobs and rebuild the domestic economy," he said.

"It has begun to acknowledge that there are advantages in buying New Zealand made but has yet to take a lead by directing government spending or playing a co-ordinating role.

"Dr Cullen's formula includes attracting more foreign investment, but surely the last thing we need is greater exposure to companies with no commitment to New Zealand," said Mr Donald.

"The recent decisions of existing foreign investors Goodman Feilder and Carter Holt to close down the Gore Oatmill and the Mataura Paper Mill - even though Gore was running at a profit and Mataura could have with the right marketing and government encouragement - demonstrates why we need to increase investment in our economy, not the reverse.

"Dr Cullen is also floating the idea of allowing the Government Superannuation Fund and National Disaster Fund to gamble on the share market. We don't believe it's prudent to risk losing these funds at the roulette table of the casino economy," he said.

"To cap off the Government's flawed formula Prime Minister Helen Clark is now suggesting that there is some merit in investigating currency union with Australia.

"Is this not the same Helen Clark who has championed calls for rebuilding national identity through the arts and has been hyping New Zealand's independent foreign policy position on nuclear disarmament to international acclaim?" asked Mr Donald.

"If the Labour-Alliance Government gave away our currency it would in effect be giving away what's left of our economic sovereignty. The globalisation of New Zealand would then be complete and irreversible.

"Dr Cullen's attendance at the meeting of the world's most powerful corporations at the Melbourne Casino this week reinforces the Green Party's serious concerns about the direction this minority government is taking."

Rod Donald said the goals of the World Economic Forum were clear: to maximise corporate profits at the expense of human rights, environmental protection and democratic sovereignty.

"Dr Cullen's presence gives their agenda credibility. His 'smart alec' attack in parliament last week where he called the concerned citizens who will be protesting at the forum 'hairy persons, somewhat unkempt and unwashed' is not only insulting to the thousands of church leaders, environmentalists, human rights campaigners, community activists, trade unionists, and fair trade advocates who challenge the WEF agenda.

"It also confirms that he doesn't understand, nor has any wish to, the fundamental issues of sustainability, sovereignty, social justice, self-reliance and food security which underpin the protests and are the reason why the Green Party has sent two of our MPs to represent us," said Rod Donald.

Contact Rod Donald MP: 025 507 183, 03 366 3292

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