Bill English MP
National Party Finance Spokesman

3 July 2007

Record Govt spend-up one reason for high dollar

The Labour Government's record Budget spend-up is one of the reasons for the record high levels of the New Zealand dollar, says National Party Finance spokesman Bill English.

The kiwi dollar today hit US78c.

"Sustained high levels of the dollar - driven by high interest rates - are going to have a big impact on the export sector," says Mr English.

"They are paying the price for Michael Cullen ignoring consistent advice from the Reserve Bank and others about Government spending.

"The OECD, IMF and Treasury have also warned that strong growth in government spending is pushing up interest rates - and therefore the dollar.

"The 2007 Budget had record spending by the Government, with Dr Cullen committing around $4.1 billion of new operating spending initiatives over the next two years.

"Dr Cullen's habit of making big commitments and spreading the cost out of future years, is building up into a bow-wave of spending which will keep pressure on interest rates for several years to come.

"Exporters, as well as households, will feel the pain."

ENDS

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