Media Release August 24th, 2000

Wanted: strong, positive leadership by a Government that won't pass the buck

The Prime Minister saying yesterday that Government "could do nothing about exchange rates" may be technically accurate but reflects poorly on its determination to restore the purchasing power of our economy, says the Northern Employers & Manufacturers Association.

"Blaming business for the decline in the value of our currency won't work," said Alasdair Thompson, EMA's chief executive.

"Shooting the messenger won't help rebuild business and investor confidence.

"Business does not expect Government to come up with a quick fix to our current account deficits which have accumulated year after year for 27 years.

"But we do expect Government to shoulder the responsibility for introducing and integrating policies that, together with effective leadership, will attract and retain investment here.

"Business has made a range of suggestions to help do this; Government has all but ignored us.

"Instead, it headed down a path of wealth redistribution with little understanding how to achieve its goals, and even less awareness of our reliance on global investor sentiment and markets.

"Now that the ideological part of its agenda is hopefully over, business wants Government to demonstrate strong and strategic leadership to build our economy. We want to build a strong kiwi dollar based on a strong economy.

"For this to happen, Government may need to take some calculated business risks, for example, by lowering the corporate tax rate, expensing R&D, investing more on skills development and quality education.

"Urgent attention is required to ensure the current higher returns from our primary commodities are not squandered on investment behind the farm gate but go into new product research and market development.

"We must achieve a far higher level of export returns than at present, to cover the Balance of Payments debt, to lift the value of our purchasing power in the world, and to make sure Government itself will be able to afford its social welfare programme.

"We urge Government to start listening to a much broader range of constituents, and get over the name calling and bickering."

Further comments: Alasdair Thompson tel 09 367 0911 (bus) 09 303 3951 (hme) 025 982 024

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