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The International Monetary Fund's latest report on New Zealand highlights the need for the Government to have a wider economic plan, rather than a narrow fixation on achieving fiscal surplus in 2014/15, Green Party Co-leader Russel Norman said today.
The IMF finds that "the New Zealand dollar would need to be about 15 percent weaker than its current level" to stabilise the net international investment position at 2009 levels. In contrast, Budget 2012 projects New Zealand's net international debt to deteriorate to over $200 billion in coming years. The IMF also notes "New Zealand's relatively modest public debt gives the authorities some scope to delay their planned deficit reduction path in the event of a sharp deterioration in the economic outlook".
"A track back to surplus after National's record borrowing binge is important but the arbitrary target of achieving a tiny surplus in 2014/15 should not come at the expense of wider economic policy," said Dr Norman.
"It matters far more that we address the fundamental imbalances that are holding New Zealand back and making us more indebted to the rest of the world.
"A tiny surplus in 2014/15 - achieved by taxing paperboys, making medicine more expensive, and cutting education funding - does nothing to fix the economy. It has become a purely political goal.
"It is not too late for the Government to start listening to exporters and domestic manufacturers who are being made uncompetitive by our over-valued currency and are crying out for action on monetary policy.
"The Greens' smart, green economic plan would balance the Government's books but, more importantly, it will address the failed monetary policy model that is holding back our exporters and increasing our overseas debt," said Dr Norman.