Role of Exports in Improving Economic Outlook

  • Bill Birch

New Zealand was fortunate to have a Coalition Government willing to continue to place a priority on lower taxes, including lower corporate rates, Finance Minister Bill Birch said tonight.

Addressing the inaugural celebration meeting of the Taiwan Business Association of New Zealand, he said lower taxes had a significant future role to play in improving New Zealand "s international competitiveness.

Mr Birch reaffirmed his confidence in the ability of New Zealand exporters to bounce back from the Asian crisis with a period of strong export growth on an international basis.

He said New Zealand exporters were maintaining the positions developed in Asia in the past decade to the best of their ability and, in addition, broadening their horizons to other areas of higher current growth.

"Consensus Forecasts figures released in June show that while growth in 1998 will be negative in Japan and South East Asia, it is strongly positive in markets including the US (3.2%) Germany (2.6%) and UK (2.2%).

"The latest figures for New Zealand exports show that our exporters are demonstrating quite dramatically that they do now have the flexibility to adjust rapidly to the changing opportunities of the international scene.

"For example, although the value of exports in the three months to April 1998 compared with the same period of 1997 was down 11.7% for Japan and 17.9% for the rest of Asia, it was up 29.5% for the United States.

"Similarly, in tourism, although the annual change in short-term arrivals for the three months to April was strongly negative for Asia, arrivals from the US, UK, Germany and Australia were up 15.2% on a year earlier.

"New Zealand has a very strong economic policy framework in place, which has already made major and rapid adjustments in the price signals to both exporters and importers, to optimise their contributions to the nation.

"New Zealand exporters, motivated by favourable exchange rate adjustments, are now moving strongly wherever practicable with a world focus on their higher-profit international opportunities," he said.

Mr Birch said those opportunities arose because New Zealand"s strong economic framework had been fostering adjustment for some time now to the situation created by the Asian crisis and the current account deficit.