Home > A Little Blue Marble Called Earth, Dollars & Sense, Social Issues, The Body Politic > Johnny’s Report Card – National Standards Assessment y/e 2012: trade

Johnny’s Report Card – National Standards Assessment y/e 2012: trade

To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.

The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.

Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc)  in 2008 and four years in office to make good on it’s election promises.

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Trade

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The rhetoric:

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more exports more jobs

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The reality:

In simple terms, we, as a country, have continued to  import more than we exported,

2008/09

The trade balance for December 2008/January 2009  was a deficit of $341 million. This compared with a surplus of $38.5 million  in December 2007/January 2008. (See: Tradingeconomics – Balance of Trade)

2012

The trade balance for September/October 2012 was a deficit of $718 million. This compared with a deficit of $226 million  for September/October 2011. (See: Tradingeconomics – Balance of Trade)

As reported in the NZ Herald on 27 November 2012, the annual deficit increased to $1.37 billion. (See: Trade deficit widens as dairy values fall)

In graph form,

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New Zealand Trade Deficit Narrows in October

Source: Tradingeconomics – Balance of Trade

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On top of that, what we did export earned us less with the increasingly high value of the New Zealand dollar,

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NZ Dollar

Source: Tradingeconomics – New Zealand Dollar

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As Bloomberg wrote in October,

New Zealand’s annual trade deficit swelled to the widest since 2009 as exports fell to a 20-month low amid a decline in dairy shipments and a rising currency.

See: New Zealand’s Annual Trade Deficit Swells to Widest Since 2009 – Bloomberg

The high NZ Dollar not only affects the value of our exports (and thus helps to pay for imports)  but has a direct, inescapable impact on our employment,

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Job losses blamed on high NZ dollar - more forecast

Full story

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Whilst governments around the world were – and still are – manipulating their currencies downward, with several techniques (including “quantitative easing”) National remains wedded to a hands-off policy of allowing the “market” to determine the value of our dollar.

So while we are playing by purist, Market rules – other countries have thrown the rulebook away and doing whatever it takes to boost their economy and create jobs.

The “reward” for National’s obedience to dogma? Massive job losses,

Fears high dollar pushes some firms close to edge

Rakon blames job cuts on high dollar

High dollar blamed for job losses at wool plant

The outlook? Not good,

Currency outlook tough for 2013

National’s response?  Abject surrender,

If ever  a lesson was needed to illustrate the sheer futility of single-minded perseverance with a failed economic ideology, it is National’s committment to it’s  hands-off policy on the New Zealand Dollar.

And yet, when it comes to “sexy” industries, National will climb over broken glass to throw tax-payer subsidies at the likes of  “Lord of the Rings“,  “The Hobbit“,  Rugby World Cup, et al.

Whilst Key  will crow about “3,000 people have been employed because of the Hobbit” (see: John Key pushes Hobbit benefit) – meanwhile 40,000 manufacturing jobs have been lost since this Government took office in 2008 (see: Loss of work hits hard).

If, by now you are feeling anxious and upset, don’t panic. It simply confirms you are still sane.

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Report_Card_trade

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= fs =

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  1. samwise
    11 January 2013 at 5:59 pm

    The Nats are “business friendly”? Could’ve fooled me.

  1. 9 January 2013 at 5:43 pm

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