Peters fears for NZ economy

  • 17/07/2015

The country's economy is facing a "full-blown cyclone" as global dairy prices tumble, says New Zealand First.

Opposition parties are warning of dark days ahead after dairy prices dropped 10.7 percent in Fonterra's latest Globaldairytrade auction.

NZ First leader Winston Peters says our economy risks falling back into a recession.

"It is economic chicanery to excuse the risk with `dairy is a small part of the overall economy', when one in five exports are dairy."

"When will the economic troika of Messrs Key, English and Joyce finally understand that the economy faces more than a head-wind but a full blown cyclone?"

He wants to see National introducing concession loans for farmers, adopting a foreign ownership land register and increasing overseas market development to boost demand for exports.

Fonterra announced yesterday that it will cut 523 jobs to save up to $60 a million a year as part of a strategy to redirect resources to new areas - not a knee-jerk reaction to cut costs as dairy prices continue to fall.

But the Green Party said the job slashes - and the farmers and rural workers facing financial insecurity - show the effects of falling global dairy prices are already being felt.

"Ultimately, these workers are bearing the cost of the National government putting all its bottles in the Fonterra basket," primary industries spokeswoman Eugenie Sage said.

She's calling on the government to support rural economies through investing in innovation and research and development so price downturns are less likely to cause job losses.