There’s been a lot of talk recently about the economy and what impact the lower dairy prices will have. There’s no doubt the recent drop in international dairy prices will hurt farmers’ incomes and that in turn will have an effect on other businesses around the country. We all feel for New Zealanders who are affected by these events but it’s important to remember New Zealand has a resilient, diversified, and flexible economy. So, while dairy is down at the moment, prices for other exports are up and other sectors are also performing well, which is helping to offset the fall in dairy prices. Beef exports for New Zealand farmers, for example, have risen to record highs……. and annual fruit exports are also up 20 per cent on the previous year and at an all-time high of $2 billion. Exporters are also benefiting from a lower exchange rate, which is fallen around 25 per cent over the past year, which means they are getting better returns for the goods and services they sell overseas.
Tourism is thriving. Just last week official figures showed we broke through the 3 million figure for the first time in terms of the number of visitors who came to New Zealand in the past year. These visitors are also staying for longer, and spending more than ever before, which is helping to create more jobs and opportunities for New Zealanders. International education, where students come to study in New Zealand, is now worth $2.85 billion to the economy and is supporting 30,000 New Zealand jobs. So, while low dairy prices are undoubtedly a blow, economists are still forecasting growth of around 2 to 2.5 per cent a year, which is good, solid, and sustainable. This growth will build on the good economic performance New Zealand has experienced over the past few years.
Since early 2011, nearly 200,000 new jobs have been created – that’s around 120 new jobs created every day. Our employment rate is also now at a near-record high and wages are rising much faster than inflation. National’s commitment to building a more competitive and productive economy is clearly working, as economic and job growth is expected to continue for the next few years. Dairy prices will recover over time and the longer-term outlook for the industry is positive. So I’m optimistic and confident about New Zealand’s future.