The ugly picture painted by Treasury’s latest figures can’t all be blamed on the turmoil in world financial markets.
Treasury has painted a very ugly economic picture for the incoming National government with cash deficits increasing, growth shrinking, tax revenue diminishing and unemployment rising.
Surely some of the blame for this can be laid on the failed policies of the noughties, if only because if labour was in power they’d be sure to blame it on the “failed” policies of the 80s and 90s.
Wouldn’t you know it? Not only is Labour trying to rush through the Emissions Trading Scheme without the serious deliberations it needs, they chose the most expensive option for it.
The Government delayed bringing transport fuels into its Emissions Trading Scheme to reduce its impact on inflation — but it chose the most expensive of four options Treasury put up.
Documents obtained by Radio Live under the Official Information Act showed Treasury preferred other options than the one chosen.
It’s bad enough that the proposed ETS will have a huge economic cost with little or no environmental impact. Why would they make it worse by choosing the most expensive option?
MAF’s SONZAF (Situation and Outlook for Agriculture and Forestry) key facts indicate:
- Dairy export earnings are projected to peak next year at $12 billion – more than 40% higher than earnings two years ago.
- Dairy export earnings are projected to ease back to $10.5 billion in 2010 before rising again to just under $12 billion by 2012.
- The weighted average payout (net of industry goods levy) for the next four years averages around $6 – significantly higher than the previous five year period. Detailed payout projections are $6.90 (2009), $5.78 (2010), $5.98 (2011), $6.32 (2012).
- Demand is growing from new markets in China and OPEC countries. OPEC countries account for 21% of New Zealand’s total dairy exports.
- The South Island continues to drive dairy herd expansion. The South Island herd grew by 13% last year – 31% of New Zealand’s dairy herd is now in the South Island.
- Manufacturing beef (a type of minced beef) prices are expected to rise by more than 30% over the five year forecast period.
- Beef export volumes are projected to fall by about 2% next year due to drought but to grow back to 2007 levels by the end of the five year forecast period.
- Export returns currently at $1.5 billion are expected to climb steadily to $2.26 billion by 2012.
- Sheep numbers were down 4% at June 2007.
- The drought and recent low prices are pushing further declines in sheep numbers – adult sheep slaughter increased by 28% for the year ended June 2008.
- Lower stock numbers and lower weights mean lamb export volumes are projected to fall through the five year period by 11% to 287 000 tonnes.
- Higher prices are set to push overall export earnings over the same period up by 25% from the current $2.1 billion to $2.6 billion.
- The average wool sale price is projected to rise by just over 40% over the next five years to $5.35 per kilogram.
- Wool volumes are projected to plateau as falling sheep numbers balance higher prices at 142 000 tonnes.
- After an initial fall export earnings are projected to grow by 29% over the five year period to $795 million.
- Log prices and pulp prices are both projected to climb by more than 30% over the next five years.
- Timber and panel export prices are projected to fall before recovering but volumes remain relatively flat over the next five years.
- Overall forestry export returns are projected to grow from $3.3 billion in 2008 to $4.5 billion in 2012.
- Wine grapes are now the largest single horticultural crop in New Zealand at more than 25 000 hectares.
- A big harvest this year will boost export volumes by 30% in next year and increased plantings will push exports up by more than 50% by 2012.
- The value of wine exports is projected to rise by 76% to $1.3 billion by 2012.
- Sauvignon Blanc makes up 75% of wine exports and is New Zealand’s largest wine export followed by Pinot Noir, Chardonnay and Merlot.
- The current average price of $8.1 per tray of kiwifruit is projected to grow to $10.7 a tray by 2012.
- Predicted kiwifruit export volumes remain static at just under 100 million trays over the next five years.
- Kiwifruit export returns are projected to grow from $779 million dollars to $1.06 billion by 2012.
MAF’s assumptions are based on expectations for “normal” climatic conditions with no allowance for domestic or international natural disasters nor major economic changes. Projections are based on Treasury’s exchange rate assumptions from the 2008 Budget.