1 Oct 2012

Action needed on effect of high NZ dollar - Fletcher

8:35 am on 1 October 2012

Businessman Hugh Fletcher says more can be done to alleviate the damaging effects of the high New Zealand dollar on the productive sector.

The New Zealand dollar has surged in the last couple of years, hurting manufacturing and farming returns, prompting calls for some relief.

Since 1984, governments and officials have said little can be done, but Mr Fletcher says that's wrong.

For example, he says, the use of interest rate differentials for foreigners as well as levies on borrowers can help reduce an overvalued currency.

Mr Fletcher says it's disappointing that there is a refusal to enter into serious and reasoned debate on the issue.

He says the most important focus for policy makers should be reducing the country's current account deficit and its indebtedness which is high by international standards.

Mr Fletcher says high debt is "wealth-sapping" because six to seven cents of every dollar of wealth created by New Zealanders is paid to foreigners each year.

He says the hands off, free market policies of the last more than 30 years have not served the business community or New Zealanders well, resulting in New Zealand firms being sold to foreign interests.

Mr Fletcher recently stepped down from the board of Fletcher Building, He remains on the board of IAG and Vector, and continues his role with the Dilworth Trust.