Farming lifts GDP figures

Southland farmers can take a bow as the rural sector has once again supported solid economic growth in the first half of this year, writes Bill English (National) in From the Beehive.

Gross domestic product grew 0.6 per cent in the June 2012 quarter and follows a 1 per cent increase in the March quarter. This takes annual growth to 2.6 per cent - the highest rate since 2007.

Agriculture was the largest contributor to economic growth in this quarter, rising 4.7 per cent. This is fantastic news for Southland and reflects a good season for pasture growth that resulted in record production of milk, the basis of New Zealand's exports of dairy products.

The result also demonstrates the significance of farming to our economy and the important role the rural sector plays in our lives.

And, despite what they might say in the big cities, it reinforces the rural sector's position as the backbone of the economy.

The Government also recognises the rural contribution and continues to work towards improving the lot of farmers.

The GDP growth in the June quarter also shows that despite uncertainty in other parts of the world, New Zealand is well placed economically.

The Government cannot influence these external events. In the current environment, it's important we continue our wide-ranging economic programme to increase New Zealand's long-term competitiveness and give our businesses the best chance of succeeding. We are focused on growth that is sustainable and built on higher savings and earnings, rather than consumption and debt.

Households and businesses are recognising this need for change and are changing their behaviour.

Apart from agriculture, GDP growth in the June quarter was also based on a number of sectors, including construction, transport and manufacturing, with the reconstruction of Christchurch starting to lift building activity.

One of the Government's four main priorities this term is to ensure the economy becomes more productive and competitive.

Helping our businesses and our farms to innovate and stay ahead of the competition is critically important in an increasingly competitive global marketplace, and we need to ensure that New Zealanders have the right skills to help our businesses compete.

Our GDP growth confirms the Government's economic plans are having a positive effect on farming, business and households, and we expect moderate growth to continue over the next few years.

» Bill English is the electorate MP for Clutha-Southland.

The Southland Times