High dollar inaction

Last updated 13:53 08/07/2013

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OPINION: In Mr Eric Roy's reply to my letter (June 12) he claims I have made the classic mistake of equating value with volume.

Mr Roy is trying to hoodwink me and other readers by suggesting I am trying to confuse the issues he was making.

As a primary producer I do hope incomes rise. 

The trouble is that much of our primary production is food, and at present it represents 12 per cent of incomes. 

If what he suggests happens, wages will have to double by 2025 caused by cost-push inflation, otherwise we will all move back to a Third World position.

Trade agreements are not a cure-all. For instance, China is charging import duty on kiwifruit and is only interested in lowest input primary production such as logs, grain and ores.

National's inaction with the high dollar has created havoc with most of our primary and manufacturing industries, to the point that many have had to make major changes or even go overseas to survive.

Mr Roy states that the Government has invested more than $400 million for all these projected plans with the hope of a $30 billion return in 12 years. 

The problem is our four overseas trading banks over the last three years have made profits of $5 billion or more per year, which they take overseas each year, and will no doubt continue to do the same for the next 12 years. This will equal $60 billion. 

To my mind, this would put all primary and manufacturing industries on an increasing treadmill of inflationary generated debt, caused by increasing taxation, ever-rising rates and also the quantitative easing our trading banks are allowed to meet their requirements.

O W HORTON

Grove Bush

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