READER REPORT:

Fixing the economy: NZ needs the Aussie dollar

KEN WATSON
Last updated 09:30 05/12/2012
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Devaluing the New Zealand Dollar would have a disastrous effect on our balance of payments. While exports may rise, the cost of servicing overseas debt would skyrocket. The price of buying fuel would rise as the prices of everything else increased because of higher fuel costs.

New Zealand should adopt the Australian currency. This would give us more buying power. There would need to be a one-off re-valuation of everything to 80% of its value with the exchange fixed at 80 cents Australian per NZ Dollar.

As the currencies are printed at the same mint there is no added cost for currency.

As Australia is our largest trading partner and investor it would mean all goods bought and sold between the countries would cost Australian Dollars.

The volatility would be removed from our currency and industry would have more certainty.

Only with a common currency could New Zealand ever hope to close the wage gap and retain skilled workers.

As for government housing, I am firmly in favour of building affordable housing but Housing NZ needs to move the old stock off the books and replace  it with more modern housing.

This would put Housing NZ's huge maintenance bill at a more manageable level.

Surplus housing could be sold to eligible tenants and for those who could not afford them, they would be moved to more modern, warmer and healthier housing.

The benefits to the health system should also not be ignored.


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