Government policies 'to blame for job losses'

National claimed today the blame for job losses lay squarely with the Government as its policies had fuelled inflation and imposed high costs on businesses.

Exporters announced a total of 177 job cuts yesterday, saying the high dollar made it impossible for them to compete.

National's finance spokesman John Key said the fault for this lay with Helen Clark's Labour government.

The Government had "put more costs into the system, most of which have hit business competitiveness", he said.

Mr Key added: "It has fuelled inflation by massively expanding government spending since 1999, which in turn has fuelled interest rates that are now the highest in the Western world."

He said that, in turn, produced a run on the New Zealand currency and made exporters uncompetitive in the face of the very high exchange rate.

But NZ First's Primary Production spokesman Doug Woolerton said: "It's easy to sit back and criticise, but in a country dependent on manufacturing and primary production, actions speak louder than words. The more we can do to talk down or otherwise achieve a lower exchange rate, the better.

"The dollar has to come down, and it eventually will, but in the meantime any attempts to hasten its fall should be commended, not ridiculed from the blue corner."

At the same time as the political row erupted over job losses, economic analysts have been accused of being unnecessarily gloomy in their outlook.

The head of the Consumers Institute David Russell called for a more buoyant attitude from forecasters.

He could not understand their bleak approach when there is full employment, a robust housing market and banks are lending more.

However, Darren Gibbs from Deutsche Bank said economists were simply being realistic.

He said the economy has had a very good run and partly as a result of that it has become imbalanced.

Mr Gibbs said New Zealand has been borrowing and spending too much, and could be in for an even weaker year than that being predicted. He did not think financial experts were being overly pessimistic.

- NZPA, HERALD ONLINE STAFF, NEWSTALK ZB