English predicts tough times ahead

By SIMON COLLINS

National Party leader Bill English predicts a drop in the New Zealand sharemarket as the fear infecting markets around the world spreads to this country.

With just days to go before Saturday's election, he told 300 people at a public meeting on the North Shore yesterday that New Zealand's "golden weather" of high dairy prices and economic buoyancy were coming to an end.

On Monday, Fonterra cut its forecast payout to dairy farmers from $5.30 a kilogram of milk solids last season to $3.70 in the coming season. And a sharebroker told Mr English yesterday that New Zealand would be hit by plunging share prices in the United States, where the Dow Jones index has dropped 19 per cent since the election was called on June 11.

"It's just a matter of time, maybe days, before the fear that we see out there starts having an effect on the New Zealand sharemarket," Mr English said.

"Sixty per cent of our market is owned by foreigners. They are not reading the New Zealand Herald and the Dominion Post. They are reading the Los Angeles Times and the British Times, and it's telling them, 'Sell!"'

Mr English was speaking after a trip on the luxury 25m yacht Pacific Jemm with National's millionaire Helensville candidate, John Key, to show reporters some land at the Hobsonville air base where Housing NZ wants to build state houses.

Mr Key said the prime harbour-side land next to the new Sovereign Yachts factory should be used instead for "high-end residential homes" and a marine industry cluster that could be as successful as Auckland's Viaduct Harbour.

"It's the kind of thing we need far more of if we are going to attract tourists in New Zealand," he said.

Mr English told the Glenfield crowd the Government could "buy" 10 companies such as Sovereign Yachts with "sweetheart" land deals, but what was needed to get the country through the hard economic times ahead was to help all small businesses.

"The engine of the economy is every small business. So we are going to do some things for them - lower their taxes," he said to applause. National has promised to cut the company tax rate from 33 per cent to 25, and the top personal tax rate from 39 per cent to 25, within 10 years.

Mr English was applauded again when he pledged to give business owners a choice of insuring with private accident insurers instead of the Accident Compensation Corporation.

He said New Zealand could not afford to have 18,000 people under the age of 20 on welfare. National would scrap the dole for the under-20s and encourage schools to develop "no-dole" partnerships with their communities to help youngsters into careers.

Responding to the Labour Party's slogan of "stable government", he said New Zealand could not afford "to sit around as if this is how we ought to be".

"If you go for 'stability' so-called, what will be stable?" he asked. "Getting Trevor Mallard back as Minister of Education to wreck the rest of the education system?"

In question time, three of the eight questions were about defence. North Shore businessman Tim Turner said New Zealand's allies would never see this country as pulling its weight as long as it kept nuclear-powered allied warships out of our harbours.

Mr English replied: "We stand by the nuclear-free legislation. I don't think New Zealanders are going to change it until or unless they can see that there is a much better deal."

But National would restore the combat wing of the Air Force "in the context of sensible arrangements with Australia that will help them to help us".

The father of a child with a heart condition asked why parents were "begging on the streets for their children's lives" with a "buy a teddy" campaign for Starship hospital's heart unit.

Mr English said a National government would work with health boards to pay off their debts.

Full news coverage:
nzherald.co.nz/election

Election links:
The parties, policies, voting information, and more

Ask a politician:
Send us a question, on any topic, addressed to any party leader. We'll choose the best questions to put to the leaders, and publish the answers in our election coverage.