Between the end of April and July 30, the TWI dropped 5.8%, from 69 to 64½. It is clear that, whereas a rising dollar earlier took money straight off the bottom line of exporters, the trend since the end of April has been an equally direct contribution towards improved export profits. Interest rates on 90-day bills, below 7% in late April, bounced back in response to the dollar. Nevertheless, at 8.4% currently, they remain well down on their 10% peak 12 months ago.   There is no doubt about the pressure exporters have had to face in the last couple of years. As this chart shows, there has been a quite dramatic gap between the growth of exports, or tradeables, compared with domestic (non-tradeables) growth. But it also demonstrates how fast and how strongly exporters respond to opportunity. In these Treasury projections, as monetary conditions improve, export growth rockets up next year to annual rates above 4.5%, in line with the non-tradeable sector, and remains high throughout the rest of the forecast period.

Finance Focus   Number 15 5 September 1997       Charts Growth on Growth Best Growth Track in 50 years 7 Consectuive Surpluses Net Crown Debt 250,000 New Jobs Created Export Earnings Up 32% Exchange, Interest rates Sector growrth Performance

With lower interest and exchange rates, tax cuts coming next year, a rising fiscal surplus, falling and strong world growth, conditions for growth in the 3 years ahead have to be more favourable than they have been for some time. providing a favourable environment, I find 4% entirely credible for 1998-99. It's good for New Zealand. We want it to happen. But over and above all that, the Government has no intention of leaving it to chance. Zero tariffs before 2010 Lower compliance costs Reduction in ACC levies Asset Sales: GPS, Vehicle Testing NZ Ltd Electricity sector reform Open skies policy Trade gains As the above examples show, the programme extends well beyond the areas of responsibility of the Treasurer and the Minister of Finance. Many are the responsibility of the economic Ministers - Jenny Shipley with ACC, SOEs and Transport, John Luxton in Commerce, and Lockwood Smith with Trade. The Government will advance the issues raised in the land transport pricing study, on ACC, and to review Crown ownership of businesses where appropriate, and to improve the efficiency of all SOEs. We also aim to reduce compliance costs, regulatory costs and legislative impediments to efficiency. These domestic measure will be back-up by trade initiatives regionally, including CER and other Pacific Rim opportunities and multi-lateral progress following through from the GATT Uruguay Round, via the World Trade Organisation. Other major issues on our list for significant progress include, for example: Outstanding Employment Contracts Act and Employment Court matters Progress on the tax issues raised by the Wine Box Commission, the Coalition Agreement and also on our international tax agenda, and the overall international competitiveness of the New Zealand tax system And more substantial progress on the code of social responsibility announced in the budget, to assist in further improvements in workforce participation.