Bollard : NZ faces World's worst financial meltdown

Reserve Bank Governor Dr Alan Bollard told the job summit in Auckland today that the global recession is the "biggest destruction of global wealth ever". He said the amount of money lost was in the trillions of dollars and that if one dollar notes were strung together, they would reach the sun. Dr Bollard said if the 30 trillion dollars lost on equity markets was handed out to the third world, global poverty would be eradicated in 10 years. He said in his speech that both the "western" and "eastern" worlds would need to change their approaches to expenditure and saving or lack of it. New Zealand's banking sector was sound, he said, but he issued a warning that they had made good profits in the good times, and they were therefore expected to help out in the bad times. Dr Bollard said the banks should not underestimate the level of corporate anger that existed because of the onerous lending conditions imposed on businesses. He urged the banks to lend, but to be sensible in doing that. Economic development minister Gerry Brownlee told nzherald.co.nz that one of the key things coming out of the discussions he had had at the summit today was that small and medium-sized businesses were struggling to raise money. People also complained about the "layer upon layer of regulation in this country", which he said the National-led Government was tackling. Prime Minister John Key earlier told the summit that New Zealand is not a country of whiners and slackers and has the right attitude to get through the global recession. He told more than 200 business, community and union leaders we would see unemployment grow in the coming year as the world recession bites. Mr Key said: "We are not a country of whiners. We are not a country of slackers. We are not a country of selfish individuals. "We are a gritty little country with the smarts and determination needed to weather this storm." Mr Key said in his speech that the Government was looking for practical, achievable steps that could be taken to save and create as many jobs as possible. "Our job today is not to promise the impossible," he said. "But we can all play a part in lessening the blow." Mr Key added: "We will not gain anything today or in the months ahead if we become lost in hand-wringing and crystal ball gazing about how bad things are or could be. "What we do know is that we are in uncharted waters." Mr Key called the summit to discuss ideas to protect and create jobs as the economy is hit by the international financial crisis and ongoing recession. Ideas already floated included troubled firms going to four-day weeks and having the Government subsidise the fifth day while workers do training or community work. The Herald understands one of the proposals at today's summit will be for a nine-day working fortnight in manufacturing with the tenth day a Government-funded training day. Mr Brownlee told nzherald.co.nz that nothing was ruled in or out and all suggestions put on the table today would be looked at. Those in the building industry have asked for subsidies for wood frame homes arguing it will boost both the construction and forestry sectors. One manufacturers' group has called for businesses to be given a year long tax holiday to encourage investment.