The government plans to make the country carbon neutral by 2040, but farmers in New Zealand are critical of their plans. The agricultural sector finds the plan to reduce net emissions of greenhouse gases to zero as unsustainable. Also, steel companies have voiced concerns that a proposed emissions trading scheme would render them uncompetitive. Beef and sheep farmers believe their business will be harmed by the trading system as well. Despite these concerns, the government still hopes to have 90% of electricity generated by renewable resources by 2025 and hopes to convince large numbers of drivers to switch to electric and hybrid cars.

The last time tourism in New Zealand was hit so hard was during the 1987 sharemarket crash. But that setback was nowhere near the breadth of the current crisis faced by the industry as a result of higher gas prices, rising inflation, and economic downturn. The growth in the number of visitors to New Zealand fell from an average of 4 or 5 percent to just 1 percent last year. The strength of New Zealand’s dollar has also made it more expensive for visitors.

Air New Zealand is suffering lower profits due to soaring fuel prices. In response, the airline has hastened efforts to develop biofuels, based on Indian feedstock, for its planes. The airline hopes to fly using biofuels by the end of the year. Virgin Atlantic became the first airline to fly a plane with biofuels in February this year.

New Zealand banks have increased some of their fixed mortgage and term deposit interest rates in response to the widespread belief that last week's budget is too inflationary. The ANZ and National banks raised their 6-month fixed mortgage rates to 9.95 per cent from 9.75 per cent and their 12-month fixed mortgage rates to 9.8 per cent from 9.4 per cent.

New Zealand’s economy slipped in the first quarter because of high interest rates and rising food and oil prices. These greatly affected domestic demand. The economy slowed by 0.6 percent in the first three months of 2008. This is not good when compared to a 0.7 percent increase in the last quarter of 2007. Factors causing this include a decrease in business and consumer confidence in employment and the housing market.

Because of 29,000 jobs lost in the first quarter of 2008, New Zealand Reserve Bank Governor Alan Bollard could potentially start cutting interest rates. This would start in September; he originally wasn’t expected to do this until December. His biggest worry is a fall in wages and prices due to pay increases showing a high cost of living rather than a slowing economy.

New Zealand is facing inflation in food, a rise in prices led to a rise of 0.7 percent in consumer price index (CPI). Annual rate has increased from 3.2 to 3.4 percent. Inflation pressure is coming mainly from food, energy and petroleum, goods in which the Reserve Bank has no control.

The leader of New Zealand First political party and Minister of Foreign Affairs, Winston Peters, will talk overseas against the FTA between China and New Zealand. He says that contrary of what Prime Minister Helen Clark believes, the treaty is not a foreign policy it is a trade policy and that the deal doesn’t contain enough concessions on the Chinese side to be valuable.

The premier of China, Wen Jiabao, and the Prime Minister of New Zealand, Helen Clark, attended a welcome ceremony in Beijing where a free-trade agreement between both countries was signed. This is the first FTA of China with a developed country; China is New Zealand’s third largest trading partner and fifth most valuable export market

Australian's treasurers agreed on a federal fund of AUD 30 billion to boost up schools, health, vocational education, disabilities and housing. This fund will be used as a commonwealth funding of the sates and it will compromise 89 separate specific-purpose payments.