Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Stagflation warning: where do politicians stand?


Media release October 4th, 2000

Stagflation warning: where do politicians stand?

The warning delivered by Dr Brash today to the Parliament's Finance Select Committee was extremely timely, the Employers & Manufacturers Association (Northern) says.

"By identifying the risk of stagflation, the Reserve Bank Governor, Don Brash has done New Zealand in general and business in particular a big favour," said Alasdair Thompson, EMA's chief executive.

"Back in August Dr Brash told the Finance Committee that business confidence could easily stay low with the economy remaining flat, or it might rebound quickly. The latter would see demand lift and lead to the Bank raising interest rates.

"Dr Brash now sees the reality of the third possibility, stagflation, which in effect we warned about in March and repeated in May.

"Our economy shrank in the June quarter though the price of imports has gone up and our dollar down as a result of soaring commodity prices in our trading partner countries. Alongside the oil price hike, we are seeing the effects of much higher prices from raw materials such as steel, aluminium, copper wire, and paper pulp.

"Inflation will go well over three per cent later this year and it would be stupid to try and pay ourselves higher incomes to compensate.

"We must repeat our call for politicians and business to demonstrate leadership by showing restraint on salaries and wage claims. We urge our politicians to state where they stand on this issue.

"If we go after higher pay in these circumstances, Dr Bash has no other option than to raise interest rates again, even if it sends the economy downhill.

"This would cause higher unemployment as our manufacturers and other producers tried to absorb extra costs. In the event Dr Brash would entrench the recession to hold down inflation."

Further comments: Alasdair Thompson tel 09 367 0911 (bus)
09 303 3951 (hme) 025 982 024


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>

ALSO:

Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>

ALSO:

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news