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


Interest Rate Hike Premature, Stomps On Growth

Today's interest rate increase is too soon with economic growth running at less than two per cent per annum and inflation lower than many of our trading competitor countries, the Employers and Manufacturers Association (Northern) says.

"Dr Brash has reverted to the form of 1997/98 when the Reserve Bank stomped all over growth," said Alasdair Thompson, EMA's chief executive.

"In this cycle Dr Brash was again last to bring interest rates down, and first to put them up.

"He's too fast on the draw, with the New Zealand economy taking the shot.

"EMA members will take issue with several of Dr Brash's justifications for today's announcement. First, we do not accept the economy is running close to capacity. The capacity utilization average of our manufacturers this year has been only 71 per cent, lower than it was for most of last year.

"Second, the strength of retail spending is temporary, and third, the US Federal Reserve has not yet spotted the recovery in the US that our Bank appears to see. The Federal Reserve yesterday noted economic activity there has not yet fed through to consumer demand.

"Fourth, monetary conditions have tightened of late with a rising kiwi dollar impacting on exporters along with falling commodity prices.

"The little inflation there is in New Zealand is not being fed by supply or demand factors.

"On the other hand, Government is allowing electricity costs to spiral out of control, sucking up demand through new taxes, and adding to compliance costs from employment law, the RMA and the HSNO Act.

"With Dr Brash stomping on growth with this premature interest rate rise, and Government socking in new taxes and costs, the Prime Minister's talk of economic growth is looking like mere rhetoric to keep business quiet."

© Scoop Media

Business Headlines | Sci-Tech Headlines


Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>



Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news