Complacency must not be an option
6 December 2007.
Complacency must not be an option.
The New Zealand Manufacturers and Exporters Association, (MEA), says that the RBNZ’s decision to hold the OCR, no change along with hard words, is not an excuse for the Government and the select committee on monetary policy to sidestep the issues driving the two economies outcome in New Zealand.
”Any expectation that things are somehow coming right should not throw a shadow of complacency over the deliberations of the select committee on monetary policy”, says Chief Executive John Walley.
“Although the MPS alluded to cooling house prices, the statement made it clear that the domestic economy continues to push back against higher interest rates and the key message for exporters is that the RBNZ expects interest rates to remain around current levels for a long time”.
“This is a major concern as strong exchange rates continue to damage the tradable sector and our capacity to export”, says Mr. Walley.
“The point in the future when we expect the domestic sector to start cooling and the RBNZ will start to talk about loosening interest rates seems a long way off today. A number of changes, including those which some might see as radical, are desperately needed on the part of the Government to help curb inflationary pressure”.
Mr. Walley says that the MEA will continue to press Government to act decisively in support of the tradable sector because the ‘business as usual’ attitude is what is driving the two economy problem, and therefore cannot be expected to fix it.
“This issues currently before select committee must
not be allowed to fade away in the summer haze or some
pre-election slight of hand. A “business as usual”
answer from the Government or a vanishing act from the
select committee will be a disaster for our exporters, and
in the longer term, for our entire economy”.
(For further information see MEA Outlook report: http://www.mea.org.nz/document.aspx?id=150)
MEA – the authentic and independent voice for manufacturers and exporters.