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

 


Monetary Policy – More Focus on Employment Needed

CTU Media Release

12 September 2013

Monetary Policy – More Focus on Employment Needed

“The slow fall in unemployment anticipated by the Reserve Bank reinforces the need for wider objectives of monetary policy,” says Bill Rosenberg, CTU Economist.

“It’s forecasts still have the unemployment rate at 6.0 percent at the end of the year and above 5.0 percent out to 2016. These are well above levels we know we can achieve and they are levels we should not be happy with. The Bank commented on the state of the labour market keeping down wage rises. We would not like to think that unemployment is being accepted as an anti-inflationary tool, and one that depresses the real living standards of New Zealand wage and salary earners.”

Bill Rosenberg says “the Bank’s forecasts also see annual GDP growth peaking at 3.5 percent in June next year and then sliding back to growth rates of 2.0 percent by the end of the following year. While it was interesting to hear the Governor saying that the exchange rate was one of the factors he would take into account in deciding on future interest rate rises, he also made clear it was too high and was burning off exporters and firms competing with imports. For a better performing economy in the longer run, a clearer focus on the exchange rate is needed.”

“All of these factors point to a need to rethink the objectives of monetary policy and the tools that are used to achieve those objectives. The Productivity Commission, in its recent discussion paper on Regulatory Institutions and Practices suggested that complex decision making was more suited to a board than an individual. A broadly based Reserve Bank board with decision making power may be another important ingredient in reforming policy making in this area.”

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>

ALSO:


Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news