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

 

Scoop Business: PayPal Stops Processing Mega Payments; NZX Listing Still On

PayPal has ceased processing payments for Mega, the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing of TRS Investments, amid claims it is not a legitimate cloud storage service. More>>

ALSO:

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news