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

 


Fiscal discipline key to keeping interest rates low

Fiscal discipline key to keeping interest rates low


Federated Farmers today called on all political parties to commit to keep fiscal promises modest in this election year in order to keep interest rates low.

This follows the Reserve Bank increasing the OCR from 2.75 percent to 3.0 percent and indicating there is more to come.

“The Reserve Bank is right – the high exchange rate is causing ‘headwinds’ for the tradable sector but the Reserve Bank does not believe its current strength is sustainable,” says Bruce Wills, Federated Farmers’ National President.

“They go on to say that the economy remains strong and that inflationary pressures are building, especially in construction and other non-tradable sectors.

“The economy has been progressing and agriculture and the tradable sector have made a significant positive contribution to that. But rising interest and exchange rates will slow progress up.

“What the bank didn’t say, surprisingly, was that government expenditure needs to remain under control.

“All political parties, who are looking to the medium and long term success of the New Zealand economy and environment, need to commit to keep fiscal policy tight. Particularly in an election year, they need to ensure they don’t go on a spending spree that the country can’t afford.

“Loose fiscal policy simply leads to higher inflation, interest rates and exchange rates.

“What our exporters and the rest of New Zealand needs are politicians who have the discipline to keep government spending in check. All our political parties should commit to this,” Mr Wills concluded.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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