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


Policy Game Changer?

Policy Game Changer? - 29 April

Today’s announcement by David Parker and the Labour Party if done well, might be a game changer, aligning monetary and fiscal policy to deal with the pressures that face our economy here and now, say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “This is a big step, but it is something that has developed around the world. The days of one target (inflation), one lever (OCR) monetary policy are numbered; we now live in a complex world of multiple targets, and multiple levers – crucially this change fits the framework of other policies announced by Labour last week.”

“Targeting our external balance as well as inflation will lead to lower exchange rates over time, and consequently better outcomes for our entire economy, allowing New Zealand to earn its way in the world.”

“The introduction of a savings lever to dampen inflationary pressures in addition to interest rates is a good move; it will remove the Reserve Bank option to deflate the tradeable sector in order to keep headline inflation inside the target band via an overvalued exchange rate.”

“This is an important strategic change, combined with signalled fiscal policy changes to re-balance investment incentives (remove the capital gains tax exemption), encouraging greater value add from more research and development (R&D tax credits) and increasing productive equipment investment (accelerated depreciation); all speak to a coherent re-emphasis of the importance of the tradeable sector. We should never forget that a balanced current account matters to each of us as individuals and to us all collectively as a nation.”

“I have seen comment that a lower exchange rate will result in higher costs, but an overvalued exchange rate is a sugar rush to consumption that has little substance. In any event, research by the Reserve Bank of Australia indicates that the feed through of exchange rate changes to consumer prices is slow and tenuous. It is a scaremongering defence of the status quo to suggest otherwise.”

“We hope the Government will take similar steps in the lead up to the election, realising that there really are alternatives to our current situation. Focusing only on domestic price stability will not work for anyone in the long term.”

© Scoop Media

Business Headlines | Sci-Tech Headlines


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Sweet Health: Sugary Drinks Banned From Hospitals And Health Boards

All hospitals and DHBs are expected to kick sugary drinks out of their premises. University of Auckland researcher, Dr Gerhard Sundborn who also heads public health advocacy group “FIZZ”, says he welcomes the initiative. More>>


NASA: Evidence Of Liquid Water On Today's Mars

Using an imaging spectrometer on MRO, researchers detected signatures of hydrated minerals on slopes where mysterious streaks are seen on the Red Planet. These darkish streaks appear to ebb and flow over time. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news