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

 

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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