Bollard Gives Committee Fiscal Warning

Thursday, 8 March 2007, 2:04 pm
Article: Kevin List

Bollard Gives Committee Fiscal Warning

Reserve Bank Governor Alan Bollard informed members of Parliament's Finance and Expenditure committee that he would have to look at utilising unspecified tools in his armoury on banks should they continue to lend money willy-nilly to New Zealanders.

New Zealand it would seem is a nation of consumers engulfed in a debt fuelled orgy of spending. Most of the consumer orgy involves buying houses rather than the 70s type orgy involving car keys and fondue sets.

National MP's on the Committee were keen to point out that besides housing overstimulating the economy the Government's spending program was also to blame. National's Lockwood Smith pointed out that Social Welfare spending had increased under Labour. Dr Smith's information lead to speculation among some in the media that Auckland's property boom could be fuelled by indigent South Island beneficiaries cranking up huge loans from lax bank managers.

On the good news front it seemed to be accepted by all that the economy had come to a soft landing and was now rebounding – it would seem that in Finance Minister Michael Cullen's hands the New Zealand economy has yet to hit a brick wall of economic gloom.

Listen to Dr Bollard during his appearance before Parliament's Finance and Expenditure committee

Scoop Streaming Audio (click here to listen): Bollard before the Finance & Expenditure Select Committee (1hour 13 mins)
Click to download the file (MP3)

ENDS

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