Interest Cuts Better Than Government Spending
The decision by Reserve Bank Governor Don Brash to cut interest rates was the correct response to help counteract the effects of the terrorist attacks in the United States, ACT leader Richard Prebble says.
"We probably didn't need an interest rate cut on purely economic grounds but the country certainly needed it from a confidence viewpoint," Mr Prebble said.
"This interest rate cut by the Reserve Bank is part of a concerted action by central banks in western democracies to keep the world economy going in the face of the terrorist attacks.
"While our government continues to procrastinate and has taken no positive steps to assist in the world-wide effort against terrorism, it has been left to the Reserve Bank Governor to take this action, which is a positive step to defend freedom.
"It wasn't until after Dr Brash's announcement that our procrastinating Finance Minister made a statement about how the government could respond with a spending plan to help stave off recession.
"But interest rate cuts have proved far more effective than tax, spend and bust government programmes," Mr Prebble said.