Immigration Behind Interest Rate Rises
Today's interest rate rise by the Reserve Bank is dramatic and has serious implications, ACT leader Richard Prebble says.
"It will have, over time, a considerable impact on the export sector and then on home ownership," Mr Prebble said.
"New Zealand is the only country in the OECD to have made two interest rate rises in such a short time. It could trigger a rise in the New Zealand dollar, which would have an immediate impact on the export sector.
"The Reserve Bank cites inflation as the reason for the rise in interest rates. But what is significant is the reason for this inflationary pressure. No doubt the principle driver of inflation is again Auckland house prices, which in just 12 months have gone from a 10-year low to an all-time high.
Auckland house prices are being driven by the government's reckless immigration policies.
"Twelve months ago, the government increased immigration quotas. But it failed to make any adjustment after September 11 when a large number of Kiwis returned home from overseas.
"So we are back to the old cycle, where the provinces are devastated by interest rate rises designed to dampen down an Auckland housing boom, generated by government incompetence," Mr Prebble said.