Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Be Careful, Minister!

23 August 2002

Be Careful, Minister!

"Michael Cullen must be extremely careful what signals he sends to both financial markets and the public when he negotiates the new Policy Targets Agreement with the Governor-designate of the Reserve Bank," says National's Finance spokesman Don Brash.

"During the campaign, Dr Cullen created the impression that there would be no change to the inflation target after the election. Now he is implying that while there will be no change to the top of the target, he intends to raise the floor of the target.

"At the same time, he is trying to suggest that he does not want higher average inflation. I would certainly hope not, since there is no evidence that higher inflation would enable New Zealand to grow faster on a sustainable basis.

"Dr Cullen must avoid even the perception of being more tolerant of inflation because of the adverse impact this would have on long term interest rates."

Dr Brash says that during the past decade, inflation has averaged about 2 per cent and over the last three years 2.5 per cent, a rate of inflation very similar to that in Australia over the same period (after the effects of their GST are stripped out).

"It is certainly hard to see any reason why the Finance Minister should be asking the Reserve Bank to be even more relaxed about inflation.

"Dr Cullen has suggested he wants the Bank to operate monetary policy in a more flexible way. But by doing this, he is ignoring the conclusions of his own expert reviewer Professor Lars Svensson. Last year, Svensson concluded that: 'the Reserve Bank's current conduct of monetary policy is entirely consistent with the best international practice of flexible inflation targeting, with a medium-term inflation target that avoids unnecessary variability in output, interest rates, and the exchange rate.'

"After the Svensson Review, Dr Cullen, sensibly, sought a multi-party consensus on its conclusions. Now that the election is over, he should stop playing political games with the monetary policy framework and again seek a multi-party consensus on that framework.

"As Svensson also recommended, there is considerable merit in avoiding a situation where something as fundamental as New Zealand's attitude to inflation is subject to change after each election. I, for one, would be a willing party to a sensible political consensus on the inflation target, which has some prospect of enduring," Dr Brash concluded.

Ends

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Breed Laws Don’t Work: Vets On New National Dog Control Plan

It is pleasing therefore to see Louise Upston Associate Minister for Local Government calling for a comprehensive solution... However, relying on breed specific laws to manage dog aggression will not work. More>>

ALSO:

Corrections Corrected: Supreme Court Rules On Release Dates

Corrections has always followed the lawful rulings of the Court in its calculation of sentence release dates. On four previous occasions, the Court of Appeal had upheld Corrections’ practices in calculating pre-sentence detention. More>>

ALSO:

Not Waiting On Select Committee: Green Party Releases Medically-Assisted Dying Policy

“Adults with a terminal illness should have the right to choose a medically assisted death,” Green Party health spokesperson Kevin Hague said. “The Green Party does not support extending assisted dying to people who aren't terminally ill because we can’t be confident that this won't further marginalise the lives of people with disabilities." More>>

ALSO:

General Election Review: Changes To Electoral Act Introduced

More effective systems in polling places and earlier counting of advanced votes are on their way through proposed changes to our electoral laws, Justice Minister Amy Adams says. More>>

Gordon Campbell: On Our Posturing At The UN

In New York, Key basically took an old May 2 Washington Post article written by Barack Obama, recycled it back to the Americans, and still scored headlines here at home… We’ve had a double serving of this kind of comfort food. More>>

ALSO:

Treaty Settlements: Bills Delayed As NZ First Pulls Support

Ngāruahine, Te Atiawa and Taranaki are reeling today as they learnt that the third and final readings of each Iwi’s Historical Treaty Settlement Bills scheduled for this Friday, have been put in jeopardy by the actions of NZ First. More>>

ALSO:

Gordon Campbell: On The Damage De-Regulation Is Doing To Fisheries And Education, Plus Kate Tempest

Our faith in the benign workings of the market – and of the light-handed regulation that goes with it – has had a body count. Back in 1992, the free market friendly Health Safety and Employment Act gutted the labour inspectorate and turned forestry, mining and other workplace sites into death traps, long before the Pike River disaster. More>>

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news