John Key
National Party Finance Spokesman

27 October 2005

Cullen plays role in interest rate hike

National’s Finance spokesman, John Key, says Finance Minister Michael Cullen is partly responsible for the interest rate hikes being faced by businesses and homeowners – with the likelihood of more to come.

He is commenting on the eighth interest rate rise in the past two years.

“Part of the blame lies with Michael Cullen who, by promising to rapidly increase government spending, has spooked the Reserve Bank Governor into making this move.

“Also, Michael Cullen has failed to address some of the inflation bottlenecks in the economy over the past six years – things like skills shortages and infrastructure problems.

“Earlier in the year the OECD warned New Zealand that increases in government expenditure would be greeted with high interest rates, but Dr Cullen chose to ignore this.

“He has played a big part in today’s interest rate hike – and in the threat of more to come – and people should not forget that when they are sitting in traffic worrying about rising mortgage payments,” says Mr Key.

ENDS

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