Bill English MP
National Party Finance Spokesman

24 January 2008

More trouble ahead for households

The decision to leave interest rates unchanged means more troubling news for families facing high living costs, high interest rates and worried about Christmas and back to school costs, says National Party Finance spokesman Bill English.

“These pressures are the partly the result of eight years of loose management of tax windfalls. Michael Cullen’s published concerns today for working families are little more than crocodile tears.

“What the Reserve Bank is now telling these families is that one of the biggest ongoing risks to their pockets, is the desperation of Helen Clark to retain the Treasury benches for a fourth term.

“For her, if it’s a choice of higher interest rates for longer, or re-election on a platform of lollynomics - history shows that Labour will always put itself first.

“Homeowners now face the double jeopardy situation of high interest and mortgage repayments, overlaid on a cooling property market.

“Before the last Budget, Michael Cullen warned his colleagues that unless they were careful with their spending, interest rates would be higher for longer.

“But rather than adopt a prudent approach, he went on to sign off on a record spending spree that dwarfed expectations. When he wrote Budget 2007, he was not thinking about the hard working Kiwis paying off their credit cards and mortgages.

“He sacrificed them, so Labour could spend more of other people’s money. That is their area of expertise.”

Mr English says over the past nine years Labour has missed opportunities, and left the Reserve Bank Governor trying to fight inflation on his own.

“Michael Cullen has his foot hard on the accelerator, while Alan Bollard has his foot on the brake.

“Statistics show non-tradeable inflation has been running at higher than the Reserve Bank target since June 2002. It is forecast to stay above the bank’s 1-3 per cent range until at least 2010.

“Under Labour, that is a recipe for interest rates that are destined to remain among the highest in the developed world.”

ENDS

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