95,000 Job Losses "Collateral Damage"

New Zealand First is encouraged by the Reserve Bank’s pledge to pursue other options for implementing monetary policy but fears 95,000 jobs will be lost while the bank does this.

The bank includes the pledge in its latest Statement of Intent but Rt Hon Winston Peters says the jobs will go within the next three years unless the changes are made soon.

“We advocate a rewrite of the Reserve Bank Act to enable the governor to take into account the balance of payments, exports, GDP growth, and full employment when setting the Official Cash Rate.

“This policy is also endorsed in a report by BERL released in June 2008.

“The governor of the Bank of England recently allowed inflation to exceed its targeted range stating that attempting to counter rising food, energy and import prices would result in ‘unnecessary volatility in output and employment’.

“Our Reserve Bank does not share the same concerns. It estimates that 95,000 New Zealanders must lose their jobs over the next three years if inflation targets are to be met using interest rates.

“This is totally unacceptable. The Reserve Bank cannot sit on its lofty heights in Wellington consigning thousands of New Zealanders to the economic scrap heap.

“New Zealand First will insist the Act be amended after the next election – irrespective of who wins it,” said Mr Peters.

ENDS

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