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


Bollard confirms inflation now beyond control

23 October 2008

Bollard confirms inflation now beyond control

Today's Reserve Bank decision to cut interest rates by 1 percent when inflation is running the highest in 18 years confirms that the thinking behind monetary policy is obsolete, says the Green Party.

"The tidy theory behind the Reserve Bank Act assumes inflation can be controlled by manipulating interest rates. That was true when inflation was the result of the boom part of the economic cycle, but is no longer the case," Green Party Co-Leader Jeanette Fitzsimons says.

"We have entered a new era where resource limits are the main driver of inflation. Even with declining oil prices during September, oil still contributed 1.4 percent of the 5.1 percent rise. Second order effects of oil prices, such as rising prices for food and other energy intensive goods and services, account for even more. They are internationally driven by resource scarcity and interest rates have no effect on them.

"When the limits of the atmosphere to absorb greenhouse gases are priced into energy and transport in 2010 and 2011, inflation will rise further, as the Bank has already told us.

Further droughts in Australia will raise the price we pay for wheat, and bread will go up again, Ms Fitzsimons says.

"There is only one way to control this kind of inflation-in-recession, and that is to control our dependence on oil and other scarce resources. Using energy, transport fuel and water more efficiently in the ways repeatedly outlined by the Greens since we came to Parliament and before, are the only economic strategy that will get us out of the mire we are in.

"Any political party that still thinks caring for the environment is a luxury we cannot afford when times are tough, and that we must 'balance' environmental protection with economic reality is not fit to lead the country. They need to catch up with business which is starting to recognise that the economy is a wholly-owned subsidiary of the environment."


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Back Again: Government Approves TPP11 Mandate

The Government has approved a negotiating mandate for Trans-Pacific Partnership 11 (TPP11), which will ensure New Zealand businesses remain competitive in overseas markets.

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>




Gordon Campbell: On Why Labour Isn’t Responsible For Barnaby Joyce

As a desperate Turnbull government tries to treat the Barnaby Joyce affair as a Pauline Hanson fever dream – blame it on the foreigners! We’re the victims of the dastardly New Zealand Labour Party! – our own government has chosen to further that narrative, and make itself an accomplice. More>>


Rail: Greens Back Tauranga – Hamilton – Auckland Service

The Green Party today announced that it will trial a passenger rail service between Auckland, Hamilton and Tauranga starting in 2019, when it is in government. More>>


Housing: Voluntary Rental Warrant Of Fitness For Wellington

Wellington City Council is partnering with the University of Otago, Wellington, to launch a voluntary Rental Warrant of Fitness for minimum housing standards in Wellington, Mayor Justin Lester has announced. More>>


Treaty: Agreement In Principle Signed With Moriori

“The Crown acknowledges Moriori was left virtually landless from 1870, hindering its cultural, social and economic development. The Crown also acknowledges its contribution to the myths that the people of Moriori were racially inferior and became extinct." More>>


Susan Devoy: Call For Inquiry Into State Abuse Reaches UN

Race Relations Commissioner Dame Susan Devoy is in Geneva and has asked a United Nations committee to urge the New Zealand government to initiate an inquiry into the physical and sexual abuse of children and disabled people held in state institutions. More>>


(Not National): Cross-Party Agreement On Pike River Re-Entry

The commitment was signed this afternoon by the leaders of Labour, United Future, The Maori Party, and the Green Party and, together with the earlier commitment by New Zealand First, means that there is now a Parliamentary majority behind the families’ fight for truth and justice. More>>






Featured InfoPages

Opening the Election