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PM’s la land comments misinformed

Finance Spokesperson

PM’s la land comments misinformed

Accusations from the Prime Minister that opposition parties are in “la la land” for questioning whether current monetary policy is working in the interests of New Zealand look extremely unwise in light of today’s statements from the Reserve Bank, Labour’s Finance spokesperson David Parker says.

“For three decades New Zealand has run a current account deficit, because the value of our exports has not covered the cost of our imports, interest to overseas lenders and payments to the foreign owners after they buy New Zealand assets.

“During that period we have become one of the most indebted countries in the world. We have lost ownership and control of the vast majority of our banking system, and many other assets have been sold to overseas owners,” David Parker said.

“Our government debt is low (because Labour ran surpluses – opposed by National), but our private debt is high and predicted to worsen.

“We now have amongst the highest net liabilities in the developed world, and it’s predicted to get worse by another $50 billion over the next four years – in other words New Zealand is still getting poorer every year.

“Mr Key’s government has failed to rebalance the economy, yet he has described other parties that will as being ‘in la la land’.

“Mr Bollard’s statement that ‘should the exchange rate remain strong without anything else changing, the Bank would need to reassess the outlook for monetary policy settings’ shows his grasp of the seriousness of New Zealand’s plight, and the adverse effect on exports and jobs, is superior to Mr Key’s.

Mr Key’s statement of two days ago looks unwise. It was always unbecoming of the Prime Minister to abuse the opposition. The unwise substance of his comments is highlighted by Mr Bollard’s statement.

“The Reserve bank governor implements monetary policy, but it is government’s responsibility to make that policy.

“This National government has not rebalanced the economy.

“New Zealand needs changes to monetary policy, pro-export growth tax reform (a CGT to remove the bias in favour of property speculation, and a research and development tax credit), as well as better savings via a broader and deeper Kiwisaver scheme.

“Mr Key’s alternative is to sell our power companies and allow the sale of more and more dairy farms to overseas. Changing who owns what already exists does little to improve the output of our economy, and show how inadequate National’s economic management is,” David Parker.


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