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

 


Reserve Bank research: OCR rise to cost up to 30,000 jobs

12 March 2014

Reserve Bank research shows OCR rise to cost up to 30,000 jobs

The National Government’s failure to contain rising house and power prices is to blame for the coming increase in interest rates that will cost up to 30,000 jobs, Green Party Co-leader Dr Russel Norman said today.

Reserve Bank papers obtained by the Green Party via the Official Information Act show that a 1% rise in the Official Cash Rate (OCR) reduces economic output by 0.5%-1% and increases unemployment by 0.5%-1.2% compared to the situation if the OCR wasn’t raised. That equates to 12,500-30,000 fewer jobs in the economy than if the OCR wasn’t increased.

The Reserve Bank is forecast to raise the OCR by around 1% in the coming year to tackle inflation,which is being largely driven by house and power price rises.

“National’s failure to get house and power prices under control is going to mean higher interest rates and up to 30,000 fewer jobs for New Zealanders,” said Dr Norman.

“If National had stabilised the housing market and bought power prices down, the Reserve Bank would not be moving to put up interest rates.

“Rising interest rates mean less household spending, reduced business investment, and a higher exchange rate – all of which mean fewer jobs.

“Inflation isn’t rising because the economy is strong. The inflation we’re seeing is due to poor policy choices driving price rises in the non-tradable sector.

“There are 50,000 more Kiwis unemployed than when John Key came to power. National’s bad economic management will make it harder for those Kiwis to get back into work.

“The Greens have launched a suite of policies that will stabilise the housing market and lower power prices. These policies would make living more affordable for families and help to keep interest rates down.

“The Greens will focus on keeping interest rates down so that mortgages are affordable, businesses can invest, and the exchange rate is lower for our exporters. Our plan means are more jobs for Kiwis. National’s inaction will cost jobs,” said Dr Norman.

Additional information:
An estimated small open economy model with frictional unemployment pages 20-21
Shocked by the world! Introducing the three block open economy FAVAR pages 22, 2

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Departure Speech: Governor-General’s State Farewell Luncheon

"...Unfortunately I was unable to get to the Antarctic, the Chatham Islands and the Kermadecs. A dicky heart thwarted our travel to the Antarctic; and even though I volunteered to parachute into the Kermadecs to join the Young Blake expedition, time, commitments and officials frustrated my plans to visit the Kermadecs and Chathams." More>>

ALSO:

New Research: Most Homeless People Working Or Studying

“The cost of housing has been rising without corresponding increases in income, whilst the number of state houses per capita has been in decline. Many low-income people are missing out on housing, whether we recognise them as ‘homeless’ or not. More>>

ALSO:

Post-Traynor: New Offender Info Sharing Plan

“This Bill delivers on that step-change by moving away from name-based records held by individual agencies to a shared, anchor identity based on unalterable information, such as fingerprints and facial recognition. It also gives agencies access to the drivers’ licence photo database and birth, death and marriages information." More>>

  • NZ Law Foundation - New $2M fund for research on information challenges
  • Littoral: New Ship To Deliver Enhanced Naval Capability

    Defence Minister Gerry Brownlee says the Government has approved a Ministry of Defence and New Zealand Defence Force recommendation to request tenders for a new naval ship to support littoral operations. More>>

    July:

    After King's Labour Snub: Māori Party And Kiingitanga To Work Together

    Māori Party Co-leaders Te Ururoa Flavell and Marama Fox met with Kiingitanga representatives in Wellington yesterday to discuss working together on key issues for the betterment of Māori. More>>

    ALSO:

    Waitangi Claim On Rehabilitation: The 'Justus' System For Māori Not Good Enough

    Closing statements at the Waitangi Tribunal case against Corrections called for immediate steps and a comprehensive review to address the high rate of Māori reoffending. More>>

    ALSO:

    Advice: PM Sets Rules For Ministers' Treatment Of Public Servants

    Prime Minister John Key has laid down the law about the way ministers and public servants should interact, saying ministers may not always like the advice they receive, but they must listen to it carefully, respectfully and professionally. More>>

    Gordon Campbell: On The Funding Changes In Special Needs Education, And Uber

    The plan to strip out the educational support for older “special needs” children in order to meet the existing shortfall in funding for special needs in early childhood education is so miserly and relentlessly stupid as to defy belief… More>>

    SPECIAL EDUCATION (& More):

    Online Learning Plans:

    Get More From Scoop

     

    LATEST HEADLINES

     
     
     
     
     
     
     
     
     
    Parliament
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news