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

More Rent Assistance, Less State-Owned Housing:
John Key Speech - Next Steps In Social Housing

"We are going to ensure that more people get into social housing over the next three years, whether that is run by Housing New Zealand or a community provider.

The social housing budget provides for around 62,000 income-related rent subsidies a year. We are committed to increasing that to around 65,000 subsidies by 2017/18, which will cost an extra $40 million a year." More>>

ALSO:

The Future Of Work: Andrew Little - State Of The Nation 2015

In 2005 when I led the EPMU we worked together with Air New Zealand to find a way to keep engineering jobs that were heading overseas. A lot of these workers were people I’d known for years and they were facing not just losing their jobs but not being able to find the kind of work they do without going overseas. A lot of people were facing personal and financial upheaval.

It was hard work but in the end we kept more than 300 skilled and well-paid jobs in New Zealand. And we managed to benefit Air New Zealand and its workforce with productivity gains too... More>>

 

Gordon Campbell: On The Sabin Case, The Pressures On Greece And (Songs About) Coyotes

Mike Sabin is a National MP, and the current chairman of Parliament’s law and order committee. Yet reportedly, he is being investigated by the Police over an assault complaint... However, the PM will not comment on any aspect of the story. More>>

ALSO:

Houses, ISIS, King (& Catton): PM Post-Cabinet Press Conference

The Prime Minister met with reporters to discuss: • Social housing, the Auckland housing market • The prospect of joining international forces to combat ISIS • David Bain’s compensation • The lowering of the flag for the King of Saudi Arabia's death ... More>>

ALSO:

Gordon Campbell: On Tomorrow’s Speeches By John Key And Andrew Little

The Key government has already kicked off the political year on a stridently ideological note, with Environment Minister Nick Smith choosing to lay all manner of sins at the door of the RMA. Tomorrow, the government will wheeling out its best salesman – Prime Minister John Key – to sell its plans for state housing… . More>>

ALSO:

Transport: Auckland Looks To Light Rail

The Board of Auckland Transport has called for an investigation into a light rail network, which could relieve traffic congestion on some of the region’s busiest roads. This stems from work in 2012 (the City Centre Future Access study) which responded to a government request to develop a robust and achievable solution for access to the CBD. More>>

ALSO:

RMA: Smith's Claims Don't Match Evidence - Greens

The Motu group’s research into the impacts of planning rules looked at the costs related to housing development but not the benefits of environmental protections and does not recommend significant changes to the RMA to reduce the cost of new house builds. More>>

ALSO:

Gordon Campbell: On The Similarities Between John Key And David Cameron

For years now, David Cameron has been the closest available thing to a mentor/analogue to our Prime Minister, such that Key watchers could be interested in an analysis of Cameron that appeared in the British press over the Christmas break. More>>

Gordon Campbell: On Ian Fletcher Resignation & GCSB’s New Role

It may well be that after being shoulder-tapped in Queensland for the GCSB job, three years of living in Wellington has been enough for Fletcher and his family, given that the pending review of the GCSB would have required an even longer commitment from him. Three years of Wellington’s weather is enough for anyone... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
More RSS  RSS News AlertsNews Alerts
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news