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

EPA: Board Of Inquiry Rejects Basin Flyover By Majority Of 3 To 1

The independent Board of Inquiry delegated to decide on the Basin Bridge Proposal has, by a majority decision (3 to 1), cancelled the Transport Agency’s Notice of Requirement and declined its resource consent applications for the construction, operation and maintenance of a flyover on State Highway 1 in Wellington City between Paterson Street and Buckle Street/Taranaki Street...

Parties specified under Section 149Q(3) of the RMA now have 20 working days to make comments on minor or technical aspects of the report. More>>

 

Parliament Today:

Red Tape: Local Regulations Go Under Microscope

The Government says it is accepting nearly all of the recommendations the Productivity Commission has made on ways to improve local regulations. More>>

ALSO:

Spending Questions: Claudette Hauiti To Step Aside At Election

National Party President Peter Goodfellow confirms that he has received notification from List MP Claudette Hauiti that she plans to step aside at the 20 September election. More>>

ALSO:

Gordon Campbell: On The Non-Apology To Tania Billingsley

The refusal by Prime Minister John Key to issue a personal apology to Tania Billingsley has been accompanied by an array of excuses... Yesterday though, Key’s choice of words indicated that an apology was the last thing on his mind. More>>

ALSO:

Conventions: Winston Peters On The Nation

Winston Peters opens door to standing in East Coast Bays electorate, says it's an "exciting point" and he's thinking about it. "I’ve had a whole lot of people writing to me and calling up and saying ‘why don’t you have a go in East Coast Bays’." More>>

ALSO:

Waitangi Tribunal: Report On The MV Rena

In its interim report, the Waitangi Tribunal has found that the Crown’s conduct in response to the grounding of the MV Rena on Otaiti (Astrolabe) reef breached the principles of the Treaty of Waitangi. More>>

ALSO:

Gaza: Wellington Protest For Palestine Calls For End To Bombing

Around 300 people gathered outside the Israeli Embassy in Wellington on Friday to protest Israel’s occupation of Palestine. More>>

ALSO:

Gordon Campbell: On The Failure To Prosecute The GCSB

So one hand of the state – the Independent Police Conduct Authority – has now washed the hands of its brother agencies, and declared that all hands are clean. Case closed. More>>

ALSO:

Illegal Search: Police Behaviour 'Reminiscent Of Tūhoe Raids'

"Māori will lose further trust and confidence in the New Zealand Police and the Independent Police Conduct Authority (IPCA) if the recent incident in Stratford is not adequately addressed. This behaviour would not occur in Epsom or Khandallah so why should police think that such behaviour was acceptable in Stratford," says Chris McKenzie. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news