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

 


RBNZ rate hike equals more pain for home owners

RBNZ rate hike equals more pain for home owners


12 June, 2014


Today’s Reserve Bank interest rate hike means home owners with a floating rate mortgage of $250,000 will pay more than $1200 a year extra in interest than they did in March, Green Party Co-leader Russel Norman said.

“Inflation is currently well below the 2.0 percent target and this third interest rate hike since March whacks home owners, to say nothing of exporters, who will have to grapple with an ever-rising New Zealand dollar.

“Home owners and those aspiring to home ownership got no assistance in last month’s Budget and today have been slammed again, plus the bank promises more hikes this year and next despite Governor Graeme Wheeler saying inflation and wage inflation is moderate,” Dr Norman said .
The RBNZ lifted the Official Cash Rate by quarter of percentage point to 3.25 percent. Annual inflation is 1.5 percent and actually was lower in the year to March than it was the previous quarter.

“People on floating rate mortgages will be hit immediately and even those on fixed rates will eventually be punished,” Dr Norman said.

“Governor Wheeler has signalled more rate rises ahead. Most families are already stretched. On a mortgage of $250,000, you will likely, by the end of this year, have $1500 less a year disposable income. Many home owners, especially in Auckland, have considerably larger mortgages than that.”

The RBNZ is virtually the only central bank around the world hiking interest rates. Some, such as the European Central Bank, are actually cutting rates.
“In the March Monetary Policy Statement, Mr Wheeler said the exchange rate was unsustainably high and he repeated that today. But today’s hike, and with more hikes promised, exporters can expect more pain,” Dr Norman said.

“The Government’s failure to manage the housing sector, where the median house price has risen 33 percent and 44 percent in Auckland on John Key’s watch, is a key driver of today’s RBNZ action.

“Instead of a hands-off approach, the Green Party would more actively manage the housing sector to reduce the attractiveness and profitability of housing speculation.

“The Green Party will take the heat of the housing market by building more state houses and funding third party organisations to provide more affordable houses. We also will curb property speculation through a capital gains tax (except on the family home) and restrict non-resident purchases of property,” Dr Norman said.

Ends

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

'Tea Break Bill' Passes: Gordon Campbell On Bad Labour Laws And Poor Safety

By co-incidence, one of the prime dangers of the government’s new employment relations law has been underlined by the release of the death and injury statistics among workers at New Zealand ports. These are highly profitable enterprises for the port owners.

The Port of Tauranga for instance, is expecting its current full-year profit to be between $78 million and $83 million and other ports are enjoying similar boom times – but they are also highly dangerous places for the people who work on or around the port premises. At the Port of Tauranga, there have been 26 serious accidents since 2011, and two deaths. More>>

 

Parliament Today:

No Charges: Outcome Of Operation Clover Investigation

Police have completed a multi-agency investigation, Operation Clover, into the activities of a group calling themselves “The Roast Busters”. The 12 month enquiry focused on incidents involving allegations of sexual offending against a number of girls in the Waitemata Police district and wider Auckland area... More>>

ALSO:

UNICEF Report: NZ Cautioned On "Stagnating" Child Poverty

An international report by UNICEF has found that child poverty rates in New Zealand have barely changed since 2008, despite similar sized countries significantly reducing child poverty during the recent recession. More>>

ALSO:

Funding Report: Two Pathways For Transport In Auckland

Commissioned by Auckland Council, the group was asked to investigate two possible pathways for raising $300 million per year ($12 billion over 30 years) to pay for the improvements needed to help fix Auckland’s transport system. More>>

ALSO:

Pay Equity: Equal Pay Win In Court Of Appeal

CTU: The Court of Appeal has made a historic decision paving the way for a substantial equal pay claim for aged care workers. More>>

ALSO:

Gordon Campbell: On The TPP Finishing Line, And Amazon’s Woes

If the Trans Pacific Partnership trade deal wasn’t such a serious matter, this would be pretty funny… More>>

ALSO:

TV3 Video: Three Die On Roads Over Labour Weekend

The official holiday period ended at 6am Tuesday, with three deaths on the roads during the Labour Day weekend. More>>

Employment Relations Bill: Govt Strains To Get Tea Break Law Through

The Government has been left with egg on its face - failing to get its much-vaunted, but hugely unpopular, meal break law passed in the first week of its new term, Labour spokesperson on Labour Issues Andrew Little says. More>>

ALSO:

Guns: Police Association Call To Arm Police Full Time

"The new minister gave his view, that Police do not need to be armed, while standing on the forecourt of parliament. The dark irony was that the interview followed immediately after breaking news of a gunman running amok in the Canadian parliament in Ottawa..." More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news