Rt Hon Winston Peters
New Zealand First Leader

29 January 2015

Reserve Bank Act Fails Exporters Again

With the Official Cash Rate held at 3.5 percent, the Reserve Bank needs to take lessons from the Bank of Canada over how to surprise the markets, says New Zealand First Leader, the Rt Hon Winston Peters.

“The Bank of Canada and the European Central Bank has done much more to drop the Kiwi dollar than anything this incompetent government has done,” the Rt Hon Winston Peters said.

“Take that forecast $572 million budget deficit. It was almost a one billion dollar negative reversal of what Mr English predicted last May and no amount of jawboning from the Reserve Bank Governor can mask ruinous government policies.

“Mr Key and Mr English can get away with it only because of falling oil prices. Something that is masking the real truth that we are the ‘washed up rock star economy.’

“And instead of a scalpel, the Reserve Bank Act is being used like a club. The OCR has nothing to do with Greymouth but everything to do with Grey Lynn. Why should the regions, farmers and exporters pay the price for policies better described as being Ponzinomics.

“This government is chucking the economic kitchen sink at Auckland, which is only sucking provincial New Zealand drier than the current drought.

“This government says it believes in the market but when it comes to interest rates and loan to value ratios, Dannevirke is treated like Devonport. The regions cannot use lower costs to compete for investment while ham fisted immigration is stoking Auckland’s house prices.

“The Reserve Bank Act must make exporting, growth and employment objectives a vital part of the policy targets agreement.

“Meanwhile the Governor of our Reserve Bank needs to take the markets by surprise as his Canadian counterpart did. Any talk about a future cut to interest rates just generates one of those Tui billboards,” Mr Peters said.

ENDS

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