Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Interest Rate Rise Threatens Recession

Today's interest rate rise could easily tip us into recession, the Employers & Manufacturers Association says.

"We have to ask whether Dr Cullen and Dr Brash are getting two sets of contradictory data," said Alasdair Thompson, the EMA's chief executive.

"Dr Cullen yesterday said the economy was showing zero growth in the March quarter yet Dr Brash responds, presumably to similar data, by hiking interest rates by a full half per cent.

"Dr Brash is mostly targeting the US dollar with interest rates to control inflation, and the exchange rate has not been responding.

"In fact our trade weighted index has not fallen; the fall in our dollar's value more fairly reflects the strength of the US currency. Meanwhile exporters to our most important market, Australia, are losing orders over there and market share here as our dollar has been rising against the Australian currency.

"The reliance on interest rates alone shows how limited and crude our monetary policy is.

"The Government's contribution to inflation with tobacco tax, ongoing tertiary fee rises, and general uncertainty hanging over our economy, is not helping. Neither are rates rises from local government. "The higher cost of money will certainly put the brakes on investment in new production capacity, but not on the sinking kiwi dollar.

"The last round of interest rate rises resulted in the exchange rate going down. The consensus of our trading bank economists just six weeks ago was that we would get US52 cents for our dollar by now; instead its 47cents as of yesterday.

"How do they get it so wrong? Meanwhile the banks are reporting record profits as are other services.

"The Reserve Bank is in a dilemma now. It has run out of rope with this latest interest rate rise. The alternative today was to leave interest rates where they were, and take a risk on our currency stabilising. Clearly Dr Brash believes the risk of recession is the lesser of the two evils."

ends

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Legal Issues: Gordon Campbell On The Commerce Commission Fuel Report

Yesterday’s interim Commerce Commission report on the fuel industry will do nothing to endear the major oil companies to the New Zealand public.

Apoparently, the fuel industry is an oligopoly where the Big Three (BP, Mobil and Z) that import 90% of this country’s fuel also control the supply, pricing, profit margins etc etc, from wharf to petrol pump, thereby all but throttling genuine competition at every stage along the way. More>>

 

Emergency Govt Bill: Overriding Local Licensing For The Rugby

“It’s pretty clear some clubs are having difficulty persuading their district licensing committees to grant a special licence to extend their hours for this obviously special event, and so it makes sense for Parliament to allow clubs to meet a community desire." More>>

ALSO:

Leaving Contract Early: KiwiBuild Programme Losing Another Top Boss

Ms O'Sullivan began a six-month contract as head of KiwiBuild Commercial in February, but the Housing Ministry has confirmed she has resigned and will depart a month early to take up a new job. More>>

ALSO:

Proposed National Policy Statement: Helping Our Cities Grow Up And Out

“We need a new approach to planning that allows our cities to grow up, especially in city centres and around transport connections. We also have to allow cities to expand in a way that protects our special heritage areas, the natural environment and highly productive land." More>>

ALSO:

Ombudsman's Report: Ngāpuhi Elder 'Shocked' By Conditions At Ngawha Prison

A prominent Ngāpuhi elder is shocked to find inmates at Ngawha Prison are denied water and forced to relieve themselves in the exercise yard... Chief Ombudsman Peter Boshier has released a report highly critical of conditions at the Northland prison. More>>

ALSO:

Promises: Independent Election Policy Costing Unit A Step Closer

The creation of an entity to provide political parties with independent and non-partisan policy costings is a step closer today, according to Finance Minister Grant Robertson and Associate Finance Minister James Shaw. More>>

ALSO:

School's In: Primary And Intermediate Principals Accept New Offer

Primary and intermediate school principals have voted to accept a new settlement from the Ministry of Education, which includes entrenched pay parity with secondary principals. More>>

ALSO:

IPCA On 'Rawshark' Investigation: Multiple Police Failings In Hager Searches Confirmed

The Independent Police Conduct Authority has found that the Police's unlawful search of Nicky Hager's property in October 2014 resulted from an unwitting neglect of duty and did not amount to misconduct by any individual officer... More>>

ALSO:

Broadcasting Standards: Decisions On Coverage Of Mosque Attacks

The Authority upheld one of these complaints, finding that the use of extensive excerpts from the alleged attacker’s livestream video on Sky News New Zealand had the potential to cause significant distress to audiences in New Zealand, and particularly to the family and friends of victims, and the wider Muslim community. More>>

PM's Post-Cab: Bad Mail

Cabinet was updated on the process around prisoners sending mail, following the accused Christchurch gunman sending letters that "should have been stopped". All mail of "high concern prisoners" will now be checked by a specialist team and a changes to the legal criteria for witholding mail are expecting to go to a cabinet committee in this parliamentary session. More>>

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels