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Cullen’s eighth blunder of the world

Cullen’s eighth blunder of the world

“Michael Cullen’s budget will be known as ‘the eighth blunder of the world’, not because of the contents but because of what is missing. Leaving out the key ingredient, the implementation of a low interest rate policy, is a blunder that will further erode our standing in the world,” says John Pemberton, Finance Spokesman, DSC.

“Implementing a low interest rate policy would have immediate benefits for all sectors of our society, from families through to exporters,” Pemberton claims. “Young couples could be helped into their first homes. Local bodies could pay for infrastructure only once and pass on the benefits in lower rates. Relieving DHBs of some $75 million in annual interest payments would go a long way toward reducing hospital waiting lists.”

“Low interest rates would see the value of our dollar drop, and the pressure from overseas investors ease. Exporters’ would face lower production costs and a lower exchange rate. It just makes common sense.”

“Instead we have the continuation of Cullen’s piecemeal approach to economics. Policies such as the KiwiSaver may have long-term benefits, but do not address today’s problems. It is doubtful that even the long term benefits will accrue to all New Zealanders, as only the moderately wealthy, or those who are prepared to reduce their standard of living even further, will be able to take advantage of the scheme. Once again, the lower incomes miss out. If you haven’t got the money, how can you save it?”

“Cullen’s blunder is that he treats the country’s economic ills as if ‘demand inflation’ is the only cause, and seeks to draw spending power out of the community. The real problem is ‘cost inflation’, caused by high interest rates that drive up prices, suck wealth into the hands of the wealthy and impoverish the rest of us.”

“Instead of the handout this budget gives to the already booming private banks through the drop in the company tax rate, Dr. Cullen should be utilising the Reserve Bank as a source of low interest funding, for the enrichment of all New Zealanders.”


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