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Money Troubles Require Active State Involvement

International Money Troubles Require Active State Involvement

Alliance Party Media Release FOR IMMEDIATE RELEASE Monday, October 13th, 2008

Alliance list candidate, Quentin Findlay, today congratulated the Government on its decision to guarantee people's bank deposits but warned that the state would need to be more actively involved in the economy as the financial crisis worsened.

He said that despite Labour's moves in this area and the tough talking from the Prime Minister, Labour was still supportive of the 'market led' approach towards economic policy.

"The Government needs to develop a range of economic tools to ensure economic protection and its current policy is still prohibitive of that approach."

This meant, Mr Findlay said, that the Government especially needed to look at legislation such as the Reserve Bank Act and the Fiscal Responsibility Act as well as its commitments to organisations such as the WTO and the related free trade deals.

Furthermore, he said that the one of the barriers to active state involvement in the economy was the proposed P4 deal between New Zealand and the US, Chile, Brunei and Singapore. Under the terms of the deal, New Zealand has offered up its ability to control financial services and also impose tariffs in return for a free trade agreement.

"The terms of the deal meant that the same people who helped create the current global economic disaster would be in control of the New Zealand economy. It's similar to giving Dracula the keys to a blood bank," said Mr Findlay.

The Government needs to have room to manoeuvre in these sorts of situations and that requires having economic tools which allowed it to control capital flows and sector markets.

The present economic framework was still largely one based in the 1980s, where the government and people had a subservient role to that the market place. This meant that the emphasis of current economic policy was to maintain monetarism in place so as to check inflation at the expense of creating employment for thousands of Kiwis.

Mr Findlay believes that there are two options in that "an economy could be geared to the market or it could be aligned to the notion that it serves people and society. We in the Alliance Party believe that it should serve the latter notion and not the former and our party will continue to promote that belief during the remainder of the election campaign."

Ends

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