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

 


Reserve Bank shouldn't raise interest rate

Reserve Bank shouldn't raise interest rate


"It is important that interest rates are kept at no more than their current levels", says CTU Economist Bill Rosenberg. "Unemployment is still high despite signs of growth in the economy. Wages need to rise in real terms after years of stagnation. Businesses need to invest in areas other than property to create jobs."

"There is strong pressure from the banks to increase interest rates, but that should be resisted. Instead the Reserve Bank should be looking at more active use of macroprudential policies to address interest rates, rather than focus them only on financial stability as they do now. For example, depending on the problems being faced they should consider more strongly focused sectoral capital requirements for banks, and make more active use of the core funding ratio as a means to control the availability of credit, particularly that funded from overseas."

Interest rates rising faster than the rest of the world will raise the exchange rate, making it even more difficult for exporters. There is a real risk that the faster interest rates rise, the more that growth in the economy, wages and employment are choked. It would also make it more tempting for banks to increase their borrowing from overseas to fund credit growth here, worsening the situation as it did during the 2000s.

Interest rate rises will also make house ownership less affordable by adding to the cost of living for people with mortgages and other borrowing. The Government needs to take more urgent action to stabilise house prices.

New Zealand is not doing well on unemployment: at 6.2 percent, it is 13th in the OECD despite New Zealand having the 5th highest growth rate. Treasury forecasts suggest it will fall only slowly from 150,000 out of work now, still being at 130,000 in 2017. There needs to be a much stronger focus on employment growth.

The Reserve Bank will make an announcement tomorrow. It should take a broad view of its responsibilities towards housing affordability, exports, employment, wages and a balanced economy. If the Government is not doing these things, it needs to take up some of the slack.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

#SaveCampbellLive : Mediaworks Delivered 104,000 Petition Signatures At TV3's Newton HQ
#PonyTailGate #TailGate Full Coverage

Pukeahu Park : ANZAC 100th Anniversary Dawn Service In Pictures

Roughly 18,000 people gathered this morning at Pukeahu Memorial Park for the Anzac day centenary. Anticipating the large turnout, patrons arrived as early as 4.30. It was virtually impossible to get near the Memorial after 5am. By 6, the crowds on Taranaki Street had stretched as far back as the Z Petrol station.

The screens erected around the park displayed the live events to those who had turned up. The heat generated by the huge number of people caused many to take a turn. Medics and ambulances were on hand for the fainting crowd members. Only twenty minutes into the ceremony, one medic said they had already dealt with 15 to 20 spells. More>>

 

PARLIAMENT TODAY:

War: What’s To Commemorate?

Gordon Campbell in Werewolf: Is there anything that can be validly commemorated on this 100th anniversary of Gallipoli? Beyond, that is, a fleeting sense of empathy with the thousands of soldiers killed or wounded on April 25 1915 and in the months thereafter, until the whole thing was finally called off in December 1915. More>>

MORE IN WEREWOLF:

ALSO:

Peter Ellis Case: Minister Declines Request For Commission Of Inquiry

Justice Minister Amy Adams has declined a request from supporters of Peter Ellis for a Commission of Inquiry on the basis that an inquiry cannot be used to determine the liability of any person. More>>

Quakes: New Process For Red Zone Crown Offers

Canterbury Earthquake Recovery Minister Gerry Brownlee has announced a process to give everyone a say on the Crown offers to owners of vacant, commercial/industrial and uninsured properties in the Residential Red Zone. More>>

ALSO:

Gordon Campbell: On The Battle Obama Is Waging Over The TPP

For the past two and a half years, this column has been arguing that the fate of the Trans Pacific Partnership (TPP) deal will hinge on whether US President Barack Obama can win Trade Promotion Authority (TPA) from Congress... Last week, the White House finally, finally unveiled a draft TPA Bill. More>>

ALSO:

Greens: Govt Breaks Free Doctors Visit Promise To Kids

Documents obtained by the Green Party show that the Government decided to fund only 90 percent of doctors’ visits for children suffering from an injury in an attempt trim the cost of the so-called “free” visits. More>>

ALSO:

Other Wars: Extension Of NZDF Commitment In Afghanistan

The New Zealand Defence Force’s commitment of mentors and support staff to the Afghan National Army Officer Academy in Afghanistan has been extended out to December 2016, Defence Minister Gerry Brownlee says. More>>

PM's Press Conference: Auckland Property Prices Increasing "Too Rapidly"

John Key accepted that Auckland property prices 'are going up too rapidly” in a press conference held today in Wellington, however he said that this is not anything new. More>>

ALSO:

Press Conference: ANZAC PMs Concerned About ISIL Bringing The War Home

Prime Minister Key and Prime Minister Abbott spoke of the bond formed between Australia and New Zealand in the “baptism of fire” of Gallipoli. Abbott stated that New Zealand and Australia’s values and interests are linked, and this is reflected in the joint operation in Iraq which will begin shortly. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news