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

 


Reasons for interest rate rise not convincing

Reasons for interest rate rise not convincing

“The Reserve Bank has not given a convincing case that general inflation is a big enough risk to raise interest rates”, says CTU Economist Bill Rosenberg. “In fact it seems to be pushing against higher wages. It is also forecasting unemployment will not fall below 5% - in current terms over 120,000 people. It appears that continuing wage stagnation and permanently high unemployment are the price we pay for these policies.”

Rosenberg, commenting on the media conference after the Reserve Bank announced its interest rate rise, noted that when pushed to describe what the inflationary pressures were, the Reserve Bank could name only construction costs and government charges – but said that “general demand pressures” would lead to general price rises and growing wages. It appears to see wage rises as something to be resisted rather than welcomed after years of wage stagnation.

Its forecasts of unemployment see the unemployment rate bottoming out at 4.9-5.0 percent in December 2014 and not falling any further in the forecast period out to the end of 2016. “These are not levels of unemployment most New Zealanders would find acceptable as a permanent state of affairs, particularly alongside stagnating wages and rising housing costs”, Rosenberg says.

“What is the problem these policies are trying to address? Is it bad to have lower unemployment and rising living standards? Should we be choking off house building when rising house prices are a risk? There is surely no suggestion we want to slow the Canterbury rebuild because of its inflationary potential. We should address the causes of rapid price increases in specific areas like housing and energy prices rather than general interest rises that hurt the rest of the economy,” Rosenberg concluded.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

2014 General Election: Voting Period Begins

The first votes for the 2014 general election will be cast today, Wednesday 3 September, as advance voting begins ahead of election day on Saturday 20 September.

“Election day is September 20, but if you want, you can vote from today,” says Chief Electoral Officer Robert Peden. “Almost 300 advance voting places will be available around the country for people to cast early votes.”

Times and opening hours will vary around the country to suit local needs. More>>

 
 

Parliament Today:

Two Dead, One Injured: Suspect Charged After Ashburton Shooting

Russell John Tully has appeared in Christchurch District Court. Tully has been remanded in custody on charges of murder of Peg Noble and Leigh Cleveland and attempted murder of Lindy Curtis. More>>

ALSO:

John Key Press Conference: Ashburton Shootings, Judith Collins Inquiry

Prime Minister John Key has delayed the release of Nationals’ fiscal policy in light of this morning’s shooting at a Work and Income office in Ashburton... Key also answered questions about Judith Collins, and confirmed that independent inquiry will be held with regard to allegations made against Collins. More>>

ALSO:

Internet MANA: Georgina Beyer Rocks The Waka

“There is now, and always will be, a range of views about many issues within our movement and members are free to express them, but Georgina’s views on Kim Dotcom are not shared by the MANA Movement leadership or the vast majority of MANA members and supporters around the country” states MANA Candidate for Waiariki, Annette Sykes. More>>

ALSO:

IGIS Update: Inquiry Into Release Of NZSIS Information

The Inquiry would be conducted in private and individuals would appear before her separately over a period of more than a week. She does not intend to name those summoned to give evidence until her report is published. “I can confirm that all persons summoned will be required to appear under oath...” More>>

ALSO:

Gordon Campbell:
On John Key’s ‘Blame It On Judith’ Strategy

Right now, Prime Minister John Key seems intent on limiting the scope of any inquiry into his government’s dealings with Cameron Slater. The declared aim is to make that inquiry solely about Judith Collins’ behavior with respect to the Serious Fraud Office. More>>

ALSO:

Maori Council Lawyers' Statement: Supreme Court Decision On Maori Water Rights

“…the Supreme Court refused to give Pouakani people what they asked for, but may have given them something much, much better instead… the Supreme Court has questioned whether the Crown owns the River at all.” More>>

ALSO:

Gordon Campbell: On The Debate, And The Collins Accusation

Debating is a peculiar discipline in that what you say is less important than how you’re saying it. Looking poised, being articulate and staying on topic generally wins the day – and on that score, Labour leader David Cunliffe won what turned out to be a bruising encounter with Prime Minister John Key last night on TVNZ. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news