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

 


Labour's monetary policy prescription warrants consideration

April 29, 2014

Labour's monetary policy prescription warrants consideration

The changes to monetary policy proposed by Labour have merit and warrant careful consideration, particularly as the Reserve Bank's independence would be preserved, the Employers and Manufacturers Association says.

"Apart from our investment in housing, we're constantly told we're poor savers, and our exporters certainly deserve a better priced dollar - this policy prescription addresses both of these fundamental issues," said Kim Campbell, EMA's chief executive.

"What's more, New Zealanders would keep their added savings rather than see them disappear when interest rates rise.

"It could work out well in the longer term.

"But it wouldn't work unless Kiwisaver is made compulsory, an idea whose costs may fall unfairly on small businesses.

"Increasing our savings rate is important for our producers to rely less on borrowings from offshore, which adds to the upward pressure on the exchange rate.

"The proposals draw heavily from other successful countries where mandatory savings are the norm, such as Singapore which has a variable savings rate, and Australia.

"The variable savings rate concept is a good idea; it would not be a good idea to allow politicians to determine what it should be.

"The policy is not sufficiently clear on whether employers' Kiwisaver contributions would be increased, which would not be helpful, and employers will be seeking reassurances that the variable savings rate would apply only to the employee contribution.

"The idea that the Reserve Bank should have responsibility for inducing a positive external trade balance is farfetched, and could be problematic. We would urge extreme caution over this suggestion.

"The wording otherwise for widening the Bank's objectives is not out of line with how other countries instruct their central banks, though we are concerned about how the changes were to be implemented and the risk of confusing the Bank's mandate.

"The policy proposals are also very light on the tight fiscal discipline business expects from the government.

"Certainly they show a level of thought well in advance of Labour's poorly considered proposals for reforming the electricity market."

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Gordon Campbell: On Bank Scandals (And Air Crashes)

Last month, the Australian Securities and Investment Commission (ASIC) filed proceedings against Westpac over activities that have some distinct echoes of the Libor scandal. More>>

Budget: Health Funding Must Keep Up With Need

NZNO: “The nursing team has been doing more with less for years. It’s getting to the point that we’re really worried about our colleagues, our patients, our jobs and the level of health care available for people in our country." More>>

ALSO:

Emissions Inventory: Time For The Government To Do The Right Thing

It’s time for the National Government to step up and do the right thing to reduce climate pollution as data shows New Zealand’s greenhouse gas emissions are higher than ever, the Green Party said today. More>>

ALSO:

Budget 2016: More Partnership Schools To Open

Seven new schools will join the eight Partnership Schools already open, along with further new schools opening in 2017. “The growth of this policy is a reflection of the high level of interest from educators and community leaders,” Mr Seymour says. More>>

ALSO:

No Correspondence With English: Did Brownlee Make Up Sale Of Navy Ships ‘On The Hoof?’

Having revealed that several Royal New Zealand Navy vessels have not left port in years, New Zealand First is now asking the Minister of Defence to prove he did not come up with the idea of selling HMNZS Taupo and Pukaki until the media asked him. More>>

Housing Plans: Labour- Abolish Auckland Urban Boundary
The Government should rule out any possibility of an urban growth boundary in Auckland Council’s Unitary Plan if it is serious about fixing the housing crisis. More>>
Greens - State House Solution
The Homes Not Cars policy allows Housing New Zealand to retain its dividend and, in addition, would refund its tax, to spend on the emergency building of around 450 new state houses. More>>

ALSO:

Houses And Taxes: Post-Cabinet, Pre-Budget Press Conference

The Prime Minister said that the pre-budget announcements showed that his Government is “investing in a growing economy”. He re-affirmed the National Government’s commitment to lowering personal tax rates but that any such change must fit with the fiscal reality of the time. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news