John Luxton

Opposition Industry & Regional Development Spokesperson

Wednesday 19 April 2000

Govt. policies begin to bite the productive sector

Acting Prime Minister Jim Anderton who just yesterday told Waikato local government leaders that there was no need for the Reserve Bank to increase interest rates, is today silent on the matter following the 0.25 percent increase in the Reserve Bank official cash rate, Opposition spokesperson on Industry and Regional Development John Luxton said today.

"Government policies already have seen inflation begin to surge ahead. Increasing superannuation payments and recent tariff freezes will add further inflationary pressures.

"Government actions in nationalising ACC, increasing tax rates and promising to repeal the Employment Contracts Act are all hurting business confidence. This has also seen a lower New Zealand dollar than economists were predicting before the last election on the then economic settings.

"These actions are also pushing inflation up. Hence the Reserve Bank's need to increase interest rates which in turn will hurt businesses, homeowners and farmers. They are all paying more for their mortgages, further slowing the economy.

"The Alliance-Labour Government has shown itself to be bereft of vision on how to improve the economic wealth of New Zealand. All the policies introduced so far have actually slowed down the New Zealand economy.

"After taking over a growing economy in very healthy shape, they are quickly reversing the very policies that have seen New Zealand create more jobs and achieve a better growth rate than at any time since the wool boom of the early 1950s," Mr Luxton said.

ENDS

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