3 July 2002

"Households and businesses are now paying for Labour's inability to deal with the real issues that will raise New Zealand's long-term, sustainable growth rate," says National Finance spokesman David Carter.

Mr Carter was commenting on this morning's interest rate increase by the Reserve Bank, the fourth consecutive 25-point rise since March this year.

"Those home owners with a $100,000 mortgage are now paying an extra $1000 a year - with more interest hikes on the way.

"Michael Cullen will again, no doubt, muddy the waters by blaming this latest increase on the target band or the Bank's interpretation of it. However, all he is doing is trying to divert attention away from the real issue - Labour's unwillingness to implement policies that will raise our long-term, sustainable growth rate."

Mr Carter says Dr Cullen's haughty, diversionary tactics will not fool New Zealand homeowners and business people.

"They know that the only path to higher growth and lower interest rates is for Government to tackle issues that will allow our economy to grow faster without generating inflation.

"National understands this and that is why our economic framework includes less regulation, lower compliance costs, amending the RMA, lowering taxes and addressing infrastructure bottlenecks.

"Unfortunately, Labour and Dr Cullen's answer of higher inflation is simply a recipe for lower growth, higher interest rates and a further decline in all New Zealanders' living standards," Mr Carter added.

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