ONE SMALL STEP FOR CULLEN AND BOLLARD

Rt Hon Winston Peters has described the new policy target agreement between the Reserve Bank Governor and the Government as a contract in semantics.

Mr Peters said the agreement was merely another step in the direction that he started as Treasurer in late 1996 when he shifted the inflation target range from nought to two percent to nought to three percent.

He said the problem was that the previous governor Don Brash kept choking off economic growth by pursuing inflation at less than two percent with the zeal of an economic puritan.

Mr Peters said the new Reserve Bank agreement should have included increasing exports, economic growth and employment objectives.

He said the Government had to boost exports and reduce immigration before any real economic progress could be made.

“Clearly the intention of giving the Governor greater flexibility is meaningless if neither the new Governor and the Minister of Finance are capable of giving definition to the phrase medium term.

“Does that mean more than one year, three years, or some time never?”

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