John Key MP
National Party Finance Spokesman

11 April 2005

Blame Labour for your rising mortgage

National Party Finance spokesman John Key says borrowers can blame the Labour Government for rising interest rates.

“An increasing number of economists are now saying interest rates are rising in advance of Labour’s big spending Working For Families redistribution package. Misdirected spending on Labour’s ballooning bureaucracy is also fuelling that.

“Homeowners, credit card holders and other borrowers will be paying for Labour’s spending priorities.

“National has consistently said that unless accompanied by gains in productivity, increased spending will result in rising interest rates. A transfer of money from hard-working New Zealanders to Labour’s welfare programme does nothing for productivity.

“Treasury has warned Labour about the size of its bureaucracy, saying the wasted spending in areas of the state sector is unsustainable,” says Mr Key.

On Friday, ANZ chief economist John McDermott was reported as saying that although the Working For Families package only took effect this month, the economic impact of it had already been factored in by the Reserve Bank in the markets.

In the same report, Deutsche Bank chief economist Ulf Schoefisch questioned the timing. He said: “… the timing is pretty risky. It would perhaps have been better to delay it somewhat.”

“National says Labour is sacrificing interest rates and the economy in order to improve its election chances. Most home-owning Kiwis won’t thank them for that by the end of this year,” says Mr Key.

Ends

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