Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Interest rate rise bad for business and workers

27 October 2005

Interest rate rise bad news for business and workers

Today's rise in the Official Cash Rate will backfire badly on New Zealand businesses, the Green Party says.

Reserve Bank Governor Alan Bollard has announced the OCR would increase 25 points to 7 percent.

Green Party Co-Leader Rod Donald says this decision will cause even more pain for Kiwi manufacturers, exporters and tourist operators and the people who work in those enterprises.

"Not only will the higher OCR increase the cost of capital but it will continue to prop up New Zealand's over-valued dollar. This has already caused exports to fall $2.1 billion over the last four years, and forced imports to skyrocket $4.1 billion during the same period," Mr Donald says.

"I can understand why Dr Bollard wants to keep inflation under control, but why does he have to cripple New Zealand's productive sector in the process? The impact of the high Kiwi dollar has already caused job losses as local manufacturers are forced out of business or offshore because of cheap imports. Air New Zealand's move to outsource maintenance is also partly driven by the high dollar.

"Dr Bollard's message is clear; he will continue to push up interest rates until there is a drop in household spending and a reduction in debt financing of the housing market. We certainly can't afford to ignore his warning that there will be serious economic disruption if New Zealand doesn't reduce its unsustainable current account deficit.

"The Green Party has long advocated for the Government to take a firm hand on the economic tiller. It will take some careful navigation and decisive management by Finance Minister Michael Cullen to avoid the New Zealand economy sinking badly," Mr Donald says.

Mr Donald repeated the Green Party's calls for Dr Cullen to:

* Investigate introducing a capital gains tax on properties other than the family home to deflate the housing boom and give the Reserve Bank the flexibility to drop the OCR.

* Tighten foreign investment laws to limit property speculation and priorities productive investment.

* Introduce across the board tariffs on imports to reduce the current account deficit and provide local manufacturers with some relief from the high dollar

* Reorient the economy towards self-reliance by backing the Green Party's Buy Kiwi-made campaign

* Implement the measures he said in 2003 that he had at his disposal to get the dollar down to a realistic level

"Our proposals may not be popular but they are necessary if we are ever going to regain control of our economy. Shutting our eyes and blaming the perilous state of the US economy for our woes is certainly not the way forward," Mr Donald says.

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Covid-19: Govt Purchases Enough Pfizer Vaccines For Whole Country

The Government has guaranteed that every New Zealander will have access to the Pfizer/BioNTech vaccine, after securing an additional 8.5 million doses, Prime Minister Jacinda Ardern announced today.

“The Government has signed an advance purchase agreement for 8.5 million additional doses, enough to vaccinate 4.25 million people... More>>


 


Earthquakes: Tsunami Activity – Cancelled

The National Advisory issued at 2:48pm following this morning's earthquakes near the KERMADEC ISLANDS REGION is cancelled.
The advice from GNS Science, based on ocean observations, is that the Beach and Marine threat has now passed for all areas... More>>

Joint Press Release: Dirty PR Exposed In Whale Oil Defamation Trial

Three public health advocates are relieved that their long-standing Whale Oil defamation trial against Cameron Slater, Carrick Graham, Katherine Rich and the Food and Grocery Council has finally concluded and they are pleased that the truth has come out... More>>

ALSO:


Government: Next Stage Of COVID-19 Support For Business And Workers

The Government has confirmed details of COVID-19 support for business and workers following the increased alert levels due to a resurgence of the virus over the weekend... More>>

ALSO:


Maori Party: New National Executive

This morning the Māori Party confirmed their new National Executive including Che Wilson, Fallyn Flavell, John Tamihere and Kaiarahi Takirua: Rawiri Waititi and Debbie Ngarewa-Packer... More>>

Government: Balanced Economic Approach Reflected In Crown Accounts

New Zealand’s economic recovery has again been reflected in the Government’s books, which are in better shape than expected.
The Crown accounts for the seven months to the end of January 2021 were better than forecast in the Half Year Economic and Fiscal Update (HYEFU)... More>>


Covid-19: Auckland Back To Alert Level Three After One New Community Case Revealed

Auckland will move to alert level three for a week at 6am tomorrow morning after two new Covid-19 community cases announced this evening could not be directly linked to earlier cases, the Prime Minister has confirmed.
The rest of the country will move to level two.... More>>

NZ Initiative: New Report Highlights How Our Housing Crisis Could Worsen If We Don’t Act Now

If New Zealand politicians thought the housing crisis in 2020 was bad, the worst is yet to come, warns a new report by The New Zealand Initiative. In The Need to Build: The demographic drivers of housing demand , Research Assistant Leonard Hong ... More>>

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels