Media statement For Immediate release Friday, 27 April 2007

Copeland: Monetary policy needs revamp with cross party support

Finance spokesperson for United Future, Gordon Copeland, is calling for a new approach to monetary policy; with cross party support.

“We have a major crisis on our hands and a cross-party response is called for.

"In particular I call on the Leader of the National Party to put aside political point scoring and commit to confidential talks with the Government and other parties. New Zealanders deserve no less.

“Yesterday's further increase in the official cash rate by the Reserve Bank comes hard on the heels of a call by both the OECD and former Governor Don Brash for a new look at our reliance on this single blunt instrument,” said Mr Copeland.

“I agree. We now seem to have a vicious cycle. Interest rate increases lead to higher exchange rates, further pressure on exporters and new wage demands.

“The losers also include all New Zealanders with mortgages and the nation’s economy as our balance of payments deficit grows.

"The winners are overseas lenders and the banks.

“The sickness is inflation but there comes a time when the cure is almost as bad as the disease," said Mr Copeland.

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