The new targets for incoming Reserve Bank Governor Graeme Wheeler can’t properly address the biggest issue facing the export economy – the high dollar, says Labour’s Finance spokesperson David Parker.
“The high dollar is costing Kiwis jobs. National must accept that unless changes are made to the Reserve Bank Act, the primacy which by law must be given to inflation will mean inadequate attention is paid to the exchange rate. Our dollar will remain overvalued. That means more businesses will suffer and more Kiwis will lose their jobs.
“Changing the subsidiary policy targets agreement cannot change the primacy given to inflation targeting under the Act. The Government must admit the primacy of inflation over exchange rate has passed its use-by-date and change the law. Giving primacy to inflation is last century’s fight. It’s time to move on.
“National’s out-of-date economy isn’t working for ordinary New Zealanders, National have no adequate plans to fix it. Our external deficit is getting worse.
“Other countries are actively lowering their currencies so they can export more. They are playing hard ball but National still plays by the old rules.
“New Zealand businesses can succeed in the world but they need Government to do what only Government can. The high dollar means they’re fighting with one hand tied behind their back. Making changes to the Reserve Bank Act is essential to make the currency more competitive, to pay our way in the world and grow the jobs and incomes ordinary Kiwis need.”