Interest rate rise will hit the regions

The latest interest rate rise will hit the fragile regional economies of New Zealand and hurt exporters by putting more upward pressure on the exchange rate, says Labour’s Finance spokesperson David Parker.

“The regions are already hit by dropping export prices for dairy products and timber prices plus they have flat housing markets from LVRs . Now they have to endure another interest rate rise which is a direct result of the Auckland housing price bubble.

““The Reserve Bank Governor has already said mortgage interest rates will get close to 7% by the end of the year, adding $233 to monthly costs on a $300,000 mortgage.
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Government has no solutions to tackle risks to economy

The National Government has no solutions to tackle the serious risks to the economy identified by the Reserve Bank today, Labour’s Finance spokesperson David Parker says.
“Reserve Bank Governor Graeme Wheeler this morning highlighted falling dairy prices, declining log exports, strong immigration and high house price inflation as factors threatening the economic recovery. The Governor also noted that the exchange rate was at an unsustainable level.
“The quarter-point rise in the Official Cash Rate to 3.25 per cent means mortgage interest rates are well on their way towards 9 per cent.
“These pressures will add to the increasing cost of living. Kiwis know times are tough when 46 per cent of working New Zealanders have had no increase in their wage rate in the past year.
“National’s tool box is empty.
“Conversely, Labour has ideas to curb all these risks.
“Interest rates are going up because house prices are out of control in Auckland. Continue reading


Lower interest rates, a more competitive dollar and better jobs from Reserve Bank changes

Labour’s Reserve Bank Upgrade will lead to lower interest rates, a more competitive dollar and better jobs with higher wages, says Labour’s Finance spokesperson David Parker.

“The next Labour Government will upgrade the Reserve Bank Act by broadening its objective and giving it a new tool that will enable it to tackle our high overvalued dollar, help create jobs and keep interest rates low.

“Governments around the world have changed how they operate monetary policy since the global financial crisis. New Zealanders have a dollar overvalued by up to 15 per cent, a weakened export sector and mortgage rates that are among the highest in the developed world.

“Labour will make the following changes to the Reserve Bank Act as part of our Economic Upgrade:

1) Broaden the Reserve Bank’s objective beyond inflation and price stability to also assist to achieve a positive national external balance, which will boost economic growth and create more jobs.

2) Encourage the Bank to use its current tools differently, in a way that will help exporters and home owners.

3) Introduce a new tool – a variable savings rate or VSR – allowing the Bank to vary KiwiSaver savings rates (which would be universal under Labour) as an alternative to raising the OCR to take the heat out of the economy. This VSR would mean Kiwis would pay money to their retirement savings instead of higher mortgage payments to overseas banks.

“The independence of the Reserve Bank, and its ability to meet its inflation control target, are maintained.

“Labour’s changes will work with our Economic Upgrade focussing on investment, innovation and industry policies.

Alongside a capital gains tax, our KiwiBuild housing policy, universal KiwiSaver and reduced costs to businesses through NZ Power, Labour is offering an alternative that will help Kiwi families and ensure our economy can create better jobs and higher wages,” says David Parker.

29 April 2014 MEDIA STATEMENT


Better jobs and higher wages in Reserve Bank changes

What really matters to New Zealanders is a strong economy that provides secure work and good wages, says Labour’s Finance spokesperson David Parker.

“On Tuesday Labour will detail its changes to the Reserve Bank Act. These changes will help create jobs and take pressure off interest rates.

“For forty years New Zealand has not exported enough to cover the costs of our imports and interest.

“Our Reserve Bank changes, combined with our wider Economic Upgrade, will help New Zealanders by creating better jobs that pay higher wages for Kiwis by helping our exporters compete overseas.

“Labour’s changes will work with our Economic Upgrade focussing on investment, innovation and industry policies.
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National sits on hands as 180 engineers join dole queue

The loss of 180 highly-skilled jobs at Air New Zealand in Auckland shows the National Government is sitting on its hands while Kiwis are joining the dole queue, moving to Australia or into less secure low-paid jobs, Labour’s Finance spokesperson David Parker says.

“National has no plans to boost employment despite promising two years ago it would create 170,000 new jobs.

“Today’s job losses represent 180 workers with families to feed and mortgages to pay. Labour extends its sympathy to those affected,” David Parker says.

“Kiwis deserve to have well-paid secure jobs, but they fear for their positions more than ever. Aircraft engineers are the type of highly-skilled workers New Zealand needs to retain.
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Two-speed economy as exports fall by 8%

Exports have tumbled eight per cent compared to May last year, showing the Government’s attempts to rebalance the economy lie in tatters, said Labour’s Finance spokesperson David Parker and Economic Development spokesperson David Clark.

“National is creating a two-speed economy where exporters struggle but speculators flourish,” said David Parker.

“Bill English promised to rebalance the economy but this drop in exports shows he has failed, yet again. Meanwhile property speculators are having a great time in Auckland.
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Manufacturing job losses: Change needed now

The loss of 84 jobs at aviation manufacturer Safe Air shows that action must be taken to revive our struggling exporting manufacturers, says Labour’s Finance spokesperson David Parker.

“Safe Air in Blenheim has cut 84 jobs because the dollar is overvalued. That comes on top of the 17,000 jobs lost in the sector last year and this year’s closure of the likes of Summit Wool Spinners.
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