INDEPENDENT NEWS

Joint central bank nothing but sugar coating

Published: Thu 14 Sep 2000 01:32 PM
“The creation of a joint central bank is largely irrelevant to the question of a single trans-tasman currency and would have only a palliative effect on the subsequent loss of our economic sovereignty,” TUF Secretary, Michael Gilchrist said today.
“Whether New Zealand simply adopts the Australian dollar or whether there is a joint central bank, the currency would continue to be managed for the benefit of the seven Australian states. Any alternative is politically inconceivable.
“A joint central bank would be mere sugar coating on the pill for New Zealanders – and what a bitter pill to swallow it is.
“In 1978 our per capita real GDP was 99% of Australia’s. In 1987 it was 98.5%. By 1998 it had collapsed to 84%.
“There is nothing inherently stronger about the Australian economy. The difference is a difference in economic management.
“The fact is that our economic management since the mid 80’s has been abysmal in comparison with that of Australia. That includes management of the dollar by the Reserve Bank since it was floated in 1985, as well as the throwing away of valuable domestic markets and a host of other missed opportunities to develop our national economy.
“Either we confront our failures and start repairing them or our performance will continue to deteriorate. An exchange rate fixed by the Australian dollar will only make us more vulnerable to shocks in the terms of trade and inflationary and recessionary pressures.
“An autonomous nation state offers its citizens the opportunity for balanced, equitable economic development. Until recently in our brief history that’s something we have looked like being able one day to achieve. With currency union that opportunity will be lost forever,” Mr Gilchrist concluded.
For further information contact: Michael Gilchrist 04 384 8963 or 04 237 7566

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