Rt Hon Winston Peters
New Zealand First Leader
Member of Parliament for Northland
11 AUGUST 2016
CUTTING INTEREST RATES NOW A BLUNT AXE
There is a sea of trouble in the international economic outlook. Brexit, sluggish global growth and deep indebtedness
are all adding to the mood of uncertainty, says New Zealand First Leader and MP for Northland Rt Hon Winston Peters.
“Internationally, Central Banks are still cutting interest rates (Australia and the UK cut last week) although the
effectiveness of this policy with rates already at historically low rates is now very limited.
“Governor Wheeler is damned if he does, and damned if he doesn’t. The cut will do nothing to dampen the housing bubble
and will have little impact on the exchange rate in a world of ultra low interest rates.
“But in the absence of any meaningful action on the economy from the Minister of Finance the Reserve Bank has been left
to do what it can with the OCR – and that is now about as useful as a blunt axe.
“The Reserve Bank has used up most of its fire-power.
“The property market is dangerously stretched – the median New Zealand house price has now passed the $500,000 and many
areas are at record levels. The last thing NZ needs is another surge in property prices.
“But despite escalating and proliferating risks the government is doing nothing to strengthen the economy and reduce its
vulnerabilities. Its time to act!
“The place to start is by adopting NZ First policy:
• Drastically reduce immigration from record levels
• Slash temporary work visas from the current staggering level of over 200,000 annually
• Puts the brakes on foreign buyers of New Zealand land, housing and strategic assets.
“Above all, this government’s exports and manufacturing policies, or lack of them, mean that our economy is not growing
because of success in international markets but unwisely from mass consumption which is the recipe for a perfect
economic story.”
ENDS