Rising interest rates are putting further strain on the financial health of New Zealanders, according to the Reserve Bank’s latest Financial Stability report, National Finance spokesperson Nicola Willis says.

“The Reserve Bank’s latest report is a concerning look under the hood of the financial health of hundreds of thousands of New Zealanders. It confirms what thousands of Kiwis already know: the cost of paying down debt is snowballing, even while wages struggle to keep pace with inflation.

“Mortgage arrears are rising quickly, even while house prices fall. For many Kiwis who borrowed heavily during the period of extraordinary stimulus in 2020 and 2021, the failure to control inflation and interest rates is going to hit their personal finances like a landslide.

“And it’s clear there’s more pain on the way. The report suggests a quarter of outstanding mortgage debt was fixed during the ultra-low interest rate period of 2021, meaning a huge number of Kiwis are still yet to feel the full consequences of rising interest rates.

“Many of those families will struggle to meet the cost of those higher interest rates. The Reserve Bank’s report suggests current interest rates now exceed stress testing requirements through the period of ultra-cheap lending.

“The financial pain ripping through New Zealand is a direct consequence of the Government’s failure to control inflation and interest rates. Despite repeated warnings that rampant Government spending and failed economic policies would stoke inflation further, Labour made no change in approach. Now Kiwis’ livelihoods are at risk.

“Now with a new Prime Minister, we still don’t have a real economic plan from Labour.

“National has a plan to fight inflation and lift incomes for all. We’ll control Government spending, return the Reserve Bank to a single mandate, stop loading costs on business, eliminate bottlenecks in the economy, and let Kiwis keep more of what they earn.”

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