27 January 2006

Bollard stops for a cuppa

“We can’t win with Bollard,” says John Pemberton, Democrat for social credit Finance Spokesman.

“Beneficiaries of all types cop abuse, with strong suggestions that they ‘get a job’. Yet now we have the lowest unemployment figures for decades, the Governor of the Reserve Bank shakes his finger and tells us that the economy is far too perky, and needs a wallop of rising interest rates to slow it down.”

The walloping, nine interest rate increases in two years, is designed to reduce strong domestic demand from all those newly employed people and, ironically, threatens a return to high unemployment, Pemberton explains.

“And so the boom/bust cycle continues. Dr. Bollard’s latest announcement of maintaining the OCR is a bit like David Lange stopping for his cuppa. Despite the “Supplementary Stabilisation Instrument Project” that the Government has set up, Bollard obviously has no answers to the conundrum that he faces.”

“The current Government must bitterly rue the demise of so many of our domestic industries, or their removal off shore, in the disastrous fallout of Rogernomics,” Pemberton continues. “Now, when our people are working and earning, they have little more than imported goods to spend their money on, increasing our current account deficit. Tinkering with interest rates alone will not change this.”

“Our economy needs a low interest rate environment to stimulate business growth and local production,” Pemberton says. “At the same time, we should apply a foreign transaction surcharge, to inhibit the artificial value created by speculation, restrict the flood of cheap imports from countries with dubious environmental and labour standards, and allow our exchange rate to reflect the true value of goods and services traded.”

“Exporters will get full value for their goods, and local industry will thrive. We could have a win-win instead of what we have now – a lose-lose for most people.”

ENDS

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