Desperate money printing from the Reserve Bank demonstrates the urgent need for tax relief, says the New Zealand Taxpayers’ Union.

Union spokesman Louis Houlbrooke says, “The Reserve Bank’s announcement of a new 'Funding for Lending' money printing programme is a desperate measure that underscores how ineffective monetary policy has become. In fact, Adrian Orr’s loose monetary policy may do more harm than good as it inflates an unaffordable housing market.”

“It is becoming increasingly clear that it’s fiscal policy that has been key to New Zealand’s relative economic resilience in the last few months. However, with the wage subsidy drying up, we must look at new options.”

“Some commentators have suggested benefit hikes, but that was ruled out by the Prime Minister on Monday. She should now look to the tax system as a way of bolstering real incomes and encouraging productivity.”

“A temporary reduction in GST would immediately boost the buying power of all New Zealanders, and encourage people to bring forward future spending. Unlike with ‘helicopter money’ handouts advocated by some commentators, New Zealanders would actually have to spend their money on goods and services to reap the benefits of a GST cut. This would improve business revenues and bolster employment.”

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