The Labour Party has laid out its plans for a so-called Reserve Bank upgrade which will include a new variable savings rate (VSR) for KiwiSaver.
Finance spokesman David Parker this morning announced two other initiatives which he says will lead to lower interest rates, a more competitive dollar and better jobs with higher wages.
The VSR would change the rate of people's compulsory KiwiSaver contributions, meaning they would pay money into their retirement savings instead of higher mortgage payments to overseas banks, Mr Parker says.
"Governments around the world have changed how they operate monetary policy since the global financial crisis. New Zealanders have a dollar overvalued by up to 15 percent, a weakened export sector and mortgage rates that are among the highest in the developed world," Mr Parker says.
Labour would broaden the Bank's purpose beyond inflation and price stability to help achieve a "positive national external balance" to increase jobs and economic growth.
It would also encourage the Bank to use its current tools to help exporters and home owners.
The proposed changes would still maintain the independence of the bank and its ability to meet inflation control targets, Mr Parker says.
The policy will sit alongside Labour's proposed capital gains tax, KiwiBuild housing policy, universal KiwiSaver and NZ Power.
Even before the policy was announced this morning, Prime Minister John Key was sceptical about what it would hold.
"It's snake oil and you really shouldn't buy it," he said.
"They want you to believe there's pixie dust out there, but actually there isn't."
"They'll come out and pretend they've got some magic tool that will somehow make interest rates lower and somehow make the exchange rate go down but they won't have anything that will actually work."
3 News/ NZN