Labour supports bill to lower NZ dollar
Sat, 22 Sep 2012 6:15p.m.
By Tony Field
The Labour Party and New Zealand First Party have found some common ground. Labour is supporting New Zealand First leader Winston Peters' plan to lower the high Kiwi dollar.
Mr Peters wants to rewrite the rules for the Reserve Bank so it can do more to help exporters.
The New Zealand dollar has been driven up by overseas traders attracted by the higher interest rates on offer here. Mr Peters says that's hurting our exporters.
“Are we going to back our own people, our own workers, or are we going to run the country for downtown Queen St paper shufflers and overseas money speculators?” asks the New Zealand First Party leader.
His Private Members Bill would broaden the Reserve Bank's role. So instead of focusing on inflation, the Bank would consider other factors like the high dollar and employment when it sets interest rates.
The bill has Labour's support.
“Inflation targeting for New Zealand has passed its usefulness,” says Labour Finance spokesman David Parker. “It was very important at the time to focus solely on inflation, but at the moment we face competitive devaluation abroad. This is hurting our exporters – ordinary New Zealanders who are losing their jobs and leaving to Australia as a consequence.”
But former Reserve Bank governor Don Brash says intervening in the money markets would be expensive and the effects could be short-lived.
“We know when they tried that in 2007 it did not work,” says Dr Brash. “We know in Switzerland it did work, but the Central Bank's balance sheet is now three-quarters of Swiss GDP, and the intervention is costing them billions of dollars a year.”
The National Party, ACT Party and United Future Party oppose Mr Peters’ bill.
While the bill looks certain to fail, Mr Peters has had a win. He has helped put debate over the high dollar firmly at the centre of the political agenda.
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7/10/2012 8:27:41 p.m.
I dont know what is more appealing. More money from exporting rural stuff while the price of living goes up (mind you oil cost too much already). Or keep the things the way they are at this moment. Hmmm the obvious one is keep it at what it is at this moment
24/09/2012 11:40:39 a.m.
Agreed BOB...!Anybody thinking that the RBNZ can "control" our exchange rate knows little too nothing about FX markets.If Japan can't do it...you really think we can?
23/09/2012 1:28:34 p.m.
While this may be good for a small minority of exporters, New Zealand imports include:
petroleum and fuels / refined oil
aircraft and aircraft parts
TV receivers, including video monitors and projectors
Automatic data process machines
In the year ending September 2011, the price spent on importing sugar and sugar confectionery has increased by more than 22%, jumping from $329 million to $403 million.
Lowering the dollar will only increase the cost of living in new zealand as we do not have the manufacturing base or the agricultural base to be self sufficient. This is why Labours previous attempts failed basic schoolboy economics told them this, but they still muddled through.
23/09/2012 7:30:52 a.m.
23/09/2012 7:24:48 a.m.
Labour talks about Key not closing the gap enough, when National has closed the gap international against most of our trading partners.UK/US/EU/Japan - NZ closed the gap in wages under National. If excluded mining from Aus, we would also have closed that gap.So what do Labour propose? They propose lowering our dollar like 25% and increasing the wage gap by 33% to everyone in the world.If there was any party with its head up its backside, Labour would be that party! Why do they come out with policy doing the exact opposite of what they claim?Labours argument over exporters is claiming that the NZ wages too high, set by rising min wage lvls, so while demanding higher min wages, they set about fixing that problem by devaluing the NZ currency 25% and reduce the current $13.50 min wage to equiv of $10 an hour!So why do Labour preach $15 min wage as opposition when they are also preaching to lower it significantly by devaluing the NZ dollar and giving NZ large inflation?
23/09/2012 6:07:34 a.m.
Bad idea you say?-Take a good hard look at rural NZ fella-and we call it progress!?Economics only seems to relate to asset sales,house prices,capital gains and corp greed. I suppose you think Brash was full of good ideas.The man is an embarrassment and racist to boot.
Economic ignorance is to do nothing (ala ostrich Key)when the western world is printing money!!
In a democracy a govt must be prepared to govern for the good overall as it indeed must govern to look after the needy,elderly and the sick.We don't see much of this with National.
Pakeha Tangatawhenua and proud.
22/09/2012 10:10:16 p.m.
There are individuals in the world that can influence our dollar more than our government can. We are all along for the ride until we stop tagging everything to the US dollar.
22/09/2012 9:19:46 p.m.
@John, Um... Don Brash... the man who got into bed with the exclusive Brethren? really you are quoting that nutter?
Erm the amount of ignorance you have shown in the number of posts I have seen from you pretty much says it all... pot calling the kettle black really.
You do realise that John Key our fascist Prime Minister has stock in the bank that holds New Zealands debt and as a result he is profitting from driving the countries debt up? thats economic idiocy right there.
Why is John Key borrowing so mcuh? more than we need? because he profits from the countries debt.
Try googling it Erm... you want to know what Fascism and economic mismangement look like... look up John Key.
22/09/2012 6:53:25 p.m.
This is a bad idea, Labour and Winston are a bunch of economic illiterates. Read Don Brash's facebook page to see why.
22/09/2012 6:52:53 p.m.
This displays a breathtaking level of economic ignorance.
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