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Opposition calls for exchange rate control

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Opposition calls for exchange rate control

3News NZ

David Parker

David Parker

The Government's new policy targets agreement (PTA) with the incoming governor of the Reserve Bank won't deal with the biggest problem facing the export economy, Labour says.

Finance Minister Bill English and the bank's new governor, Graeme Wheeler, signed the PTA on Thursday.

It continues to require the bank to keep inflation between 1 and 3 percent, and Mr English says there are no major changes in it.

But Labour's finance spokesman, David Parker, says the exchange rate is more important than inflation and the bank can't deal with it unless the Government changes the Reserve Bank Act.

"The high dollar is costing Kiwis jobs and unless changes are made our dollar will remain over-valued," he said.

"Giving primacy to inflation is last century's fight, it's time to move on."

Mr Parker says other countries are actively lowering their currencies so they can increase exports.

"They are playing hardball but National still plays by the old rules," he said.

"New Zealand business can succeed in the world but the high dollar means they're fighting with one hand tied behind their back."

Labour, NZ First and the Greens want the bank to be given new powers to control the exchange rate, which the government has so far rejected.

The dollar rose to nearly 83 US cents on Thursday after latest statistics showed the economy grew more quickly than economists had predicted in the second quarter, but fell back in later trade.

NZN

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Comments

21/09/2012 10:30:32 p.m.

Isaac wrote:

All I see here is a play for corporate campaign contributions, as the only way for currency debasment is big government loans. Print more money, build inferstructure, short term job creation and then sell it. While we pay for it in the meantime, an age old con for the morally corrupt few.

21/09/2012 6:38:37 p.m.

David wrote:

@Brad There are many ways to control the exchange rate... having a double degree in economics and finance I can tell you that it basically comes don to the government having the balls to make a choice as to what method is best suited. I have also seen your posts... stop defending Key on the basis that you are exactly the same as he is and take every opportunity you can to put people down. I will always go after fascists.. they are nasty, and there are many different kinds of jews... some of their factions are considered to be extremely fascist. Wasnt comparing Key to Hitler... just to another Fascist that people recognise.

21/09/2012 5:22:24 p.m.

Kim wrote:

@Drad..Thanks for the espert analysis. So you are saying we could print .. say.. 20b and it wouldn't effect the dollar? Then what are we waiting for...

21/09/2012 2:43:54 p.m.

Brad wrote:

Kim - your guess is 2-3 cents eh? The US Federal Reserve is currently printing TRILLIONS of US dollars quarterly to lower the US currency. I can tell you what $10b of NZD will do against this kind of money printing - NOTHING. You are dreaming son.

David, you need to face reality and stop the preaching about fascism - give me strength. The NZ Reserve bank doesnt have a hope in hell in reeling in the USD based on the current growth state of NZ currency and the corresponding weakness of the US position. You should be celebrating that the NZ economy is growing at 2.6% in times of a world economic slow down. Bleating on about your personal hatred of the PM and attempting to some how make some sensible argument to currency control and comparison to Hilter is ludicrous. Grow up!

21/09/2012 10:16:33 a.m.

David wrote:

LOL @ Jim Labour didnt intervene with the level of the dollar while they were in power because it was no where near the levels that it is currently trading at, so grow up. Remember also Jim that it wasnt that long ago that the dollar was sitting at 55 - 65 US cents and importers were doing just fine. Of course importers will make less money if the value of the dollar is lowered... exporters will make more however and there will be a balance achieved. No economy wants to import more than it exports as there will be a huge Trade deficit... as New Zealand currently has. Currently we have a Fascist Prime Minister... yes Jim fascist A Fascist is someone who picks on minority groups, a Fascist is someone who talks aabout "Nationalism" or one rule for all (so long as its the rule of the superior people). A Fascist is someone who talks about taking personal responsibility but takes none themselves. Fascists are nasty human beings.. Germany had one during the second world war. New Zealand has one now.

21/09/2012 9:42:49 a.m.

Greg wrote:

Fonterrra doesnt need any help.
The only companiesd to benifit from this are the very very few that export to the USA.
This is why I wont be saving for my retirement too far out, the last decade of your working life should cover it. Its bad for workers as well, drop the value of the dollar and have a nation wide pay increase of 5%, otherwise we are just digging the poverty hole even deeper. Why bother trying to get ahead here, if you do get an education and skills, go straight overases.

21/09/2012 9:06:53 a.m.

Kim wrote:

What i would like to see is a breakdown of the effect on the dollar of printing say $10b. My guess would be a 2 - 3 cent drop in the dollar. This would allow us to keep our assets (and thier profit) and spend 4 billion on work inititives for the young. Ok so out petrol would go up a couple of cents a litre..so what? ok a flat screen tv would cost you 10 bucks more..oh no... Come on lets see some real analysis on the effects of specific numbers..

21/09/2012 9:00:28 a.m.

Jim Seaview wrote:

QUOTE: "But Labour's finance spokesman, David Parker, says the exchange rate is more important than inflation and the bank can't deal with it unless the Government changes the Reserve Bank Act. "The high dollar is costing Kiwis jobs and unless changes are made our dollar will remain over-valued," he said." This is just more Labour Party hypocracy - Labour did not intervene with the exchange rate while they were nine years in Government, but now that they are in opposition with the Greens, Mana, and NZ First all led by Winstone Peters - Labour want to go back to the old Muldoon Era and have Exchange rates set by politicians?????? What rate Mr Parker would the Labour party set the exchange rate at - 55 US cents, or 65 US cents?????? Please tell us David what the effects on imports would be? We would love to hear your comments. Our final obvious question - "Would Labour use a paper or a pigskin dartboard to set the new exchange rates rates?

21/09/2012 5:35:55 a.m.

Brent wrote:

Is Labour going to devalue our Dollar if elected?