Peters wants more responsibility for Reserve Bank
Tue, 25 Sep 2012 10:09a.m.
By 3 News online staff
The high New Zealand dollar is taking part of the blame for the job losses in New Zealand mining announced yesterday.
There are calls for the Government and the Reserve Bank to do more to bring down the Kiwi dollar.
New Zealand First leader Winston Peters is proposing a bill to widen the remit of the Reserve Bank, wishing to see the bank's role broadened to include other factors.
“Right now inflation is really the only objective and the governor of the Reserve Bank keeps his job regardless of whether 100,000 [people] lose their jobs in manufacturing and exporting,” he told firstline this morning.
Mr Peters wishes to see GDP growth, employment figures and export numbers also become key roles for the Reserve Bank governor.
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25/09/2012 11:38:34 a.m.
Take our min wage of $13.50 currently.Say our dolalr devalues 25%, this will balance out with a rise in inflation and lowering of real wages to equiv of $10 min wage now.This is what Peters is asking for, a lowering in real terms of the min wage rate, but by doing it through devaluation and inflation.I just looked up the min wage levels listing 197 countries, of which NZ in 2011 rated 9th highest. The 25% lower dollar would move us well down that list as much would increase in costs.Take say NZ land that Peters cares so much about for the media. If the dollar drops 25%, its so much easier for foreign interests to buy into NZ land!The US is devaluing by printing money and causing inflation as its finding it tough to compete on the world market as its wages too high. This is the same arguement Peters is using.Okay, so how much higher are US min wage levels?Min wage in the US is $7.25, with the exchange rate around $9 NZ while our current min wage is $13.50 which is 50% higher than the US. The higher US min wage is actually much lower than the NZ min wage!While Peters/Labour wont ask for a drop in the min wage, they instead ask for devaluation and inflation to drop its value down from the $13.50 to around $10 in todays value. How else do they expect to make exports more competitive but to lower NZ real wage costs?
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