"The Reserve Bank Governor tried to tell Parliament this morning that New Zealand’s only options going into COVID were mass unemployment or the current high inflation. In reality the Reserve Bank has failed to find a balance and we are...
"The Reserve Bank Governor tried to tell Parliament this morning that New Zealand’s only options going into COVID were mass unemployment or the current high inflation. In reality the Reserve Bank has failed to find a balance and we are all paying the price at the pump and the checkout, and for an overinflated housing market,” says ACT Leader David Seymour.
“Asked if he’d evaluated whether Quantitative Easing programs such as Large Scale Asset Purchases and Funding for Lending went too far, he said they would evaluate it one day. That’s a woeful level of accountability from an organisation that lectures every other bank on its conduct and culture.
“The truth is that the Reserve Bank printed $60 billion, and that cash has sent house prices through the roof and given New Zealand higher inflation than nearly any other developed country. The Reserve Bank simply got it wrong, and printed too much money with destructive consequences.
“The Governor also acknowledged that the Government running a forecast $21 billion deficit in Financial Year 2022 would create inflationary pressure. The only good thing he could say about it the Government’s deficits is that they are forecast to wind down. The truth is that Labour’s deficit spending binge is pushing up the prices NEw Zealanders pay at the checkout, the pump, and for their housing.
“The pain is set to be prolonged with the Reserve Bank raising rates only 0.25 per cent this cycle. Inflation will get further away and it will be even more painful to deal with later on. You should never let inflation get ahead of you, because chasing it from behind means raising mortgage rates right when people are being squeezed by high prices.”