COVID review confirms ACT was right on Reserve Bank

“The independent review of New Zealand’s monetary policy response to COVID-19 confirms the Reserve Bank fuelled inflation and higher mortgage rates, with Labour’s dual mandate weakening the focus on price stability. This Government has done the hard work of recovering from that economic mess and putting the books on a better track, but we can’t claim victory yet. The next Government will need to be laser-focussed on ending waste so we can grow the economy,” says ACT Leader David Seymour.

“This is a comprehensive independent review by two respected monetary policy experts, and its findings vindicate warnings ACT was making years ago. At the end of the day, there’s no such thing as a free lunch. You can’t print your way to prosperity. You can only afford things and get wealthy if you produce real goods and services worth real money.

“It seemed like good times then, but the hangover isn't worth it. We have spent years unwinding the inflation and higher interest rates that followed.

“The extraordinary thing is Labour wants to restore the dual mandate. The Reserve Bank should have a clear focus on price stability. Labour’s changes ‘downplayed the importance of price stability’ and allowed larger and longer-lasting deviations from the inflation target.

“That is why we must lock Labour out. But the challenge is even bigger that. In order to unlock New Zealand’s potential we must keep finding savings year after year by forming a government that is smaller, more efficient, and capable of balancing the books.

“ACT Ministers have driven $14 billion of savings across three Budgets, helping avoid more debt, taxes, and pressure on interest rates. That discipline has helped put the Government on a path back to surplus a year earlier, but it needs to be delivered year on year.

“New Zealand has a serious challenge with productivity, wages and the cost of living. We will not solve it by making this country a more frightening place to invest, build a business, employ people and take risks. Confidence in this country suffers when politicians decide to scapegoat and attack legitimate businesses. We saw it with the oil and gas ban, and now every other party is proposing intervention in the grocery sector.

“If we want New Zealand to be the best little country in the world, we need a smaller, more efficient government that focuses every dollar on results. That is how we make life more affordable, rebuild trust in public services, and unlock New Zealand’s potential.”