Despite employment hovering near its maximum sustainable level, the Reserve Bank has kept the Official Cash Rate at 1.75 per cent in a strong signal that Adrian Orr believes the economy is in trouble, says ACT Leader David Seymour.
“Near-record low unemployment would normally see the Bank predicting an increase in interest rates as workers spend more of their wages.
“However, Orr believes low interest rates will be needed to support economic growth through 2019 and 2020.
“The Bank notes business confidence is low and GDP growth is slowing.
“It is abundantly clear that Labour’s poor economic policies are to blame for New Zealand’s changing economic fortunes.
“The highest minimum wage in the developed world, a ban on oil and gas exploration, and the potential for industry-wide collective bargaining and a capital gains tax will all throw sand in the gears of the economy.
“Labour and Grant Robertson now own the economy. They cannot continue to blame the previous Government.
“By keeping interest rates low despite high employment levels, the Bank is saying that the Government’s approach will harm New Zealand’s economic prospects.
“Grant Robertson should take heed of that warning.”