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Government inaction puts financial stability at risk

The Government’s double failure to address the housing crisis and diversify the economy is leaving New Zealand exposed to major risks, says Labour’s Finance spokesperson Grant Robertson.

“The message from today’s Reserve Bank Financial Stability report is that the Government’s failure to deal with the housing crisis is now a major risk to New Zealand. There is only so much the Reserve Bank can do with LVRs, which have had some temporary effects.

“The real problem is the Government’s half-hearted and failed policies on both supply and demand.

“Labour has a comprehensive plan to increase the supply of affordable housing and crack down on speculators. The lowest rates of home ownership for 60 years are a sure sign that after eight years the National Government has failed. It is time for a change of approach that can only come with a change of government.

“The dairy sector has again been highlighted by the Reserve Bank as a risk. After eight years of a National Government New Zealand’s on volatile commodities is far too great. What is needed is investment in infrastructure and high value industries. There is precious little sign of this at the moment.

“New Zealanders now have a higher household debt to income ratio than they did just before the global financial crisis. This exposes many Kiwis to significant risk if interest rates rise or the economy goes into a downturn. The Government’s complacency in the face of this shows they are out of touch with the challenges facing us,” says Grant Robertson.