Govt inaction on housing keeping rates high

The Government’s failure to rein in the housing crisis means the Reserve Bank Governor cannot lower interest rates despite inflation being at 15-year lows, says Labour’s Finance spokesperson Grant Robertson.

“Inflation is below the target band and the economy has actually deflated in the past two quarters, yet we have among the highest interest rates in the developed world.

“As the Reserve Bank has repeatedly pointed out the biggest reason for that is the Government’s refusal to tackle the housing crisis.

“If it wasn’t for skyrocketing housing prices in Auckland and the increased spending that comes off the back of that, there’s no doubt the Governor would be looking to lower rates.

“That would lower our overvalued dollar, make our exporters more competitive, create jobs and boost incomes, as well as lower mortgage costs for stretched families. Not to mention reduce the serious financial stability risk the Reserve Bank Governor is so worried about.

“In his commentary today, it is clear the Governor is very concerned about the impact of a high dollar on our exporters.

“National is failing to build enough houses and refuses to take action on property speculators. That failure is keeping rates high which is hurting businesses, homeowners, and all Kiwis looking to get ahead.

“The decision on interest rates is usually seen as a headache for the Reserve Bank Governor. It’s quickly turning into a headache for everyone, thanks to John Key,” says Grant Robertson.