New Zealand Labour Party

Government must be more than a bystander on the economy

Despite what he might think John Key is not a political commentator, but actually a leader in a Government who needs to take responsibility for the conditions that mean a rise in interest rates, says Labour’s Finance Spokesperson Grant Robertson. 

“John Key has told a business audience that a rise in interest rates represents the biggest threat to the New Zealand economy. It is certainly true with the household debt to disposable income ratio at its highest level on record, even higher than during the Global Financial Crisis, there is a real risk for many Kiwis when interest rates start to rise.

“But the Government is not some innocent by-stander in this situation. A big part of the growth in household debt is because National has failed to fix the housing crisis. As house prices have spiralled out of control National has failed to act - either on building more affordable houses or by cracking down on speculators who are driving up house prices. 

“At the same time wage growth for most New Zealanders is stagnant. 44 per cent of workers got no pay rise last year and 67 per cent got less than 2 per cent. People are working longer hours, often in more than one job, but they feel like they are running harder and harder just to stand still. 

“Budgeting agencies are reporting that some of the borrowing they are seeing is actually just so people can make ends meet and deal with an unexpected bill for a car or a school trip. That is a sign that wages are too low. 

“Labour believes that being in government means more than just being a commentator – we recognise that New Zealand at its best gives Kiwis a fair go. This means implementing our plan to fix the housing crisis through Kiwibuild, building more state houses, cracking down on speculators here and offshore and dealing with homelessness. 

“It also means investing in our economy to grow decent jobs right across New Zealand, and supporting education, training and research to improve our productivity.” Grant Robertson says.