New Zealand Labour Party

Govt action needed after Wheeler holds

The Reserve Bank Governor’s warning that “excessive house price inflation” is posing a risk to financial stability puts the pressure back on the Government to take action to address the housing crisis, says Labour’s Finance spokesperson Grant Robertson.

“Graeme Wheeler’s decision to hold on interest rates for the time being means that in the short term there will be no further action from the Bank. This puts the ball back in the Government’s court.

“The Reserve Bank is seriously constrained by the housing market. An OCR cut risks pouring fuel on the fire but the Governor wants to get interest rates down to ease the pressure on the high dollar that is hammering our exporters.

“National needs to take action to rein in the housing market and stop sitting on its hands, pretending that the market will take care of itself.

“While the headline growth figures for the economy are trumpeted by the Government, the truth is most of that activity is driven by record population growth. Growth per person is stagnant and real disposable incomes per person actually fell in the last quarter.

“Most New Zealanders feel they are working harder and longer, but they are really just running to stand still. Their incomes are stagnating and housing is totally unaffordable in Auckland and getting worse across the rest of the country.

“By standing by and doing nothing National is letting down New Zealanders. The only way to get wages growing and housing more affordable is to change the government,” says Grant Robertson.