Too little, too late from English on dollar

Bill English has caved into the pressure on the high dollar but needs to go much further and overhaul our out-of-date Reserve Bank Act, says Labour’s Finance spokesperson David Parker.

“Bill English has given in to the unrelenting pressure from manufacturers, exporters, workers, unions and political parties to change monetary policy but he needs to go much further. The new tools are useful but on their own they won’t be enough to make our currency competitive and help our exporters flourish.

“The Reserve Bank has a tunnel vision mandate that requires it to primarily consider inflation. Our retro Reserve Bank Act was made in the 1980s when inflation was the main demon. It’s time to bring it into the post-financial crisis world.

“The Reserve Bank must be given more firepower. It needs to be able to give appropriate weight to other critical issues such as employment and our overvalued dollar as well as inflation.

“Bill English is only doing half the job. He risks making it harder for first home buyers without the benefits of creating better jobs and higher wages that full reform of the Reserve Bank Act will help bring.

“National’s economy isn’t working for ordinary New Zealanders. Manufacturing outside primary industries is in trouble and jobs are being cut every week. We need to remove the tunnel vision mandate and give the Reserve Bank a 20/20 perspective for the economy.

“Labour has long argued that the Reserve Bank must be able to look beyond inflation and give equal weight to other important issues such as the exchange rate and jobs. That would help our exporters and manufacturers and create better paying jobs for New Zealanders.”