New Zealand Labour Party

Reserve Bank action shows Govt out of touch and out of ideas

The Reserve Bank’s unprecedented measures today show it understands the serious risks of the overheating housing market – in complete contrast to John Key’s refusal to acknowledge the crisis, Labour’s Finance spokesperson Grant Robertson says.

“The Bank is right to take action to curb speculation but the Government’s refusal to tackle foreign speculators gives them a free hand.

“Overseas buyers have done extremely well out of LVRs already and now cashed up foreign speculators will face even less competition.

“This would be an unintended consequence of the Reserve Bank’s actions and shows the ludicrous situation where a central bank wants to tackle a major issue that the Government is ignoring.  The Government must fix this looming loophole, and address the impact of foreign speculators who are simply taking profits where they can get them.

“If National can’t even admit there’s a housing crisis, there’s no chance of it fixing it. The Reserve Bank’s actions today show how weak the Government’s approach is. National can’t keep delegating housing policy to the Bank.

“The Governor said other major risks to financial stability include falling prices in the dairy sector and the peak of the Canterbury rebuild. This is compounded by National’s failure to invest in diversification in the economy.  It can’t delegate the future of wealth generation to the Reserve Bank as well.

“National is out of touch and out of ideas. The Reserve Bank’s actions show we desperately need a Government willing to take action,” Grant Robertson says.