Seymour may have the answer
As inflation hits levels a generation of New Zealanders hasn’t seen, politicians are thrashing about,blaming anyone but themselves for the financial storm enveloping households and businesses alike.
The official cash rate has already risen from a Covid low of 0.25% to 3.5% and is expected to hit 5% or higher.
Grant “look, no hands” Robertson tells the Dominion-Post the banks’ social licence requires them to support borrowers “if times get tough”.
The official cash rate has already risen from a Covid low of 0.25% to 3.5% and is expected to hit 5% or higher.
Grant “look, no hands” Robertson tells the Dominion-Post the banks’ social licence requires them to support borrowers “if times get tough”.
Meanwhile over in the NZ Herald, the Greens’ Julie-Anne Genter says we need a tax system that prioritises people over profit.
“Everyone should have enough to make ends meet and afford the basics of life–but right now wealth is out of balance in Aotearoa. Every day thousands of children in NZ go hungry.People struggle to pay rent or mortgages. Families go cold, often forced to make impossible decisions about whether to pay bills or eat. Meanwhile massive Australian-owned banks make eye-watering profits, with ANZ alone posting a record $2bn”.
No mention from Genter there that it was the government of which her party is a member that pumped billions into the economy during Covid that helped create those eyewatering profits.
Point of Order thinks ACT’s David Seymour might be closer to hitting a target when in a press release he talked of most households struggling with high prices, rising interest rates, and no end in sight to either– and went on to say:
“After an hour before the Finance and Expenditure Committee, Adrian Orr refused to accept the Reserve Bank got anything wrong, couldn’t say when inflation would return to normal, and blamed everyone but himself.”
Seymour reckons it’s time to replace hubris with humility and have a bank that accepts it massively overstimulated the economy, causing consumer price inflation, asset price inflation, inequality, and now higher interest rates.
Truly a litany of economic pain. So what do we get from the Governor?
Seymour’s view:
“Not only would it be respectful to all those Kiwis struggling with the costs of economic mismanagement, a little humility from Orr might open up a culture of learning rather than defensiveness.Unfortunately defensiveness is all we get from our Governor”.
Seymour points out the Reserve Bank demanded commercial banks hold more capital after its Capital Review in 2019.
“As soon as we had one they delayed the changes until 2021. Today Adrian Orr argues we have the most stable financial system on the planet, but the changes are still necessary and will come into force over the next six years. He is incapable of accepting a mistake.
“In reality the Reserve Bank cut interest rates too much in March 2020, printed far too much money through the Large Scale Asset Purchase Program, created an enormous housing bubble, and now the biggest threat to financial stability is the collapse of the bubble and runaway inflation it created.
“Until the Governor admits he got it wrong, we will never move forward, that is one reason New Zealand needs a new Reserve Bank Governor.”
Point of Order acknowledges Seymour is using a big dollop of hindsight in his argument, but his conclusion cannot be avoided.
“Everyone should have enough to make ends meet and afford the basics of life–but right now wealth is out of balance in Aotearoa. Every day thousands of children in NZ go hungry.People struggle to pay rent or mortgages. Families go cold, often forced to make impossible decisions about whether to pay bills or eat. Meanwhile massive Australian-owned banks make eye-watering profits, with ANZ alone posting a record $2bn”.
No mention from Genter there that it was the government of which her party is a member that pumped billions into the economy during Covid that helped create those eyewatering profits.
Point of Order thinks ACT’s David Seymour might be closer to hitting a target when in a press release he talked of most households struggling with high prices, rising interest rates, and no end in sight to either– and went on to say:
“After an hour before the Finance and Expenditure Committee, Adrian Orr refused to accept the Reserve Bank got anything wrong, couldn’t say when inflation would return to normal, and blamed everyone but himself.”
Seymour reckons it’s time to replace hubris with humility and have a bank that accepts it massively overstimulated the economy, causing consumer price inflation, asset price inflation, inequality, and now higher interest rates.
Truly a litany of economic pain. So what do we get from the Governor?
Seymour’s view:
“Not only would it be respectful to all those Kiwis struggling with the costs of economic mismanagement, a little humility from Orr might open up a culture of learning rather than defensiveness.Unfortunately defensiveness is all we get from our Governor”.
Seymour points out the Reserve Bank demanded commercial banks hold more capital after its Capital Review in 2019.
“As soon as we had one they delayed the changes until 2021. Today Adrian Orr argues we have the most stable financial system on the planet, but the changes are still necessary and will come into force over the next six years. He is incapable of accepting a mistake.
“In reality the Reserve Bank cut interest rates too much in March 2020, printed far too much money through the Large Scale Asset Purchase Program, created an enormous housing bubble, and now the biggest threat to financial stability is the collapse of the bubble and runaway inflation it created.
“Until the Governor admits he got it wrong, we will never move forward, that is one reason New Zealand needs a new Reserve Bank Governor.”
Point of Order acknowledges Seymour is using a big dollop of hindsight in his argument, but his conclusion cannot be avoided.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
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