Nicola Willis is calling Labour’s willingness to discuss increasing the Reserve Bank’s inflation target “insane economic illiteracy”. Labour says that’s a “massive misrepresentation” of their stance.
Labour’s finance spokesperson Barbara Edmonds this morning said the party was “open to a discussion” about lifting the 2 percent midpoint of the RBNZ’s target to 2.5 percent.
I don’t support 2% or 2.5%. The original target was 0% to 2% with a midpoint of 1%. That was a good target as it was as close to no inflation as you can get, without risking negative inflation.
The difference between say 1% and 2.5% over time is quite huge. Say you shopping comes to $300. Over a decade the former sees you paying $331 and the latter $384. A 10.5% increase vs a 28% increase.
David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders
No comments:
Post a Comment