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
2 comments:
Really?
Nicola Willis imposed the single inflationary mandate on the reserve bank, and now the Luxon government is complaining the reserve bank is achieving its inflationary target?
The reserve Bank isn't perpetuating NZs low productivity and ridiculously high food, electricity, and banking costs.....
The underwhelming Nicola Willis is!
Come on Mr Luxon, you told us we're paying too much for food, so stand up to the nefarious forces in the National Party to give us a finance minister who can remember and understand numbers, who doesn’t require Chris Bishop to stand in when Barbara Edmonds is asking questions, and who can be honest with Kiwi battlers.
No amount of Sean Plunkett fauning will hide the devastating affect Willis is having on Kiwi battlers' wallets..... which could cost you the election.
Negative inflation David. Surely that must mean that your money is gaining in value. And therefore stuff is getting cheaper. Good God, we can’t have that!
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