Latest / Early Edition with Ryan Bridge / Andrew Dickens: The Reserve Bank and the Government need to work in tandem

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Andrew Dickens: The Reserve Bank and the Government need to work in tandem · Early Edition with Ryan Bridge

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  Speaker 1: The OCR thing yesterday. For a while now, I've been
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  Speaker 1: thinking that the Reserve Bank and the government are working
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  Speaker 1: at cross purposes for the country. So yesterday the RB
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  Speaker 1: kept the OCR at the same rate it's at the
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  Speaker 1: reason increasing inflation and little or no growth in GDP. Now,
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  Speaker 1: of course, the government has an agenda of growth, growth, growth,
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  Speaker 1: so reduced interest rates could help stimulate the economy to
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  Speaker 1: bring some growth, growth, growth, an economy that has some
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  Speaker 1: very flat spots in between primary produce and tourism. But
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  Speaker 1: the Reserve banks perview is inflation and low interest rates
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  Speaker 1: fires on consumerism, fires on inflation, so they haven't lowered
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  Speaker 1: the rate. It's fair to say the RB will not
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  Speaker 1: do what the government would like it to do. But
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  Speaker 1: meanwhile the government pulls back on all government spending, including
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  Speaker 1: stuff that fires on an economy like construction and public
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  Speaker 1: builds and roading and more. And if you want proof
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  Speaker 1: about this claim, government accounts in the eleven months to
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  Speaker 1: the end of May for investing and operational activities was
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  Speaker 1: three billion less than forecasts, three billion less than they
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  Speaker 1: said they would spend, and it's six point four billion
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  Speaker 1: less than the same eleven months a year ago. So
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  Speaker 1: this is money that isn't stirring in the pot that
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  Speaker 1: is the New Zealand economy. And as the interest rates
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  Speaker 1: have fallen, we're not using the cheaper cash to spend.
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  Speaker 1: Our farmers and our businesses and our households are choosing
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  Speaker 1: to pay back debt instead. The government wants private capital
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  Speaker 1: to invest in this country, but cash ain't cheap and
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  Speaker 1: the investments aren't coming in. As I said before, why
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  Speaker 1: would anyone want to invest in this country when even
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  Speaker 1: the government is keeping its wallet shut. So welcome to
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  Speaker 1: year three of recession with no change in sight unless
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  Speaker 1: the policies of the Reserve Bank and the government start
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  Speaker 1: working in tandem. For more from Early edition with Ryan Bridge,
• 1:52
  Speaker 1: listen live to News Talk Set B from five am weekdays,
• 1:55
  Speaker 1: or follow the podcast on iHeartRadio