Economic Circumstances Can Change - Suddenly

10 August 2017

The National Government would do well to bear in mind that circumstances can change – suddenly.

“Reserve Bank Governor Graeme Wheeler would have better served New Zealanders today had he given this warning,” says New Zealand First Leader and Northland MP Rt Hon Winston Peters.

“Years of ultra-low interest rates have created major distortions in the global economic and financial structure.

“Internationally, debt has reached staggering levels.

“A return to anything like normality in interest rates is still a long way off. The risks inherent in this unprecedented situation are real and need to be fully acknowledged.

“New Zealand First considers that it is an important responsibility of the Reserve Bank to give New Zealanders a full and frank assessment of the range of risks our economy faces.

“The Reserve Bank cannot be clairvoyant but in the era of speculative bubbles regular updates of the risks are warranted.

“If any of the asset bubbles that have been driven by the era of ultra cheap money were to burst or decline sharply New Zealand would not escape unscathed.

“New Zealand First’s view is that the New Zealand Government is taking an irresponsible and cavalier attitude to the risks in the global economy by allowing a massive immigration influx of over 73,000 net people annually.

“This staggering influx is creating enormous stress on our housing, health, education and transport infrastructure at a time when caution and prudence is called for.

“New Zealand First calls on the government to heed the risks in the global economy and immediately reduce immigration numbers to the common sense level proposed by New Zealand First.

“Mr Wheeler concludes his last Monetary Policy Statement as Governor of the Reserve Bank with the meaningless statement: “Numerous uncertainties remain and policy may need to adjust accordingly,” says Mr Peters.