OCR drop exposes National’s failed economy

The cooling New Zealand economy has prompted the Reserve Bank to continue its stimulatory stance by dropping the OCR further, in the absence of any long term plan for economic resilience from National, the Green Party said.

“With the economy slowing down rapidly, prompting the Reserve Bank to drop the OCR, National’s failure to put in place long-term measures to ensure continued productive investment and job creation has been exposed,” said Green Party Co-leader James Shaw.

“Lower interest rates will hopefully kick-start investment in the productive economy because National’s economic policy failures mean the economy is now at risk – dairy prices are tumbling, the Christchurch rebuild is slowing, business and consumer confidence is at its lowest in three years, we have the highest trade deficit since 2009 and the biggest gap between our tradable and non-tradable sector since 2000.

“National’s lack of long-term economic thinking means short-term jolts are felt more sharply throughout the economy.

“The risk from a lower OCR is that it fuels Auckland’s housing market. The best way to stop this would be to introduce a proper capital gains tax and restrict land sales to non-resident overseas buyers – because National’s complacency towards property speculation is keeping first home buyers out of the market.

“New Zealand families are already feeling the squeeze, especially in the regions where the tumbling dairy price is hitting rural economies hard.

“The Green Party thinks economic policy should be focused on long-term resilience not dairy and property, which means moving investment from property to productive sectors with a capital gains tax, spurring business innovation with R&D incentives, and building a smarter economy that works for all New Zealanders,” Mr Shaw said.