16 Comments
26 July 2007
VIDEO: John responds to the hike in the OCR
| John Key responds to the most recent hike by the Reserve Bank in the Official Cash Rate. At 8.25%, New Zealand now has one of the world's highest interest rates, something that is encouraging speculation in the dollar even while it puts enormous pressure on the manufacturing sector, exporters and home-buyers. |
#1 - Toni Spellmeyer 2007-07-27 20:40 - (Reply)
We're dealing with a lame duck Labour govt. You need have the ability to take over the govt now in a vote of no confidence & get our policies on track instead of belittling all the destructive decisions that Labour is following now
#1.1 - cathy miller 2007-07-27 21:35 - (Reply)
I listened to John Key on the video and quite frankly he told me nothing that I and the rest of the country didnt already know... Much as I respect John, I want to know HOW he would change things, rather than just point out the obvious.. If Labour has spent the $600m that John says they have, what have they spent it on and what about the Surplus that has so conveniently appeared to have been forgotten in all this debate... Why has that not been absorbed in order to soften the blow of Government spending and thus ease the burden on Taxpayers - after all, the surplus belongs to US, the Taxpayer, at the end of the day.
#2 - Peter Southward 2007-07-27 20:54 - (Reply)
Plumbers incomes in rural areas fall far short of Politicians. Those city prices certainly dont reflect our situation. What if elected, would the National Party do to help Employers with training apprentices to take over from our aging tradesmen? Me included. Sole traders find it financially difficult to train apprentices and with much information,knowledge and experience to impart these men are frustrated to say the least.
#3 - Adam said:
2007-07-27 21:41 - (Reply)
I need my staff to understand the basic laws of spending vs earning of which this government know no bounds. Watching that power hungry teacher just show they are running a muck in while power. The news full of well fed staff in poorly run government department and their plush offices make me seethe with anarchy. I like other employee's need to get our unsavy masses motivated for change, we have the right team but their fielding, I know you trying to hammer them but the masses are blind with Plasma TV and Instant loans with life of just visiting! It jail time for Pope and your making the right steps and utilising the right technology, but how do we connect with this demographic to explain in lamens terms who feeds the terminally ill golden goose of Cullen?
#4 - Brian Casey 2007-07-27 22:56 - (Reply)
John Key is right on the button. What makes matters worse for Kiwis is that the taxpayers money that Labour is spending is mainly on unproductive avenues. Expanding government civil servants with +$100 000 pa salaries chasing paperwork, increasing red tape, and chasing house prices in Wellington does nothing for our economy. In fact, employing thousands of new civil servants is the same as stealth borrowing using taxpayers money committed into the future. Borrowing now by stealth from future taxes is a special socialist trick. And just watch the next spending rash before the next election. We have far too much unproductive spending in the government sector. A special point : we have so many DHB's "addressing" the problem of nurses and doctors leaving this country. Yet we don't actually "fix" the problem, by addressing the salaries of these dedicated people. No, we " address" the problem by spending more money on consultants, recruitments agencies, NZQA, supervision, more DHB staff etc. We just don't fic the problem. No wonder our interest rates are so high -- we have a very high country risk rating.
#5 - steve 2007-07-28 00:06 - (Reply)
It is questionable why the latest interest rate rise was needed as the effects of the previous increases are now following through. If one looks in cafes at the number of people having breakfast, in Auckland the numbers are declining. A real sign thst the economy is shrinking, home sales are taking longer and values are not increasing. Looking at the migration figures it is easy to blame migration for the the house price increase. But the real issue is the population growth and lack of new housing to satisfy this increase that is the problem. It is wrong to focus on the immigration figures without looking at the emigration figures. A quarter of New Zealand citizens live in Australia! IF these cam back to New Zealand prices could increae to even higher levels.
#6 - Steve Southall 2007-07-28 07:23 - (Reply)
We're hurting out here in the electorates. Our mortgages are going up, we're not getting pay rises, and we see exporters going to the wall. The dollar must come down, but then we don't want high inflation either where prices start skyrocketing. You're right to say there are no quick fixes, and that the problems stem from high Government spending. This is where you need to go on the offensive and push the message home. Counter Cullen's arguments of "what health and education services do you want cut" by specific examples of where current spending is wasteful, poorly targeted or carries an excessive administrative overhead for services delivered. Tell us how National would do it better. And on a presentation point - sort out the background. Looks awful.
#7 - Maureen Sudlow 2007-07-28 08:55 - (Reply)
We are among the struggling home-owners (well us and the bank!) trying to pay off a mortgage on a low income. Apart from that we fail to see how constantly raising interest rates is going to have any effect on the rise in the NZ dollar - except, as you say, to make it more attractive to foreign buyers. Alan Bollard needs to come down from his ivory tower and give the economy a chance to settle on its own.
#8 - E Burton 2007-07-28 09:18 - (Reply)
Maybe monetary policy should also consider exchange rate stability. Businesses tend to be just as concerned about volatility as they are about absolute values.
#9 - C Masters 2007-07-28 11:11 - (Reply)
Total overseas debt is about 89% of GDP. That is NZers own about 11 months income overseas. The problem is that is INCREASING by 8-9% each year - with the accumulating interest getting worse. The main problem is that once debt get to around 100% of GDP, the foreigners will stop lending in NZ. And interest rates will rise to reflect higher risk. So the currency could collapse, etc, and you and I will all be working and paying taxes NOT for current goods and services but to service the historical debt. There is no point giving this Govt policy ideas to win another election. Eventually debt control, and quality of spending, plus a link ($NZ) to other currencies,only way. Don't encourage Urban sprawl in an Agricultural Counrty,utilised existing land and build up, consolidating transport infustructure. C Masters
#10 - Alan Hewetson 2007-07-28 11:31 - (Reply)
John, I appreciate receiving your key notes OCR increases, Home owners Mortgage interest , other borrowers interest rates& exchange rate increases I am one of the everage NZ'r with a mortgage, married 35 years, with independant grown up family I earn above average earnings- which have remained static for past 2 years - & my wife is working also In line with govt's request to hold inflation - we are not making demands for more income, based upon current inflation We have just had to renew our mortgage which was 7.45% to now 8.8% We now face mortgage increase of $57 pw or $2,964 per year. I know others are facing greater increases. It is now, just another tax The average NZ'r is being punished for establishing a home, working hard, and providing a stable family RBNZ state they must increase OCR, to conatin infaltion - this is hypoceracy, Increased interest is adding to inflation. as it then increases all other borrowing rates, including businesses, and pushes up our exchange rate, to penalise exporters. The RBNZ then attract investment from overseas at higher rates of interest than can be received overseas Does the ordinary NZ'r only get one chance each 3 years to have their say, and get changes made ??, or is there something we can do about it now Why should honest, hard working, family NZ'rs be penalised, by RBNZ & Labour. I bet you Bollard, Cullen Clark do not have mortgages, but have investments, bank economists work for banks, who must also be profiting out of rising interest rates, and exchange movements - which creates no good for anyone else And why should exporters be penalised Why is RBNZ & Labour actually increasing interest rates - because we are all loosing & overseas investors are winning at our expense Why should the everage NZ'r be penalised, taxed for owing their own home, which is an investment in NZ I do feel & understand the pain faced by my independent children, who also purhased family homes I also understand why so many of my offspring & even my equivalent friends are leaving NZ to live in Australia or UK 20 years ago we faced the sudden change from high inflation, high interest rates, and our economy and lives all improved - we now appear to be on the upward cycle, to yet again an inevitable & another painful crash - created by Govt policies, over which we have no say Enough is enough - can we do anything now to reduce interest & exchange rates, or do all average NZ'r have to bear this for another 14 months until next election, when inflation will be higher, along with interest & exchange rates Yours sincerely Alan Hewetson
#10.1 - Nathan McCluskey 2007-07-30 10:45 - (Reply)
For those of us who don't own a home, it's fantastic because high interest rates will diminish domestic demand in the real estate market while the high cost dollar will decrease international investment in the local property market, both of which will soon cause house prices to drop so that I can buy one. I hear your concerns, but you're in a better position than I am so while I'm sad for you, your pain is my gain. John Key has complained much about the current Government's policies, but how exactly does he propose to do things differently. Would he reign in the Reserve Bank and let inflation increase? We haven't seen that level of intervention from a National Government since the 80's.
#11 - Andy Wilgermein 2007-07-30 09:39 - (Reply)
Thanks John gfor your comments but it is dissapointing to find criticism without a solution. Best not to say anything than criticise and offer no answer. Has anyone thought about raising the deposit on homes other than first home buyers to something very high like 50 or 60%. That would stop the speculators in their tracks ..slowing the house building market You don't raise interest rates therefore the overseaes investor who is only after high interest stops and the demand on the dollar is reduced and it helps not to fuel inflation. At least thats a solution ...is it too simple????...If the reserve bank has no authority to do that ...give it authority or get the Govt to implement it.
#12 - Dean Grooby 2007-07-30 09:52 - (Reply)
As an employer and home owner we are now getting closer to the promised land, as another election year closes in, what promises will we hear. With all the promises, arguing and spending still little has been done to relieve the pressure on the average Kiwi but thanks to MP"s own inivation you have successfully looked after yourselfs with another payrise (how many is that now), while the rest of us fight off the next attack of governmental interference. Just a few months ago NZ was ticking along nicely, why the change now. Under this Labor Government employers are forced to spend more creatively on themselves or their businesses as tax reliefs do not support spending on employees. There are more tax benefits in buying a new car than giving a payrise, which is usually brought from boroughed money. What is the answer we are looking for, in my line of work I have found that Kiwis have forgotten the basics which should always come first. Health, education, equality, responsibility bring to mind some of these basics. These are all being eroded under not just Labor but MMP. Why can't we have lower interest rates, why can't we make money when we sell our houses, why can't business owners get tax benefits, the talking needs to be over as something needs to be done with a lot more action as pointing out the obvious does not give confidence in a National leadership. Lets get back to the basics first and remember the people, how close to be coming a third world country do we have to get before something is done John if your up to the plate next is it 3 strikes your out or will you make the difference.
#13 - Helen Kay 2007-08-01 07:34 - (Reply)
Government spending is at an all time high and must be addressed immediately....and as for the surplus that Cullen has hidden away for a rainy day..... Of couse this will be pulled out right before the election to tempt the masses into giving em another go! But will the Public be fooled again?
#14 - Tim Jamindar-Arnold 2007-08-07 10:49 - (Reply)
The problem of NZ's high ocr has one basic cause. Allan Bollard's job description. It has been written in law that inflation must not rise above 3%. I am sure that at the time this seemed like a sensible target to aim for and there must have been good reasoning behind it. However we can clearly see that had his job description alowed inflation to be as high as 5% then there would have been absolutely no need for the increases in ocr as inflation was not much more than 4%. The economy would still have naturally reigned in the real estate market because even with these increases in interest rates people are still purchasing investment properties with yields around 5% and frankly they are better to have their money in alot of other places! While John Key has not offered solutions in his little speech here its clear he has an understanding of the forces that turn our economy at a much higher level the Clark and Cullen. There is only one viable future government for New Zealand and that is a national government. If there is anything I can do to help John, please do let me know.
