OCR decision a welcome relief for working people – CTU
NZCTU Te Kauae Kaimahi Economist Craig Renney said the decision by the Reserve Bank to cut the official cash rate by 50 basis points (0.5%) to 4.75% will be a welcome relief to workers facing higher unemployment and a struggling economy. “The Reserve Bank has been forced into a significant cut because the economy has failed to fire. Weak consumer spending, weak business investment, weak house prices, and a weakening labour market all put our economic recovery at risk.”
“The Government is expecting the Reserve Bank to do all the work and support economic growth. Rather than supporting the economy and working people through difficult times, this Government has chosen to cut spending and investment, and is happy to see unemployment rise to levels not seen for a long time. These are choices, and the Government could invest now to deliver the growth we need for the future. Simply cutting interest rates returns to the economy of the past – and all the problems it already had”.
“While many people will welcome lower interest rates, and some retailers will welcome the potential for additional spending, the rate cut is not a sign of strength in the economy but is a recognition of its weakness. We need to build a better economy, one with good work and higher incomes. Nothing in the government’s plan for cuts delivers that.” Renney said.
Yes, agree you know there is something wrong with your economic system when unemployment has to rise in order for inflation to come down. Our governments cuts to public services create more inequalities and therefore hurts the same people mostly those on lower incomes and in precarious jobs. Whereas the rich many have private health insurance and don’t have to worry about getting prompt medical treatment and send their kids to private schools well resourced. We are getting less and less for our taxes, and this is unfair as people are dying prematurely with our public health system and schools being in disarray. I find it hard to believe this is what many NZer actually want.