OCR Hike Disproportionately Hurts Workers – Time For A New Approach – FIRST Union
FIRST Union is concerned that yesterday’s unprecedented 75 basis point OCR hike will unnecessarily punish lower-income workers and is calling for a new approach that shares the burden more appropriately.
“Yesterday’s monetary policy statement suggests that RBNZ is aiming to throw another 70,000 people out of work, slashing their living standards and decimating progress on child poverty in the middle of a cost of living crisis”, said Dennis Maga, FIRST Union General Secretary.
“Recent labour market data shows that women, Māori and Pacific communities are already experiencing rising unemployment – this is an attack on our most vulnerable communities.”
Mr Maga said a blunt tool like a rates hike to drive unemployment needs to relegated to the rarest of circumstances, not when corporate profits have increased 60 percent in the last two years.
“RBNZ have said they’re willing to throw the economy into recession in the fight against inflation, but why not use this moment to seriously consider developing a suite of alternative policy responses that share the costs of the inflation response more equitably?”
“This could include more progressive tax on high income individuals to control demand, limiting prices or regulating margins on key inflationary commodities, or implementing temporary restrictions on international tourism that further lifts consumption.”
“A blanket OCR rise will further entrench inequality in our society and could cost Labour a third term in office.”
“We need meaningful policy that deals with the fundamental economic inequality in our society or we will fail to solve the inflation problem while making working people worse off in the meantime.”
I totally agree. People lost their jobs during the pandemic. A lot of people suffered from depression during the pandemic, too. We certainly don’t need more job losses now. For what? To create a recession due to inflationary pressures!! It’s bulldust! It wasn’t the workers who created the inflation. It was the printing of billions of dollars which has caused house prices to rise yet again, a whopping $825,000 average house price in this country and wages have not risen in accordance with that.
Shift the responsibility of the economic problem on to another market. Like a one-off wealth tax on the fair market value of the shares held in publicly traded companies.
Then tax cuts. We need a lower rate of GST so that is the most obvious one to go for.
Then cap everything else for two to three years. Petrol. Rents. Food. Only minimal rises of property rates.
Otherwise, by creating a recession as Adrian Orr is wanting, the government is sacrificing revenue, the employers of this country are sacrificing employees, and everyone is sacrificing Christmas which is less than a month away.
A one-off wealth tax on a market capitalisation of around $35,000,000,000 worth of publicly listed shares, of fifteen percent, would bring in $5,250,000,000. It would exempt shares held by KiwiSaver investors and, more importantly, it would avoid a recession.