OCR increase will deepen the damage in an already very weak job market – NZCTU
The Reserve Bank’s decision to lift the Official Cash Rate to 2.75 percent will make life harder for the 171,000 New Zealanders already out of work, says the New Zealand Council of Trade Unions Te Kauae Kaimahi.
“The OCR hike today is not what this country needs”, says NZCTU President Sandra Grey.
New Zealand has been through a prolonged economic downturn, in large part because of the Reserve Bank’s decision to keep the OCR too high for too long through 2023–24. Raising it again repeats that mistake.
“Unemployment, underutilisation and Jobseeker numbers have all climbed steeply over the past three years, and today’s decision will push them higher still”, says Grey.
There were 171,000 people unemployed in the June 2026 quarter, the highest number of unemployed New Zealanders since the early 1990s. A further 440,000 people were underutilised, meaning they want more work than they can get. Jobseeker Support numbers have increased 26 percent over the past three years, to more than 218,000. Meanwhile wage growth is running at 2 percent, a five-year low, while annual inflation was 4.1 percent in the year to June.
“Unemployment can have lifelong financial consequences for the individuals, whānau and communities affected. It can mean lower lifetime earnings and can lock some people out of the labour market for good. It also has deeply negative impacts on people’s mental and physical health and can fracture households and communities”, says Grey.
“A higher OCR will simply make the much-needed economic recovery harder, and will mean further misery for people who are out of work or who can’t get the hours they need”, says Grey.
“The OCR is not the right tool for dealing with the current drivers of inflation, which are council rates, household energy prices and global oil prices. Squeezing working people will not bring down the price of electricity. We need a more sophisticated approach to managing inflation that doesn’t rely on putting people out of work”, says Grey.
From where does this CoC get it’s financial advice? Seems to me they simply knee-jerk when they panic and bring in another policy/bill that is completely against what they are trying to achieve. This latest fiasco will mean a higher OCR and the much-needed economic recovery harder, causing more misery to our workers and making it more difficult for the 171,000 already out of work! Are they so damned stupid or just plain arrogant? They don’t know what they are doing; in fact Willis is yet another square peg in a round hole – she hasn’t a clue and those advising clearly haven’t either! Read the stats in para five of this article! Then they expect people to get to retirement with a nest egg. How can you save when you can barely pay your bills and feed your family? It’s impossible and cruel as we watch some of the wealthy become wealthier, with their exorbitant salaries, tax loopholes and supercilious, self-satisfied attitudes! Come on NZ’ers time for a huge reset – we can do much better!