11 March 2004

Hon Matt Robson MP, Progressive Deputy Leader

Thank goodness Brash isn't governor

National and ACT's ideological opposition to giving rational consideration to foreign currency intervention is a good reminder of why it is so good that Don Brash is no longer in control of monetary policy, Progressive MP Matt Robson says.

"One of the first things the coalition government did after being elected four years ago was to broaden the definition of 'price stability' in the Policy Targets Agreement to require the Reserve Bank to take into account New Zealand's economic and social development interests when making decisions on monetary settings," Matt Robson said.

"And now we are seeing rational and intelligent leadership at the central bank itself, with its call on Parliament to empower the Reserve Bank with an option of intervening in currency markets if and when it deems that to be in the national development interest," the Progressive MP said.

"The minority government has over the past four years found strong support in Parliament on sensible proposals to look after New Zealand's interests - but not from National or ACT.

"National and ACT - the parties that last week joined forces to insult Brunswick Corporation after its multimillion dollar investments in New Zealand-based high technology companies - have today again proved themselves to have no interest in the concerns of either New Zealand-based exporters or of the broader national interest," Matt Robson said.

Reserve Bank Governor Alan Bollard today asked Parliament to consider giving the central bank more powers to sensibly intervene in currency markets as deemed appropriate by the central bank.

Matt Robson said he hopes Parliament will agree to bring New Zealand central bank behaviour closer into line with the way every other successful Asian central bank already behaves. Dr Bollard, who aims to keep inflation within a range of 1% and 3%, today
also left short-term interest rates unchanged.

"Had Don Brash been governor pursuing National's inflation target of zero to 2%, interest rates in this country would currently be up to one percentage point higher than they are - that is 6.25%, not the more rational rate of 5.25% that they are now," Matt Robson said.

ENDS

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