PTA announcement a positive signal

“The new policy targets agreement is a positive signal of a more growth oriented outlook,” said Council of Trade Unions secretary Paul Goulter today.

“The narrowing of the target band and the indication that inflation must be contained over a medium rather than a short term is good news for workers who have been frustrated by the impact of unnecessarily high interest rates on mortgages,” he said.

“Those unnecessarily high interest rates also hamper investment, which could result in more employment.”

The CTU, in its submissions to the Review of Monetary Policy in 2000/01, argued forcefully for changes in the operation of monetary policy.

“Having argued that the changes announced at the conclusion of the Review did not go far enough, we welcome today’s announcement,” said Paul Goulter.

“Workers don’t benefit from high inflation, and no-one wants to see inflation persistently over 3%, but there is no doubt the inflexible approach of the Reserve Bank has at times been very damaging to the productive base of the economy.”

Paul Goulter said driving inflation down to very low levels had reflected an obsessive rather than a considered and flexible approach.

“We hope that this new PTA will herald a change in approach,” he said.

“We welcome the commitment by Dr. Bollard to consult widely in the private sector and the CTU would expect to be included in such consultation.”

Paul Goulter said the new PTA meant that the focus could now shift to other areas of policy which will contribute to economic growth, including investment in skill, economic infrastructure, fostering innovation, and industry sector strategies.

“The CTU is committed to playing a role in this process as workers must be involved in the development of initiatives on growth and productivity,” he said.

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