Mortgage Holders Pay The Price For Reckless Government Spending

The Reserve Bank today announced that their Official Cash Rate would rise by 0.75 basis points to 4.25%.

This increase will push up mortgage rates for Kiwi households, many of which are coming up for renewal in the next few months. New Zealand families are already facing significant pressure on their household budgets due to the extremely high levels of inflation.

The Bank’s Funding for Lending programme—which allowed banks to borrow from the Reserve Bank at the Official Cash Rate to offer cheaper mortgages—also runs out next month. Kiwibank has estimated that this could be the equivalent of a further Official Cash Rate hike of between 15 and 50 basis points.

New Zealand Taxpayers’ Union Campaigns Manager, Callum Purves, says:

“The Reserve Bank has been forced to put up the Official Cash Rate because of its failure to keep inflation below 3%.

“The extremely high levels of inflation we are facing are in no small part down to the double whammy of reckless Government spending that went well beyond what was necessary to respond to the pandemic and the Reserve Bank’s own money printing programme that is already forecast to cost the taxpayer billions in losses.

“Government tax revenues and expenditure are at record highs. The Government urgently needs to reign in its addiction to excessive spending and bring expenditure back down to pre-pandemic levels at the very least. New Zealanders cannot continue to afford this toxic combination of high taxes and high inflation.”

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