Media Release

Friday 21 December 2012

CEOs lack understanding of QE benefits

“The poor understanding of economics by the majority of NZ’s top business CEOs is dismaying” said DSC leader, Stephnie de Ruyter.

“This is borne out by the fact that only 2 per cent of New Zealand businesses surveyed in the latest Grant Thornton International Business Report want the Government to implement Quantitative Easing.

“The fact that those CEOs are amongst the most well paid in the country might explain why they are little concerned about a measure that would bring significant benefits to the vast majority of people who are less well off than themselves.

“It would also explain why the additional tax that will come out of Kiwi’s pockets in future to pay for the Government’s increasing borrowing is of little interest to them either.

“And it probably explains why they were happy for our Reserve Bank to use Quantitative Easing to prop up the country’s big banks at the height of the credit crunch of 2008 to ensure the interest rates their companies borrowed at were as low as possible.

“That “printing of money” by the Reserve Bank quietly provided the trading banks with the funding they required without any distortion to the economy.

“Why that process was deemed to be OK for funding private banks owned by a select few overseas shareholders but is not now considered OK for the Government deserves an answer from our top CEOs.

“Why they would want to continue to support increased Government borrowing from those same banks instead of the Reserve Bank, which could provide the same finance at interest rates as low as ½ a percent, defies belief.

Perhaps it’s because they are amongst the privileged few who can afford to have shares in the banks.”

ENDS

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